5 months and ready to fold help!!

Pizza Shop Talk The Think Tank
1

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?

2

First, do you have a menu with prices either online or one that you could copy and paste so we can see just what your prices are? How do your prices actually compare to PH and the competition? Where (city/state) are you located? What type of market do you have (population, what industries are near, are you on the ‘going home’ side of the road, did the previous owner have a ‘reputation’)? What are your food costs and labor costs?

One thing I did notice…you said doorhanging seemed to pick up sales but increased labor. One thing you can do to keep labor cost down and to market to the community is to contact a local Boy Scout troop, Girl Scouts, church group, etc. and offer them a pizza party (a few pizzas and soda in your restaurant) to have them distribute doorhangers. It gets the kids and parents in your restaurant, creates good will with the community and gets your doorhangers distributed for foodcosts of a few pizzas and some fountain soda.

You also said you sell the buffet for $6.50 lunch and $7.50 dinner including a drink. Try marketing it as just the buffet for $4.99 or $5.99 and let them order drinks…the price looks lower in advertisements, so it is better "perceived’ value. (Think about it…why do car advertisements advertise payments for $299…because it sounds better than $300…and they don’t mention the sales tax, title and licence…except in the small print).

Anyway, give us a few more details and I am sure everyone here can offer some suggestions or tips.

3

First do like Tom Suggested, sell your buffet for 4.99 and then let them order a drink. Buffet is really difficult to do, it’s hard to make money on it and keep waste to a minimum. You really have to have high volume to make it in the buffet business. Make half and half pizzas, one or two toppings each for most but one. Unfortunately people love buffet, they think they’re getting things for free. I don’t know what size pizzas you put on your buffet, if you put large (14 inch) cut it into 16 pieces, if you use 12 inch pies cut them into 12 inch pieces. The best way to lower cost on the buffet is to Make Less More Often. When I ran a restaurant with a buffet that was my philosophy. Make smaller batches of pasta, make smaller batches of cheese sticks. If you want to stick with the buffet, advertise the hell out of it. You can do that cheaply by printing off box toppers and flyers and distributing them yourself.

You could develop a sandwich line and maybe offer soups, people love soup and salad combos.

How many hours a week does each salaried person work? if it’s less than 40 make it at least 45. I run a restaurant and I am the only salaried person and I work 50 hours a week. This week it’s 65 with not one day off.

will have more later,

4

The question I bring to the table is “How badly do you want to make this work?” It sounds like you are comitted a great deal already, and your sales could very well go up with some infusion of marketing dollars. The princing adjustment from the previous posts sounds like it could be meaningful . . . you have direct feedback from customers about what they dislike about your pizzeria. Use that to your advantage. If you have $400 shifts, then it is quitr possible you have time blocks where hourly staff can spend 30 to 90 minutes out doorhanging . . . that’s the way it is in my shop anyway. 1 guy out on the streets while manager and owner run the kitchen during slowest shift(s). If you want it to work, I am hoping you can manage it. I hate to see a fellow independent owner go under.

If you want to save the business, the owners may want to consider forgoing some portion of their salaries for a period of time, increase their actual labor in the business, and develop a very specific marketing plan to increase sales and a defined, measurable goal as to what you want to accomplish. The infusion of cash could give you flexibility to make some investments for the near future in terms of building your sale.

If the reliable things are not possible (doorhangers, sales, coupons, flyers, samples and specials to local businesses and colleges and apartments, etc) . . . then it may be time to get serious about what you are and are not willing to commit in the short term to keeping this alive.

5

where are you located?
what is your rent?
why buffett?
what are your gross sales weekly?
what is your food cost%, your labor must be zero if there are 4 owners, right?

6

It seems to me a store doing sales of 5-7k/week would be much better suited in a store a lot smaller than 3000 sq ft. I imagine your rent is pretty substantial on a bldg that large. Labor costs might be out of whack with that much management also. 170 labor hours on 5-7k a week seems high to me.

How long is your current lease? Maybe a move into a smaller bldg would improve your margins.

Probably a good time to go bare bones, cut staffing to more appropriate levels for those sales. The 4 owners and 2 part timers should be able to staff a store doing 5-7k.

Just my .02

steve

7

If you want to hock your equipment look @ Direct Capital ask for Brian Varney. Steep interest rate and they’ll probably only go 20k on a newer business.

8

Wow! Thanks for all the replies. To answer some of the questions.

