Pizza Biz Purchase Question - should or should not?

Pizza Shop Talk The Think Tank
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Just based on what you have already told us. Even if you worked full time you would be lucky to walk away with 50k a year

Not worth it unless you think for some reason you can boost sales by 30%

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I have no problem with the price… it would cost more than that to duplicate the business… If the business can operate and make you 50K it sounds like a good deal.

But the rent? That is a problem. I would want the rent to be $2500 on those sales. I could live with maybe $3000… but that is it. Utilities seem high to me too.

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This may sound silly, but (given an acceptable price for the existing business level), you WANT to see problems!! Poor management, lousy employees, bad inconsistant food, etc. Because those things are “easy” to fix, which should result in a much better business…

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You’re paying for equipment, recipes, and rights to the lease and name. Good will is a lousy thing to buy or sell. If your sales drop off 30% after taking over, can you sue the previous owner for reneging on the contract because the sales weren’t at the same level?

The utilities do seem high, but what is the breakdown of utility costs? If it’s mostly gas, that’s a decent explanation, and possibly can be dealt with by changing equipment–namely ovens. If electricity is half the utilities, something is up. Check maintenance records on the coolers, etc, as well as the oven.

What if food cost is more like 33%?

What possibility exists for adding to the customer base? Is it a rural area, small city, major metro? Business oriented area, residential, mixed? What kind of advertising has been done in the past?

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It’s sounding a lot better. You can do some checking on the equipment, if you can get make and model or at least good descriptions (8x8 walk-in cooler, 3 door True reach-in cooler, 60qt mixer etc) you can check things on line and see how the values match up. But, then, you do have a cost for recipes and for the lease. And, simply paying the previous owner for his/her trouble. Take all of that into consideration. Keep in mind your need for operating capital, too.