?_Correll:

[system]

Hi John,

First of all, I appreciate you taking the time to answer my question. Here is my situation in a nutshell:

Last year, I purchased a non-franchised pizza shop (1,000 sq/ft) in a business area in Lake Forest, Orange County, CA. The store is sandwiched between a Quizno’s and a sausage shop (Haute Links) in a small outdoors shopping strip that includes McDonalds, KFC and Starbucks. There are a lot of businesses around. There are also residential houses and apartments within one or two mile radius. At the time, the owner had minimum staff and was not doing a good job keeping the place clean and desirable. They were open weekdays only and used to close at 3:00 PM every day. When we took over, our first couple of months, we sold about $350 a day. We worked on the store and cleaned it out (our image and the inside of the store). A lot of equipments also needed fixing which we slowly took care of. We added some of our own recipes and tried to make everything fresh and tasty. We added delivery and night business. Our hope was to increase the lunch sale that belonged to the business customers and develop the dinner and weekend sales that we were hoping to come from the residential area. We used a variety of advertising mwthods. Penny Saver, Restaurant on the Run, etc. We also did direct door-to-door flyer distribution. Incidentally, so far, flyers have proven to be the best means of attracting customers. Now, after exactly one year, here is our situation: We are selling about $650-$700 a day. Our day business supplies the majority of it. Our night/delivery business is very inconsistent and not really great even in best times. Our weekends have also been very slow and inconsistent. And due to labor problems, I have been forced to close some weekends as well. I have been pumping my own money every month into the store since I bought it. My rent and CAM are $3,600 and the gas, power and phone comes to $1000 per month. Now, here is my question:

Am I fooling myself into thinking that if I stick around for another year and spend money from my own pocket, I will eventually make it? How do you analyze this growth that I had within the past year? Any advice and insight will be greatly appreciated.

Thanks again,

 

[system]

Admins, please delete this message. This was supposed to be a private email to John Correll.

 

[Patriot_sPizza]

You can edit/delete the text of your message but I’d leave it up & see what response you’ll get from others…I reckon John can give you advice, but others have their unique insights as well…

I’ll chime in 1st!

I used to live nearby many, many yrs ago…

Your rent is high for my part of the country, but seems reasonable for your area…

How many seats?

I imagine your lease prohibits you from selling “subs” and & don’t know your menu, but lunch must be fast, fast, fast!!!

Try a hot sandwich that can be prepared in 2 minutes or less…try a calzone special that can be par-baked & flash finished…

Consider making sandwich rolls using your pizza dough & use them for a sandwich…

more to follow, if you like…

 

[system]

Thanks for the reply. Unfortunately, it doesn’t look like that I can edit my post. Could you take my name and phone number off? And please change my user name to BO?

I can sell subs. And, depending on the day, we do sell a good number of them. We also sell several pasta dishes as well as pizza by slice. We have also introduced a giant 24" pizza.

 

[Patriot_sPizza]

I can’t edit anything…log in under the 1st name you used to make the original post…

then “view” that post & in the right hand corner you’ll see the “reply” button, the “quote” button & an “edit” button…

don’t sweat the tele # - no one will call unless you ask…we’re all one big family, quite protective of our “own”

Semper Fi

 

[snowman]

Personal information removed per your request.

He cannot edit the post because he posted as a guest rather than a registered username.

 

[system]

2nd to chime in,

Well fasten your seatbelt cuz everyone here is about to give you a whirl wind of opinion!

Like most investments it takes time. One year and look at the tremendous growth you have had. Double the sales (sure double the hours but still double the sales without much increase in overhead) Generally I think 18-24 months is how long it takes before things become “better”

You have had to spend, I’m sure lots of money “fixing” the place. Next year you won’t have so many of those costs.

One thing you said that was really a concern to me was…you had to close some weekends because of labor issues. My opinion is this is NEVER an option. Once it becomes an option you’re in big trouble. I would imagine some slow nights you have a tendency to close early. Also not an option. People need you to be predictable. Predictable in food, service, hours - everything. How could I plan on using your restaurant for a special event if I have called in the past and you weren’t open? Doesn’t matter if they dine in deliver or carry out. Set your hours and be open.

As for advertising, I am sure most of us are going to agree doorhanging will give you the best bang for your buck.

That’s it for now, gotta do some paperwork. Welcome to PMQ the people here are great and we love to help each other. Ya know the ol saying be careful what you wish for…Post questions here and people will respond like crazy so don’t get overwhelmed.

 

[j_r0kk]

Barry,

Let me give you a little insight about Think Tank and how it works:

This is an interactive forum for pizzeria owners, supervisors, and managers throughout the world. Some don’t post at all and just read. Some are extremely active in Think Tank to keep it moving along. Although you tried reaching Mr. Correll personally via e-mail, I would like to tell you the smartest thing you’ve probably ever accidentally done was to stumble into this little part of the website.

So, now that we’ve gotten that out of the way, let’s analyze your problem, shall we:

1. You’re averaging $650-$700 per day, majority on dayshift
2. Weekends inconsistent
3. Inconsistent hours (forced to close some weekends due to labor)
4. Rent and CAM $3,600/month
5. Spending money out of your own pocket

Your question:
Am I fooling myself into thinking that if I stick around for another year and spend money from my own pocket, I will eventually make it? How do you analyze this growth that I had within the past year?

