NY to FL: Logging My Journey to Open a Pizzeria

Pizza Shop Talk The Think Tank
21

Thanks for the comments. I’m glad some people aren’t completely supportive on these boards. It forces me to look at things from all angles which is important.

  1. The whole money issue has been pretty clear. Our plan is pretty simple. Because of all the assets the possess, they’ll be able to get a loan and use these assets as collateral. This business will be 100% mine, as will the responsibility to pay the loan. If things fall through I’ll be responsible along with my fiance to pay off this loan . Even in the accounting feilds in the lower levels, 40k/yr for each of us with our minimal expenses will be able to handle the loan if things don’t work out. Also, we’ve saved up a lot of money ourselves over the last couple years, each working multiple jobs and continually monitoring our expenses.

  2. Location is key. I plan to spend a few months exhausting every resource possible before choosing a spot. I’m already about a month in. Fortunately for me, I don’t NEED this business now. I’m in no rush to get this done, so there’s no sense of urgency to find somewhere.

  3. It would be EASY to spend 200k, but if I can find a spot that has been a restaurant and save maybe 50-75k there, buy used equpiment, etc. I’m all for it. I’m a beginner. I’ll wait for the profits to roll in before the fancy LCDs, decor, etc.

Later tonight I’ll be posting my thoughts on the current search. Today I ventured into Sarasota. Who knew there was an Amish area of Sarasota? I guess I’m still a Florida newbie, hah!

22

Good Luck to you NYFLPizza.

Similar to you, I am in my 20’s, 25 to be exact, been in the industry since I was 18, and went to college and got a BS in Biology. I’ve realized over time that I want to be in the pizza business not because I want to get rich, but because I love the business. In about two months time I will be managing the owners second store about 11 hours a day every day. Hope to save up enough money to open my own place in 3-5 years time.

I definitely do not come from a family with money. My grandparents did okay, but my parents failed miserably. Still love 'em though. I will have to open my place on 60,000 or less. It really isn’t an option for me to open a place with 100,000 or 200,000. Where would I find money like that?

BTW, I love that city-data site. Pretty interesting. I’ve been checking out cities around the rocky mountain states and the pacific north west. Currently I’m in California.

23

Any chance the owner would consider going into a 3rd store with a partner, or possibly sell you a share of one of his stores? Maybe you can do something in just a couple years instead of 3-5. After successfully managing his second store, approach him with your plan to do your own. Maybe instead of losing you, he’ll work with ya somehow. A co-worker of mine worked for a guy who was very successful, owned numerous pizzerias, and gave small shares, maybe 10% or so of his business to his top employees that were with him for quite some time. They’d make their pay and 10% of the business’ profit. This would allow them to save up and possibly go in as a partner on the owner’s next one. All possible options.

Also, be careful on the site I linked in my first post. I believe the data is from 2008. I’d be sure to cross reference it with other data before making any decisions based on it.

24

Best post of this thread and very true.

I was very similar to you NYFLPizza. I started planning my restaurant when I was 23, opened when I was 26. I worked in a pizza place all through college, primarily as a driver. My degree is in finance and I’m currently pursuing a master’s degree. Trust me, you will be using your degree in this business and you shouldn’t look at it as bailing on your degree. As a matter of fact, I think my background in finance and accounting is one of my major competitive advantages.

Also like you, I entered into this business with a large amount of cash for a 26 year old. I was sitting on about 250k when I started planning and ended up spending about $120k to open my first place. I’m still open almost 6 years later and now have a much larger second location.

It has not been all smooth sailing, but I’m sure you’re not expecting it to be. We’ve run into our fair share of financial problems along the way and there have been days (months even) that I would have given this thing away to anybody that wanted it. I’d give anything to rewind 6 years and reopen knowing what I know now! I suspect most of the owners here would say the same thing, and you’ll be back in 5 years saying it too. I was fortunate enough to have enough fall back cash that I had time to learn my lessons and come out alive. Many are not as lucky and they either end up having to close or stuck in a 70 hour per week job that pays $30,000 per year. The advice about not spending that entire $200k upfront is extremely sound.

Best of luck to you!

