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forecasting profit & losses for a start-up business

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GotRocks:
I have been doing that, and I have found nothing about forecasting, that is when I decided to join becuase everyone here seemed so knowledgable and I was hoping I could both learn and be able to add to the discusion from my past experiences.

Maybe I am looking at this forum from the wrong angle, I got the impression it was a forum where pizza professionals are tossing idea’s back and forth to help themselves and other to further their success.
Did I guess it wrong? Is this more of a social club forum for people in the pizza industry instead? If so, I will resing my membership and look elsewhere.
Did you guess it wrong? You had the impression it was a forum where pizza professionals are tossing idea’s back and forth to help themselves and other to further their success. I’d say that’s exactly what’s you’ve got here. You’ve asked a question about P&L which has been addressed by a few people and several have commented on your stated 20% food cost. I don’t see that that anyone has ‘attacked’ you over your food cost but several people have commented on it.

You’ve joined in on a few of the recent posts so you can see that there are plenty of idea’s and views thrown around.

Not everyone on this board has the same opinion or approach to business (thank god) so if you are going to get upset when someone doesn’t share the same view as you or questions when you mis-state figures then maybe this isn’t the place for you.
 
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I just thought some ‘realism’ was needed, when I commented about the obvious. Its a great paperwork drill and busy work to assign to an MBA, but quickly loses value when factored into a dynamic workplace. Your idea of everyone gaggling around the wood stove on a winter evening sharing stories and watching the pizza get made is romantic, but imho totally unrealistic. Have you watched a kitchen make 100+ pizzas/hr?? Also, for example: you’re so interested in the weight of toppings, yet seem to think pizza’s are made in 2 minutes… Here’s an assignment (while we’re all studying): how long does it take to apply: 3oz onion, 12oz of cheese, 2lbs of sausage (ooops, yeah that was a joke), 6oz sauce, 2oz of tomatoes, 4oz spinach, etc… I’m not attacking you personally, just encouraging you to apply some practical issues into your dream sessions.
 
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Whaddya say we get back on topic for a few posts? like back to P&L’s instead of projected cost ratios, then we’ll go back to those cost figures later.
And where exactly did you get the following idea from?;
Your idea of everyone gaggling around the wood stove on a winter evening sharing stories and watching the pizza get made is romantic, but imho totally unrealistic.
Have you never seen an open-kitchen concept restaurant? Did you ever walk into a domino’s or little caesars? that is an open-kitchen. Funny how I never see people romanticizing there, have you? So please quit with the jab’s already.

Please, enough with the sarcastic preconceived notions based on no shred of truth or facts.

Now back to the P&L’s forecast formula’s

I am thinking of taking my break-even-point, and working backwards from that figure to see how many customers I would need on a weekly/monthly basis to exceed that goal, then how many months of the year I will be able to exceed my break-even point, then reconciling those figures based on the population of the area I plan to start the business to make sure these goals are actually achievable based on population density and tourist numbers in the area for each month,

I have heard one possible way to do the forecast is by figuring 20% of the area’s total inhabitants (the 20% rule?) to visit at least twice a month. Does this sound like a feasible and/or a reliable method to base customer assumptions on?
There has got to be some industry specific formula out there to use!
For instance, lets look at how “Krispy Kreme” figured their eligibility requirements for someone to own a franchise, they required a certain minimum population density before they would give the go-ahead for a franchisee.

I would really like to know what assumptions chain places use to figure feasibility and forecast business flow before opening? It has got to be more than just mere speculation.
 
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GotRocks:
There has got to be some industry specific formula out there to use!
Nope… pure speculation and guesses based on all the criteria we already told you… For the 8th time.

Any franchise (BEFORE they even consider a location) first thoroughly checks the credentials of the potential franchisee. Capital, knowledge, EXPERIENCE, resources etc. Most franchises are successful, or they wouldnt be franchises… that being said they have opened many locations so their ‘forecast’ is based on other previous stores openings. You plan on being an independent, so therefore you have nothing to go off of except the things we’ve been telling you (based on our experiences) and you’re clearly not listening and/or not wanting to hear the answers…
 
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Gotrocks - anyone who seriously thinks that there is a likelyhood of 20% of the population visiting a shop twice a month - unless you are the only shop in the area - is living in a dream world.

The reason you are getting such a hard time is that you are making some pretty out of this world statements 20% food costs and 20% visiting. With all due respect I really think you need to do A LOT more research.

OK - so I’ll try and be helpful to you. There are a few formulae on this site to help ‘guess’ pizza sales in an area, however, I’ve gotta say that personally I believe that any formulae has to be so vague to be appropriate for ‘all’ of the US and therefore is likely to be of no use at all.

