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Help please with business plan

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itsjustpizza

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Hello I’m looking for some help. I’m looking at taking over a former Pizza Hut store. Lucky for me it’s fairly well built out and has most of the equipment in place making for a quick re-branding and start-up. I want to do it right and So I’m working on a business plan for a 5000sq foot Pizza place. I’m looking for three things this early in the process.
The first is a good way to put together a business plan. What is peoples experience in building a business plan. Any software recommendations or such?
The second is access to actual real world numbers. Has someone found a good source for this. Is anyone willing to share their numbers made anonymous of course?
Finally what kind of start-up costs would be expected? Can I do this on a modest budget?
 
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First, “can I do this on a modest budget”. nope…unless modest is different for you than most folks.

Info I used was found by looking under the “Industry Info” tab above, by culling the annual “Pizza Census” issue of PMQ, and by hitting the internet. There is a TON of intel out there if you just go look for it including sample business plans that you can tailor to fit your needs.

Also, find your local SCORE chapter. They are business folk of all stripes and are there to do nothing more than make your life easier with knowledge, support, and contacts. Find them!!

And lastly…plan on having about twice your planned and expected capital at your disposal. You may be the rare one that never needs to tap it…but have it available!
 
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Hi Joey:

You do not state how old the shop is.

Just my usual advice to those buying an existing shop.

Building and health code are updated regularly.The shop you are looking at may not be up to date.

You will be required to bring the shop up to code to get an occupy permit.

Be advised that nothing is grand fathered in for a new owner.

Have the Health , Building and Fire department inspect the shop and tell you what if any upgrades will be required before you make a decision.

George Mills
 
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PizzaJoey I will be very honest and blunt…what you asked scares me! You contradict yourself. You say early in the process but are dealing with a recently closed and I guarantee you soon to be liquidated PH location. That says buy now or it is gone. You are talking about 5000sqft and then saying at a modest price. Those two do not compute. There really are not any great “programs” that you can just plug in some numbers and get a plan out of. Each and every business is so unique and different that it just does not exsist. The restaurant world has one of the highest failure rates of almost any startups. Why? Easy… everyone thinks it is easy to make and sell food. Why not…everyone eats! They also think they can do it without a large investment. Then they realize they forgot a few hundred items that all cost money and oops…they are broke. You need a large cash reserve in almost every case. Yes some people get really lucky and buy a place that is turn key and really just needs new and better management but that is 1 out of every hundred thousand. Can we ask… what is your background? Work history? Ownership? Location means alot also? Ask yourself how a corporately funded PizzaHut failed? How long was it there? I also must go back to the 5000sqft. That is really big for what is obviously your first business venture. For all I know I am way off on my thinking…but without a lot more details it is hard to say. Let us know more about the situation and see what help can be offered. Just remember that even though you might not like what you hear at times…their are people here that have decades of real-life business experience and have also made plenty of mistakes with their success along the way. There are also people that think they know it all. My advice…read a lot and listen to the people that do not know it all. They know better! :idea:
 
Joey, it’s time to start working with an accountant who is experienced with restaurant ventures. Doing this yourself is a recipe for financial disaster.
 
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I appreciate the feedback and concerns. My main focus is putting together the numbers. It’s a unique opportunity that presents itself as the landlord owns everything and isn’t liquidating. The previous business owner had some “unique internal challenges”. The building is fully furnished and built out from the Pizza ovens to the mops basically the Walk-in was emptied and the doors where locked. Rent is very reasonable. So thus my main focus is making sure the numbers work and putting together a Business plan is my main focus. Any assistance would be most appreciated.
 
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Joey, again, you need specific assistance. Strangers on the Web won’t be of much help. Find a professional accountant who is experienced with restaurant operations. That person will give you every bit of information you can possibly need, based on your specific situation and with your financial situation taken into consideration.

Unless you want to put your complete financial accounting on line here, for all of us to see and marvel at. If you do, though, be sure to put your account numbers as well, since that is a significant factor.

Please, don’t do that. Please, please, don’t.
 
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Having just finished writing my 1st biz plan (other opportunities were ‘wingin’ it…lol…) it was a valuable experience, when dealin with potential investors…

Tho I have many yrs in the hospitality biz and the last 10 or so with pizzas, I benefitted writing the plan…

There are many others online that you can review, but it really starts with a spreadsheet, IMHO…

Graph out your menu and the hours in the day and ‘guesstimate’ what you might sell thru the day, 7 days a week…

From there you can map out the labor needed to produce those daily/weekly sales numbers…

That will be a real eye opener…

Semper Fi!
U.S.M.C. Area Auditor
3rd MAW, El Toro, CA
 
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A quick “guessemate” for what busines you could expect would be based on what biz the closed PH did.
 