25

2/3/10 - Trip to Sarasota

Today I ventured out to Sarasota. I hit exit 213 (Fruitville Road, SR 780) and exit 210 (Bee Ridge Road, SR 758). This area is slightly older than the three exits above. Most plazas are older buildings with older architecture. Not that this is a problem, but just an observation I made. I traveled westbound on each road up to Lockridge rd which is probably less than a mile shy of 301. I wasn’t too happy with my discoveries.

First was Fruitville road. There was a nice small plaza on the right hand side after exiting the highway. Before I get into it, here are my basic criteria in my pizza search:

  1. Middle class area - I don’t want a lower class area that chooses the chain pizza’s $5.99 pies, and I don’t want the upper class areas (not many of those) where people would prefer a fancy dine in restaurant.

  2. High traffic area - I’ve been looking at the FDOT web page to track this. Most of the places I’m looking that are in excess of 35,000 cars that will pass by the establishment daily. These areas tend to be closer to the highway, I75. The further off the highway, the more the traffic dies down.

  3. Good visibility - I’d rather not have a place where people need to turn up a couple side roads to get there. Visible from the main road is my goal. I’d imagine being visible from the main road will be a catalyst to a quicker start.

I’m sure there are more that I’m not thinking of now, but these are the basics.

Fruitville road had a small plaza right off the highway on the right. There were about 4-5 stores easily visible from the road, and then a Sam’s club behind the plaza. Unfortunately, there were no opportunities for leasing here. All of the spots were taken. As I continued Westbound, every plaza seemed to have a pizza place. Most were the chains, and sprinkled in were the occasional small business pizzerias. There was an older plaza I found right on the corner of Fruitville and Beneva road. I saw a lot of older people along with Amish people in the plaza. Odd combination? I didn’t get the best vibes from the area, but I left a message with the leasing agent anyway to see what the deal was with the open spots. Unfortunately, that was about it for Fruitville.

Bee Ridge road was more of the same. It was an older community once again littered with chain pizzerias. I was excited a couple times as I found a few plazas that seemed to be rather busy, but I always seemed to start at the wrong end and would find a pizzeria in one of the last lots in the plaza. I spent about an hour traveling up and down on this road, but wasn’t able to find any appealing locations. Any spot was either pinned between pizzerias, or had a pizzeria in the plaza already.

Here’s one issue I seem to have. I’ve found one location that I’m very fond of. Every other spot I find I tend to compare it to this one. I’m not sure if that’s the best idea because I instantly rule out locations with a quick comparison to my favorite one to this point. In these preliminary stages, I probably need to be a bit more open minded. I could easily begin negotiations with the place I currently have ranked as my highest, just to find out there’s no chance the deal will go down. Then I’ll be back to square one with little information on the other plazas that I initially dismissed.

The plaza I have ranked #1 right now is nearly perfect. It’s in an extremely high traffic area, a very large and well maintained plaza that’s relatively new, great visibility from the road and right off of the highway. Here’s the issue. There are basically two spots available. I’ll post a picture to show my dillema.

Location A was a former pizzeria, 1900 sq ft. This should create HUGE initial savings. The majority of the electrical and plumbing area already in place. For some reason the floors were all torn up, but I’ll still save 10’s of thousands with the essentials already in place. I believe there is also a grease trap which will save another few grand. I have the phone number for the Manatee County Government Building Department which I plan on calling tomorrow. Hopefully they can dig up the plans that the last owner had so I can see what’s already in place. To me this spot is perfect besides ONE issue. Parking. Take a close look at the picture. There are a few spots lined up close by, but they’re usually filled up, I bet by employees that are lazy and don’t want to walk. I’m unsure of what type of problem this will create. Will people choose not to come here because they have to walk a couple hundred feet to their car carrying a pizza?

Location B is a different story. There are plenty of parking spaces right outside of this lot. I believe it’s currently a 4900 sq ft lot they plan on splitting into 3000 and 1900. It’s also the first store you’ll see when you pull into the plaza. This can only be a good thing. The issue with this one is that the rent is going to be a few dollars more per sq ft, and I’ll certainly be shelling out 10s of thousands to get the initial plumbing and electrical foundation in place.

Assuming most of the time the close spots are taken, how much of a downfall is it to have a small walk to the car for a takeout order? Dine in is much more popular in FL, but I’d still say that over 2/3rds is takeout. I’d like to hear some thoughts on this one.

I plan on hitting one last exit tomorrow, 207. After that, I’ll be traveling up and down 301 out by the gulf. I’d rather not have to travel this far to work daily, but everything is an option at this point.

