The benefits of forward-thinking investments for your catering business

Johnson Reed
3m read

Foresight is key to any business, but for those in the fast-paced catering and hospitality sector – where consumers’ tastes can change often – it’s even more important. You must work as hard as you can to be proactive with investments, instead of reactive. Costly, one-off purchases may affect the viability of your business plan: something we mentioned in a previous article, for those in need of strategy advice. Thinking long term when it comes to your business assets matters to your brand. How so? Let us explain catering equipment leasing, and its advantages…

Avoid a knee-jerk loan

First, we should identify the investment risks a catering business may take that could impact their financial health. Like Johnson Reed, businesses in this sector specialise in common sense. They are savvy when it comes to seasonal tastes, for example, pushing one food or drink deal over another as the year continues. But there’s always room to miss a trick. What if you don’t have enough agency staff for a conference dinner? Do you have reserve cash to cover a new pub beer that isn’t selling as much as you’d hoped? How about uniforms, training courses for managers, or a mistimed expansion? Often, these are the result of a poor business plan that hasn’t prepared for growth and contingencies. A loan can seem like a quick, temporary fix until the plan is redrawn. It may get cash flow back on an even keel, yet if profits sink again, there’s something wrong at the core of your strategy. This can stop you taking a chance on a new concept, recipe or service offering. And once you’re in a persistent debt cycle, efforts are bent on recovering loss, instead of experimenting with new avenues for business growth.

Catering equipment leasing for progressive development

We want everyone to realise their investment potential. That means being smart, and preparing for anything, as your capabilities expand. Catering equipment leasing is one of the best investments for doing so. Here’s why:

  • Costs are recouped as the equipment starts to influence your catering ops. If an industrial dishwasher, for example, cleans more dishes and cutlery, you’re able to serve more plates at a time. The leased item can therefore pay for itself.
  • You can work towards owning the equipment or returning it. Three, four and five-year contracts are additionally flexible, so the investment is exactly how you wish it to be. Payments remain fixed throughout, so you can budget effectively too – knowing exactly what to pay and when.
  • Thanks to both of these points, creativity can flourish. You haven’t bought the new tools outright; they are not a ‘done deal’, if you prefer to have them only as a temporary means of support. Some menu items or services may not catch on at first. With leasing, you have a financial safety net as you’ve not made a large expense, so there’s more room for trial and error.

We haven’t touched on tax-saving opportunities either… Another main perk for catering equipment leasing in the UK. By not buying the items outright, you can reduce your corporation tax bill. You can deduct your total spend on leasing from your year-end profit, reducing your liability. Choose Johnson Reed to reach your extraordinary. There’s a lot to discuss for specialist lending channels – call or message us to find out more.