We are known as the “buffet place” since the previous owners had it buffet. 75% of our sales are buffet.

We have subs and combos, toasted ravioli, wings, pastas and salads that can be bought off the menu. We have our signature pizza called the Monster Pizza. It is an 18", 10 topping pizza. If one person can eat it in one hour, they get it free along with a T-shirt and their picture. We have had 22 people try it in 5 months with only one person actually doing. The monster is also a favorite for parties.

We live in a rural town of 7000 in extreme Southern Illinois - close to the Kentucky border. We are in the process of getting our website done. You can view it a www.gobpilepizza.com. However, we have changed the prices since we first started the site.

We put 12" and 14" pizza on the buffet and we do cut it in squares instead of slices. We do one toppings and a semi-supreme and a cheese stick.

As far as owners working . . . well, my husband and I put in about 85 hours together a week in the restaurant. I handle the bookkeeping at home and of course we are always on the phone with the store. My daughter and her husband . . . not so much. They both decided to go back to school so are acting more like employees than owners. This has been a bone of contention in our family. So, they draw the big bucks and only work 30 to 40 hours a week. My husband has not drawn a paycheck in two months. I’m not on the payroll at all. My daughter and her husband cannot afford a “pay cut”. We have cut our labor down to about 179 hours for hourly. Our other two managers are salaried and they both work 6 days a week.

We started out all wrong. We did not have enough money for the start up costs. Of course, no one told us about start up costs. The previous owner said it was turn key. Wow, was he wrong. I wouldn’t be so worried about folding if we didn’t have to use our sales right now to pay the bills. I’ve tried to get loans for working capital and it’s not a happening thing.

Our rent is $2100.00 a month. Our electric/gas is $1300.00. Our food costs runs about $1900.00 to $2200.00 per week.

If there is anything that I have left out, please let me know. All we need is $65000.00 and we’d be good to go and out of the woods with working capital and the sales could start adding up.

9

If I had sixty five grand, I’d offer to buy into your place and help you make it a success.

10

You said you were known as the “buffet place”, so do you offer a lunch and dinner buffet? If so, you may want to reconsider because as many said, keeping foodcost and waste in line can be difficult and you may be cannabalizing evening pizza sales. Every area is different and you know your customers better than anyone, but many places offer buffets for lunch only for the ‘speed’ factor of people on their lunch breaks and to showcase a specialty or gourmet pizza in hopes of converting lunch customers over to new or gourmet offerings for dine-in, delivery or carryout.

I like the idea of the ‘monster’ pie eating contest. You may want to promote a certain night as your MONSTER PIE EATING CONTEST night where you try to get several customers trying to eat it all at once (also serves as entertainment and can be a good marketing tool). If they eat it all, as you said, it is free, but throw in a bonus…if no one in the contest eats teh entire pizza, whom ever eats the most at the end of one hour gets theirs for free anyway…while the others have to pay, which they would expect to anyway if they don’t complete the task. If you can get this contest going, send a story pitch or press release to the local paper to try and get an article in the paper for some free "novelty publicity…maybe even offer to let a local journalist jump into the contest for free just to see what contestants go through. Offering a ‘trial run’ to a local journalist just for teh heck of it so they can see just how difficult it really is could turn into an article in the paper too. Good luck and I hope some more operators here chime in with some ideas.

Also, if you need some directions on writing a press release, read this article that tells you what journalists are looking for and how to write one. When you click on the link, be sure to click on the link at the top of the page that says “CLICK HERE TO VIEW “PRESS RELEASE BASICS” IN A NEW BROWSER WINDOW” to view an actual breakdown of the press release. Here is the link to the article… http://www.pmq.com/mag/2002summer/cohen.shtml

11

“As far as owners working . . . well, my husband and I put in about 85 hours together a week in the restaurant. I handle the bookkeeping at home and of course we are always on the phone with the store. My daughter and her husband . . . not so much. They both decided to go back to school so are acting more like employees than owners. This has been a bone of contention in our family. So, they draw the big bucks and only work 30 to 40 hours a week. My husband has not drawn a paycheck in two months. I’m not on the payroll at all. My daughter and her husband cannot afford a “pay cut”. We have cut our labor down to about 179 hours for hourly. Our other two managers are salaried and they both work 6 days a week.”

That smells like the problem. 4 owners and two managers ? If they can’t afford a paycut they need to work more. Get tough with them. Ask them if they would rather work more or have no income because the shop will have to close.

