Anyone know anything about owning a pizzaria?

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FelixDeCat

Lifer
Aug 4, 2000
29,307
2,099
126
Pizza shops can be very profitable - if they're very well established. The kind of place that when people visit their hometown, they stop in for some nostalgic comfort food. Also, it's extremely easy for an auditor to catch a shop hiding profits. There are too many other numbers that would be a smoking gun. "The records show you purchased 90,000 pizza boxes last year. But your sales records are only for about 85,000 pizzas. And, enough cheese was purchased for 90,000 pizzas. "

If you've never worked in a pizza shop, I don't think it would be a good idea. Further, I'd expect a decent pizza business to sell for FAR more than 80k.

Ill give you $500 for it. It's all I have.
 

Nebor

Lifer
Jun 24, 2003
29,582
12
76
Pizza shops can be very profitable - if they're very well established. The kind of place that when people visit their hometown, they stop in for some nostalgic comfort food. Also, it's extremely easy for an auditor to catch a shop hiding profits. There are too many other numbers that would be a smoking gun. "The records show you purchased 90,000 pizza boxes last year. But your sales records are only for about 85,000 pizzas. And, enough cheese was purchased for 90,000 pizzas. "

If you've never worked in a pizza shop, I don't think it would be a good idea. Further, I'd expect a decent pizza business to sell for FAR more than 80k.

Strong username to advice ratio.
 

Blackjack200

Lifer
May 28, 2007
15,995
1,685
126
Pizza shops can be very profitable - if they're very well established. The kind of place that when people visit their hometown, they stop in for some nostalgic comfort food. Also, it's extremely easy for an auditor to catch a shop hiding profits. There are too many other numbers that would be a smoking gun. "The records show you purchased 90,000 pizza boxes last year. But your sales records are only for about 85,000 pizzas. And, enough cheese was purchased for 90,000 pizzas. "

If you've never worked in a pizza shop, I don't think it would be a good idea. Further, I'd expect a decent pizza business to sell for FAR more than 80k.

It strikes me as something difficult to quantify. Yes, you can say they had X gross receipts, and Y costs, but again, how many entrepreneurs are really looking to setup shop in Reading? If the same pizza shop was in Philly, that would be very different.
 

Red Squirrel

No Lifer
May 24, 2003
67,907
12,376
126
www.anyf.ca
The only thing I know about it is that you have to make pizza, then sell it for less money than it cost to make it including all your expenses. You do those two things, and you make profit.

On serious note, if you are willing to put the work into it, (pretend that you have to do every single part of the business yourself as you'll probably want to start with very low staff if any to get a feel for it) then I'd say go for it.

Though there is some risk involved like any other business decision.
 
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Carson Dyle

Diamond Member
Jul 2, 2012
8,174
524
126
Further, I'd expect a decent pizza business to sell for FAR more than 80k.

It strikes me as something difficult to quantify. Yes, you can say they had X gross receipts, and Y costs, but again, how many entrepreneurs are really looking to setup shop in Reading? If the same pizza shop was in Philly, that would be very different.

What's your reasoning? A business making (or losing) $X in Philly is worth more than a business making the same in Reading???

Again, we're talking about selling _pizza_, not filet mignon. I'll bet there are some very successful pizza places in Reading.
 

zCypher

Diamond Member
Aug 18, 2002
6,115
171
116
All I know is working for pizza place made me eat lots of pizza, mmmmmm.

Seriously though, if you're prepared to do what it takes, you can do it. But don't go in expecting to work at regular job effort levels. You'll easily need to work twice as hard and twice as much to make the same net amount as a regular job. The hard part is you need to overwork yourself like that in order to get to the point where you can actually afford to expand and hire help. The situation described doesn't really sound like you can afford to hire much or any help in that situation. Running such a place alone would be a hella lot of work. Running a business is a shitload of work even without the labor aspect. There are several full time jobs worth of work that need to be done.

If you think you have it in you to give what it takes (and for several years minimum for things to turn around), then do it. Set the right expectations for yourself, plan it all properly, and maybe you can pull it off.
 

Scarpozzi

Lifer
Jun 13, 2000
26,389
1,778
126
Around here there are probably more pizza shops than anything....second most plentiful is chinese restaurants, third is mexican restaurants....4th is McDonald's.

Pizza shops come and go a lot because you have to steal customers from all the other pizzerias and keep them. That's tough to do unless you have a great location. If you're close enough to a college campus, you can do targeted advertising campaigns and offer discounts to students, stuff like that.