26

As usual, two very nice and wise posts from WIZ & PIPER. These guys rock! I read everything they write and try and apply most of it! Sorry mine fell south… but there’s something there to reflect on. Best of luck. I look forward to watching this thread progress.

27

Thanks for the post. One of my major goals in logging everything I’m thinking through this whole process is to have people with the experience such as yourself help prevent me from making the plethora of mistakes I’m bound to make. I’m going to make them, but my goal is to limit them.

28

NYFLPizza,

As you are, I’m searching for my next location. But I already know its going to cost. Perhaps .75 - 1.25M. I’m not all about HITW but remember, its all about making money. *There is the guy who’s posted on the board, who’s fantastic at doing low dollar startup/take-overs (was that Jroock?) … but someone who nailed a few there…

29

Yours didn’t fall south. As you mentioned, perception is important, well beyond how people on a small forum view me. To my customers, I don’t wanna come off as the 23 year old who comes from rich parents and was handed a pizzeria. My parents aren’t rich and I’m not going to be handed this pizzeria, but I can see how giving off that perception could be bad for business.

Because of your post I’ll be sure to continue the rambling in my posts and be as clear as possible about my situation and my intentions. I appreciate every post and hope to gain something from everyone’s feedback.

And if you’re searching for a ria in that range, you’ve obviously had success in the past. That’s crazy! I hope one day to move up in the ranks and be able to get into something like that. Do you have any web pages for your locations? I’d love to see what you’re involved in.

30

With the right location and building/staff, you can do $30 - 50K+ weeks. *Not DELCO. But its going to cost big $$s to get that building…

31

I’m a little confused by this post. Do you mean in the location in my picture you think there’s potential for 30-50k weeks? Which one, A or B?

What does DELCO mean? (sorry if that’s a noob question)

I’ve been in contact with the leasing agent. It’ll likely be high teens low 20’s / sq ft for A, and probably a few dollars more for B.

32

No, I didn’t see that in your locations. My next store will do that, but it depends on finding the right location, building & staff. *DELCO is Delivery/Carry-out. I may be a newb, but 75% of my sales are dine-in/carry-out, with the trend moving with dine-in. *Keep in mind, my delivery has increased yoy and is note worthy. I suspect the high-volume stores (1.5MIL+ do big time dine-in). We are lucky to have some of those operators on this board. Perhaps they’ll chime in.

33

What do you think about the whole parking situation I mentioned in location A?

34

$20 a square foot for rent in a strip mall? Thats $20,000 a month just in rent! :shock: That cannot be right.

How much walk-by traffic do these locations have? For that kind of rent your gonna want at least 500 people a day walking by your place (not driving by). Usually, the advantage of high rents is that you do not have to advertise.

35

Well, it is right but you have it confused. In commercial sites, it’s costs are usually calculated by taking your rent per sq ft (we’ll say $25 after CAM charges, taxes, garbage, etc.), multiplying it by the size (we’ll say 2000 sq ft for arguments sake) then dividing by 12 to arrive at your monthly rent:

$25 x 2000 sq ft = $50,000/yr
$50,000/yr / 12 months = $4166.66 / month

It’s not $20,000, but it’s still damn expensive. Add that to the fact that they’ll probably want you to be locked in to a lease for a few years? Gotta certainly try and work out some sort of deal into those contracts. Maybe some sort of escalating contract where the first year or two are 20% less, maybe only $20/sq ft. Or maybe you can get x months for free, etc.

What type of deals have fellow forum members gotten worked into their lease agreements?

36

thank you - glad to help!!!

37

LOL… of course it cannot be right, you did your math wrong. By your math to get it down to normal rent it would have to be a $2 a square foot… And THAT cannot be right.

The last place I worked at was $38/sq ft. Talk about high rent.