To get stores off the ground I’ve worked open to close 7 days a week for months. That’s 100+ hours a week and for some of those starting months not drawing any type of pay. I’d say the hours involved is one of the most over looked aspects of restaurant ownership.

12

Our lunch buffet is from 11:00 a.m. to 2:00 p.m. Our supper buffet is from 4:00 p.m. to 7:30 p.m. Sunday through Thurs and until 8:30 p.m. on Fri and Sat.

After reading everything that has been posted, we owners had a meeting to discuss what we could do. We printed reports from our POS and found that Mondays sales die after 2:00 p.m. and it isn’t worth being open for supper. So we have decided to close at 2:00 p.m. on Mondays. We looked at staffing again vs. sales and cut labor even more. Next weeks schedule - hourly payroll is down to just over $700.00 with most of the hourly staffing saved for the weekend as that is when we have the best sales and delivery.

As of January 22, we had already cut down the pizzas on the buffet to one toppings and a semi-supreme. We also started a M-W special of the day. We have a pizza of the month special. We also have other specials that we offer on our direct mail. We decided that if anyone buying buffet wants a special pizza, they can have it put on the buffet for an extra $1.99. Some people don’t like this as they were used to just asking for any pizza they wanted for the buffet and it was made for them (when it was Papa’s Pizza to Go). Some people understand. We take the pizza to them first before it is put on the buffet.

As far as the Monster Pizza, when we had the one guy actually eat it, the newspaper did come and take his picture with 2 of our employees and did a free write up on it for us - color picture and all. We like the idea of having Monster Pizza Night and are planning on implementing it.

We also decided that we needed to change the atmosphere of our store. It still looks like Papa’s and people need to know that we are different. We are changing the decorations and rearranging the seating for starters. We have lamps over each table but there is also flourescent lighting too. We are ditching the flourescent lighting for a more cozy atmostphere.

Our restaurant is called Gob-Pile Pizza & Pasta. Southern Illinois is know for it’s coal mines - the left over coal is called gob piles. We also state that we put gobs and piles of great toppings on our pizzas. Most people in this area know what gob-piles are. We are planning on displaying coal mine memoribilia as part of our theme.

Since buffet is 75% of our sales, we are going to try to phase out the buffet slowly and market our menu items. We are still getting free samples of cheeses and other items to try to cut our food costs. Has anyone heard of Grande cheese? We tried it today and really liked it.

Did I mention that we are also a WIFI Memo restaurant? We thought that would attract a lot of the younger crowd and college students, plus corporate meetings (we have an area in the back that we use for parties and meetings that seats 50 people). However, we have very few laptops coming in.

Of course, we still need immediate money. We barely made payroll this week. But I feel like we are on a positive course and it’s all thanks to everyones ideas on this board.

Laura White
Gob-Pile Pizza & Pasta
Benton, Illinois

13

IMHO----I think you’re making a few mistakes.

  1. If the buffet is 75% of sales-DON’T PHASE IT OUT!!! Learn how to make it more profitable.

  2. Instead of charging people extra if they want something different, why not try “make your own” on the buffet? Put small amounts of each topping on the buffet and let them top it as they like.

  3. Don’t close for dinner on a Monday. Find ways to increase your traffic instead. Free desert? Free soda?

  4. Your food cost and labor are way too high! If you’re only making $400 a night, you don’t need more than 3-4 people on, including the driver. Make sure all of your staff are cross trained. Everyone should be able to do almost everything. I’d stay away from Grande, product is great, but cost is too high for a buffet.

  5. Thanks for explaining what a gob pile is. I was really starting to wonder :wink: Change in atmosphere is good. Incorporating you local culture is always great.

Good Luck!

14

As an x-CiCi’s GM, I believe you’re foolish to dump 75% of sales…buffets can be successful if you run them correctly…

  1. Price your buffet at a enticing price, say, $4.49, then charge a set price for unlimited sodas…

  2. Make only 12" pizza only for the buffet - set/stage a rotation of 8-12 pies, remembering that people luv pepperoni pizzas more than any other selection.

  3. Evaluate the total of items offered on your buffet. CiCi’s makes brownies, cinnamon rolls, pasta & a salad bar - focus either on price or selection - not both.

Let people special order a pizza, but ask them how many slices they wish, the serve them tableside & put the rest on the buffet.

15

I agree with some of what was said AFTER you’re last post.

The LAST thing you do is close Monday nights…you cut staff, give away free kid meals with an adult buffet, ANYTHING but closing early.