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I just talked with a client who bought a so called “ready to open store” and after getting all the inspections done found out he needed to drop another 40,000.00 to bring every thing into compliance…The “red flag” should have been that the landlord would not let him bring in inspectors until the deal closed…So IMO very few opportunities are as good as they seem…Good luck…
 
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Royce…not to sidetrack but everytime I hear that comment I really lose it. How can someone sign a contract, lease, or any deal when one of the parties is basically hiding something. I understand when someone gets tunnel vision and it is their own fault that they missed all the issues and signed anyway…but when you are denied full access to the details or inspections beforehand… I would tell them to run away everytime. If the other party is just being cautious and not realizing what they are asking by not allowing full access…they will come around as soon as you walk away. If they do not…then they were surely hiding or trying to purposely deceive you. :!:
 
Pizza Joey:
Any software recommendations or such?
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I would suggest getting to know Excel, or any other spreadsheet program, very well it can be your best tool.

I would start by taking your planned menu and break it down to the ingredient level to get a good understanding of what your food costs will be.

Patriot has giving premium advice on the next steps to take.
Pizza Joey:
Finally what kind of start-up costs would be expected? Can I do this on a modest budget?
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These two questions are too ambiguous to give a reasonable answer. Modest for you may be extravagant for the next guy. IF all you need to do is re-brand and restock your supplies you could get away with anywhere from $5000 to $20,000 depending on what you need to do. BUT it could also cost you $100,000 so without knowing the microeconomics of you situation there is not a good answer.
 
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Thanks to all those that have helped regarding the business plan question. Unfortunately It appears next time I ask a question I will need to also start a second thread…as to “Why I shouldn’t open a restaurant”…or “Other people’s horror stories”…So as to not distract from the original question.

As per the question for Business planning. Here is a helpful and good link to what I’m trying to do. Although not a good fit as it’s for a chain but it’s a proper business plan and not just a back of a napkin spreadsheet.
http://www.businessplanmyway.com/images … ltered.pdf

I’ve been able to call utilities and get an idea what numbers to expect there. Same with Health and Fire inspection reports. Would love any feedback from people that have done and worked with a business plan. Cheers.
 
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qcfmike:
Royce…not to sidetrack but everytime I hear that comment I really lose it. How can someone sign a contract, lease, or any deal when one of the parties is basically hiding something.
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Mike over the years I have been on think tank I bet I have seen 100s of folks come here with no more than a “wing and a prayer” and think they can be in the pizza business…Most of the time that does not work…As many here know, this business is not “rocket science” but it is hard…However, just like a lottery where there is a little chance of winning the “big prize” folks still keep buying their tickets…
 
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PizzaJoey you have just proven what many here have tried to expalin to you. I did not read your link after I saw the title of Pizza Hut Franchise…etc. This business outline is not what you want or need to proceed with your plan…as you also stated. You are not a franchise or corporate store. You do not and will not run an indie shop in the same fashion. It just doesnt work. The comment about a back of a napkin spreadsheet shows how much you need to learn. The people that have commented on your question are some of the best assets on this site. You want an easy answer to your question…but if you read what has been said about that you would understand that there is no easy answer to give. Why do we give you the hard and sometimes ugly truth when we talk…well that is easy. We have lived and experienced this firsthand. We have made and loss plenty in doing so. We have watched friends and strangers jump into business ventures that explode both good and bad. Everyone here wants everyone else to succeed but YOUR questions show YOUR inexperience in the business world. Like its been said…pizza making is not rocket science. You can buy/lease a building. Equip it as needed. Hire and train your staff. Open the doors. Oh, and also BE OUT OF BUSINESS IN A MONTH!!!

Now back to your question. That napkin spreadsheet as you call it is the base for your business plan. 99% of a business plan is the analysist of all of the numbers. From food cost…based on your menu… to labor rates… insurance… buildout… utilities… inventory… advertising… lease… NAPKINS!!!.. etc… etc… etc. If you are looking for investors, or going to the bank… they will want to see how every penny will be spent and what your projections are with every penny coming in. If you have a million in the bank and are going solo… then you as the sole investor will want to know all the same answers.

