Question

In: Accounting

As the owner of a restaurant, you must make decisions about the location of your restaurant...

As the owner of a restaurant, you must make decisions about the location of your restaurant and the equipment and furniture needed to operate your restaurant. Would you prefer to buy or lease your building? Also, explain whether you would prefer to buy or lease your equipment and furniture. What benefit do you see in your choices? 200 words or more

Solutions

Expert Solution

As an owner of a restaurant if I am supposed to make decision about its location, equipment and furniture I’m order to operate my restaurant i would make the following decision based on the current trends and profitability.

For Location: The location for my restaurant would be more of a highway or any road joining two major cities or industrial towns and the best customer for the restaurants are the travelers or the drivers who drive a lot and therefore need stoppages at regular intervals of time as in this manner i can get a variety of customers as well as can easily overcome the competition at an initial phase of its commencement. I would definitely go for the lease of the land for the location as I won’t be making a huge capital investment and risk of buying the land

For Equipment: For the equipment as well i would be going for the lease of them as now a days every day something or the other new technologies are developing in this sector be it any type of furnace or any other equipment. if i lease them for short time spans I can easily switch between new technologies and there are chances i can get a combined equipment to do two tasks where as if i bought them i had to work with them only and ignore then latest trends and ignoring opportunities (new technologies) i never good for any business.

For Furniture: For the furniture i would like to buy them personally as furniture is something which should match with the interiors of the restaurant as they the most appealing to the customers and if i go for taking them on lease there are chances that they might be identical to some other place as well in that way it won't be leaving a mark on the customers. Moreover, furniture does not ask a huge capital investment and you can always sell them easily once they are old fashioned and at times, they give a good reselling value too.

So, these would be my decisions for them.


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