If you are near office buildings, put fliers around and offer delivery for business meetings and try to encourage call-in/carry-out orders at 5pm.

You just have to offer good product at the right price. If you have a nice dining area, sell alcohol and boost your revenue that way.....or sell 6 packs of beer convenience store style...or growlers of craft beer....or wine if you can in your state. Don't forget desert pizzas and anything else you can offer to upsell your customers and milk more money out of them.
 

DrPizza

Administrator Elite Member Goat Whisperer
Mar 5, 2001
49,606
166
111
www.slatebrookfarm.com
It strikes me as something difficult to quantify. Yes, you can say they had X gross receipts, and Y costs, but again, how many entrepreneurs are really looking to setup shop in Reading? If the same pizza shop was in Philly, that would be very different.

Ohhh, I don't know. Let's start with some ovens. I can quantify that.
http://www.webstaurantstore.com/suf...ogleShopping&gclid=CMrm0cf03sECFQaBaQodqEkAdQ
$27,000 for a pair of ovens. $80k starting to sound low yet?
Tables, utensils, pans for the pizza, etc. Make your own dough? How about $10-12k for a mixer? Let's not forget about the inventory, sinks, counters, cash register, an open sign, coolers for drinks (though sometimes suppliers will provide some display coolers, provided you only use their products; ditto soda dispensers). Large refrigerators for storing cold food, walk-in cooler, freezers, fryers (if fried food is available), etc. Commercial equipment isn't cheap.

And, if it's a decent business, the name of the business, with its pre-existing customer base - That part might be a little difficult to quantify. I do know of one idiot who bought a 30+ year old pizza place. It had a hell of an established customer base. The day he closed on the sale, he could have walked in and turned on the open sign. Instead (and the former owner was equally baffled) he chose to spend a few months remodeling the dining and kitchen areas - for a business that had within the previous couple of years done that process when they changed their location to the larger location across the street to accommodate their customers. And, he changed the name of the business. That was the final nail in the coffin. People really don't care (for the most part) who owns a pizza shop. Change the name of the business, and alter the menu significantly, and even if you made the pizza the same way, you are starting from scratch without any customer base. (I know one pizza restaurant that benefited enormously from the stupidity - it gained a lot of new customers. Hard to quantify that, though a completely wild guess: $100k of additional sales per year.)

Also, if you're serious about doing well, at lunch times, bend over backwards for very large businesses. "15% off your purchase of $100 or more" or other large order discounts. And NEVER be even 1 minute late with an order for a large business. It pisses employees off when they have a 30 minute lunch break, and their food isn't there the moment they're on lunch break. As soon as they're on break, and the food isn't there, it's an instant negative experience. (If you've ever ordered out for lunch, had a scheduled lunch break, and had the food arrive minutes before your lunch break was over, you know exactly what I'm talking about - and after one bad experience, the next time you wait even 30 seconds, you're already worrying.)

A poster or two before said to "Don't forget desert pizzas and anything else you can offer to upsell your customers and milk more money out of them" - don't get too large of a menu. Master what you sell. Focus on making the best pizza in the area. Not, "this is pretty good pizza." You'll probably need wings to go with the pizza, and probably subs. Wing/pizza deals don't even have to be deals. It can be 25 cents less than the price of the two ordered separately. Customers don't care; psychologically, they seem to feel that combos are much cheaper. But, as soon as you toss on dozens upon dozens of other items, complicating your menu, you:
complicate training for new staff. Have items that are made infrequently - increased storage cost of ingredients/greater inventory required. And most importantly, you need more staff for the same volume of sales. No one gets upset and changes their restaurant because you don't happen to have diet mountain dew in your fountain. "Pepsi, diet pepsi, mountain dew, sierra mist (or root beer)" Gotta have one that's caffeine free. Every employee can memorize all the drinks, and you don't have idiot customers who are overwhelmed with choosing from 30 different flavors. And, less inventory = faster turnover = no wasted, expired, or off-taste product.

Dine in orders: have some specials that are very simple and quick to serve. Lunch time: 2 slices of pizza and a large drink... Always a large drink; never a can, never a bottle. Profit is higher on fountain (generally). And, work out your prices so that change is easier to make for those specials. 3 slices and a large drink, so that with tax, it works out to exactly $5: less time at the register, and the customer can be served VERY fast. Result: you can handle greater volume of customers as word spreads about how quickly you serve people at lunch. If the pizza is good, and the service is blazingly fast, you *will* get a lot more customers via word of mouth at the larger businesses. That translates into more families ordering your food at dinner time.
 