I would suggest going to schools and make Mondays school night and donate a percentage to the school as mentioned here by others.

I also think it is a bad idea to cut the lighting in a buffet, make it bright and cheerful and inviting rather than trying to force dim lighting and an adult environment.

Another issue, you have video games, have you considered making it redemption ticket games for prizes?

I would suggest against using Grande cheese for the buffet, I would rather put MORE of another brand on costing less than Grande, others might not agree.

I also agree about using meduim pizzas and managing the line rather than reducing the number of pizzas. If someone comes in to try your establishment and sees a buffet that is bone thin and you are charging 2 bucks extra for special items, you wont see many people returning.

You need to increase sales and marketing rather than shutting down monday dinner and give up.

I would also suggest putting the buffet in the name, if I didnt know better I wouldnt have known 75% of your business is buffet, you might want to center your marketing, name and focus on the largest percentage of your business.

In my view, the steps you gave will drive you into the ground rather than upwards.

If you want to drop buffet, then get out of the lease, get a smaller shop and start over completely.

One other comment, you havent mentioned how much your kids compensation is. If they are putting in 20-30-40 hrs and you are working much more, you might give them the ultimatum of participating to make things work no matter what it takes, or hire another manager and let them completely off the hook.

16

Of course, we still need immediate money. We barely made payroll this week. But I feel like we are on a positive course and it’s all thanks to everyones ideas on this board.

Contact Brian Varney at Direct Capital . They are the Ebay authorized equipment leasing company. You would only need to put on the lease the equipment needed to reach the dollar amount you are looking to receive.

They usually cap young businesses @ 15k - 20k if you have the invoices or equipment purchase prices listed in a sales contract you could wrap it up in about 2 weeks. The security deposit would be about 2k

17

dont fold, just get rid of some of the chiefs… you cant be that small and have twice as much of your $ paying owners than workers. try to buy out some of the partners and reduce the internal draw! if you were bringing in in 30k a week maybe you could aford 4 owners and 2 managers. your sales dont support it so someone has to go or you are all gonna lose! if you have a grea t product as u say, things will build, but only of you don’t bleed it dry before you get the chance to make some $. sorry to be so blunt… but it is what it is.

18

Gobpile,

Your approach:

It looks like you’ve got some people in here offering some VERY good advice that you really need to take a look at. Some knee-jerk reactions you’re producing are because you’re stressed and you want to cut as many costs as possible, which is understandable. However, if you carefully look at your business from a customer’s point of view, you’ll see that these reactions are hurting your business rather than helping. Some that I’ve noticed:

  1. Closing early on Mondays
  2. Raising the price of your buffet
  3. Attempting to phase out your buffet (which brings in 75% of your income)
  4. Charging an extra $1.99 to give the customer something they want on your buffet line.

These changes that I’ve listed all do one thing: it alienates your present customers. What this will do is actually lower the modest sales you’re already bringing in. You seriously need to look at these situations you’ve put yourself in and ask yourself, “If I do this, how will the customers perceive my business… and is there a possibility that I’ll lose one or two?” If there’s a potential negative perception and you could possibly lose a customer or two, then you are simply making the wrong decision and need to address it quickly before it gets you to the point where you still need $65,000 and now your sales won’t even allow you to make half the payments you’re making now. Consistency is the name of the game in this business. If you don’t have it, your customers will notice and will potentially not be customers anymore.

The business side:

Sales…$6,000/wk.

Rent…(approx.) $490/wk

Food… $2200/wk

Labor(179 hrs. @ $5.50)… $984.50/wk

Elect/gas… $303/wk

These are assumptions:

Advertising (the amount you should budget - 5%)… $300/wk

Mileage (25% divided by $20 ticket avg X $1)… $75/wk

Insurance… $140/wk

Telephone… $100/wk

Payroll taxes… $150/wk

Other variable costs… $230/wk

Profit… $1027.50/wk

According to this structure that you’ve listed I used the Break Even Calculator provided by PMQ in the “Manager’s Toolbox” section and found you’ve got a Break-even of around $4,400/week. This break-even is paying a manager’s salary of $31,200/year ($600/week).

So here’s your money problem:

Salaried employees:

  1. You
  2. Your hubby
  3. Your daughter
  4. Your son in law
  5. Manager1
  6. Manager2

Let’s take into consideration that you and your hubby do NOT take a salary (which if not mistaken, is actually the case anyway) but everyone else is:

  1. You… $0
  2. Your hubby… $0
  3. Your daughter… $400/wk
  4. Your son in law… $400/wk
  5. Manager1… $400/wk
  6. Manager2… $400/wk

Total… $ 1600/wk or 26.67% of your payroll.

