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Newbie looking for advise, direction,

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STRONG74

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Hello my name is Manny like most people that come to this site, I am thinking of starting my own pizza company. I have been looking online for information and stumbled onto this forum which seems to be great so far. My initial thought, of course. How much do I need to start up? Due to bad credit I will not be able to get any loans. No partners, just me and my wife. I do have some cashed saved, I recently got laid off due to the economy, with a promise from my boss that I will get called back when it picks up.

I will work full time at the pizza place, I am a very hard worker and am used to work tons of hours which I have no problem because I am dedicated, and from my thinking if I’m going to bust my A$$ I might as well do it for my self instead of making my boss rich. My wife is very understanding when I work long hours because she knows it’s always for our family.

First I have no experience in the pizza world; I would like to start off very small, with a pick up delivery place something like a little Cesar’s pizza. Maybe some more options like subs and calzones if I have the cash for the equipment. So I need a very small unit, enough for conveyor oven some elbow room and storage. The city I have in mind does not have too many pizza places near and is surrounded by tons of house and more home are in the process of being built. As well as shopping centers which is why I want to try and open up shop and get established with all the new residents before they get used to another pizza place that if another one opens. I think I have a great opportunity here to bond with the city before it really gets big. Does anyone know what kind of cost I am looking at to start a small place like this?

I found this information that I can buy that supposedly give me all the information together I am thinking of buying the digital copy to save $50 I am sure it is all free information but if it is well put together it may be worth it VS my time online that way if I’m sure I can afford to open up shop I can get to work on finding the exact spot, equipment etc… sorry so long winded. My head is just going crazy try with questions… any suggestions, advise I would appreciate it.
 
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Manny, I hate to be the first but you will hear this from the many on here that have been in the restuarant business for a very long time as they respond…but even the smallest of startups require lots of capital to get going. There are so many expenses that people just do not see or understand in the process. Yes you can by used equipment and start really small…but add in the buildout of the space, the health dept requirements, insurance, stocking for that first day, reserve funds for months if needed…you say your credit is bad…there goes pretty much any type of bank financial assistance even if you needed it. Not too mention your lines of credit with vendors for your supplies. I will throw out $100k to start a small delco operation at the minimum. There are a few here that have succeeded with much less or found that perfect setup in a closed out location that saved them tens of thousands of dollars…but you do not fall onto those often. I know everyone wants to be their own boss and make the money for themselves… problem is the saying “it takes money to make money” holds very very true in the restuarant world. Best of luck too ya!
 
qcfmike:
Manny, I hate to be the first but you will hear this from the many on here that have been in the restuarant business for a very long time as they respond…but even the smallest of startups require lots of capital to get going. There are so many expenses that people just do not see or understand in the process. Yes you can by used equipment and start really small…but add in the buildout of the space, the health dept requirements, insurance, stocking for that first day, reserve funds for months if needed…you say your credit is bad…there goes pretty much any type of bank financial assistance even if you needed it. Not too mention your lines of credit with vendors for your supplies. I will throw out $100k to start a small delco operation at the minimum. There are a few here that have succeeded with much less or found that perfect setup in a closed out location that saved them tens of thousands of dollars…but you do not fall onto those often. I know everyone wants to be their own boss and make the money for themselves… problem is the saying “it takes money to make money” holds very very true in the restuarant world. Best of luck too ya!
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thanks for your input, yes it does take money to make money i have always believed in that. obviously $100k cask is out of may range, my bubble is bursted on the first reply lol just kidding i really had no idea what it would cost for start up, that’s why i asked here.
 
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I’ll second qfcmike’s comments. 100K is a very realistic number. I bought my first store for 35K fully built out with almost new ovens, walk-in etc but by the time I added a few items it needed like a freezer, a sign, a bunch of dough trays etc and covered startup expenses and operating losses until the place broke even I was about 120K into it.

My second store also cost me 35K. We added some equipment, a remodel etc. All-in the cost was about 80K.
 
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Sorry for the bursting of the dream…but I would rather you burst the dream instead of the thousands of dollars you would take the hit on if you tried to start and ran out of money. That would hurt a lot more and a lot longer. Don’t give up…just take a harder look and learn the business first. It is not a storefront and making a pizza…it is SOOO much more.
 
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STRONG74:
I have no experience in the pizza world
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My best business advice would be to “stick with what you know.”

The reason I run a restaurant is because that’s what I worked at in High School and how I paid my way through college. When it came time to open my business after graduation, I choose a delco pizzeria because it was what I knew best. Had I worked at something different, that knowledge and experience would have determined the type of business I opened. Oh, how I wish I had done something different!

What skill set do you possess? What do you know best? Use that as a starting point to figure out what kind of small business would be best to open. Go with what you know.
 
