Hello from Queensland Australia

Hi, thought i would introduce myself, Ive been reading this forum for probably over a year now, finally registered yesterday. I have been really impressed with the amount of info and the pizza guys freely sharing their experience and helping out the less experienced.

A little about me… I’m 35 and originally from New Zealand. I am currently a supervisor in a metal processing factory in Brisbane, been here for 10 years, Ive been in the metal trade for most of my working life, about 3 years ago i started dabbling in business, i was importing stuff from China and selling on eBay, was making some good pocket money, I learned some good lessons and i was loving playing with numbers, finding out what sold and what didnt, making sure customers were happy,doing research. I loved the whole idea of running a business by myself. It got me thinking about getting into business, but what business.
I knew i wanted to get into the takeaway food industry, i thought of fish and chips, burgers etc, but Ive always had a love of pizza, i used to love making home pizzas, but they were nothing great, started researching how to make great pizzas, after some time I started making awesome pizzas (well by my standard lol) they were coming out great, loved playing with different dough techniques, topping combination’s. I discovered i have a real passion for pizza, i was becoming obsessed haha.
I started thinking about getting into a franchise, mainly due to my lack of business experience, i researched all the major pizza franchises in Australia, ended up seriously looking into 1 franchise, but after a while i decided i would get no satisfaction of churning out mass produced cheap pizza everyday, i then started researching inde stores, and i was blown away by the quality difference, i had always just ordered pizza from the big chains before, now i just cant eat that mass produced cheap crap anymore, no matter how cheap it is.

My plan now is to buy an existing inde store, i seriously looked at 1 about 2 months ago, the guy was prepared to lease the business to me for 12 months, with option to buy after the 12 months.the numbers he were telling me were ok, not great, but i could see improvements i could make to increase turnover. i asked him if i could see the books, he said he has 3 business’s all tied in together and he would have to get his accountant to separate the books, 2 weeks went by, hadn’t heard from him, i contacted him asking if i could see the books, he said they aren’t ready yet but he could write down some numbers for me. Ive decided i don’t want to take his word for it and i really want to see the books, so 2 months have gone by and i haven’t heard anything from him, i think i will give this opportunity a miss.

As of now Ive decided i need some experience in a pizza shop, its a bit hard as the hours i work are 2pm to 10pm.
A couple of questions Id like to ask u inde’s…

  1. Would u let someone come into your store for experience, I’m thinking of asking an inde operator if they would like someone to help out for no charge, just for some experience.
  2. What is your biggest headache running a pizzeria.
  3. When I buy a store i would want the previous owner to train me in all aspects of running the business for a period of say 1 month, is this a reasonable request?
  4. I used to cook pizzas with great success when i was using an electric oven, but now i have a gas oven and the dough doesn’t rise, the outer crust is hard as a rock and the rest of the base is uncooked, i thought it maybe my dough, but i took an uncooked pizza over to my friends place and cooked it in his electric oven and it came out perfect?, ive tried lowering the temperature (i normally set the oven at 250 Celsius), placing the pizza on the low, then middle then high rack, and tried with and with out a pizza stone. I’m thinking my oven is dodgy, do u guys know of any problems cooking with gas?

Thanks for your time and the wealth of info i have gained from this forum
Mark

Theres an old saying here “Don’t walk away from this deal, RUN”

If your buying a potential business, and they will not show you “the books”, It is a big red flag.

If i was interested in a business, i would:

  1. Need to see tax returns (State and federal). (Your in Austrailia, so i don’t know how it works down there)
  2. See invoices from all suppliers.
  3. See Lease.

Theres alot more stuff to look at here…

With regards to your questions:

  1. If you walked into my store “to help out” for experience, i don’t know if you may be a potential competitor, or anything. So i think i would pass. On the other hand, people probably won’t resist the free labor.

  2. Biggest Headache running the store: many things: employees, landlord, suppliers out of product, etc…

  3. If you are going to buy a pizza business, work there for a few weeks for free, to check things out… You can always walk away from it without losing money.

  4. Tom Lehmann the dough doctor is your man for this question.

Mark
Welcome to the forum. I’m from a Perth northern suburb and have been in the industry for 5 years.
I came in untrained and will no knowledge of the industry but with a number of years in sales and marketing. Plus I owned a roadhouse / truck stop in Coffs Harbour for 10 years back in the 70/80’s so I had a bit of ffod knowledge.
As many of the older (time on the boards, not age) posters here would recall someof my earlu posts with staff problems and other industry matters. The info I got from here was immeasurable and some great friendships have developed.

A lot of the info here is not directly relevant to us in Oz but there is untold others that cannot and should not be overlooked.

