Grossing 300k/year what profit would you be happy with??

Pizza Shop Talk The Think Tank
1

Just a ball park question

If your shop was grossing about 300k per year and you were working about 50 hours a week

what profit would you be happy with.

i am in this situation and i am making close to 43-48k per year. Is this good or bad??

I think i need to do the Mypizzapromo direct mail and try to get sales up alot

Thanks

2

How much could you “farm out” those 50 hours/week for? Is that a $30k job? If so, you’re clearing 13-18k. Are those 50 hours that another person would actually have to pick up or are you there when you don’t really have to be?

300k isn’t much to work with, which you already know. The good news is that your sales can climb a good 10% and not cost you anything but food cost. The building is already there, the man hours are already there, and the oven is already on. You could actually do another $30k in business a year and take $20k of it right to the bank. It doesn’t scale out that well much higher than 10% or so, but it’s there. Unless you just don’t have capacity in the oven, seating, etc, you should be able to pull that 10% in with very little extra cost in labor or other expenses. Yes, there are costs in OBTAINING that extra 10% in revenue, but all in all, unless your market is just saturated, you should be able to pull a really good ROI on that extra push.

The best news is that you’re getting there… keep working on building sales. But overall, yeah, 43-48k on a 300k store can really be bothersome considering the hours you’re putting in… you could make that much money doing lots of things for 50 hours a week and you might even have health insurance or something :). Think of 300k as your STARTING point. As you move up into 450-500k in annual revenue, you’ll be more handsomely rewarded.

3

well i am doing alot better when i bought the place 24 months ago, the old owner was grossing only 148k.

I shut it down and remodeled it and changed the menu

other than my pizza promo direct mail. i am out of ideas.

We are in a small retierment community with only 1500 old folks. and we have a full menu. pizza, pasta, subs, burgers, salads, beer, wine. etc

I have done all sortsa things to boost sales. and it has worked, i just need to go to the next level

I am at the point staff wise, where we do 800 ish a day, but we could easily handle 1200 a day with the same staff, then all i am paying for is the 25% ectra food and the rest is almost all profit.

So i need some ideas to boost sales another 75-100k a year

4

1st of all, you are doing well on 300K. Your earnings are about 15% of sales which is respectable.

Have you looked at raising prices?

5

Ok first off. we are a high quality restaurant in a retirement community.

Our pizzas are great and out toppings are not cheap.

we sell organic black angus burgers

That start at 9.99 each and the Pepper blue with bacon is 12.99. We sell about 250 burgers a month

and the pizzas start at 9.99 for a medium cheese and $1 per topping and a large is 12.99 plus $2 per topping and the 18" family size is 17.99 plus $3.00 per topping.

I cannot imagine rasing our prices. my food cost is about 28% this includes paper products and beer and wine.

i amlost feel bad telling some customers the price of a famliy size Meatza pizza. Its 27.01 with tax

However where we are located in washington in the small town of port ludlow, the average home value is around 700k. so they have money

I just need to get the sales up a little more. And people love our food we hardly ever ever here bad things

6

start delivering.

7

There is not a standard answer to your question. You can make over 100,000 on a 300,000 shop.
It all depends on your costs.

Can you shave 5% on food/paper/drinks by measuring/ shopping around?
How about 5% on labor?
How about raising sales 5%?

The point I’m making is that you have a money machine with your business. You need to crunch all the numbers and identify opportunities.

8

We deliver every thing on the menu.

My labor is a 14-15 % with out paying my self. Mabye this is to high.

I really dont work as hard as i first did, because i was getting burned out. maybe i should cut out more labor

9

i never pay myself i just keep going pay bills and save money as much as possible… my store is paid for i have nothing leased here other then the lease for the property.

10

So Tango are you taking owner distributions or any compensation?

11

I was just looking at pizzapromo and there direct mail, its a huge investment upfront, everything looks nice but minuim is 25,000 pieces for me we are PROBABLY going to try but my wife is skeptical as that is a whole lot of pizza to get an decent RIO.
are you primary residentual

12

Yes it is kinda costly but we are in a up scale community full of rich old folks. If you saw the inside of my pizza place you would understand

I am going to order 25000 and have them driect mail 15000 and sent me 10000 for take out menus.

It will cost about 4500 with the menus and art work and postage. total

I know its costly but i have called some of their customers and they say its the best money they have spent on adverstising period.

13

it doesnt seem like you are far off from the usual as far as money wise…If u work 50 hours a week and you are 7 days then thats prolly two full days not at work and maybe an extra shift…at that point you are paying two people to make up for yourself(We all think we are that good.) you can shave money from all around by shopping prices and watching your paper usage.

I would suggest trying to capture a lunch business. There are many ways you can do it and there are companies that will fax your specials everyday. I use one and have definatly seen at least a 50% increase for lunch.(they always yell at me because i dont push it enough and i can do even more)