Profits approach zero for tax purposes and skyrocket when trying to sell the business… :mrgreen:
You can probably find some average percent quoted somewhere, but it’s meaningless to operators. Only your profit is what counts, not the average.
It’s a hard question to answer because everyone is in different markets, different competitive situations, different labor price markets, has different food costs, different operating expenses, different property markets, different starting costs or financing costs, if any, etc. People in fashionable ski resort towns (
) have high ticket prices and per unit gross profit, but wouldn’t last a week with the same operation in somewhere like Oklahoma.
But there are a couple of rules of thumb about costs. A direct material cost (food) target for pizza is about 20% (or less), which is why it’s an attractive business. Traditional restaurant food costs are closer to 33%.
Operators hope to budget about 8% of sales for rent.
Everything else is more variable. The start-up costs for the pizza business, for independents, is not considered very high, but the running costs of the business are high and successful independent owners are usually hands-on people and sharp about managing and controlling the operation within their unique market environment.
Others may have different ideas, but that’s my early morning take on my first cup of coffee…