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qcfmike:
Sorry for the bursting of the dream…but I would rather you burst the dream instead of the thousands of dollars you would take the hit on if you tried to start and ran out of money. That would hurt a lot more and a lot longer. Don’t give up…just take a harder look and learn the business first. It is not a storefront and making a pizza…it is SOOO much more.
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thanks i appreciate the honesty, and yes losing all my money before i even started would hurt lots more. 😦
i will continue to look and learn and see what becomes of this.
 
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brad randall:
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STRONG74:
I have no experience in the pizza world
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My best business advice would be to “stick with what you know.”

The reason I run a restaurant is because that’s what I worked at in High School and how I paid my way through college. When it came time to open my business after graduation, I choose a delco pizzeria because it was what I knew best. Had I worked at something different, that knowledge and experience would have determined the type of business I opened. Oh, how I wish I had done something different!

What skill set do you possess? What do you know best? Use that as a starting point to figure out what kind of small business would be best to open. Go with what you know.
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I mainly work in construction Management which is a very good career, very stressful and long hours which is why i said i would be ok with having that situation working for myself. when i got laid off i had a conversation with my wife about changing careers and she pretty much trust my decision which is helpful, i will be looking and see what is the best option for me. this was the first choice that seem to make sense at the time and it is still something i would like to do and run. your comments have still not deterred me and i will keep reading and maybe come up with something. i know people fail more than they succeed but i atleast want to try, that way i can tell myself i tried and just couldn’t make it, instead of being one of the people who always say i wish i would of started my own company…

of course im not going to be dumb and just jump in so i can say oh well i tried. but hopefully i can figure out something small and work my way up. maybe start a pizza cart at events or something until i can make extra money to make the next step up…
 
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I won’t echo what the other operators have posted…just be careful. It sounds as if you have had some hard-knocks already to earn your bad credit rating, you could really find yourself in a spot if your new venture turned sour.

One source of info in this trade is staring you in the face…click under the “industry info” tab. A good outside source I found somewhat helpful is a book " How to Open a Financially Successful Pizza & Sub Restaurant". Understand with ANY outside source they’re main interest is NOT in your success but THEIRS. You buy their book…they win. But out of the books I sourced, this was one of the better and includes a CD with files I found useful.

Also avail yourself of a local SCORE chapter. The 2 3 hour sessions I sat in with them were priceless in gaining knowledge and I’d already ran a business for decades!
 
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I’ll be harsh and blunt, don’t do it. I’m one of the rare one’s that has made a little bit out of something. We bought our shop 10 days before the big bank collapse of '08. I never really was that into it, but my wife’s boss approached us after I sold my bar and wanted to pay cash for our shop and have me manage it in exchange for 50% ownership. After signing contracts, he bailed and left us with a moral and legal obligation we couldn’t get out of. We basically bought a 15 year (high end rep shop) pizzeria with $150 in the register our first day and $4K in the cooler of inventory.

Seems like a great success story, but it’s not. Aside from all the start ups that everyone is talking about, it’s remarkably easy to lose a fortune in a business like this. The bigger you get at the beginning, the higher the risk. Oven breaks down on a weekend? $4K. Make line breaks down? $1K. Condenser on your cooler? $1K And that’s if you’re lucky enough to know someone in the neighborhood that will let you move your $10K of stored product to their cooler at 1:00 a.m. until you get repair guys in. Do you know how much those “minimum wage” workers actually cost you? Can you design your own website, can you program your own POS modules? Can you convert your phones to IP lines, or are you going to get hammered by LAN costs? Can you do your own accounting and payroll, or do you need someone else to do it?

What’s happening at your store when you’re not there? Because, let me tell you, the one time I got a visit from one of my TT peers, I was to distracted by the fact that my wife had just moved out to have a decent conversation about pizza. It’s demanding, it’s full of predatory corporate chains and it’s not what you think. Making good pizza isn’t that hard, nor is it that expensive. Operating a good pizza joint is hard and it’s remarkably expensive.
 
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deaconvolker:
Also avail yourself of a local SCORE chapter. The 2 3 hour sessions I sat in with them were priceless in gaining knowledge and I’d already ran a business for decades!
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Glad to see that post. I have been a SCORE counselor for about 8 years now. I enjoy talking to the people that come in working on thier business ideas. One tip, when you call the local chapter, ask questions about the counselors available. We all come from different backgrounds and not all of them are equally applicable to opening a small food business.
 
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I think it’s been said, so I’ll just reinforce the general opinion. Starting a business of any kind, even if it’s just out of your own kitchen, is no small endeavor. I can appreciate you wanting to work for yourself and respect your work ethic, but starting a business from nothing is not only going to cost you thousands of dollars in start up, you’ll also be operating as a lose for the first few years trying to make it back.
 
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