You need to invest a considerable amount of money in commercial kitchen equipment, if you want to develop a successful restaurant or catering business. The main question is how to obtain the equipment in the most cost-efficient manner. You need to consider the main options available and choose the best one for you based on your individual needs and requirements.
When you hire equipment, you use it, but you do not own it. You pay a set amount of money, usually monthly, for the right to use the different items. This option gives you considerable flexibility as you can hire everything that you need at a fairly affordable rate. You can add new items when required. You can change between models and brands.
The main drawback of hiring equipment is that you do not own it. It is not your asset and you cannot use it as such. This means that you do not get to incur depreciation costs, but at the same time, you will not be able to use the asset for building equity and for borrowing money against this equity.
With a lease agreement, you obtain the right to use the equipment for a certain period of time. Most often, the term of the agreement is two to five years, but it may be longer. At the end of the lease, the actual owner of the commercial kitchen equipment will get it back. Depending on the type of lease that you have, you may have the option of purchasing the equipment.
Many business owners prefer to go for leasing because it allows them to get the latest and greatest equipment at a fairly affordable cost. Eventually, the appliances will incur wear and tear and will depreciate in value, but you lose nothing from this. At the end of the lease term, you can lease brand new equipment again.
When you buy equipment, you make an investment in the respective assets. You are their owner. Consequently, you can use their equity. At the same time, their value will depreciate over time. Still, you ca sell the items at any time and receive a fair price for them to regain some of the money you have invested. You can borrow money against them as well.
You have to make the necessary calculations in order to decide which option for acquiring commercial kitchen equipment is best for you. You may want to consult a financial expert to ensure that you will make the best choice.