My son is looking to start his own shop. Looking at an older building that would be completely refinished inside for us and we start with all new equipment. This is going away from a town but on the main drag toward the country.
The population in a (one mile radius) is only 1088 & households 421
Closest pizza shop would be 1 1/2 mile each way from this building.
Is this too little of a population and household to support a shop?
3 mile radius jumps to 19,117 population and household of 7,676
if there are reasons for a large traffic volume past the shop, no reason it shouldn’t work. We’re in a somewhat similar situation, 2.600 in town and c. 15,000 within a 5 mile radius. We are at a major intersection, where a 4-lane highway ends, traffic is forced to go essentially right past us to continue south (or to get onto the 4lane from the south). We are also 2 minutes from the county courthouse and surrounding businesses, like lawyers, bonds companies, realtors, title companies, and 10 minutes from a consistently growing junior college.
If your sons’ shop has anything close to this type of base nearby, it should be fine.
I’m not an expert on this topic but I’ve worked with stores in a similar type of location. One is about 35-miles south of Kansas City, it serves up GREAT pizza with service to go with it. They have been written up in the Kansas City Star as a “pizzeria with a cult following”. Two others that come to mind, one is very close to us, and they are stuck out about 10-miles from no place Kansas, population in the town is probably not much more than a couple hundred, and they do quite well as they cater to the local farming community, another place is out in western Kansas, I swear it is 20-miles from no place, but there is a Pizza Hut! My gosh! Who goes there? The answer is everyone within about a 25-mile radius. They are the local land mark, the meeting place for all of the locals in the farming community, and the competition is -0-. My advice is to serve up a great product, offer it at a fair price, with a good side order of FRIENDLY SERVICE. I’d try to stay away from delivery if I can. Sure, people will moan and groan that you don’t have delivery, but they’ll get used to it, and if you really do have GREAT pizza, I’ve found that they’ll come for your dine in or carry out. Check out <www.ajsnypizza.com> here in Manhattan, and Topeka, Kansas. Adam Peyton, the owner has three stores now (he just celibrated his fifth year in business) and he only offers dine in and carry out in a market where it seems everyone delivers, except for AJ’s. You just can’t believe how much DICO only improved store operations. Is this the right track for everyone? I can’t answer that, but like I told Adam, we can always add delivery at a later date if we feel we need to, but it is hard to delete once you have started it.
Just one man’s opinion.
Tom Lehmann/ The Dough Doctor
My gut says go for it, but my son is afraid he won’t have a busy lunch hour at this location because of not having alot of business people. He has plenty of support from his freinds that all have their own shops. Bottom line we have got to pay the bills if it’s not that busy. I want him to do it but i’m scared crapless.
I do not have any knowledge or experience to comment on the population, and even if I did the others have done a fantastic job explaining how it does work. But I do want to share something of mine that relates to you.
When I opened my shop I had just turned 24, and put my entire savings into the shop. My father helped me with a little working capital to get things going. I have been doing pizza in a chain environment for years, and was very skilled with marketing but marketing takes money, and all my working capital was coming from my dad. Unfortunately, he is the nervous type to always look at worst case scenarios, and I am the go hard or go home type. For a little over a year we were slowly bleeding money, not getting customers to come in and my dad continually stressing about what I was going to do (he did not want an ownership in the business, he just wanted to invest in me).
I finally got a hold of a little extra cash myself and, without him knowing put it all into LSM efforts. Once we had seen a positive result, I told him how it had happened. He was still nervous, but now I wasn’t reliant on him for the working capital, and I kept reinvesting every little bit willing to lose it all, but hoping for a big return. I am now up over 100% from last year in sales, and my bottom line is positive instead of negative even with the marketing costs.
My reason for sharing that is that I think one of the worst things I could’ve done, is exactly what we did at the beginning: Opened Halfway. Go at it with smart confidence, with the mindset that you know you will make it, and refusing to take no for an answer. Working 4 walls marketing, social media, and any free marketing you can do (I gave free pizzas to every business within a mile radius as one of the LSMs I spoke of).
Sorry to shy away off topic, I just thought the experience might be of some value to you and your son as well.
I can relate to that because my dad was a Tile mechanic and was afraid to start his own business. I started a cleaning business 17 years ago and I’m still here.
What is LSM, I’m sure this is something I should know.
Local Store Marketing I think…
When I worked for one of the big three we used LSM (Royster hit it on the nose, Local Store Marketing) to reference things like door hanging, business flyering, banner shaking etc that was done specifically to raise sales at a specific location or within a certain radius as opposed to national marketing such as TV, Radio, Red Plum, etc.
We ate lunch at a freinds pizza shop today. He asked if we made any decision yet on a location. Just said we were still considering the location I been talking about.
He just gave me concerned look. He doesnt think its a good location. They have two shops both doing over 10 per week each. They feel if a location cant do 10 or more per week its not good.
To get that kind of location around here your about 3200.00 to 4800.00 month just for rent. The building I like has a lower population in the country and would run 1200.00 per month rent.
I’ll take all the input available.
with good cost controls, no reason a smaller shop can’t be profitable. No one will get rich right away, but cashflow is cashflow, no matter what level. If you and your son know what to do to keep within a budget, you could well be fine. Of course, if the business doesn’t work for the customers, you won’t make money no matter what size or location.
The building we are looking at is 2000 square feet which is large for a start up. My wife suggested to include a seperate room we could promote for parties or business meetings during lunch.
We thought about delivery because we don’t have many business close by. Insurance is the issue if you want to be legal. All the pizza people we know just send people out delivering and don’t even worrie about getting in an accident.
Any feed back on delivery wanted
I would say where you are located deliveries would be a must if you want to tap into the other close by population areas
I couldn’t see people driving out to you when they have such a large choice close by
Unfortunately today people are lazy and want to stay at home rather than jump in the car to pick up their order
Without delivery I can’t see you doing anything more than minimal sales
ps I HATE delivery but do it because it is 20% of my business in volume and around 27% in $$
Thanks Wa Dave
I understand what your saying and yes we know it would not be a big money maker at first.
We looked at a existing shop last night. This place is at a half decent spot doing around 5 per week. Rent is alot more and this place has not been taken care of. One pie oven thats working and everything is total filth and very tight 1000 square feet.
Question to everyone:
Would you buy this for 50,000 and work with crappy equipment and a small shop?
Start at the location I’ve been talking about with new equipment and a large shop then market the shop. All the businesses are 1.5 miles west of us.