I am in the process of opening a small restaurant business. Currently, we are mulling over buying or leasing the food equipment. Are there any financial benefits to leasing this equipment?
Honestly, do not fret too much over this decision. There are good and bad points in a situation like this, no matter what you do. There’s really no right or wrong answer. It all depends on your situation.
Obviously, one big thing is that there will be a hell of a lot less expenses. Some kitchen equipment can be quite expensive.
By leasing, you will not have to spend as much. Since you are starting the business, these savings will be important. Without having this initial expenditure, you can use some of your capital to improve in other areas of the business that can bring in more money.
Leasing kitchen equipment allows you to plan for monthly payments. If you were to invest in different food equipment, boy, that is going to be a heck of a lump sum payment!
Leasing allows you to do some experimentation with your business. As a new business, you will still be finding your way. You need to see what works and what does not.
If something is not working as well as you had anticipated, you may decide to stop it. Imagine how you would feel if you spent $7,000 on equipment that you now want to phase out.
This way, you can return the equipment. Even if you wanted to sell equipment you invested in, do you really think you will get the asking price? I doubt it. You will suffer losses.
If you bought the equipment and it breaks down, you will have to pay for the repair. This will happen when the warranty expires by one day! Leasing means you can call the company and they will come and fix it. After all, it is theirs. Also, you may not know this, but these companies regularly send their team out to service their equipment.
Every once in a while, someone will come by and ask you how things are going. They will take a look at their machine and give it some servicing. This is great for you because problems can be spotted and rectified before it becomes too big. It also leaves your equipment functioning optimally.
I know that Nella Cutlery does this, but so do many others. I know this company because they used to come by where I worked, many years ago.
Leasing is also tax-deductible, as it is an operating expense. Sometimes, you can find a company that offers a lease-to-own option. You kind of get the best of both worlds.
This way, you get to own it in an affordable method. There are also companies who will upgrade equipment. This would be fantastic for your business.
If you own an equipment, you are not going to run out and get the latest version. It gets too expensive. Upgrades allow you to get better equipment without you so much as batting an eyelid!
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