You ask about start up cost and real world numbers…well that is what you were just told buy half a dozen SUCCESSFUL business owners. They all told you to start a spreadsheet and talk to an accountant about the real numbers of your specific location. We do not have the details. We do know that large franchise locations hang on for a long time while losing money because of corporate support. Their numbers are figured in a very different manner than most small businesses. I asked for some further details about location. That alone would get you a better response as population, demographics, what type of operation are you thinking of doing, even the menu will change all of the answers to your questions. I will repeat what I said in an earlier post here:

Just remember that even though you might not like what you hear at times…their are people here that have decades of real-life business experience and have also made plenty of mistakes with their success along the way. There are also people that think they know it all. My advice…read a lot and listen to the people that do not know it all. They know better! :idea:
 
Pizza Joey:
Here is a helpful and good link to what I’m trying to do. Although not a good fit as it’s for a chain but it’s a proper business plan and not just a back of a napkin spreadsheet.
http://www.businessplanmyway.com/images … ltered.pdf
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How do you think PH put together such a document? I would be willing to bet they used spread sheets to make all those pretty graphs.
Pizza Joey:
Would love any feedback from people that have done and worked with a business plan. Cheers.
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You already have feedback that you seem to dismiss as back of napkin advice.

Just a bit of background on my own experience. I opened my store after graduating from the Business Administration program at the local college with First Class Standing. I developed my business plan that would rival the one in the link you provided BY USING A SPREAD SHEET. When I took the business plan to the financial institutions they commented on it being the most comprehensive plan they had seen in years.

If you are looking for an easy way to develop your business plan forget it. It takes time and effort to complete. In my case it took about 4 months of FULL TIME WORK.

Good luck with your efforts.
 
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brad randall:
I’ve always recommend The Restaurant Book by James Rudnick, Richard Ware as a good one to cover all the general things involved in opening a restaurant - especially the financial stuff. I’m sure some of the examples they use are a bit dated, but the meat & potatoes of operating a food business haven’t changed that much… and you can get a copy on Ebay for less than it will cost to have it shipped.
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I honestly must say I’m quite shocked. I was really hoping I could reach out for some specific assistance in developing a business plan. I’ve not asked any naive questions nor shown any lack of knowledge of the industry. In fact I work with you all on a daily basis as my career is focused exclusively on the pizza industry. For the past ten years I’ve been on this board daily, In that time I’ve gone to every single Pizza Show every year from Vegas to Ohio even the rarer Chicago and Florida shows. I’ve had beers with and spoken to almost every single person on this message board and know the names behind many of the screen names here. You have shared your success stories as well as your unexpected problems with me.

I was hoping I could find kindred spirits whom could assist by saying hey I used this book or here is a great article from PMQ that helped me. Or here is a good spreadsheet template that helped me. Or to get some solid numbers call the utilities they will share some info. Even the occasional hey this a number I overlooked when putting together my business plan etc…

Much to my surprise I hear horror stories or how I’m going to fail…someone even took the time to write a belittling four paragraph rant on how I need to learn from others, and just use a spreadsheet. As if I never thought of using a spreadsheet. Not that I’m poo-pooing using a spreadsheet. I simply know it would be easy to forget certain numbers. Thus I’m looking for more assistance than just starting with a blank page.

So hoping to get this back on track:
A well done business plan such as the one I previously linked to consists of two parts. The first is the numbers and projections financials etc. The second part is the messaging how to put it all together to make it readable and properly convey needed info to others. Both I can use help with

Has anyone used any software or Excel templates they can recommend that would assist in ensuring I don’t miss anything.
Has anyone that put together a plan and found anything that easily got missed?
Can anyone point me to a good book, article, spreadsheet or Business plan that they would recommend for me to reference?

P.S. Thanks to those that have helped so far.
 
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And, Joey, I’ll suggest it again.

Find an accountant. You’ll need one anyway, but this is prime time to do that. That accountant can give you templates for figuring out your numbers. Yes, real-world numbers from current operators will help. None of us, that I can tell, are in your area, and we have no idea of the possibilities of your business. No idea of the competition, the demand, the average rent for your area, the costs of delivery or even of product in your area… all that is stuff you need for your business plan.

You said you contacted utilities. Great! Now, contact food vendors, get the cost for cheese, meats, and pizza boxes. Multiply those numbers by however many pizzas you think you’ll sell a week, and then multiply by at least 8. That could be a basis for your food costs. Then, add in costs of drinks, utilities, insurance, payroll, misc supplies such as dish chemicals and toilet paper and paper towels and linen service and so many other things that are essential.

What % of sales is your food cost, ideally? Your labor cost? Your insurance etc? Your misc supplies? And, finally, your profit? If you know those, great. If you don’t know those, you are in trouble.

If you know the pizza business as you say, you shouldn’t have to be here asking these kinds of questions. You need to talk to an accountant. s/he will help you develop your business plan.
 
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PM me your email address and I will send you a bunch of generic spread sheets that cover many aspects of business planning. You will have to tweak them to fit your needs. Again I will express there is no easy way to do a business plan it is a lot of work.
 
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