I was reading through some business plan literature and an example of a business that planned to buy smaller-capacity equipment, a lower-quality register system, etc with plans to purchase higher capacity and quality equipment in the future as the company expands.
This immediately raised two questions in my mind:
(1) If you are planning for expansion, wouldn't it make sense to plan to purchase the equipment you'll need for the first 1-2 years' expected capacity needs (espresso machine group quantity, etc) and not what you would need for the first 6 months?
(2) Is there any sound logic in buying lesser-quality equipment in the effort to have more capital needed for operations (until reaching profitability)? I would imagine the quality of equipment, having significant implications for the quality potential of the products created with that equipment, would be of the highest importance!
I currently plan to buy equipment that will last for the first 1-2 years of expected growth and equipment that I can reasonably afford. To explain this in terms of an example, if I plan to only need a 2 group espresso machine during the first 6 months, then a 3-4 group machine after the first year, I plan to purchase the latter, though I don't plan to spend $50,000 on an espresso machine.
Thank you all in advance!
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