I am new to this forum but I have spent the last 2 weeks reading all of the posts from the last few years.
There is a lot of good and useful info on this board.
Concerning the preliminary work on opening my shop, I have educated myself and found out about a lot of things that I didn’t previously understand. One thing is for certain, I will be underfunded. That’s not to say I am broke, but I don’t have bank loans and unlimited credit cards to turn to. This is a family business. The money will be coming from me, my wife and other family members. I will be the main cook, my wife will run the front of the house. We plan on being a delivery/pick up only…but would like to have about 6 tables inside. My son and nephew will help with dishes, making pizza, etc. We have been thinking about this for years and finally decided to make the leap.
According to my business plan, we only need to do about $346 per day to pay the bills. We want this business to survive and hopefully, one day thrive. I’ve been a cook, dishwasher and have worked my way up to a mangement position with a global company. I may not be a genius, but I am extremely well organized and I know how to hire good people. I am a great manager and a hard worker. The rents that we have been shown are in the $2000 a month range for about a 1200 sq ft facility. I have several construction contacts (friends) through my business that are willing to help me build out the kitchen and minimize costs.
I am purchasing my equipment used, paying cash for all of the build out costs, paying cash for rent and all of my deposits, power, insurance, advertising, etc. When I open, I plan on setting back about $20,000 in cash for whatever costs may arise. However, that’s it. If things go bad, my family has agreed to help out wherever they can in an effort to make this company work. Our hope is that we can leave this restaurant to our younger children whenever they are old enough to take over.
From everything I’ve read on these forums, we are destined to fail…mainly because of undercapitalization.
My questions are:
If we keep labor costs next to nothing (because the family will be doing most of the labor), wouldn’t that contribute to having a better chance for success?
Because the rent cost is fairly low for California and if we can keep food costs under control, doesn’t that contribute to having a better chance for success?
I figure monthly expenses at around $9,000 and I need $346 profit per day to break even. I want to offer my large 18inch pizza at 14.99, so I would need to sell 23 per day to reach my profit level. That’s not counting salads, sandwiches, drink, etc.
Why is this a bad business plan? When we open, is it possible that we won’t have customers for days or weeks?
I understand that there are a lot of experienced pizza shop owners on this board, I just can’t see why everyone I talk to says we will probably fail. I don’t want to put my family in a bad position and lose our money, but we really believe, together, that we can make a go of it.