I know this is a random question because of all the variables but i am looking for an average. I am currantly working in the Computer field and have an opportunity to start a pizza place. I make good money as a I.T. Geek but my heart is in a differnt place. I have worked for pizza places and have a a couple of small bussiness in the past. I would really appreciate any info or advice. thanks
Joe Patrizzi[/b]
I don’t think there is anywhere which lists all the profits from ‘small pizzaria’ so to get an average figure is cvery hard. As you you say there are soooooo many variables that there is simply no answer to this. Is it is new place, is it an existing place, whats the market like, whats the product like, whats the popluation like, whats the competition like, whats your business skills? the list goes on and on and on.
The key things everyone will tell you here is:
- Don’t expect to make money from day one! Typically it can be anything from a year to 2 to 3 before people start make money and you will need capital to fund the business and fund your income for this period.
- Expect to be in the shop ALL the time when you open and live and breath the business thereafter
- I think the ave number of new businesses which fail is something like 1 in 3. In todays climate even if you can get money to back your business (unlikely) business failure is likely to be higher.
- The amount you will make will be a number between loosing everything and making a reasonable living.
none of your business
THanks…
I know how difficult answering that question is so let me put it a differnt way. How much business would a shop have to do to bring the owner 75k a year? Assuming the owner works in the shop. I understand about the hard work and long hours.
Approx 500k/year, maybe less if you’re really good at watching your costs.
lets get that in context of the first question - how many new shops do anywhere near 10k per week in their first, second or even 3rd years? - not many at all - take a look a few posts back about people doing 1k a week, 4k a week etc etc.
It very very easy to put down figure - much hard to achive them.
What is a “small Pizzaria”?
If you are talking 500 sq ft doing <$5,000 a week, you are buying yourself a job. Maybe you can make as much as 50K if your rent is low and you do a good job on costs.
If you are doing $10,000 a week (also a small shop by most measurements) and youo run it yourself and do a good job you can make 150K.
is that a doable figure
I think you’ll have to give some more specific data about the shop and demographics of the area for people to tell you much more. I’m in a small(ish) college town with a lot of competition and do around $4K a week right now, I should be hitting $6K-$7K once I get the shop running right.
True, but I didn’t say whether or not its achievable. He asked what he needs to do to make 75k, and I answered accordingly.
I agree that a $10k shop could be considered small compared to some Big 3 stores or some of the larger indies.
But, I believe the last PT industry report said the average annual volume for an independent show was $250,000, less than 5k per week. Based on that, I would say a $10k store is pretty decent sized. You won’t be able to put it on auto-pilot and retire in the Bahamas, but like Bodegahwy said, you’d probably be well over a six figure income.
I just don’t want you to think it will be easy to get to $10k/week. I’m thinking most of the people here are well below that.
Thanks indie, I live in a upscale small town that is on the outskirts of the capital. There is a MR Gattis PIzza, a Domino’s and a Pizza Inn. The town is very spread out and all of the pizza places are several miles apart. There is no non Commercial pizza places in town and i was hoping to capitalize on that. I just got off the phone with the chamber of commerce here and they tell me we are a town of 28000 with average income of 95000 a year. does that help ?
28,000 is good number of people, but a lot depends on how far spread out they are, how good your location is and what kind of rent you are looking at.
I think that a store doing 400K (~$7500 per week) should be able to make the 75K you are talking about… but again, I would need to know local wage rates and rents to be sure.
A lot of getting to that sale volume has to do with whether the owner focuses on operations or on sytems and marketing. If you get bogged down making dough, mopping floors and tossing pies you will not have the time to market your business and to focus on smooth systems, service levels and local relationships.
You also need to be sure that your ovens and other equipment can handle the volume you are putting in your business plan. A lot of small shop startups skimp on the facilities and can never hit the numbers because they simply can’t make the product when they are under the gun.
My cousin has been in the “small pizza shop” business in San Jose Cali for the last 30 years or so…In all that time he has owned & operated 3 different pizza shops…Has made as much as 90K a year & as low as ZERO a year…Due to competition, rising food & energy costs, rising rent costs & rising labor costs, that’s how volatile this business can be…
He is recently in the phase of rebuilding his business, since he had his business partner bail on him… Risks from all directions…
Thanks for all the info People it gives me alot more to go on…
Actually, my store would be a good barometer for you then. We have about the same population, but average income is probably in the mid 20K range. For competition, we have a Pizza Hut, Papa Johns and Papa Murphy’s along with two smaller chain stores (one that just opened), another strong indie store and an indie store that was a Dominoes but was so bad they got dropped.
Depends on your product and abilities, but seems like you could easily do better than I am.
Thanks indie, did you say you had two stores? How long did it take for you to get 2nd up and running?
Nope, I just have one. It’s been around for about 15 years, but my wife and I just bought it a few months ago.
I would love to here the story of how that decision came about. what were you doing befor you bought the store?
Is it what you thought it would be? would you do it again?
It’s a long one, but…since you asked.
I’m a local kid and have always been a fan of the shop. I sold my bar last summer after I got married to spend more time with her and our two year old. The owner of the shop had closed over the summer because he had to move 12 hours away for his wife’s job and employees were robbing him blind, so he reopened in Sept. and put it up for sale. My wife’s boss approached me in October about wanting to buy this shop and offered me 50% ownership + a small salary to operate it for him. We signed a contract that allowed him to go back home while I took over operations and we would make payments while working to secure loans. This was about one week before the huge financial collapse, and my partner ended up not being worth as much as he once was and had to back out. We approached my wife’s parents, but the bank was now looking for a huge down payment, so they backed out too.
The owner wanted a local family to carry on the tradition he had built who would care about it as much as he did. So, he offered me a chance to buy it on contract for two years with a balloon payment due then. As frustrating and stressful as it has been, it is turning out to be a huge opportunity for our young family. We’re getting the most respected pizza name in town, with a downtown location that has huge visibility, and next to the city auditorium, a building we own instead of rent, equipment and opening inventory for less than $8K start up money.
Now, the reality of the situation is that I have no restaurant experience (let alone pizza experience). I am gifted at operational and financial efficiency, but not in marketing or networking. Also, because of the lack of a business partner that we expected to have, there is no net under us right now. So, if something goes wrong, there is no excess funds to rely on. It’s been a huge learning curve to fight off all the competition here while maintaining (actually, vastly improving) product quality. The Think Tank has been an invaluable resource so far, and I’m sure will continue to be so.
It has absolutely not what I originally thought it would be and there were days that I felt like an absolute fool, but I have learned and grown so much, I would do it again in an instant. I’d be glad to discuss openly any experiences we’ve had to someone who is considering opening a independent pizzeria. Our path has been extremely unique, but I would be thrilled if our story helped or encouraged someone else.