Here’s a hint: Your entire payroll should be lower at $6k/week.

The solution:

  1. You’ve got to stay consistent in your approach on the business side. Don’t go making changes for the sake of making changes because it shows the customers that you truly have no idea what you’re doing and that you’re unstable.

  2. You need to cut costs. Not with your hourly employees, either. You’ve got too much overhead in upper management. You need one manager, one assistant, and one shift leader… period. That would be: your hubby, you, and maybe one of the existing managers or your son in law. I know it sucks. You want to be nice and keep everyone aboard because they’ve stuck by you and they’re so good to you. You can’t look at it this way. It’s a business and you’ve got to treat it as such. Offer the rest positions as hourly employees until you get things turned around (which is not going to happen because this is the plan you MUST stick to).

  3. Tell your daughter and son in law (I’m assuming they put no money into this) that their pay from this store shall come from their ownership percentage of the profits this store creates. The store makes $0, they get XX% of $0. If they want to work in the store they can do so on an hourly pay basis @ $7.00/hr (and only schedule them when they’re needed… not for the sake of putting them on the schedule to make money). If your son in law worked for Papa John’s he should know all about bonus checks.

  4. I’ll reiterate: Keep the business like it was. Sure, change the lighting a little if you want. The actual BUSINESS, though, is doing fairly well at an avg. of $6k/wk with a population of 7,000. There are a lot of operators in this forum who would kill to be averaging that much. Eventually, you will bring in more business with smart advertising but right now $6k/wk is a respectable number to be hitting with that address count.

  5. Take the advice of the operators who have given it in this forum. You can do some of the cool specials they recommended in the mid-week to spruce up your sales and give you a little extra push, but the way you had it before you posted your first word in this forum was actually a good system that was working for you.

  6. Keep your advertising budget at 5% of your sales. Do NOT exceed this amount. I noticed that you did radio advertising, tv commercials (both good ideas but don’t really give you direct response). You need to cut those out for now. Your focus should be on print advertising. This form of advertising will give you a direct and immediate response and that’s what you need right now.

As far as the $65k is concerned:

Nobody is going to “give” you $65k. If you get it from a bank you will have to pay this money back, thus increasing your overhead. Yes, it would be nice to infuse your business with all that extra cash but if you look at the big picture, you’re borrowing from Peter to pay Paul. That is a recipe for failure and you seriously need to do these things I, with everyone else have listed for you to get yourself in the black. I’m sure you’re not $65k behind on your bills. If that were the case you’d have been closed down for a long time now.

Print up an “aged payables” report. Find out who’s 30, 60, 90 days out on your payments. Pay all your current bills once a week that will keep you running. (My bills are paid on Mondays). To all the creditors who are overdue, pay out a pre-designated dollar amount each week with your “important” bills. Get the 90 and over 90 people first. Then start to play catch up with the other people until you have all your debts payed down.

In Conclusion:

Re-structure your upper management. I wrote this a couple of paragraphs ago, but I mean it. You CANNOT survive the way you’re going now. Your upper management payroll is bleeding you dry. You must:

  1. Place your hubby as the one in charge (General Manager)
  2. You must pick one of the remaining magers to be an hourly($7-$8/hr) assistant.
  3. You must pick one of the remaining managers to be an hourly ($7/hr) shift leader.

THAT’S IT!

Your restaurant doesn’t need any more managers and you can’t afford to pay them anyway.

I hope this helps. -J_r0kk

19

Wow!!! You argue some great points. The same ones I was aruging with my other partners - especially about closing early. I also think that is a big mistake but they didn’t think so.

I also argued with them on charging extra for a special pizza for the buffet. I don’t want to phase out the buffet but there is a lot of waste.

I think that our delivery area is way too big we deliver up to 10 miles away. I can’t convince two of the owners (my daughter and her husband) that we are losing money on this. Their argument is that we will make it up on in-town deliveries and that people will call us because Dominoes and Pizza Hut won’t deliver that far. Two of the towns do not have any type of pizza restaurant at all and the others only have one.

We are charging $6.50 for lunch buffet and $7.50 for supper buffet these both include drinks. I don’t see where charging $4.99 plus the drink is adding any profit from what we are already charging. Drinks around here are no higher than $1.59.

