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OH NO! Someone else thinks pizza is the way to big $$$

Cremaster

New member
I am looking to create a small profitable pizza shop based on a small shop that has been in business for 40+ years. Below is a discription of this shop. What I think would be most important to change is italicized.

The pizza place I would like mine to resemble takes orders over the phone and uses a legal pad to keep track of the orders and they ring on a register and take cash or credit cards - no checks. All orders are taken when they are made, no computers here, you can see the pizza being made from the dough ball to ingredients added via a window, the pizza is placed in one of several large deck ovens to bake, it is removed to a box and sliced and handed to the customer or placed on top of the oven to keep it warm till the customer comes in to pick it up. There is a walk in, storage in the back, an employee restroom, and an area for cleaning and preparation. These areas are rather large. There is also a minimalist wait area with about 8 chairs.

The pizza are two sizes. No slices. The cheese is a good quality and huge. It is mounded on the pizza, not sprinkled like it was a pizza-pizza. Items are not reduced as you add more of them and they are huge as well. The pizza sauce is rather bland but it works rather well. NO ONE hates this pizza.

Pizza, spaghetti, and a few hot deli sandwiches are the only items they hand over the counter.

Canned drinks, 2 liter drinks, 1/2 gallon iced tea, and small salads are self serve from a small glass door cooler. A help yourself chip rack is also there if you have a notion for chips. I would say that 95% of sales are for pizzas. There is no suggestive selling or pushing of these items. This place exist to make and sell pizza.

This place has made so many pizzas that before the health dept made them get rid of the wooden pizza prep area the dough and paddles had worn the surface of the wood to the point that it was misshapen.

This is the type of pizza store I might want to open. Hopefully it would be cheap to open, cheap to run.

I think that they are tossing away 50% of their profit. What say you?

The following are things that I plan to search for and ask about in the forum. Can you please add further topics I should research and place your comments please?

Cost of start up and cost of doing business.
Store size and layout
Dry good storage off site? Is it cheaper than expensive shop space?
Oven type, those 90 second ovens vs deck ovens and how they affect quality.
Marketing
Target margin
Portable vs brick and mortar
Financing
Techniques of order taking, the legal tablet has it merits but lacks for suggestive selling, quick ordering, price verifying, advertising targeting, repeat customer encounter tracking, and stock control.
Employees, attracting long term quality people
Management
Valuing a pizza business for purchase and sale.
Suppliers, that Five Guys place has been based on a bedrock of quality suppliers, where to find quality and consistent dependable suppliers.
Maximizing impulse sales
Packaging beverages for maximum profit.
Creating a business plan.
Location, Location, Location
Profit, Profit, Profit
Menu (simple is what I am looking at)
Pizza style, taste (copy this place or not)
New profit items - knots and kookie bread
QUALITY CONTROL
QUALITY CONTROL when the boss is not there
Should I take on a family partner, what should I fear, what are the benefits?
Benefits of Take Home only.
Pizza for the freezer.

Again thank you for your assistance.
 
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ok will give it a shot i have 20yrs in Pizza and 7 of that owner operator

Cost of start up and cost of doing business.
at least $25,000 for just a small delco

Store size and layout
you can get by with 1000-1200sf

Dry good storage off site? Is it cheaper than expensive shop space?
not an option why pay a 2nd rent
unless you are just kicking butt
& your supplier will only make 1 del a week

Oven type, those 90 second ovens vs deck
good pizza takes time not a microwave speed
deck or conveyor will depend on space and
your dedication, deck you need a tender
conveyor you just set it and forget it

Marketing
depends on your market door hanging, direct mail, or internet mktg

Target margin
break even 1-2 yrs then 10% on your 3rd and then just start growing

Portable vs brick and mortar
this is dependent on your pref this company at one time was doing a complete store pkg
with a modular building set on your sight http://beta.pesiparts.com/ might check them out

Financing
cash is KING these days banks are not loaning money on restaurants unless you have enough
collatoral and a credit score over 700

Techniques of order taking, the legal tablet has it merits but lacks for suggestive selling, quick ordering, price verifying, advertising targeting, repeat customer encounter tracking, and stock control.
POS system point of sucess seems to to do all this (I Think I dont use it yet)

Employees, attracting long term quality people
GOOD LUCK!!!

Management
for the first 2-3 yrs YOU DA MAN!!!

