Question

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, discuss whether you would prefer to buy or lease your equipment and furniture. What benefit do you see in your choices?

Answer 1

The location is an essential factor to consider while discussing how to start a restaurant business, as it can determine the success of your restaurant. While choosing your restaurant’s location, it is a good idea to identify your competitor in that area and gauge their progress and understand their business model. The competition needs to be assessed not just in terms of cuisine, but also the type of dining experience they are offering to their customers – casual dining, fine dining, etc. Evaluating the competition would help you understand the customer base that hovers in that area, their pocket size, and their preferences.

The restaurant should be located in a place which is easily visible as well as accessible. Upper floor locations are generally not considered suitable as their visibility is low, and customers also find them difficult to locate. A restaurant right in front of the road and on the ground floor has higher footfalls.

For the new restaurateur, the investment necessary to buy a property may be the deciding factor in the eternal question of whether to buy or lease a business location. Funding can be hard to obtain without restaurant experience, and even someone with a track record in the business may determine that buying a restaurant is too steep an investment unless the location has been proven highly successful for previous owners.

List of equipments for restaurant:-

• Ovens and Ranges
• Charboilers
• Countertop griddles
• Fryers
• Microwave ovens
• Stock pot ranges
• Hot plates
• Steam Tables
• Induction cookers
• Rice Cookers
• Toaster
• Food Warmers
• Sandwiich Grills
• Pizza Ovens
• Salamanders and Cheese melters
• Pasta Cookers
• Gyro machines

List of furnitures:-

• Table Tops and Bases
• Chairs
• Youth high Chairs
• Baby Chairs
• Booth

Whether to buy or lease the restaurant Building:-

Leasing

Many new restaurant owners start by leasing and work their way up to purchasing their location, or one nearby, once they have established a steady clientele. Leasing can be advantageous because it allows you to put your capital toward upgrading the kitchen, designing the dining area, and, most significantly, promoting your new restaurant.

The key factor when considering a lease for a restaurant will be what the leaser does and does not permit. Clearly, the space needs to have the wiring, ventilation, and plumbing to house a restaurant, and with that in mind, you may or may not need to do some remodeling to bring the facility up to your standards as well as up to code.

A knowledgeable landlord will be aware that his or her potential profits from a successful restaurant hinges upon whether or not you can adequately utilize the facility to suit your needs. In some cases, the prestige of bringing a restaurant into a prime location can land you a very favorable leasing arrangement — one that is flexible enough to allow you some comfort in case of a business failure and that doesn’t put too much burden on you for managing and improving the site.

Another advantage to leasing is that it provides you with an opportunity to spend money on marketing efforts and building up a customer base. Conversely, it may offer an easier exit in the event that you have to give up the business.

Buying

Buying a location is a major and typically a long term commitment. Typically this is reserved for someone who has either been in the restaurant business before, has significant available capital, or is well-known in some capacity and can draw business on the cache of his or her name. The primary factor, along with having a first rate restaurant, is the ability of that location to attract customers. An attractive property in a well-traveled vacation destination or in a growing community, without a glut of competitors, can be a solid investment. However, you will need to be diligent when doing your research. Considering the purchase as a long-term commitment, you will need to know that the community has a history of economic stability and is unlikely to change in the coming years. You also need to know what the local planning commission has in mind regarding construction and changes in zoning and accessibility.

Of course, one major advantage to owning a location is that you will not have to worry about a rent hike. In addition, as an owner you do not have to work within the parameters as set up by a landlord, giving you more freedom to do as you like with your property, as long as you stay within zoning laws and health code requirements.

The final consideration when buying any real estate is the projected value of the property. Will the price of the property appreciate in the coming years? While the goal of most restaurateurs is to build a successful dining establishment, the acquisition of prime real estate can make ownership very rewarding. Over the past ten years the real estate market has been very good in most areas of the country. This provides the restaurant owner with equity. However, the market is subject to change and it is important, before you consider buying a restaurant, that you have the property appraised and stay abreast of your real estate market.

So its better to lease the restaurant building

Whether to buy or lease furniture and equipments:-

As we get ready to open a new restaurant, something to consider is whether or not to lease some of the commercial kitchens. While you probably wouldn’t consider leasing a stove or a dishwasher for your home kitchen, leasing for a commercial kitchen often makes the most sense. When outfitting a new restaurant kitchen, it is important to remember the appliances you choose will get a lot more wear and tear than those of an average home kitchen. Factoring the cost of repairs and the time it takes to fix something, it is sometimes better to lease equipment rather than buying it.

Leasing can save you a lot of start-up money and come with better or longer warranties than the pieces of equipment you buy outright.    

Benefits of Leasing

• Saves Money. Leasing large commercial equipment, like a commercial grade dishwasher, will help you save your start-up cash for other areas. Instead of paying for a dishwasher, you could use that money toward your first food order, or your first payroll or your marketing budget.
• Some Leased Equipment is Free. A leased piece of equipment may be free (as in no monthly lease fee) if you are already buying the companies product, such as dishwashing chemicals or coffeemakers.

• No Paying for Repairs. If the equipment breaks, you don’t have to spring for repairs.
• Easier to Upgrade. When the lease on your commercial restaurant equipment is up, you can get a new model if you choose to renew.

Some Commercial Equipment is Better for a Lease Than Others

Certain pieces of restaurant equipment are better suited to leasing, because of their short lifespan and wouldn’t be worth the investment to buy new. These items include:

• Ice Machines
• Dishwashers
• Coffeemakers
• Coolers

Other items that are ideal for a lease include table linens, cooks uniforms, floor mats, and dishrags. These items get dirty, really fast in a busy restaurant and outsourcing their maintenance to another company may be cheaper than paying your staff to clean them.

What to Know Before You Lease Restaurant Equipment

Of course, with any lease, you don’t own the equipment, and you will have a weekly or monthly bill. You will also need to sign a contract, which you should review (or have your lawyer review) very carefully, to ensure you understand it and agree to the terms. If your restaurant closes before the lease is up, you may be responsible for the rest of the payments for the term of the lease.

The layout of your kitchen will also be important in deciding what kinds of equipment you will need. Restaurant kitchens are often crammed into small spaces, and it is essential to make every square inch count. You may have dreams of large reach-in coolers, spacious range with grill and long line to plate food, but the reality may be something much smaller.

Buying Restaurant Equipment

Purchasing brand-new restaurant equipment is the easiest method of all. After you do research on brands and prices, you can buy your pieces directly from a manufacturer or choose to work with a supplier.

The benefit of buying from the manufacturer is that you don't have to pay any overhead expenses. However, you may need to arrange for deliveries yourself, and you may need to hire someone to help set up all the equipment. A supplier could be a cost-effective solution if you can get deliveries and setup included with the price. Either way, new restaurant equipment typically comes with long warranties that help protect your equipment should anything go wrong. These warranties – which can range from 5-10 years to lifetime – ensure that you can return a piece of equipment for repairs at no cost to you.

So its better to take the equipments and furniture for lease