I do, however, want to clear the air on the buffet. We don’t just have 5 pizza’s only on the buffet. We have two 6 foot long buffets that are always full of pizza and a cheesestick at all times. We also serve baked potatoes on the buffet and sweet potatoes. We just cut down the special pizzas such as chicken bbq, alfredo, bacon cheddar, veggie, etc. Also, we have a great salad bar, plus another buffet with 3 dessert pizzas. We have a steamer that has chicken alfredo, spaghetti and melted cheese (for the potatoes or for the tortillias.

We also have a fantastic menu and would like to see more dine-in orders from that.

As far as cheese, we use a 5 way blend on our pizzas and have found that Grande is actually cheaper than what we are using. If there is something else out there that we don’t know about, please let me know.

We were using 12" pizzas on the buffet, but one of the partners got the idea that in the long run it would be cheaper to put 14" and cut them in squares than it would be for the 12". I kept asking for the numbers on that, but have yet to see them.

I last checked about an hour ago at the store and so far we had a $400.00 lunch with a party of 60 coming in at 2:30 for buffet. The town is having high school tournaments and this is a school coming in after their game. We only have 3 people in the store today - one owner and our two salaried managers. Our weekends are great, it’s just Monday thru Thursday that kill us.

I still haven’t heard any suggestions about obtaining working capital money. That’s our biggest problem. We would be able to do the marketing we need to do and not rely on sales so much right now to pay the bills.

Our area is a depressed area. The closest major city is St. Louis and it’s 100 miles away.

I feel like I’m bouncing around all over the place trying to remember what to answer to some of your questions. We have marketed the schools, churches, college, etc. We do not have free lunch for anyone other than children under 3.

We do offer a student discount for high school and college kids - lunch only for high school, both for college except on weekends since they have night classes too. It is $4.83 with tax. Pizza Hut offers a pizza for $5.00 in 5 minutes for students. Our high school students only have 30 minutes for lunch so by the time they get to our place, they only have about 20 minutes to eat.

20

We are trying in our own various ways that even if there were $65K out there and available, the people with that sort of money aren’t going to risk it on a cash strapped operation that is struggling to bring in customers and manage the business they have. With your having less than 18 months in business, I will go on a limb and say you will not find anyone to loan you that kind of money unless you have significant cash reserves and collateral. You are better mortgaging your house if you think this business can make it and thrive. I don’t know if that is wise at this point.

The other message we are all sending is that we do not believe that $65K is going to solve the problems with your business. There are parts of your business plan and model that are working against your success, and that money will not fix. The menu, identity, management and labor structure, decision-making, and service philosophy that aren’t going to improve with more money and more debt. You are obviously conscientious people trying to do right by your customers. The suggestions you’ve gotten will cost far less than $65K and could possibly do more to help your business than you could imagine.

Money is spectacularly difficult to borrow without collateral . . . and pizza equipment ain’t liquid collateral they look for. You might find an “angel” investor who likes putting money in local businesses for kicks, but they expect large return on money they put at large risk.

You will eventually spend yourself out of profit depending on what you pay for mileage. Delivering 10 miles away means a 45 minute round trip at best . . . that’s adding 75% of the driver hourly to the cost of that pizza, and you cannot send adouble run most times.

You’ll get more profit by possibly drawing more customers. that is the key to success . . . drawing more bodies through the door. PRICE IS WHY THEY BUY . . . VOLUME IS WHY YOU SELL. I’d rather have 20 customers buy at 4.99 plus drink than 10 customers buy at your current price. It is not truth but perception of truth that will lead people to decide for you. To increase profits, you either increase the price or increase the number of customers . . . . customers will usually increase bottom line faster than a higher than the price will. Cutting excessive labor and food costs will help a gobpile as well.

  1. All that variety and extra stuff isn’t drawing enough customers to make profit the way you are doing it. If you do what you always do, you will get what you always get. I can understand now what the big waste issue is. Cut it back and live.

  2. Why would I order from your menu when I have 12 feet of food items for one price? I would offer enough variety on your buffet to entice and satisfy the buffet market . . . . AND make it lean enough to entice menu customers to order that way. It is a precarious balance, but your customers will always see you as the buffet place if you have two giant buffet lines full of stuff. I’m not saying give it up, but to figure out your identity and decide who you are and who you want your customers to see.
    5 pizzas and a dessert pizza are good start.