Valuing a pizza business for purchase and sale.
get all their financials and bank statements, and offer 1/4 a years sales plus equipment over 5-10 yrs
i.e. 400,000 in sales offer 115K 1916 a month 5yrs 958 for 10yrs

Suppliers, that Five Guys place has been based on a bedrock of quality suppliers, where to find quality and consistent dependable suppliers.
get samples from vendors and watch thier pricing every week or month depending on where your at Roma, Lisanti, and Sysco

Maximizing impulse sales
pictures and samples

Packaging beverages for maximum profit.
2ltrs and fountains

Creating a business plan.
look in this site i believe they have a sample

Location, Location, Location
“if you build it they will come” don’t have to be Main st to be successful

Profit, Profit, Profit
maintain controls food and labor and don’t be to proud to ask
for help from vendors samples, misprinted boxes, block plus pricing on cheese

Menu (simple is what I am looking at)
many mktg companies on here will print but i use a greeting card program and create my own
corplast board and vinyl lettering

Pizza style, taste (copy this place or not)
depends on where you plan on opening 10-15 miles away? yeah around the corner? no

New profit items - knots and kookie bread
very profitable if you make your own dough

QUALITY CONTROL
I use pics of pizzas along the makeline and
cut table and as the late great Bobby Buchea would say “visualize and attack” this helps
with teenagers I also use portion cups (get the ones that PJ’s uses you can find them on ebay all the time)

QUALITY CONTROL when the boss is not there
introduce them to the “I” word Integrity and maybe put in cameras, and count boxes

Should I take on a family partner, what should I fear, what are the benefits?
the only family members you should ever consider is your spouse and kids
keep bros and sis’s, aunts and uncle’s, mom and dad OUT

Benefits of Take Home only.
since you don’t have delivery drivers labor would be low
or you could price cut since you don’t have that extra payroll and still
maintain a 11-15% cost (not including you)

Pizza for the freezer.
test, test, test and sample, sample, sample,

well i hope this helps and consider it my Christmas gift to you since it is 1:40am Christmas morning and Santa just got here

any other questions PM me

dennis
 
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Yes this was a great Xmas gift you have given me. Heck, you answered the whole post!!! Of course my job is just started now. I now have to search out more info on each of the topics you were kind enough to comment on. Thank you and I will busy myself with detailing out the stuff you have given me.

I am returning to lurk mode for a while but will check this thread daily. Great site you guys have developed here!
 
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I’m not motivated enough to try to match Fat Boy’s response, but I’ll chime in on a couple of the subjects: As Fat Boy said on family members as partners - basically NO! The reason is: Who is the Boss? There can be only one. It’s a good way to tear a family apart.
And how to get good, dependable employees? Number one, don’t hire experienced people. Why? Because if they are great employees, why are they looking for work? Start with kids looking for their first job, they are thrilled to be working, and haven’t picked up any bad habits, yet. It goes without saying that you have to train them right, but if you do, that’s the only way they know. And let them make decisions on their own! It always baffles me when bosses are shocked that their employees can’t make an important decision in a semi-emergency situation, when up until that time, that same boss demanded that the employee shut up, stay in line, and do your job. It takes practice to make decisions under pressure. This means, of course, that you can’t ream an employee for making a poor decision - correct, but don’t ream.
And one final thing: The RULES have to apply to you (the boss) too. Anything that the employees see you do, they will copy, since even if it’s against your rules, it can’t be bad - since you do it.
 
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Off and on over 20 years in pizza. Owned two stores for 10 years and one for another 2.

Cost of start up and cost of doing business.
25K: Only if you get very lucky. 100K is more common. No doubt some of the regular champions of shoe-string start-ups will chime in, but don’t kid yourself. Unless you find a fully built out, equiped store that someone is walking away from, you will not get open let alone profitable for 25K… and then you have to ask yourself why they walked away.

Store size and layout
Agreed 1000-1200 feet if it is well laid out.

Dry good storage off site? Is it cheaper than expensive shop space?
Off site storage is not practical. Invest in shelves!

Oven type, those 90 second ovens vs deck
Not sure what a 90 second oven is. Get a conveyor.

Target margin
Target? 15% on sales above maanger wages. Takes a while to get there and things have to go right. Easy to blow costs.

Financing
SBA will loan on the pucrchase of an existing business. Forget about bank financing on a new one. As posted, they will loan on other collatoral, but that loan is secured by other proerty… such as your home.

Techniques of order taking.
Forget the stone age. Get a POS system.

Employees, attracting long term quality people
Agreed. Good luck. To attract and retain good people you have to be a good manager, treat people well and pay them.

Valuing a pizza business for purchase and sale.
Very complex subject. Much too much so for a short post. Get professional assistance!! Formulas like the one above are a dime a dozen and worth what you pay for them. There are stores that do 400K that are worth 200K and others doing the same sales that a seller should pay you to take off thier hands. In any case I would NEVER consider a sales ratio for pricing without including profitability on the picture.
 
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Target margin
Target? 15% on sales above maanger wages. Takes a while to get there and things have to go right. Easy to blow costs.
Not exactly sure what the above is saying. Are you saying that if my manager is making 40k then I should target like so?

Gross Sales 250K - 40K = 210K .15 of 210K = 31,500

So I should target for 31.5 or 71.5.

Or am I way off?
 
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