Here is one thread I found after a quick look. I’m sure (as your really looking for this) that you may be able to find a few more.

viewtopic.php?f=6&t=2888&p=14509#p14509

As I said in a previous post surely you have thought through you ‘planned/expected’ sales before you decided to go into this? I can’t believe anyone would consider going into this business and invest any money without having an idea about what sales to expect - so use this figure.

IF you’re saying you have no idea at all what sales to expect then I really don’t know what to say other than good luck!

When I started I researched my competition to find their typical sales and also found a shop in a similar nearby town and found out their sales. So I had an expectation of my sales. Working backwards from my both my break even and expected sales I also worked out how many orders I needed per day.

Hope this helps.

Wiz
 
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I was born Richard Cranium before I changed my name to Willi. I had to change it because people were using my name as a reference on Pizza business discussion boards. I’m slammed, it’s Superbowl brah!
Willi
 
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Wow, what a complete waste of everyone’s time that this thread has turned into, Sad actually.

Wizzle, I did not state that I expect 20% of the population visiting, it was a question to see if anyone else has heard of that estimation! WTF people.
read it again;
I have heard one possible way to do the forecast is by figuring 20% of the area’s total inhabitants (the 20% rule?) to visit at least twice a month. Does this sound like a feasible and/or a reliable method to base customer assumptions on?
Ya know what, I have come to the realization that participating in this section of the forum is friggin useless. have fun arguing amongst yourselves.
 
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GotRocks:
Wow, what a complete waste of everyone’s time that this thread has turned into, Sad actually.

Wizzle, I did not state that I expect 20% of the population visiting, it was a question to see if anyone else has heard of that estimation! WTF people.
read it again;
emmmm, the problem with your posts is that you seem to forget what you previously wrote and forget that we can all scroll back and see what you actually typed! :roll:
  1. I didn’t say that you expected 20% of the population visiting did I? - read my post again!
  2. You DIDN’T actually ask ‘has anyone heard of that estimation’.
  3. You ACTUALLY asked ‘Does this sound like a feasible and/or a reliable method to base customer assumptions on?’ a much different question!
Go on have a look its all there! So thats all of your 3 statements incorrect!

Now before you start 'WTF’ing people on this board, name calling and accusing people of ‘arguing’ I suggest you back right up there and read what a) you have written in the first place and b) READ what people ACTUALLY replied!

The only comment so far that you’ve made which I think has any validity is ‘what a complete waste of everyone’s time that this thread has turned into’. At least you’ve made one valid statement!
 
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Hi Gotrocks:

Your basic question was “I have got to come up with a 12 month & 36 month “forecasted” P&L statement.”

You should use as your net profit what you want to earn in that time period then work backward using the figures suggested on this forum to determine what you have to do to earn a fair return on your time, effort and investment.

If you find the figures indicate an unreasonable sales requirement to achieve your goals, don’t do it.

Just a suggestion.

George Mills
 
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Wizzle: emmmm, the problem with your posts is that you seem to forget what you previously wrote and forget that we can all scroll back and see what you actually typed! :roll:
  1. I didn’t say that you expected 20% of the population visiting did I? - read my post again!
Wizzle: Gotrocks - anyone who seriously thinks that there is a likelyhood of 20% of the population visiting a shop twice a month - unless you are the only shop in the area - is living in a dream world.

Wizzle: The reason you are getting such a hard time is that you are making some pretty out of this world statements 20% food costs and 20% visiting. With all due respect I really think you need to do A LOT more research.
Wizzle: 2) You DIDN’T actually ask ‘has anyone heard of that estimation’.
hotrocks: I have heard one possible way to do the forecast is by figuring 20% of the area’s total inhabitants (the 20% rule?) to visit at least twice a month. Does this sound like a feasible and/or a reliable method to base customer assumptions on?
Wizzle: 3) You ACTUALLY asked ‘Does this sound like a feasible and/or a reliable method to base customer assumptions on?’ a much different question!
that was part of the question you left out the other part… and who cares.
Wizzle: Go on have a look its all there! So thats all of your 3 statements incorrect!
How about stop yanking this guys chain… he is trying to communicate on a messageboard for one. lol hot pants
 
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BPLive

I suggest you also actually read the words you quote properly if you are going to try and be clever!
  1. I clearly said ‘anyone who thinks’ and not ‘you expect’. Then I said he is getting a hard time for making statements. Now where did I say that he ‘expects’. They are not the same thing!
  2. He clearly didn’t ask if ‘anyone had heard’. He made a statement saying he had heard something then asked if it sounded ‘like a feasible and/or a reliable method to base customer assumptions on’?
I don’t know where you studied English but the first sentence is a statement and has a full stop and the question mark at the end of the second question shows the question.

