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Northeastern Pennsylvania Scranton, Wilkes-Barre, Pocono area
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Old 08-14-2014, 10:20 AM
 
1 posts, read 649 times
Reputation: 10

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hello,
thanks to all that read,,,,

I am purchasing a large amount of restaurant equipment some new some slightly used with recent service records, my major concern is.. i am not yet incorporated. i am in middle of forming the corporation the restaurant that will be using this equipment will be under the corporation once the incorporation process is complete. IS it ok to purchase the equipment with my own private capitol.. or should i wait until i am incorporated and than purchase with the corporations capital. If i purchase now with my own personal money how do i than get the equipment listed as an asset under the corporation.

any restaurant owners or knowledgeable people please any advice would be welcomed.. besides telling me to get an accountant,, and or an attorney.

thank you
Danielh44
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Old 08-14-2014, 11:33 AM
 
3,128 posts, read 2,631,534 times
Reputation: 2949
The statistics are sobering: according to a study by Cornell University (The biggest mistakes restaurants make, and why they have a high failure rate), 75% of all new restaurants fail within 5 years of opening.

If you are dead set on going into the restaurant business, then buy the equipment with your personal funds and when you incorporate, have the corporation buy the equipment from you.

Since your new restaurant will have no D&B rating, your food service suppliers will expect payment on delivery. Many established restaurants also must pay on delivery. Is your capital adequate to meet all expenses (labor, rent, utilities, supplies, maintenance, etc.)?

For a better chance of success, buy an established franchised restaurant, but that can be really expensive.
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Old 08-14-2014, 03:16 PM
 
Location: Wilkes-Barre, PA
1,693 posts, read 3,107,282 times
Reputation: 1233
Going to agree with Wells, buy the equipment with your personal funds and then buy them back. Your biggest danger in Pennsylvania though is not funding, it is licensing and taxation. I had a friend open his own place in Chestnut Hill near Philly and the fees were astronomical and they don't give you break like they should in your first year. In fact, they pile it on even more with first time filing fees. It is very expensive to start. Do your homework carefully.
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Old 08-14-2014, 06:22 PM
 
Location: Swiftwater, PA
13,163 posts, read 10,580,292 times
Reputation: 9326
I am not a restaurant owner. I did own my own business many years ago. I thought that I would throw in my two cents.

There was a pizza shop that opened up just a few years ago close to my house. The owner was very proud of his pizza - but it was not special. They did not make it; they eventually went under. There are many mistakes that new business owners can make today. In food; you need something that sets you aside from your competition and you need a lure to originally get customers in your door. Almost every day on TV's food stations you can get great advice and see the creativity of others around our Country. Pay attention to restaurant makeover programs and look at the mistakes made by others.

I wished that I had been a better accountant when I was in business. Fortunately I came out of my business ownership with a shirt on my back. My business failed - but the commercial property I bought made money on rentals to other businesses. Eventually I sold because of required, expensive, new sewage requirements - but I made money. Many business owners are not that lucky. You have to be able to roll with the punches, take advantage of opportunities when they exist and know when enough is enough.

Good luck!

Last edited by fisheye; 08-14-2014 at 06:34 PM..
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