stay working or open pizza shop?

[system]

Hi
I’m a long time reader but first time poster.
I value your opinions and need help on a decision of opening up a pizza shop which backs up to the beach. the seller was selling for 70,000 and now just lowered to 25,000.

Its about 30 minutes from my home…It seats 50 ppl nice big kitchen w/ hood stove fryer refrigerators No walk in cooler and no pizza ovens rent is 2300 a month 2100 sq ft grosses 140,000. but heres the thing I just got a job doing what i love to do cooking in a banquet atmosphere and i love the job i just started 2 weeks ago. I go in at 10:00 am get off at 6:00pm. off on Tues and Wed get 175 pto (paid time off) at 13.50 a hour. Ive worked on and of in the pizza industry since 1980 and wanted to open a pizza shop but when i didn’t find a pizza shop i was happy so with I went out and got this new job but the broker just called me with this awesome drop in price for a Italian rest.
Im not sure what to do! Need your opinions.

Thanks

 

[famouspizza]

I personally would never consider a 40 min commute with the amount of hours I work…unless the pay is not good, sounds like you found a nice gig…why not wait and something closer might pop up…it’s not like places are selling like crazy these days and chances are it will only get worse

 

[Wing_Man]

Irving:

but heres the thing I just got a job doing what i love to do cooking in a banquet atmosphere and i love the job i just started 2 weeks ago.
Thanks

I think that’s a strong suggestion on what you should do.
A second thought.
Do you have 1-2 years expenses saved ? Both shop expenses and living expenses?

 

[system]

Yes I do have the expenses saved.
3 weeks ago I would have jumped at this opportunity but because of this new job im second guessing it. I know the pay is not the best i took a pay cut taking this job but its a job that makes me happy. I know having my own pizza shop would make me happy too. To buy a resturant for $25,000 is also a offer thats also hard to refuse.

 

[NicksPizza]

Wait a couple more weeks and buy his used equipment for .25 on the dollar. Then renegotiate your own lease and open your shop. If the place is under-performing, then you could wait for him to bail and vulture his stuff. Start your own place that way . . . unless someone beats you to the punch.

Or offer him for his equipment today to see what he says. Only do that if you are certain this is what you want to do, and you have a wriotten business plan, marketing budget, and financing in line to get started out of the gate.

 

[goomba]

Hello Irving,There is so many questions to be answered here in order to give you an honest opinion.Whats included in price?How long in the lease?Why is he selling in such a hurry?Is there any competitors?How many homes in the area?Is there parking?Is there room and $$ to purchase and install pizza ovens w/ hood?And are you ready to open and close 7 days a week for the next couple of years to get her up and running properly?Do yourself a favor and answer all these questions before you just jump into something w/ out doing a lot of research and thinking.Good luck on your decision and if you do it we’re always here to help you with any questions and advise.
Niccademo

 

[Kris]

No walkin cooler or pizza oven? What exactly are you getting for 25,000?
Those were the major expenses we had opening our place. You will need about 40,000 for those. The costs add up quickly, when you think you have enough saved…double it.

Also you said you opening your own pizza place will “make you happy” I get that…said it myself. If you are already happy why not stay with what you have. The grass is not always greener on the other side. Keep saving…there will be other opportunities down the road. Enjoy the happiness you have right now.

Just my 2 cents.

 

[xpk]

right on.the grass is usually never greener on the other side
I would relax the thought for 45 days

 

[tommieknowspizza]

THE BUSINESS GROSSES $140,000 A YEAR. THATS WHAT $2692 A WEEK. OKAY LETS DO A GUT CHECK HERE

WEEKLY GROSS $2692
FOOD COST (30%) $ 808.
LABOR & LABOR TAXES $ 300.
RENT $ 575.
WATER & SEWER $ 75
ELECTRICITY $ 150
GAS $ 150
2 PHONE LINES $ 40
LICENSING $ 20
MISC $ 100
GROSS NET $ 474 WEEKLY ~~~ $23,700 ANNUALLY.

