If you are planning on getting into the restaurant business, one of the biggest challenges you will face is equipment financing. Setting up your own restaurant demands a considerable amount of cash. For one, you need to invest on restaurant equipment such as stoves, grills, gas range, freezers, tables, seats, POS system, flatware, computer, etc. Think about how much start-up capital you will need to be able to buy all the necessary equipment and furnishing.
What about applying for a business loan?
True, you can apply for a business loan, but in a high risk industry such as a restaurant, but if you spend all money on equipment alone, there may not be much left for other expenses such as marketing, supplies, and hiring workers. Is there an alternative financing option for aspiring restaurateurs? Rather than purchasing all the equipment and furnishing your business needs, why not consider business equipment lease financing?
Here are equipment lease tips that are especially for restaurant business owners:
Make Sure It’s NSF Approved. If you are going to lease kitchen equipment like blenders, mixers, refrigerators, coolers, etc. you need to make sure that the devices all have the NSF (National Sanitation Foundation) Sticker. Commercial kitchen appliances that do not have an NSF Sticker may cost you levies and fines once your local health department conducts sanitary inspection.
Avoid Overbuying. With all the excitement of starting a business and opening up your restaurant , some entrepreneurs may be overspending by taking on too much, too soon. Creating a solid business plan will help you not only map out your business goals, but help you to create and maintain a budget. You should be realistic about your needs and consider your budget and the space.
Follow Local Regulations. You should know that there are specific regulations in furnishing a commercial kitchen. Before submitting your equipment lease application, make inquiries from your local health department, fire inspector, building inspector, and city zoning about the specific rules for restaurants in your area.
Shop around. Compare quotes from several equipment vendors. Make sure you understand what is included in the quote and what is not. Will they install the equipment? If not, get quotes from companies that will do the installation.
Negotiate with your vendor. The internet has made doing business a little "impersonal". Too many times we just shoot an email to a company to find out pricing. When negotiating for a better price I’ve found the phone to be more effective. Many vendors will offer a discount on large orders if you just ASK. Build a rapport with them, and choose wisely. Sometimes that phone call has also helped me to make the decision to NOT buy equipment from a certain vendor. Take the time to make that call and you will be able to find the best pricing for your equipment.
Used restaurant equipment. Don’t forget the benefits of buying used equipment. Generally its much cheaper and as long as its been kept up by the previous owner, you maybe to able to buy a higher end piece of equipment for the same price as a new lower end.
Check your credit. Some commercial restaurant equipment leasing providers only grant approval to clients with good to excellent credit history. They may also have a minimum time in business requirement. Before you fill out that equipment lease application, make sure you qualify for their program. Again, a quick call or an email can accomplish this for you.
Get free lease product distributors. Some product distributors do offer a free lease If you make them your official supplier. For instance, if you offer coffee and beverage in your restaurant, find a distributor that will provide you with a coffee maker or a freezer at no extra cost. Just remember, free isn’t always better. Make sure you understand the cost involved in buying the coffee (or whatever product) from them. You may find that over time you are paying more to serve their brand than you would if you could buy bulk from another distributor.
As my mother is always saying "the cheap, will become expensive!"
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Originally posted on Lease Funders blog: Equipment Lease Tips For Restaurant Businesses