If he’d had asked ‘Has anyone heard of this way to forcast?’ you would have been correct but he didn’t and you are not!
  1. Well you obviously care enough to try and correct me!
Now, I’ve tried to contribute and answered his posts on more than one occasion as others have, provided information (including ways to forecast sales). I have also politely pointed out where I think he’s off the line i.e. food cost - (its called advice). I think I am entitled to question him when he comes back and argues and mis represents what I have said to him.

You however have simply come along to try and p*ss on a post at the end without contributing anything. Unfortunately as you seem to have such a poor grasp of reading, quoting and basic English its just shown you up as an idiot!
 
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Wizzle Wassell:
BPLive

I suggest you also actually read the words you quote properly if you are going to try and be clever!
  1. I clearly said ‘anyone who thinks’ and not ‘you expect’. Then I said he is getting a hard time for making statements. Now where did I say that he ‘expects’. They are not the same thing!
  2. He clearly didn’t ask if ‘anyone had heard’. He made a statement saying he had heard something then asked if it sounded ‘like a feasible and/or a reliable method to base customer assumptions on’?
I don’t know where you studied English but the first sentence is a statement and has a full stop and the question mark at the end of the second question shows the question.

If he’d had asked ‘Has anyone heard of this way to forcast?’ you would have been correct but he didn’t and you are not!
  1. Well you obviously care enough to try and correct me!
Now, I’ve tried to contribute and answered his posts on more than one occasion as others have, provided information (including ways to forecast sales). I have also politely pointed out where I think he’s off the line i.e. food cost - (its called advice). I think I am entitled to question him when he comes back and argues and mis represents what I have said to him.

You however have simply come along to try and p*ss on a post at the end without contributing anything. Unfortunately as you seem to have such a poor grasp of reading, quoting and basic English its just shown you up as an idiot!
more clutter in this thread here hot pants. I’m a reader… equal to you, I’m calling it out as it is. and that is that the guy is trying to have a conversation and you are finding any technicality of sentence structure from a forum to throw around off topic arrogance. I see no problem with what the guy is saying, he simply is trying to figure it out.

As your comments on my speaking and what school I went to… again example how you are picking at people cluttering up, beyond your advice, because you simply look where I am from (Athens Greece) in my profile = right I don’t know English. lol and Greeks invented pizza.
 
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BPLive:
more clutter in this thread here hot pants. I’m a reader… equal to you, I’m calling it out as it is. and that is that the guy is trying to have a conversation and you are finding any technicality of sentence structure from a forum to throw around off topic arrogance. I see no problem with what the guy is saying, he simply is trying to figure it out.

As your comments on my speaking and what school I went to… again example how you are picking at people cluttering up, beyond your advice, because you simply look where I am from (Athens Greece) in my profile = right I don’t know English. lol and Greeks invented pizza.
Technicality? Sentence structure? As you say you ‘don’t know English’. Clearly you don’t, clearly you can’t read as well because I never question your ‘speaking’. If you want to pick a fight with someone over what they have written being able to understand what’s written down in the first place would be a good start!

I’m well aware he’s trying to ‘figure it out’ which is why I have posted helpful comments and links (more than you have done). But this guy chooses to take offence not just with me but a few others as well. Perhaps you wanna correct them also?

Your profile doesn’t mentions anything about where you’re from, so yet another incorrect statement from you. Oh yeah and your weblink doesn’t work as well - something else you’ve got wrong! Keep trying you may get something right one of these days!
 
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dude I’m from Jersey. In another thread I stated I’m in Greece right now.

Anwyay you mouth’d off more than made any points and threw the guy off-topic that lead to a mess of a thread. The other guy who tried to guess he never made a pizza 'commercially didn’t help either. You are all over the place… One Way Wizzle. I’m not the one picking a fight. The one who doesn’t understand the english language is the one who doesn’t see sentences from Hotrocks on a more broader spectrum. You see it one way and stuck with it. I think most of us understood he wasn’t trying to be an A Hole. Wasn’t the one anyway.

You think you can make points and then mouth off the rest about nonsense, got out of hand imho. Ruined the thread with the nagging and nagging that he didn’t say “heard” correctly or whattheFever. Comprende?
 
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BPLive:
dude I’m from Jersey. In another thread I stated I’m in Greece right now.