38

NYFL,
your description of you drive through sarasota was good, I pictured exactly what you were stating due to my time living and working in these area’s. The office I worked out of was on old 301 & Televast road right near the airport.

what you are going to want to do, is drive south on hwy 301, it merges into 41 at the south end of the downtown sarasota area (I believe there is a McDonald’s right at that merger) continue south and go down past sarasota square mall. No need to venture down into Venice.
Head west onto Siesta Key, do that drive and look at all the pizza shops through that area, you’ll end up on 41 again (Tamiami trail) now when you are heading north, follow the route for Hwy 41, and drive that past the airport, all the way into bradenton. Head west on cortez road, follow that until about 75th street and head north until you hit manatee Ave. in bradenton. Drive that east until downtown Bradenton, You can take one of the 2 bridges north into palmetto, I suggest you take the old bridge which is 41, take this through palmetto. Keep your doors locked, if you have a handgun, keep it loaded and handy in your glove compartment (legal in FL with no licensing requirements) and see just how “special” Palmetto really is. Maybe a drive up 301 by Cortez mall will give you a better understanding of the area too. If the street numbers have 'East" in their descriptor, be vary aware of your surroundings, it gets rough in that area, If you see a cute girl hitchhiking, do not pick her up, she is most likely a working girl or a sting set-up from the sheriff’s dept. You’ll see this even in the middle of the day down there with crackheads offering favors for $10.00

As I mentioned earlier, I lived & worked in that exact area back in the late 1980’s, I was a field service electronics technician by day, and after my 9-5, I delivered Chinese food at night in the Greater Bradenton area.
Just count the number of pizza shops along manatee ave and stop for a shake at the 'Shake Pit" on near 20th & Manatee ave, get the banana chocolate shake or malt, they are great. watch the cars go buy and watch the number of pizza delivery vehicles you see in 1/2 hour. You’ll be amazed!

You’ll notice all avenues in bradenton go east/west, and all the streets go north/south. it is a delivery drivers dream!! In Palmetto, it is exactly opposite set-up .
But there are very rough area’s on the east side where you plan to set up shop. And I would not send a driver near there for fear of robbery or murder over a few bucks or a pizza.

I am not trying to shoot down your plans, but since you are new to the area, the wonderment of your unique new surroundings is still in your mind and you have just not noticed the heavy criminal element and the major amount of competition yet.

You looked at city-data, that is good, great actually. Now look at the median income of your target audience. Old farts do not eat pizza too much. The young broke crowd goes for the cheapest crap they can get. And you have very few working middle class in that area.
I have a very loathsome view of that area for all the crap I was forced to deal with down there. I want you to see what I am referring to now before you spend a pile of money and realize it later.

I am in the start-up process of opening a pizza shop myself, but in a far different market. I’ll start a thread on my venture soon enough. I am enjoying reading other peoples adventures here.,

39

I wish I could disagree, but the areas you speak of are pretty downtrodden, and your depiction of the area was accurate as well. I leave way out east on 301 in Parrish, a nice quiet area. They’re finally doing some road work up here to expand it from being just one lane roads each way.

When I worked as a staff accountant way out into Bradenton, each day I drove west on 301 and went all the way down towards the end and made a left onto 41/45 which was the second bridge. Took that south to 64 and went west on 64th most of the way down. I worked right near Blake medical. I know exactly what you’re saying about the shady areas. It’s certainly a different environment for me. I lived in NY, about 60 miles north of NY city. People didn’t hesitate to leave home with their doors unlock, cars unlocked, etc. I lived in the middle of the woods. The pizzeria I worked in was in the middle of the woods. It was a small area, with just not much going on.

However, even with your dark light shed on the situation, business is still booming here. There are areas that are flourishing, and don’t have the crime rates of areas such as Palmetto. The city data page actually shows all that type of information, from median age, average income, crime rate, etc. That’s why one of my goals is to be right off the away. These areas are important for the state to keep nice up to par. When tourists are heading south and make stops off the highway, all the nice new stuff is right there. The further west they head, the shadier it gets. Exits 217 and 213 are very nice exits. People have a lot more money here. There’s also a road, Lakewood Ranch blvd that runs parallel to 75, just east of it. That’s a nice upscale area where crime right isn’t a major concern.

I’m going to continue to search all around, but surely will keep everything in mind before making any decisions. I’m really liking the exits 217 and 213 however, partially because they lack the negative traits you discussed.

40

That must be a Florida thing, in Hawaii all commercial listings are listed by the square foot per month.

What does a large pepperoni pizza go for in that area (on average)?

Why not go somewhere in Florida where there is a lot of money? Like Key West, Miami, Palm Beach, Orlando, etc. Personally, I would go where the rich/tourist are at. Especially if your starting out in a brand new state (to you).