Gosh dont be so harsh on the guy hes having problems down & out and i c alot of beating him with a stick. There are some good suggestions Kyle, Im kind of where u are I havent gotten paid in the last year myself, listen to some of the advice here. The negative shit dont listen to or just ignore take the positive and dont give up thats the differnce between the winners and losers take what works for u, and every market is different. I would try some sale like lg. pie & free knots 5.99 or free soda. market the word free try it it works, try to cut labor . try to make it work.
I wish I was pulling your leg, I really do. But I am not. I got bamboozled on the purchase. I think I saw it referred to as a fools tax in another thread.
I have read a few helpful posts and a few that were just not helpful. You can always count on jrokk to make me take a deep breath and step back. What do you guys think about this idea?
$2.99 large cheese & pepp for the first week or two. Then $3.99 for the next week or two. Then settle in at $5.99 and advertise that for a buck more you get a much better pizza. I don’t know I am out on a limb here.
Please keep the helpful posts coming!
wishey-washey…pick a strategy…don’t confuse your staff or your customers…
focus on a $5 pizza, if you choose & stick w/it…let your customers know your quality…have a “system” in place to have pies ready 2 go between 12-1 & 5-8…
you’re still bouncing all around and not doing your “homework” - you will doom yourself to failure when you fail to plan…
Yes, fantastic idea.
I love it when stores jack up their prices every week. I also love it when they say “oh, hey, btw, 3 weeks ago that pizza you ate at my shop was really bad. So, give me $2 and i’ll make you a great pizza!”
America will choke down ANYTHING for a buck! That has made McDonalds RICH! For Pizza the going rate is $5. That has made Little Ceasers RICH! Yet having a better price point than the competition will make me broke according to some here. And if I do a limited time introductory offer that is bad too, according to others.
I am at a complete loss. This place is nothing but frustration. If I didn’t owe my relatives money I would have walked away a long time ago. But I do owe them money and every credit card I have has maxed and closed so now I am stuck with this. Til death do us part.
i now it is hard for you,but,maybe you should just take a deep breath and walk away.your family will understand that you gave it your best shot,and will except any repayment plan you can come up with,i know mine would…
WHEN LIFE GIVES YOU LEMONS,MAKE LEMONADE
You do certianly have a difficult hand of cards to play. In reviewing what I’ve read, you want to get into the high volume/low margin pizza game. It can be done, has been done, and will be done again. You’ve gotten some good advice here from a few corners.
My advice is to sit down, take a glass of ice water, and statrt writing down the outline of what your business will be. If you are going to be the quick and hot, low food cost pies, then set about deciding what your fixed costs and your variable costs will be. Just like starting any other business concept. Figure out how much your break even costs will be, and then set about building a business strategy that will make that amount of moeny with the “$5 pizza game”.
Include in that plan how you intend to carve out your market share in what appears to be a really crowded marketplace. Similar to what j_r0kk touched on: what will make you different, noticable and more desireable than the other guys playing the game? If you are identical, then they’ll go with brand familiarity and do LC or PJ . . . groups of people are like sheep following the herd. Make your place the “cool” place or the friendly place or the place kids love or something. Getting too caught up in $$ can end up costing you the survival you’re looking for. Keep in mind that these are people we are selling to, and not just numbers on a demographic profile.
That alone is a chink in the armor of the high volume, low price guys. They aren’t very personable. Goes to the Service element j_r0kk mentioned.
If you are indeed serious with all of this, what is your goal here?
It sounds like you just want to buy enough time/money to pay back your debts and then run.
If that is the case - I think it is just best you cut your losses right now. If you are trying to turn this into a viable business, then that is a different story.
Thanks. Good ideas. I am going to run the first chance I get. That being said, if it is a going and viable business, then maybe I can get paid a few bucks more than I owe out when I do leave instead of just working for free for 3 years. I would love to make this place rock and roll for 6 months and then sell it. At that point I could sell for about $25,000 to pay off the land contract and my family. Anything more than that would be for me. I have told all the employees that if they came up with $40,000 cash they could be the boss that very day and I owe out $30,000 on it right now. With all the headache this move has become I really do regret not just closing on June 1st and giving back the keys to the old owner, but whats done is done. I have too much money tied up in the move to not at least open and give it a whirl.
Do not do this. You set the bar at $2.99. Your pizza is only “worth” $2.99 in your customers’ eyes now. If you want your concept at $5.99, then do that. If you want to do a “customer appreciation event” for one week only at $2.99, then go for it. But make sure you bill it as a “Customer Appreciation Week” and that it’s a special for that week only.
Don’t do it on your first week either. At $2.99 with good advertising, you’ll be slammed and won’t be able to keep up and will give yourself a bad reputation from the get-go.
Definitely NOT keeping the Toarminas name. I was the 7th or 8th owner of the store that was there for 11 years. It had been a dope operation for at least a couple of those years.
Now you know the secret to turning a profit there
Here’s the other problem - you are playing someone elses game. They made up the rules, they have all the chips (customers) right now, and you are going in with ONE idea (cheaper than cheap).
Like many other commenters, I’m thinking that you are not in a position to win the “I can make cheaper pizza than you” game.
