Considering Startup

So I am considering getting into the pizza business and it is a huge passion of mine. I have experience running on my own business (tax, payroll, ordering, accounting, etc) but no experience specifically for a pizza shop. Money and funding is not issue, and recipes also wouldn’t really be an issue either. I have a very specific plan of what I want my restaurant to be but I want to start smaller first before I try to have a “dream” restaurant.

Is there any specific advice you would give to someone starting up (simple saying don’t do it isn’t the type of advice I’m looking for)? Ovens, locations, coupons, delivery, menu, employees, hours, etc are all the types of things I’d love thoughts on. How about buying out an existing vs starting up? What is standard evaluation for a independent shop, 3x?

I have plenty of business experience, business mentors, and the legal and accountant side all taken care of. I understand those risks.

Thanks guys, I really love pizza and business. I make pizza every single day as it is and would love to have my job be my passion. Also if there is anyone on here who provides consulting I would be interested.

How many hours are you planning on working a week? BTW, I’m not trying to be a wise-ass in asking that.

I don’t know if he still does, but I believe Pizzamancer used to work as a consultant. He posts here often enough so you could check with him on that.

Rocco- Thanks for the reply, I know my post was very general. Hours per week? What I was kind of planning on in the early stages was somewhere around 65-75. Hopefully Pizzamancer will chime in then.

Okay, you wanted it. Here it is:

Way too vague. If you want good answers, start asking good questions. You will never get the right answers asking the wrong questions.

The pizza business is great. It is great when it is great, and sucks rocks when it isn’t. I have seen more than enough operators go to work every day like it is a prison. Don’t be those guys. There is the potential to destroy your relationship with pizza, and making 500 pizzas a day is nothing compared to making one pizza a day in your own oven. De-link the two ideas in your mind and you will be far better off going into opening a shop.

Specific advice: Write a business plan. Plan the marketing, plan the operations, plan staff training, plan the menu, plan the lay out, plan the daily and weekly paperwork. Here, the goal is to make a plan and make mistakes. Don’t be so afraid of making mistakes that you fail to plan in the first place. Executing the wrong plan is 1000 times better than not having a plan. The guy who exercises 1 minute a day is far ahead of the guy who never gets off the couch and thinks about exercising all day.

Buying existing is usually a bad idea for a first time operator. Make your own mistakes, not someone else’s. That said, if there is a clean place for $30,000 in your area, pick it up, fire the existing staff and go for it. There is no ‘standard evaluation’ when it comes to pizza unless you are buying a very profitable place. Most places for sale aren’t that, or they wouldn’t be for sale. No-one sells for health reasons (but many unprofitable shops say they do).

Money and funding are always an issue. Do you have a budget? How much do you plan on spending in the build out process? What is your burn rate? Operating funds?

Welcome to Think Tank…

If you read through the forums here, there are 1,000s of years of experience…Lots of good news stories and unfortunately some bad news ones too…If you take the time to read for a while, you will learn…

I am a business broker and business appraiser. There is no “standard price” and no statistical support for the oft quoted 3X.

With that said, I am also a pizza store owner and if you want to buy mine for 3X it is for sale!

Pizzamancer-

Thanks for the response. Sorry I was vague, it was hard to know where to start really. I understand the difference between making pizza in a home and in a commercial setting. I’ve made a couple pizza in a commercial setting before, but not for very long. I do however feel the passion for dough can translate from one to the next.

Thanks also for the planning tips. I definitely need to get those from rough ideas and basic excel sheets into a clean and compiled list. My problem right now is I’m not sure on the exact type of pizzeria I want to open. I have a dream idea, but I think it is much too big to go for from the get go. I want to start something smaller first. I don’t want a small 1 table mostly delivery/carry out, and I don’t want to go for a full blown restaurant. I need to finalize the plan for somewhere in between.

Thanks for the existing pizzeria advice. I’ll make sure and do that. It would be nice to be able to get a lot of equipment for a great price, however I will not settle for an oven just because it is a good deal. I will make sure that I get the exact one I want.

As far as funding, obtaining it or having enough is not an issue. Obviously the issue is investing the right amount to have the highest ROE. I don’t have the exact budget yet. I haven’t found a location or finalized the idea. Once I get the idea honed in I think a budget can be developed.

Also thanks to those who welcomed me, although I just joined I have lurked for years. I am much more active at pizzamaking.com.