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Scarpozzi

Lifer
Jun 13, 2000
26,389
1,778
126
That's not the only style of pizza oven. It may be the most versatile, but most small startups use these so anyone can be a pizza chef without knowing how long it takes to cook one. They're almost idiot proof (if you forget to preheat).

http://www.webstaurantstore.com/tur...ogleShopping&gclid=CPnE6K763sECFUgA7AodoGQAWg

I agree with what you say about not bulking up the menu. I was really talking more common sense business practice to sell complimentary products. That doesn't mean they're free...it's like you rarely see places that sell hamburgers without fries. Same thing can apply to "pizza and beer" or "pizza and breadsticks" or "pizza and chicken wings" (which can be pulled straight from the freezer to the pizza oven)

The goal is not to have a huge menu, but to maximize profits based on what sells in your area to your customers without requiring too much additional storage space. If you offer 2-3 extra products alongside your pizzas with common configurations, you could boost profits by 30-50% easily, just by upselling.

You can start small using beer/alcohol, freezer to oven products...and once you get big enough, even premake salads to go. If it doesn't sell or isn't profitable, simply drop it before it becomes too much of a liability. It takes testing the market to find out what works where you are.
 

Blackjack200

Lifer
May 28, 2007
15,995
1,685
126
Ohhh, I don't know. Let's start with some ovens. I can quantify that.
http://www.webstaurantstore.com/suf...ogleShopping&gclid=CMrm0cf03sECFQaBaQodqEkAdQ
$27,000 for a pair of ovens. $80k starting to sound low yet?
Tables, utensils, pans for the pizza, etc. Make your own dough? How about $10-12k for a mixer? Let's not forget about the inventory, sinks, counters, cash register, an open sign, coolers for drinks (though sometimes suppliers will provide some display coolers, provided you only use their products; ditto soda dispensers). Large refrigerators for storing cold food, walk-in cooler, freezers, fryers (if fried food is available), etc. Commercial equipment isn't cheap.

I'm guessing the ovens and equipment in that place are old. $80k does not really sound cheap to me considering the location. Nobody wants to drive to (or live in) Reading.
 

Apple Of Sodom

Golden Member
Oct 7, 2007
1,808
0
0
I purchased a local pizzeria that is established and has a strong following. It was listed on CL but also through a broker.

Pizza can have good margins, depending on if you want to sell expensive brick oven pizzas or churn out cheap Hot Stuff shit.

I paid somewhere around $250K for a hole in the wall but popular place with a 15 year history. Of that about $80K was used equipment and the rest was "blue sky" - basically what the name is worth. We are more of an artisan pizza - brick ovens, lots of sauces and toppings. You aren't going to get our pizza choices at Papa John's. Then again, we aren't selling 500 pizzas an hour.

I have a manager. I have to do some work, but not a lot. I am not going to flip pizzas when I can pay someone $10/hr to flip pizzas.

Our sales are around $800K/year. You figure 25% of gross for payroll, 25% for food cost, 25% fixed costs, and 25% for "profit" which" doesn't include taxes, debt service, or saving for equipment breakdown and shit. So that is about $200K profit per year. Of course those costs are ideal and it is easy to see your payroll go to 27%, and your food cost hit 29%, and then spend some on advertising... you get the idea.

This deal you are talking of does not sound that great. You need to get labor cost, fixed cost, food cost and see what it is as a percentage of the sales. If they add up to 90% then your $350K/year pizzeria is only generating $35K in profit, out of which you need to pay taxes and loan service.

TL;DR: I purchased a well established pizzeria about 2 years ago for around $250K. Sales are between $700-$800K/year so far. A 20% margin on that is respectable. Don't forget to save up a bunch of money in case equipment breaks down as soon as you buy it.
 

Apple Of Sodom

Golden Member
Oct 7, 2007
1,808
0
0
Ohhh, I don't know. Let's start with some ovens. I can quantify that. <snip>

Lots of good stuff in there. A few things off the top of my head from my experience:

1) Bottled drinks need to be offered in limited quantity. Fountain drinks have a cost of about $.30 (less if dine in with a washsable cup) vs a bottled drink which runs me about $1.70 wholesale

2) When I bought the business I paid a lot for the name and established customer base. First year we didn't change much. I paid for the name, Facebook page and reviews, recipes, pizza combinations, etc. We wanted the sale to be transparent and opened the day after the sale finalized with the same name, different owners.

