So after getting out the pizza business 3 years ago, I still some what have the itch. Before I had a dining room, full service with a bar and we did delivery. Curious if anyone thinks a casual type place your order get your own drinks and carryout location could do low volume, but also low labor and be viable financially? I’d like to do deck ovens this time around, as I think they put out a better product. I don’t want to get into something though where I need more then 5 or 6 employees for the whole week to run the place. Thoughts?
I think a low volume shop can make money with the right circumstances.
Low rent
No delivery
Hands on owner
Small town with little to no competition.
I know a guy who had 5 delcos in a medium sized city years ago. He ended up closing them and opened 1 small shop in a small town. Doing 6-7k/week out of this 500 sq ft hole in the wall he told me he was making more profit than when he had all 5 shops firing on all cylinders. He was only open 60 hours/week. He had 3 or 4 part time employees. Did little to no advertising as there was no competition. very low overhead($300/month rent). Food cost 25%, labor 15% . He ended up making over $3000 week PROFIT.
The best part about a small town is you know the big guys are not going to come in 3 months after you open. The worst part is that if 2 or 3 other independents follow you in there is not enough business to go around.
A friend of a friend has a hot dog cart at a large hardware store…He works 8 or 9 months a year…Sales average 800.00 a day…Rent is 35.00 a day including power, water and freezer and storage space…My best guess is his food cost is 20% to 25%…It looks to me he is making more than 135,000 a year and gets to spend his winters in the South Pacific…
The point is, that with the right location and the right market, you should be able to do the same in a pizza place…May be a pizza truck at a high traffic spot where no one else can get in…And if you do find a small market, you need to make sure you “own” the market so no one can penetrate if they try to…
Sounds like fun if I ever get the pizza bug again…
Defining terms will be important here . . . what does ‘small town’ mean? ‘Low volume’?
It is a brutal existance running a truly low volume shop in a town of <2500 people. I would steer people to a place with somewhere closer to 7500 to 10,000 population for a small town, low volume shop. The smaller the service population the more vulnerable to local economic strife, poulation fluxuation, customer attrition, and unsophisticated elected officials. Just a little different perspective from down here :o)
It can be done, smoothly, effectively, and with some profitability. Gotta decide if it is a primary support revenue, or an investment venture. Might be tough to raise a family on . . . . decent shot at making some supplemental profit. Like Royce said, done well in the right place, it could probably spew money right from the oven! Perfect storm could bring 5 figures, I guess, with enough service population.
I want to add my 2 cents on this one. Why limit a low volume shop to only small markets? Other than the higher rent… all of your other monthly and operating expenses will be roughly the same. Now finding $300 a month anywhere these days seems like a stretch…but why not find a nice small space and put the same effort into it that you would for a town of 10k but instead a town of 50-100k. There is a lot of commercial space out there looking to be occupied, so why not offer a high quality pie on a smaller volume there. Look at some of the recent articles in PMQ about these small, high quality pizza shops that are doing very well in large cities. The downside to this will be when you realize that you are no longer low volume and sales go up…and who is going to complain about that one! :idea:
I was told you either do “quality or quantity” by the great John G!
I do 5 digits weekly year round in a 3500 person town. Going on 3 years.
So far have fought off two other indies and PH. I’ve done “quantity” for others and been successful.
Now, I do quality. Yes, I’m very hands on and give back to the town every opp I can.
I have to agree with this.
I believe if i was doing 1/2 the business that i am currently doing, No delivery, Lower rent, i would be making more money then i am.
I currently have to understaff a little to maximize profit.
I used to run a burger joint…We had rotisserie chickens…We sold our chickens for about 50% more than the grocery store just down the street…It took me a while for me to understand that folks were willing to pay a “premium” price because they could get in and out of our location quickly (easy parking, no long lines at checkout) and we would reserve their chicken…The grocery store sold several hundred birds a day…We sold maybe 50 but our margin was huge…
Royster I would take the gamble to say that you probably had a better bird over the grocery store also? You make a good point about location and time to run in and get out. Everyone is in such a rush these days that the faster in and out they are, the more likely they will come back. Now if you can do great food and in a timely fashion… people will pay a premium for that one. :!: