We purchased a pizza restaurant in August 2006 and opened September 1, 2006. The business was Papa’s Pizza to Go, but the former owner got out of the franchise and sold everything to us. We lease the building.
Our restaurant is a 3000 square foot building which seats 120 people. We have pizza buffet for certain hours and we also sell off the menu. We have dine in, carry-out, pick-up (we have a pick-up window) and delivery. Our menu also has pasta’s, toasted ravioli, sub sandwichs, hot and bbq wings and dessert pizzas. We are the only pizza restaurant in town that has whole wheat pizza crust.
We are in competition with Pizza Hut, Dominoes and Pizza Shack. Our delivery area is much larger than any of these other places. Our restaurant is very nice as the building is only 5 years old and we keep it very clean.
We are struggling. We paid cash for the business (our savings) and didn’t have a lot of money for start up costs. This is a family owned business. My husband and I are partners with our daughter and her husband. Her husband was General Manager of Papa John’s for several years.
We have direct mail go out twice a month, we do door tagging and business tagging, we have tv commercials. We have also done radio and newspapers. Our daily sales on Monday thru Thursday are terrible. We are lucky to have $400.00 net days. Our weekends are good at anywhere from $1200.00 to 1600.00 net.
We changed our format from having several different types of pizza on the buffet to only 4 plus a specialty pizza and cheese stix. Our buffet also consists of a salad bar, dessert pizzas, baked potatoes and two different kinds of pasta. We are running specials trying to get people to order more from the menu instead of doing buffet. We have cut our labor down to 170 hours a week not counting the 4 owners who are salaried and two managers who are salaried. That’s the best we can do as we have to have delivery drivers.
Since we lease our building, we can’t get a bank to loan us any money. We have approximately $180,000.00 in equipment and inventory but the banks will not use that as collateral. We can’t get a business credit card because we have not been in business for a year yet. We are behind in our taxes and bills as we are relying on sales to help pay the bills and payroll. We have borrowed money for personal loans to help us get by but are loaned out now. By my calculations, we only need $65,000.00 to get everything caught up, get our POS paid off and have extra money for capital expenses. Then we could let our sales build up.
We do have great product and our customers will attest to the fact that we have the best pizza in the tri-county. We have customers that come from 30 miles away just to eat our food. We stay consistent on our product, we have finally learned how to order food and cut our costs there. We also have arcade games and vending machines that bring in about $400.00 a month.
Our weekly net sales run $5000.00 to $7000.00 a week. It’s not enough. We did raise our sales this past week because we did major door tagging and business tagging, but that raised our labor also. We are a rural area as the town we are in only has 7000 people. We recently raised our buffet price to $6.50 lunch and $7.50 dinner (which includes a drink). You can’t imagine how many people have complained and even walked out because they thought our price was too high. You can’t eat that cheap at Pizza Hut.
My main question after all of this is how do we get a loan to get us caught up? How do we keep from filing bankruptcy before we’ve been open 6 months?
When we first started we had plans on opening up another restaurant within a year or two, but now, we are feeling like this was the biggest mistake we have ever made.
Does anyone have any words of wisdom?