As far as getting a store the business enviroment in Australia now leads most to buying a job. Our wage system is up the creek especially with the Rudd (or should I say Crudd) goverment’s new wage sytem that comes into efffect from July 1st. This will drive many operators to the wall with the new penalty rates imposed. Utility charges are going through the roof and food costs are astronimcal, so making a profit is extremely difficult. Rents outside of getting a dilapidated old store in a poor location are extreme. And when you go to look at a store to buy the figures are mainly inflated and the equipment in need of repair or replacement. Sales will show high but tax figures will show a loss or minimal profits. You just have to do lots and lots of research and searching out the truth - sorting the wheat from the chaff.

Feeling depressed ? Maybe then don’t read further. But if you are game there is more.

Once you do your due dilligence on figures then spend at least 2 - 3 months doing it on others things we don’t normally think about. Equipment quality and compliance; staff availability and potential hiring possibilities / problems in the area selected; local goverment requirements; competitors in the area, not only pizza; shop infrastructure and the condition of it including electrical boards, plumbing, drainage, pest invasion … thew list is endless. Check with the local government of potential new shopping malls going in the area, road deviations, new urban developments etc.
By doing all this you will minimise the “fools tax” that we have all paid by overlooking some of this.

Remember if someone is selling it is because they are trying to make a buck or are getting out before they go under. You can pick up a distressed sale or closure cheaper but to do so you really need to know your ABC to get it to work for you.

Demographics will determine what sort of dollars you can get out of your shop and what type of business plan you need to develop. Without a detailed business plan you have no hope. A plan properly done will be exhaustive work taking all of the ablove into account.

Still here?

As far as a franchise goes I would be very wary. Eagle Boys are opening stores on the doorsteps of others as are Dominos. Pizza Hut are struggling for survival. All take around 12.5% for fees and advertising. Average Eagle Boys entry fees are $350k - $600K depending on type of store. Not sure on the others. With a franchise you are tied to their marketing, promotions, costs, sells, product etc. OK if you are brain dead and can’t think to do it yourself, but where is the enjoyment?

Getting to work for free, I don’t know about. Better to get a casual job working in a store as a driver where you get to do prepping and be able to work the make bench. Keep the eyes open and take in as much as you can. I wouldn’t let anyone withoput experience or just off the street manage my store for me, especially someone wanting to open up their own.

No figures then run away as fast as you can.
If you buy get an agreement to work for free at least 6 days per week for a month prior to taking over the store. You will get more traing that way than after you own the place. The owner still has money to amke up to the day of the sale so he will run it as normal. After he sells he will lose interest and you will want to do it your way, plus you will have the headaches of owning a store to deal with.
If interested in a store and put in an interest to purchase sit in the store very night from opening until the quiet time and count customers, check till receipts, staff levels etc. This way you can see what staff is good or bad, true sales levels and potential. You will quickly see if there are opeartional problems. If you see a steady stream of customers on normally quiet nights then be wary of the owner padding the sales by getting friends or family to come in to inflate sales. Ask for detailed week by week sales for the past 3 years at a minimum. If they cant produce then run.

I will let others add their bits now. Don’t feel that this has been a personal attack but many of us have paid “fools tax” dearly by thinking we knew everything about buying a business. In the end of the day don’t buy on emotion as it is the quickest track to financial ruin.

Best of luck
Dave

Thanks for the replys, really appreciate it.
Dave, you’ve bought alot of things to my attention that I hadn’t even thought about!!! But u haven’t totally scared me off yet haha. I have been following your posts for quite a while now, I was hoping u would reply to my post, luckily I am the type of person who researchs the hell out of most everything I purchase, you have given me a few other things to research

Mark;
I’ll leave the business and operations questions for experts much better than I in those matters to answer, but for your dough/pizza question, lets take a look at it. Typically, an electric oven bakes drier than a gas oven, and even withthe commercial ovens, bake time is longer, and the temperature is somewhat higher. This isn’t to say that electric ovens are bad, they just bake differently from gas ovens, as you have already discovered. Depending upon the design of the home oven, you might be getting more radiant heat from the electric oven than from the gas oven. Does the gas oven have an exposed flame on both the top and bottom of the oven, or is it covered by a piece of steel? I’m betting that the electric oven has an exposed element on both the top and bottom of the oven My home oven is electric too). Your dough formula might also explain some of the differences, especially if you’re using sugar in the dough formulation, which would cause the dough to color up faster (not bake faster) than a dough formulated without sugar.
If you can share your dough formula and dough management procedure with us that would help us if figuring out what’s happening.
Be sure to spend some time exploring the rest of the PMQ site, especially the Manager’s Tool Box and the Recipe Bank, there’s a lot of great information available here.
Welcome to the Think Tank!
Tom Lehmann/The Dough Doctor