3) Add-ons can be great. Get a good wing, mozzy sticks, fried ravioli, etc.

4) Offer dessert. Homemade cannoli or homemade gelato if you can swing it.

5) Craft beer is huge. So is craft soda. It isn't a high profit margin but it helps get people in the door.

6) Figure out if you are discount pizzeria or artisan. You can't be both. If you routinely have specials and sales you will devalue your product. Pick your markey segment and stick with it. There is no correct answer, but don't expect to sell pizzas for $25 all the time if you have deals like Pizza Hut (buy one get one free.)

7) Just because you like something doesn't mean customers will. When introducting a new product run a special on it or serve as slices and ask customers what they think.
 

slag

Lifer
Dec 14, 2000
10,473
81
101
And OP, anyone who would list their business for sale on craigslists and not through a legit business broker, is not someone I would do business with.

If this business was making so much, it would be easy for them to sell it. And if he was making $200k a year (profit after expenses), the business would probably be asking close to a million as an asking price.

It really depends on the business. I don't think one can make a blanket statement like that as certain businesses are very seasonal and might not be worth going through a broker.
 

Carson Dyle

Diamond Member
Jul 2, 2012
8,174
524
126
I'm guessing the ovens and equipment in that place are old. $80k does not really sound cheap to me considering the location. Nobody wants to drive to (or live in) Reading.

These statements of yours are getting more and more idiotic with every post. I'm not even sure why anyone is trying to teach you anything any longer. There are almost 90,000 people living in Reading. And I guarantee that one hell of a lot of them eat pizza.
 

BoberFett

Lifer
Oct 9, 1999
37,563
9
81
Anyway, my perception with pizzarias is that they're a lot of work but you can make a lot of money. Grossing $8k a week, even if you allow $4k for expenses, which seems like an awful lot to me, is $200k a year. Of course, you're probably working seven days a week for that money.

This seems well thought out. I can't see anything going wrong with this plan.
 

BoberFett

Lifer
Oct 9, 1999
37,563
9
81
Are you serious? 10% is not a standard number for your average business because there is no such thing. Some dude cutting grass with his dad's mower is getting almost 100% profit margin. My real estate business is probably around 70% profit margin.

If you're making 70% margin on an existing business, you'd be an idiot not to plow every possible cent into that. Why would you invest money into something that makes less?

Also, I highly doubt your 70%.
 

NetWareHead

THAT guy
Aug 10, 2002
5,854
154
106
Id probably learn how to spell it correctly first if you are thinking of investing in a pizzeria
 

Blackjack200

Lifer
May 28, 2007
15,995
1,685
126
My plan is to sell pizzas to poor violent people in Reading before dying of diabeetus because I drank so much soda from the fountain. That will not take five years.
 

cubby1223

Lifer
May 24, 2004
13,518
42
86
Are you serious? 10% is not a standard number for your average business because there is no such thing. Some dude cutting grass with his dad's mower is getting almost 100% profit margin. My real estate business is probably around 70% profit margin.
100% profit margin if the lawnmower is supplied for free, the vehicle to take you from lawn to lawn is free, the gasoline is free, and you take no salary for your work.

You guys think he's getting 10% on $8k a week? Okay, so his expenses are $32,400 a month? What exactly is he spending $32,400 on?

A $10/hr employee costs $14/hr http://www.snagajob.com/resources/what-you-cost-your-employer/

Lets say you hire two of them for 180 hrs a month each. That's 360 hours * 14 = $5,040. Okay $27,360 to go. Man, rent must be a fortune.

Insurance. Maintenance. Equipment replacement. Electricity. Gas. Water. Taxes. Loan interest...

The Little Caesar's in my town is about as minimalistic a joint as you can operate, and they staff about 6 employees. If you add delivery and dine-in, you're easily above 15 employees. If you believe you can run a pizza joint on two employees, I'd love to see you try!
 
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MagnusTheBrewer

IN MEMORIAM
Jun 19, 2004
24,135
1,594
126
My plan is to sell pizzas to poor violent people in Reading before dying of diabeetus because I drank so much soda from the fountain. That will not take five years.

As long as you don't need the banks money, you're good to go then. The reason banks and money people scoff at business plans while requiring them is that for the purpose of loans at the micro business level (< 100 employees) they're irrelevant. They don't even consider it in the loan decision, only your assets. Hell, they don't even consider them in "small" business loans (< 500 employees). However, their auditors believe it a part of responsible business practice. As I said, you create a business plan for yourself not, the bank.
 
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