The answer to your questions would be “YES”… and “NO”. Let me explain… To go the same route you’ve been taking you’re seeing sales increases vs. last year, yet minimal. At this rate you’ll be paying bills out of pocket for a very long time. Therefore it would be a very tough decision on your part. However, if you’re willing to make a few changes and use a few ideas you might find yourself in the middle of a gold mine.

You’ve already got the first problem licked. Most operators (myself included) have a helluva time capturing the dayshift market. With that said, all you’ve got to do is find a way to convey your message to the residents at night.

You’ve actually done a good job identifying your problem:

Our night/delivery business is very inconsistent and not really great even in best times. Our weekends have also been very slow and inconsistent

This stems from a lack of customer-base. The common philosophy is: The more customers you have in your database, the more consistent your sales will be. Some customers might eat once per week. Some might only get pizza once every couple months. This will create inconsistency in the night/delivery business. However, if you create more customers, you’ll find that your nights will be higher as well as steady and easier to predict.

With that being said, I would recommend you focus your marketing efforts on gaining new customers. You should develop a marketing campaign targeting new customer growth. This campaign should last no less than 8 weeks. Personally, I would use the word “FREE” on a special or two as that one word has always worked for me as a sales generator.

If you’d like advice, simply ask. I, as well as 20 other operators will gladly help in any way we can. Before I leave, I’ll give you a little reading material:

http://www.pmq.com/tt/viewtopic.php?t=2940

http://www.pmq.com/tt/viewtopic.php?t=2854

-J_r0kk

 

[system]

Thank you for your message. I am going to implement your advice and think of a couple of promitions and see what happens in the next 6-8 weeks.

 

[system]

BO:

Sorry I’ve taken so long to respond. I’ve been out of town. Here’s a few thoughts to bear in mind:

1. No one in the world knows for certain whether you will or will not make it if you continue on. There are two reasons for this. First, no one knows all the variable factors pertaining to your particular business and market situation. Second, one of the variable factors to a business’s success is the owner-operator, or YOU. And neither I nor anyone else knows YOU – that is, your attitudes, values, philosophy, work ethic, learning abilities, managerial skills, etc.
2. In spite of the know-it-all persona that most consultants and many business owners like to project, in fact no one knows it all. Further, no one has a magic, works-every-time, works-every-place success/sales-building formula. Consultants and authors like to convey the impression that they possess such a formula, because it’s good for business. But, in fact, none exists. The reason is because every business and business situation is, in some way, unique from all others.
3. When receiving advice from others, bear in mind that this advice is based on what worked in HIS or HER past. To the extent that your current situation is similar his prior situations, or life history, the advice possesses validity. However, to the extent that your situation differs from his prior situations, the advice is invalid, or risky. Unfortunately, most consultants and business operators like to believe, or like to project, that their experience base covers all situations, when in fact it does not.
4. Having said all that, I will answer the question you posed. Based on what I read (and read into) of your post, my feeling is that your chances of succeeding if you continue on are minimal. Hence, my feeling is that you would be better off if you attempted to cut your losses by selling the business and pursuing some other avenue or goal. Again, I could have arrived at a totally erroneous conclusion. This is simply one person’s impression and best guess.

Good luck with whatever avenue you pursue,
John Correll

 

[NicksPizza]

John Correll:

1. In spite of the know-it-all persona that most consultants and many business owners like to project, in fact no one knows it all. Further, no one has a magic, works-every-time, works-every-place success/sales-building formula. Consultants and authors like to convey the impression that they possess such a formula, because it’s good for business. But, in fact, none exists. The reason is because every business and business situation is, in some way, unique from all others.

John sure packed some punch in his post. I like a lot of what he said. I will go on record as saying that j-r0kk’s (and others’) doorhanging program comes closest that I have heard about to being a magic bullet for pizzerias. Owner after owner comes back to proclaim the glories of consistent doorhanging campaigns.

That said, even that idea is not the panacea that we proclaim. some places don’t find doorhangers worth the papaer they’re written on.

Bo, I reread your post, and realized the numbers you were showing us. The road will be pretty long, and I can see where you might not be in the black very much. John pulled no punch when he said he didn’t think you would make it. Without some incredibly creative and effective changes in your business model, I can see him being right. If you can remake yourself into a place getting more night and delivery business, I can see a chance to make it. However, my shop averaged $727/day last year . . . and our rent runs $800 . . . utilities and phone peaks at $700 or so. We struggle some months to make the bills and debt payments. And there is no profit or payroll for the owners at this poont (3 years in)

Take a deep breath and decide if you have the fire and the temperament to make this work. It can be done, and the right person can do it. The numbers will be hard to overcome at first, but will get more manageable.

 

[system]

I agree that a creative, well-conceived, WELL-MANAGED, ONGOING doorhanging program has been, over the decades, one of the most effective sales-building tools for a pizzeria.

Another powerful tool – although very seldom used – is an ongoing door-knocking program done by the owner, which eventually covers the entire market area over a period of, say, 6 to 12 months.

John Correll