I was revisiting my path in the pizza business and laughed, shook my head & high fived myself with some of the decisions I made. It got me thinking about what were some of the bad ideas/decisions that should of been avoided and I started on one, then another and before long I had a list. I thought I’d bring this into the tt so that others joining our industry can have a heads up of our mistakes.
I’m pushing over 20 years in the business and it has been a rollercoster ride. When I melt down everything to being equal, I would say I had misplaced passion in becoming big instead of staying focust on 1 good shop and make it strong.
…misplaced passion in becoming big instead of staying focust on 1 good shop and make it strong.
I remind myself of this every time I have someone asks if I plan on franchising. I have only been around for 6 years but I have seen great operators lose everything by trying to expand.
The best strategic move I made was to open the 2nd shop. Profitability derived from the efficiency of that operation (same town so we combined staff and prep) maded it a very profitable move. BUT, I was able to do it with cash not debt as was also the case in the main store.
I also think that going high end was a good move. We have a number of competitors duking it out for late night cheap pizza. By going for the better end of the market we are able to use great ingredients and charge a fair price.
Do Different:
Control Costs. It took us 2-3 years to unwind some expensive choices. Some were small like having an extra phone line for faxes ($600 per year) rather than sending the occasional fax on on of the regular lines. Others were huge like recognizing the manager’s wish to overstaff which makes his job easier. Get smart about food prices and shop!
Make dough from day one (we bought Rich’s for a year) and buy block cheese. For the first year these two things cost us about $12,000 extra in costs.
Buy company cars from day one. Not so much a cost issue as the fact that it more than doubled the pool of available drivers to hire.
The irony with me was that I had plenty of cash to open my restaurant, but I decided to be greedy and try to get the restaurant done on 100% leverage. I borrowed the money against some stock on a margin account. Because the interest was relatively cheap and the stock paid enough dividends to pay the interest costs I decided to keep it levered.
It was one of the dumbest things I’ve done in this business, to be sure. I got forced to sell the stock cheap when the market came undone in the fall of 2008 to cover the margin loan. If I had just sold some of the stock in 2004 and paid for my first restaurant in cash I would be much better off financially today.
unlike Daddio i did try to expand to soon to quick been open in my little town 7yrs(3 diff buildings)
1st- should have stayed in original rent alot cheaper and bldg alot newer it was only 5yrs old in 2003 when we opened & 2000 Sqft for $400 thought being on main st was the way togo [size=7]wrong [/size]
2nd opened & closed 4 other locations thought i had it all together and that the staff i had at original location could and would take care of the business [size=7]wrong [/size]
3rd pay the tax man when due, got behind a couple years ago while opening 2 stores within 6 month sof each other and thought i can double up next qtr and didnt thought well the penaties and interest couldn’t be that bad [size=7]wrong [/size]
4th wish i hadn’t opened in such a small mkt, thought well this small town is perfect they are just crying out for a hometown pizza shop and i can make it happen [size=7]wrong [/size] ok maybe not on this one
if i had to do it all over again i would just [size=7]KISS[/size] and kept only 1 location small staff and make a living not try to become the next PJ’s and keep my stress level way down
but at least my kids grew up safe in small town america and i didnt have to worry about them getting stabbed in Irving