Like Nick said, write a formal business plan. Then give it to a couple of people not involved that are experienced enough to look for flaws. Get numbers if you can from the prior operation. If they are not availabl, see if the utilities will gve you the info. Find out about insurance, non-owned auto for pizza delivery is expensive. Go to the library, there are books that show how to write a plan and they have sample plans you can use for various industries. Talk to a real estate professional. They can get you good demographics for your area. Somebody here should be able to point you to industry trends data showing how often the average households in the various income brackect order pizza and average ticket size. I don’t know where to find it, but I know it is available.
Make all your calculations, estimates, projections and assumptions on the conservative side. Assume cost will be higher than you anticipate and sales will be lower. You won’t be hurt too bad if you do better than projected.
With 30% food cost and 20% labor you only have 50 cents of every dollar to cover your rent, utilities, marketing, telephone, debt, routine maintenace and all the other routine stuff like trash collection, alarm monitoring,bank fees (oohh yeah) etc. That is why the plan is important, you have to identify all these things before you commit and figure out if you can deal with it. Our plan took me three weeks to write, and I started with a completed plan from another store pretty much identical to mine.
How large of an area are you talking about for the 500 people. I have only started up one shop, so I am not an expert, but that would scare me off unless I could honestly beleive I could pull from a larger area, at least a couple of thousand households. Prior to buying this pizza shop, we ate pizza about once a month in our house. We have a lot of customers like that, then again we have a lot that order twice a week. Looking a google earth it doesn’t look like you get to a bigger population until you down by the airport and then back east to big bear. You would have to create a reason for customers to come to you from the other side of the lake.
In addition to cooks, you will need drivers. The larger area you serve, your driver needs go up significantly since they are out of the store longer on each run. Dominos has drilled the number 30 minutes in the consumers mind for the last 30 years. After 30 minutes, each minute seems like ten to the customer.
Just my 2cents, but I live in one of the fastest growing counties in the southeast US and our home construction has slowed to a crawl compared to what it was. The so called experts are saying it will be a lot harder to get a mortgage. (The pendulum is going to swing to far the other way now). I would be carefull about growth estimates in the community unless there is a specific thing driving it.
If you can be honest with yourself and make the numbers work, running a pizzaria is not a bad way to make a living. The hours are unpleasant(the system would not allow the term I originally chose), vacations are limited to 3 or 4 days at a time for most of us, but you are the boss and you get the benefit of your own work. Prior to opening your own shop, you should get some experience working with pizza. You will have to train those working for you.
Nick stressed the plan, I would like to stress honesty, to yourself. Do not make assumptions you don’t know you can meet. Do not fudge the numbers be what they need to be to show you can succesfull. Let the numbers be what they are and if they tell you its not a good idea, believe them. Numbers don’t lie without help.
In addition to deciding if the business could be sustained you also have to evaluate yourself. I know several people who have been so high on the idea of owning their own place that they never considered what was really involved in the day to day operation. I know I was not prepared for it. Dealing with employees is the biggest pain in the butt, but can also be very rewarding. Dealing with salespeople will drive you insane. Your customers are your best friends and they also give you fits and you can not let on that part of you would really like to choke them while you are remaking the pizza because they had their 6 year old call in the order and he screwed it up :evil: . You have to be ready to deal with these things with a smile because nobody wants to buy pizza from a grumpy jerk. (I know, my temper has cost me customers at times before I learned to hold it in and smile like Joe Biden talking about a middle class tax cut )