Compare These Top Vendors for Restaurant Equipment Leasing

Business Guide To Restaurant Equipment

Efficient and reliable equipment is essential to the success of your restaurant operations.  Deciding whether or not to purchase new or used equipment will be dependent on several factors, not the least of which is long-term versus short-term costs. You should first determine what your needs are and plan accordingly. The type of equipment you purchase can and will directly affect your bottom line, so study your finances and plan your purchases carefully. This brief guide to restaurant equipment purchasing will give you some insights that may be helpful in selecting the options that will be most beneficial for your business.

Benefits

A market research report completed by IBIS World states that consumer sentiment is expected to rise, which results in more companies investing in efficient restaurant equipment due to the positive effect this has on the industry revenues.

No Wear and Tear

If you decide to purchase new equipment for your restaurant, one benefit is the joy of not having to deal with wear and tear from previous owners. This provides you with the certainty that your equipment is working at the highest level of quality possible so that your customers benefit from great-tasting food and beverages. Additionally, the equipment is more appealing to the eye with no wear and tear to the exterior.

Covered under Warranty

Purchasing new equipment for your restaurant also provides you with the certainty that any repairs needed within a certain period of time are covered under warranty. Additionally, if there are any defects upon purchasing, you do not incur out-of-pocket expenses to take care of them. Having this initial warranty eases your mind, so you are able to run your restaurant as efficiently as possible.

Total Control over Maintenance

Purchasing new equipment allows you to have complete control over when each item needs to be serviced. Unlike used equipment, new equipment makes it possible to keep an accurate record of the maintenance schedule in the event that a problem arises. Keeping up with the maintenance requirements extends the life of your equipment, which saves you a great deal of money in the long run.

Leasing Equipment

If you decide to lease your equipment instead of outright purchasing it for your restaurant, you will pay a considerably smaller amount in start-up costs. This is especially helpful when working within a budget for your business. Additionally, when repairs are needed, this is not an expense that you have to deal with.

Purchasing Used Equipment

If you prefer to purchase used equipment, you will save money on upfront costs as well as benefit from equipment ownership. If the equipment is sold by a reputable owner, you will enjoy the value at a lower cost for years to come. Reputable sellers maintain the upkeep of the equipment.

Things to Consider Before Buying Restaurant Equipment

When deciding on the right equipment for your restaurant, purchasing outright may appear to be the most sensible option. However, you need to consider if this makes the best use of your capital. In order to decide whether owning your restaurant equipment is cost-effective, you will need to consider the potential pitfalls.

Pitfalls

Potential High Cost

When purchasing restaurant equipment outright, you have to find the capital to pay for it in full. Renting equipment does not have the initial high payment; however, it does have continuing costs. Both options have maintenance costs, although some rental agreements include this in the monthly or annual payment.

Unable to Predict Future Use

If your restaurant is a relatively new business, you may end up spending a large amount of money on equipment you may not need in the future. Leasing your equipment allows you to return it if you no longer need it, although you could still potentially lose money if you rent annually.

No Tax Benefits

Buying your restaurant equipment outright means you cannot take advantage of the same tax benefits enjoyed if you had rented your equipment. Leasing equipment would allow you to deduct the rental fees from your taxable income.

Depreciation of Assets

As time passes, your equipment will depreciate in value, meaning if you wish to sell it on in the future, it will not be worth what you paid for it. However, the costs you pay for renting equipment will also amount to a loss over time.

Reliability

If your equipment breaks down and you are the owner, you will have to foot the cost and potentially buy a new item to replace it. When you lease your equipment, maintenance charges are usually included and the equipment is usually updated on an annual basis. This can make all the difference, as being without important equipment could force your restaurant to close.

Pricing

Over 500 U.S. companies manufactured restaurant equipment in 2009, based on information from the International Trade Administration. The leading companies in the industry are Manitowoc Company, Inc., Illinois Tool Works, and True Food Service Equipment, respectively.

Brand New Equipment

Even though the cost may be more, it is vital to have quality restaurant equipment in order to better serve customers. If you go overboard, you may end up overrunning your budget. To prevent this from happening, only purchase necessary equipment first.

Rented Equipment

Used restaurant equipment is ideal for those businesses looking to get a foot in the market. Depending on who you buy the equipment from, you may be able to get a cheaper price or even some freebies thrown in for good measure.

Conclusion

The two most obvious advantages to having new equipment are in reliability and appearance. Whether you buy or lease will depend on the condition of your finances. For start-ups, the best initial option might be used equipment, especially if the dealer includes a maintenance agreement. 

Owning your own equipment carries a higher tax hit than leasing or renting, and rapid depreciation can quickly lower the resale value. Repair costs are higher for operator-owned equipment, particularly if it is out of warranty or there is no maintenance agreement with the vendor. Investing too much in your equipment can seriously limit your available capital.