Actually, what is your dream store? Might as well start there. There is very little that hasn’t already been done. Nobody is going to steal your concept (and if they do, consider it a complement). Success is based far more off execution than ideas anyway.

Pizzamancer- A smaller restaurant, probably around 50 seats. WFO with locally (US) sourced ingredients, similar to Biancos. Streamlined menu offering mostly pizzas with a few daily specials of house made pastas and some fresh seafood that would change constantly. Everything always from scratch. Also do breads and a couple amazing apps in a second WFO. Also would like to try and have a deli adjacent to the restaurant. This would allow us to possibly partner with them and do lunch specials like paninnis, antipasto, and a set up for a good lunch prix fixe. I would then have a focus on some specialty wines and amazing microbrews from around the US.

I don’t think I have the ability to do something like this until I have more extensive training. Also location for this style would be much more limiting.

You sounded good until you hit seafood, especially constantly changing seafood. That is probably not a good idea. Customers hate change. There are many exceptions to that of course. Take a look at the Strip Club Meat & Fish. They post some awesome sounding stuff daily on their facebook fan page. If you are in a high traffic upscale tourist area, it might work as well. In general, you have to spend a huge amount of money on location for this to be an effective strategy though.

Getting rid of that, you could easily pull off what you are looking to do. Also, the idea of 200 beers in your selection is good, but as a beer drinker, I find the beer at most of those restaurants is crappy a lot of the time. With 200 selections, you might only sell 6-10 of a beer a month. Not worth it, and the beer quality is usually bad or skunked. Having 6-7 beers that you pay good attention to makes for much better tasting beer. Focus on one supplier who takes care of their inventory. PBR tastes better than the best microbrew that sat out on a pallet in the sun for a few days or in a dusty warehouse for 4 months. I think you got the idea that I am a bit anal about a lot of things, and beer is one as well. Nothing tastes better than a fresh beer served at the proper temp, in the right glass, with the right amount of foam, from clean beer lines. I cleaned mine daily. My staff was happy to get an after shift beer, and my customers noticed the taste.

Made from scratch is great, but be careful. I see places advertising fresh dough made daily. To anyone who knows anything about pizza, is that really a selling point? I don’t want a pizza made with green dough. I want a pizza made with dough that rose slowly over 36-48 hours. I try and source everything locally. It is a good business practice, but quality and consistency trump locally sourced every time.

About seafood, it isn’t that I want to constantly offer it, I just want to rotate different specials throughout the week, such as a pasta, seafood, meat or chicken dish. I wouldn’t offer them all. Just a special from the kitchen each night to give a second option to pizzas. I’d like there always to be a choice for people who come in that would be a surprise, something new, and extremely fresh in addition to the regular items.

I’m not sure where you got the 200 beers part? I just want to have some amazing choices, but no where near 200. I know avid beer drinkers love to find a place that offer some high quality and unique choices. I think this can sometimes be a reason some customers come back. A drink they can’t find anywhere else.

As far as the dough, I would never advertise same day dough. The quickest I would consider is a 24 hour dough, and that is only if it is a room temp rise. My other option would be a bulk to ball then cold rise. I would have the balls ready for lunch at around 48 hours, and the dinner ones would be somewhere around 56. I will probably take option number 2 so that the lunch and dinner pizzas are more consistent.

Thanks for the long response and feedback. I hope my post clears up a bit of my vision. I still am concerned because I could see a SF oven, a diving arm mixer, a full build, etc etc costing me 200k. If I just get my feet wet first since I’m new to the industry, I could probably do it for 1/4 of that cost and then turn the small one into absentee down the road and build my dream one with a ton more knowledge.

Jeff,

Just a suggestion, but if you’re looking to get a little experience in the business before taking the plunge it might not be a bad idea to work for a bit in a pizza shop. You can learn an awful lot by doing so, especially if you can find someone to take you on in a mentoring capacity (i.e., letting them know what your plans are). Making pizza as a hobby and making it for a business are two entirely different things, so you could learn an awful lot regardless of what sort of operation you work in.

Also, you’re assuming that you can open one shop and make it successful enough to make it an absentee establishment so that you can pursue your dream restaurant. Don’t assume. I think (after garnering some experience working in someone else’s restaurant) it would be better to just open in the location you want to be in and grow from there. Start small in terms of menu and grow it into your dream as you get more experience. In a word, plant the seeds for your dream restaurant and grow it. Just my two cents. Whatever you decide, best of luck.