Long range planning for new pizzeria(2013)

[ABN173]

Hello all,

My name is Dale Campbell, and I am new to the forum. I used to work in the industry (only for 4 years) and even managed a place until it was sold to a couple. Once they felt learned all they could from me, and felt comfortable with the place they let me go. This was long ago (1987) and I was young so I started a career in the army. I will retire in 2012 and plan on applying for a “Patriot Loan” through the SBA to open my own place. This will be near a large military base with a lot of military retirees as well as active duty service members living in the area. This is a post that is growing and in no danger of a BRAC shutdown. Anyway I have thought about having a military themed restaurant (Nothing over the top that repels non-military customers though). I lived in the area for five years while stationed there and there are lots of the inexpensive fast food pizza places (like CiCi’s) but there is only one place that I would consider a decent dine in pizzeria, and it serves good pizza but not what I would call great pizza.

I Learned from a fellow named Paul Monette that opened a place/chain called Village Pizza in Birmingham, AL. He believe in simple proven techniques such as fresh ingredients and for the most part stayed away from canned items (especially toppings)

I am in the initial planning phases now, and playing with recipes and such. I am looking to serve pizzas, calzones, caprese, subs, pasta and salads. I also lived in Italy for eight years(while in the army) and have some invaluable experience both as a consumer and from learning typical Italian home cooking.

Again, I am no expert and it has been over 20 years since I was involved in this industry so I do not claim to “know it all” in fact I hope to learn some things here. Having said all that I welcome the forums advice and comments!

With Regards,
Dale

 

[Pizza_of_the_Month]

Welcome Aboard!
The best way to start planning is with a business plan. Define your goals and find info on how to reach them. The forum has alot to offer. Start with the stickys at the top of the think tank page. There are alot of great posts there.

 

[royster13]

Best spend a few weeks reading and re-reading this forum…It has “the good, the bad and the ugly” as far as the pizza business is concerned…And then when you have read it all, you can ask the “grizzled” vets here any questions you are left with…Good luck…

 

[Deacon_V]

First…Thank you for your service Dale. I wasn’t wise enough when younger to avail myself of a military career, but was very supportive of our #2 sons’ service in the 1st Cav.

My advise, seek as much and more information as you can possibly stand. Start with the “Industry Info” tab on this very page. When I built our business plan PMQ was an invaluable resource. I would also recommend getting in touch with a S.C.O.R.E. chapter in your local business community. Soak up real-life, real-time info from the folks that blazed the path.

Plan on more work, more time, more headaches, and more surprises than you could “plan” for…but with it comes more satisfaction than I’ve found in any of my past-lives! Good luck. Hoorah.

 

[bodegahwy]

Save money. Yes there are loan programs available, but debt is a burden you should seek to minimize.

Look into the local banks. Find out which do the most small business banking. (They will all say they do, but there are significant differences in fee structures that make some banks more suitable for particular types of businesses than others.) I believe that the information about how many SBA loans banks do is public. Find the banks that do this a lot. Move your personal banking business to the bank you choose NOW. Introduce yourself to a loan officer and let them know about your plans. Check in and chat with them every 6 months or so.

Get a part time job in a restaurant. It does not need to be pizza.

Consider a franchise.

Look at buying an existing business with a good location. It is faster, cheaper and less risky than starting from scratch.

 

[Roger]

bodegahwy:

Save money. Yes there are loan programs available, but debt is a burden you should seek to minimize.

I agree 100% with this statement. Save as much money as you can! Put every spare dollar you have in it’s own account for the next 2 years and don’t touch it! If you can afford to put $1500 or more in that account for the next 3 years, you will have at least $54,000 when you are ready to open your place. This will minimize a lot of the risk that you are going to take. My advice would be to keep saving until you have enough money to open the place with cash. I know it might delay your planned opening date. Even if you have to work 2 jobs to safe enough money, it will be worth it.

If you open a business by paying for everything with cash and it fails, it will not negatively effect your life to the point where you can’t recover. You will have only lost time and the money you have saved. If you go out and get an $80,000 loan and your business fails, you will be stuck paying that back (with out the extra cash that the restaurant was supposed to be bringing in) and it might put you in a whole that you may never be able to dig out of. It could force you in to bankruptcy. Also, if you rent a place you will be bound to that lease and if you are unable to pay every month and have to break it, you will risk being sued and held liable for the remainder of that lease.

Whatever you do, don’t let your emotions and passion dictate how you go about handling this business venture. Head into this with the knowledge that more that the majority of new restaurants fail within the first 2 years. You need to prepare for the worse and minimize as much risk as you can. By getting a large loan, you will already be in the whole before you even open the doors for business. As I’ve talked about on here in the past, I know from experience. I opened one of my pizza shops blinded by desire, passion, and enthusiasm. I got $85,000 in loans and never once considered that I might fail and what could happen. I just went on my gut feeling that everything would be a success and went full speed ahead with blinders on. The end result was that I was out of money and closed within a year. I had negative cash flow from day one thanks to my big loan, expensive lease payment, and the many unexpected problems/delays that came up. The business never had a chance. It took me over 2 years to recover. It was an emotionally and financially trying time for both me and my wife. It was not fun at all and it definitely could have been avoided if I would have went by the advice that I’m giving you.

On the other hand I have also opened 2 other pizza shops with cash that I had saved up. I am proud to say that I am still in business and have ran one shop for the past 10 year and the other one for the past 4 years. The day that I opened them for business I owed nothing, so I had positive cash flow from day one. Even when it was slow in the beginning, it wasn’t that bad because I had money saved in the bank and I didn’t have to pay any expensive loan payments. From my experience if I were to open another business again, cash would be the only way to go. My feeling now is that if I can’t afford to pay for my new business in cash then I’m probably not in a position at that time financially where I should taking the risk of opening a business. Instead I should keep working hard, saving up the amount of money that I need and patiently wait for when I am financially ready. I am no longer into taking uncalculated gambles with my money. I prefer to only take calculated risks now instead.

Another thing that I would like to mention is that when I purchased equipment and other things for my business with my hard earned cash, I was a much smarter shopper. I was patient and found great deals which saved me thousands. When I had gotten that large loan for my failed shop, I spent a lot more freely and wasted a boatload of money. It always seems a lot easier and less painful when you pay for something by swiping a plastic card or using loan money . I guess it takes the emotional part out of it like when you are actually handing somebody cold hard cash that you’ve worked for and saved.

I guess I’m done rambling now but my last piece of advice would be to never stop learning. Education, education, education!!! Before you open your business you need to brush up on accounting, marketing, managerial skills and develop effective systems. Best of luck and make sure to study this forum until you have all of the posts memorized! lol. There’s a lot of great advice and knowledge to be gained here.