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How to Purchase Equipment for a Restaurant – Planning Phase

Equipment costs for a restaurant can easily consume the gross profit of your business.  The key is to keep the costs low in order to spread the costs appropriately over time.  Purchasing equipment for a restaurant requires planning, researching and using finesse to acquire equipment at the lowest cost possible.  This article is dedicated to teaching the owner how to purchase the equipment for a restaurant at the lowest cost possible.

To keep costs down, there are really only two rules when buying equipment for a restaurant.  The first rule is to buy the equipment used.  The second rule is to refer to the first rule.  The key to success is to buy the equipment used.  By planning, researching and using some business finesse an owner of a small restaurant business can purchase the best equipment at the best price.  The following illustrates the use of planning phase to successfully reduce the overall cost of purchasing equipment for a restaurant.

Planning

Of the three phases to successfully purchase equipment for a restaurant, planning will provide the greatest value if done correctly.  Whether you are opening a new restaurant or expanding/replacing existing equipment, planning will reduce the overall cost dramatically.  One of the poorest business ownership habits is the urge to buy now.  This urge is a byproduct of poor or no planning, in effect, it is an emergency.  Many consumers and owners of business feel the urge to get it done right now.  What adds significantly to the overall cost of a business is impulse buying.  Resist this urge and sit down and develop a list of needed equipment and wanted equipment.  Plan well in advance of your needs, you can’t wait until the last day to purchase a needed piece of equipment, the seller will sense your urgency and take advantage of your poor planning.

The following are the steps you need to take in the planning phase.

Design Your Menu

This one step in the planning process is the most important, it identifies the types of foods you will prepare and the type of equipment you will need.  As an example, if you are designing a menu oriented towards frying food, then deep fryers become more important than oven based equipment.  If the menu dictates freshness of foods, then refrigeration is essential in the success of the food preparation process.  The menu identifies the right equipment.

Design Your Kitchen

Review the health code and take measurements of the space for the kitchen area.  Your kitchen is divided into four major zones.  The first is storage of food and preparation supplies.  The second zone is your cooking area.  The third is the food preparation area and finally the cleanup zone.  The state and local health code provides guidance in how to properly prepare your kitchen to meet all these needs.  A fifth zone is the customer zone.  This list includes furniture, decorations, utensils, waiter/hostess area items, menus and so on.  It can get extensive but this article is oriented towards the kitchen equipment and not the eating area.

Make a List of Needed Equipment

This is the time consuming aspect of your planning process.  Break your list out into the four zones as identified above.  Make a list of the required equipment to comply with your menu.  This list doesn’t need to have details of the equipment yet, that occurs in research.  Right now you are identifying the needed pieces.  Some of the equipment will be the wanted type and not actually needed.  That list comes later in the process of planning.  As an example the storage zone may look like this:

1.  Large standup freezer with 3 separate compartments
2.  Walk-in refrigerator
3.  Pantry shelf system
4.  Cabinet storage system for cooking supplies
5.  Transfer cart to move from the storage area to the cooking area
6.  Rack system for inside the walk in refrigerator
7.  Overhead hanging system for inside the refrigerator for meats
8.  Dessert mobile cart fully enclosed with glass front
9.  Mobile racks for transfer of unbaked breads and deserts

Make a List of Wanted Equipment

Same as above in the respective zones except here you need to clearly differentiate between needed and wanted.  The goal is to reduce your overall initial outlay for the equipment.  Wanted equipment can be purchased at a later date on a ‘if cash is available’ basis.  This will be a short list, but the key is for you to ask yourself if you can still deliver the menu without this item.  Odds are that you will not have capital available to purchase these items but it is nice to have this list anyway.  It will be good for future reference.

Santa Clause

Just like Santa, he’s making a list, he’s checking it twice.  Review your list, sleep on it, and go through it again.  Don’t forget the detail items of pots, pans, cooking tools, mitts, aprons, protection equipment, air ventilation, fire suppression; even the bottle opener should be on your list.  Then sleep it on it one more day and review again.

Conceptualize

The final step is to walk through your expected kitchen area and lay out the flow and the equipment locations.  Conceptualize the whole kitchen area and take notes.  Take measurements, pull out some masking tape and tape it to the floor or the wall where the different pieces of equipment will be located.  Most likely you’ll discover space will be an issue.  Believe me; the kitchen is never big enough.  Pretend you are the cook, the assistant and the waitress.  Look at your food preparation area, can you get the entire waitress staff in there at the same time and still have fluid movement?  I can assure you there will not be enough space to do the job. 

Think about the overhead area, hanging ladles or pots, will they get in the way? 

What about the floor?  Did you include the mats on your list to prevent slipping on oils and grease?  What does the health code allow to be near the floor?  Will the door swing clear the mat?

Finally, do a run through on a meal.  I mean act just like a child and pretend to cook a meal.  Bring those little toy cups and plates etc. to walk through this.  The goal is for this to rattle your brain for anything you may have missed.  Imagination solves a lot of problems.

Summation

The planning phase is the most critical phase of the entire equipment purchasing function.  You should have a 2 inch binder broken out into the respective kitchen zones and the eating area.  When you do the research phase, you’ll discover that the 2 inch binder will hold the information for just one zone. 

You need to have thought of all the different equipment needs, tools, and auxiliary items to properly run the kitchen area of the restaurant.  You do this by:

 · Planning the menu
·  Design your kitchen
·  Make a list of needed equipment
·  Make a list of wanted equipment
·  Check your list twice
·  Conceptualize

The planning phase is the best overall step to purchase the restaurant equipment.  If done correctly it will be reaffirmed in the next major phase of how to purchase equipment which is ‘Research’.  Act on Knowledge.

If you have any comments or questions, e-mail me at dave (insert the usual ‘at’ symbol) businessecon.org.  I would love to hear from you. If interested in my services as an accountant/consultant; click on My Services in the footer of this article.

 

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About David J Hoare (395 Articles)
I spent 12 Years as a Certified Public Accountant, Over 20 Years of Practice in Accounting and Consulting, Controller in Management of Closely Held Operations, Masters of Science in Accounting, Prepared over 1,000 Business Tax Returns and Hundreds of Individual Returns

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