NOT A PRETTY PICTURE. YOUR DAY JOB PAYS YOU 13.75/HR. THATS $27,500 ANNUAL GROSS WITH 2 WEEKS OFF.

IF THE STORE HAD A WALK-IN, AND A OVEN IT MIGHT BE WORTH $25,000., BUT CONSIDERING YOU NEED TO PURCHASE THAT EQUIPMENT WHICH MIGHT COST YOU ANOTHER $10K TO $15K, PLUS YOU WILL NEED ABOUT $10K OPERATING CAPITOL. THE REAL COST OF OPENING THIS NEW VENTURE WILL BE ABOUT $50,000.

HOWEVER, IF YOU CAN GET IN THERE AND INCREASE SALES TO $3500 OR EVEN $4,000 A WEEK, YOUR GROSS NET MIGHT BE AS MUCH AS $60,000 A YEAR.

I GOTTA IMAGINE THE REASON WHY THE BUSINESS WAS REDUCED IN PRICE, IS DUE IN PART TO THE LACK OF A WALK-IN, AND OVEN, AND SECONDLY THE LEASE WHICH, HE IS STILL PAYING. I IMAGINE YOU COULD TALK TO THE LANDLORD, RATHER THAN THE REAL ESTATE BROKER. IF THE SELLER HAS A COUPLE OF YEARS LEFT ON THE LEASE THEN IN EFFECT THE BUSINESS IS WORTH NOTHING TO THE SELLER IF IT IS CLOSED. THE RENTS DUE ON THE REMAINING LEASE, ARE MORE THAN THE VALUE OF THE EQUIPMENT.

YOU MIGHT BE ABLE TO WALK-IN TO THIS BUSINESS WITH NOTHING DOWN, JUST FOR TAKING OVER THE GUYS LEASE, AND IN EFFECT FOR $25,000 YOU COULD GET OPENED.

 

[NicksPizza]

tommieknowspizza:

THE BUSINESS GROSSES $140,000 A YEAR. THATS WHAT $2692 A WEEK. OKAY LETS DO A GUT CHECK HERE

WEEKLY GROSS $2692
FOOD COST (30%) $ 808.
LABOR & LABOR TAXES $ 300.
RENT $ 575.
WATER & SEWER $ 75
ELECTRICITY $ 150
GAS $ 150
2 PHONE LINES $ 40
LICENSING $ 20
MISC $ 100
GROSS NET $ 474 WEEKLY ~~~ $23,700 ANNUALLY.

NOT A PRETTY PICTURE. YOUR DAY JOB PAYS YOU 13.75/HR. THATS $27,500 ANNUAL GROSS WITH 2 WEEKS OFF.

Not to beat the proverbial dead horse, but I live in this sales neighborhood . . . actually the higher end across town part . . . and have a little insight. You will be d@mned hard pressed at this sales level to keep food costs at 30%. You will be bumping on 33% to 35%, which is another $80 a week at best. Marketing needs to be trimmed out of there somehow to survive, let alone grow. Let’s do bare bones and go $25 a week. That’s down to Gross Net of around $370 weekly and $19,250 annual first first 6 to 12 months.

Tommie, Your utilities estimates are probably high for this small of a shop, too, but your point is exceedingly well taken. You aren’t even paying off the loan for the purchase and equipment yet, and you’re at MAYBE $500 a week if you are really good at working the margins, and before paying any loans for startup.

Gotta really, really want it to do this.

 

[lilian]

are you in irving texas?
ok well do you know how to make good pizza ? did you compare your pizza to popular pizzas did people around you made that test and told you honestly your pizza is as good or better ? if that is the case do not worry about the numbers much and 25 grand not a big deal if you have it do like being in the pizza business and love to offer the best pizza in the world do it if you are not compasionate about it or about anything else then forget about it i hope that i have helped