I’d suggest coming up with something else to try.
Maybe you can market the heck out of SOMETHING ELSE at a really low price point - and get your regular price if they buy a pizza too? Something the other places don’t even sell maybe. Just a thought.
Or put together great-SOUNDING packages that still get your ticket up. I didn’t look back, but do you have seating? If so, you can do “all you can eat” pizza and soda for $8.99 or something.
Or target delivering your higher quality recipes a little further to some affluent neighborhoods. SOMEONE has money within a driving distance - and you can doorhang and deliver to them if you want to sell a pricier pizza…
Key information from one of Kyle’s previous posts gives a pretty clear idea of the marketplace he is in:
Let’s analyze the market for viability and marketshare:
- 65,000 people / 2.64 people per avg household in Wayne County = 25,000 households (approx)
*25,000 households X $17.45 per month = $436,250 total market potential
*$436,250 / 50 pizza shops = $8,725 per shop per month
$8,725 / 4 weeks = $2,181.25 avg per week
I could get more specific if I knew the zip code or city/state. I could do this by radius using DemographicsGuru.com
Either this is inaccurate information, or this is the town where pizzerias go to die (sorry for the dramatics). Whatever anyone does with this store to make a profit, the road will be a challenging one, to say the least. I have to be missing a piece of the puzzle, because these numbers don’t add up to all 50 pizza places staying in business more than 6 months. But, it is what we have so far.
Cheap piiza, gourmet pizza, sterling silver lined pizza . . . all are a hard sell in this little pond full of fish.
well, if he’s in the Wyandotte/Southgate area, he does have alot of competition…it has always been a “beat-up” area, but like goes on…
an “odd” pizza market, as Little Caesar’s hails from Detroit & “square” pizza is quite popular (Buddy’s, Buscemi’s, Jets)…
Maybe its time to go “square” as I don’t see Buddy’s suffering…
he has approx a dozen “competitors” in his market area…your demoG #'s are close, but not 50 shops in his trading area…
$2.99 won’t work…
I am in Taylor 48180. There are absolutely 50 pizzerias in my area. FOR SURE! I bet in a 3 mile radius alone there are 35 and 5 miles it is for sure 50.
I am at 11054 Allen Road in Taylor. Southgate is across the street from me as is Allen Park (kitty-corner). Go ahead and check the demo #'s I would be interested in them too!
ya, you’ve got 110K households in a 4 mile radius & 50ish competitors…
its crowded, but what you need to do is figure out YOUR point of difference - a basic business principle you’ve forgotten…
cheapest is not always a point of difference you want 2 b known 4…
I still believe a $5 LC model might work - maybe do it “square” style as your POD or USP
I got about 94,500 households in 5 miles, so 94.5K to 110K is a better guestimate. Call it 100K for math estimates:
*110,000 households X $17.45 per month = $1,919,500 total potential
*$1,919,500 / 50 pizza shops = $38,390 per shop per month
$38,390 / 4 weeks = $9,957.50 avg per week
These numbers seem a bit more survivable if you can make more than your average. In the volume business, ya’ gots to reel in a whole lot of fish to fill the baskets, if you know what I mean. I am not familiar enough with the ratios and numbers for a model you are talking about, but I feel a good bit more optimisitc about your project with $10,000 per month average marketshare than $2,100 per month.
Marketing and identity will be your lifeblood. You gotta have a sh*t hot plan that runs like it’s on greased rails, and an identity that no one can ever mistake. Could work out, and make us all envious of the little engine that could.
Little Ceasers, Dominoes, Jets, Hungry Howies, Buddy’s, Buscemis, Mancino’s, Primo’s, just to name a few, are all from the Detroit area originally as I understand it.
Hey Patriot where are you from? You seem to know the Downriver area pretty well!
Nick. The figures do look feasable but remember some of the chains would probably be taking in anything from $15K - $25K or more. This then skewes your workings and potential sales. No market splits sales evenly between all players.
In my area we do high $9K - low $10K whilst Dominos near us do $23K per week and Pizza Hut probably the same or in the high $teens. The guy in the next suburb less than a mile for me would be lucky to do $3K on a busy week. Half a mile away from him is another store doing about $5K per week at tops.
The major chains have the added pull of there continued letterbox, press and TV advertising which none of us indies can match in spend. They advertisie the hell out of it and draw people in.
If Kyle can’t do this for his cheap pizzas plan, and he has indicated he hasn’t got the bucks, then there is no way he will get to the figures your worked out no matter what price he goes to. If you can’t tell them about they won’t know about it.
I am situated in a mid to mid-high income catchment area with way less competition than Kyle ( about 10 -12 competitors for 23,000 houses) and we are only getting our $10K per week on premium pricing - granted in OZ we don’t eat as much pizza or as often as in the US. Our spend per household would be way, way less than yours.
Don’t get me wrong, I not knocking your brillance at maths and statistics but I feel the simplistic valuation result badly skewes the reality. Unfortunately a lot of simplistic statistical evaluations result in a mean average, and with the vast amount of established and big player competitors, Klye is at the bottom of the pack so the mean will be far from his reality.