Anwyay you mouth’d off more than made any points and threw the guy off-topic that lead to a mess of a thread. The other guy who tried to guess he never made a pizza 'commercially didn’t help either. You are all over the place… One Way Wizzle. I’m not the one picking a fight. The one who doesn’t understand the english language is the one who doesn’t see sentences from Hotrocks on a more broader spectrum. You see it one way and stuck with it. I think most of us understood he wasn’t trying to be an A Hole. Wasn’t the one anyway.

You think you can make points and then mouth off the rest about nonsense, got out of hand imho. Ruined the thread with the nagging and nagging that he didn’t say “heard” correctly or whattheFever. Comprende?
Oh you’re from Jersey, that explains it all then. At least if you were from Greece I could understand your lack of comprehension and written skills, obviously it’s just ignorance then. I’m all over the place? You obviously haven’t read this thread (or your own comments) as pretty much all of your statements are just absolute rubbish. ’
  • The guys name is GotRocks, not Hotrocks
  • The other guy who tried to guess he never made a pizza 'commercially didn’t help either (your words not mine)??? Gotrocks said he had 20 years commercial pizza. He’s not the other guy he’s the guy!
  • I think ‘I can mouth off’??? - you’re the one who started to pick holes in other peoples posts when you’ve not even been involved or participated. Theres a name for people like you… TROLL!
I’m entitled to my opinions just as everyone else is on this board but at least I participate.

Pretty much everything you’ve typed on this thread has been absolute nonsensical rubbish. Pretty much sums you up then!
 
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BP,
The other guy who tried to guess he never made a pizza 'commercially didn’t help either
That be me. It wasn’t a guess. Someone who asks others what to put on a pizza, so they can then ‘forecast’ has not made commercial pizzas. I suggested they try making one and then using those numbers to project a forecast. Better yet, toss those numbers to the group and ask their opinion.

To really throw some RUB on, this guy ‘comes off’ like a big time chef dude, too good for the opinion he solicits… if so, why as us lowly pizza guys? Again, I simply stated what was obvious and suggested a recourse. He obviously didn’t like so why should I bother adding anything else?

Could I have stated it better? Probably. Yes, definitely. But you know what? I’m just as direct in person, so why not do what I’m best at, which is being myself.

If someone posts a question, such as, “should I turn left, or right?” Should I answer, left? Or, right? Or, how about, suggesting they determine where they are, or where or they going, to which some people might reply, “I didn’t ask you for directions? I asked for a decision.” Anyhoooo, I probably should have been more polite (for him, that means less direct).
 
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I took it as he kept saying his experience because he was taking insult on the comment. and not cuzz he wanted to look bigger. or just trying to paint his picture by words showing who he is. I mean he did apologize. Sometimes we may read each other differently I guess. and maybe he is from another generation and speaks differently on the PC than others. Just thought he was getting roughed up lol :shock: :lol:
Wizzle Wassell:
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BPLive:
dude I’m from Jersey. In another thread I stated I’m in Greece right now.

Anwyay you mouth’d off more than made any points and threw the guy off-topic that lead to a mess of a thread. The other guy who tried to guess he never made a pizza 'commercially didn’t help either. You are all over the place… One Way Wizzle. I’m not the one picking a fight. The one who doesn’t understand the english language is the one who doesn’t see sentences from Hotrocks on a more broader spectrum. You see it one way and stuck with it. I think most of us understood he wasn’t trying to be an A Hole. Wasn’t the one anyway.

You think you can make points and then mouth off the rest about nonsense, got out of hand imho. Ruined the thread with the nagging and nagging that he didn’t say “heard” correctly or whattheFever. Comprende?
Oh you’re from Jersey, that explains it all then. At least if you were from Greece I could understand your lack of comprehension and written skills, obviously it’s just ignorance then. I’m all over the place? You obviously haven’t read this thread (or your own comments) as pretty much all of your statements are just absolute rubbish. ’
  • The guys name is GotRocks, not Hotrocks
  • The other guy who tried to guess he never made a pizza 'commercially didn’t help either (your words not mine)??? Gotrocks said he had 20 years commercial pizza. He’s not the other guy he’s the guy!
  • I think ‘I can mouth off’??? - you’re the one who started to pick holes in other peoples posts when you’ve not even been involved or participated. Theres a name for people like you… TROLL!
I’m entitled to my opinions just as everyone else is on this board but at least I participate.

Pretty much everything you’ve typed on this thread has been absolute nonsensical rubbish. Pretty much sums you up then!
ooo righty… ^^ rest my case and I’ll move on.
 
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