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[hohonj]

Hey all,

I have been making pizza my whole life, and after years of wilting away in the corporate world, I wanna follow the dream. I have seen this post before on this site, but does anyone have any good advice for how to start? I have started saving money and writing down my recipes (which i have been perfecting), but the business side of this seems so intimidating. If you have any advice on how to get started, please let me know. Other then making good pizza, and thinking about locations... I dont know what else to do next.
I really hope some of you can help

[pcampbell]

Are you in NJ?   If so where abouts?

[CaptSammy]

Are you trying to buy an existing pizzeria or start from scratch. That's your first decision. You can also check out this site. http://www.pmq.com   This site is made up of pizzeria and takeout owners. lots of valuable info to be got there. But no matter what you will have to decide if you are buying an existing or building your own.
Good Luck CaptnSammy

[hohonj]

Are you in NJ?   If so where abouts?

Yes, I am in NJ. Right now I live in Montclair. The top choices for me are to open in South NJ (Red Bank) or Baltimore, MD. Baltimore is leading right now only because there are so few good pizzerias there.

[hohonj]

Thanks Captn! Our preference is to start from scratch. I have thought about buying an existing pizzeria and was shocked at how many options really are out there. I assumed that buying an existing pizzeria will be easier to start up and we can just change it around to suit our needs. PMQ looks like an awesome website. I can't wait to check it out. Thanks a lot!

[pcampbell]

OK Just curious.  I am in Bergen County.  In your situation (although we are not moving so we are more limited and sort of getting away from the pizza idea).  There is so much pizza around here.  Not much of it is any good but people still eat it and there are many established places.  Bad pizza there's been around for 10,15, 20 years.   

In terms of sales, 150k seems to be the going rate for established pizza places around here.  I think this is crazy really, since I would not anticipate spending half that on building out an empty space.  But it's probably also because I think all of the places for sale have bad pizza!!!

Good luck. 

PS Any good pizza in Montclair?

[hohonj]

OK Just curious.  I am in Bergen County.  In your situation (although we are not moving so we are more limited and sort of getting away from the pizza idea).  There is so much pizza around here.  Not much of it is any good but people still eat it and there are many established places.  Bad pizza there's been around for 10,15, 20 years.   

In terms of sales, 150k seems to be the going rate for established pizza places around here.  I think this is crazy really, since I would not anticipate spending half that on building out an empty space.  But it's probably also because I think all of the places for sale have bad pizza!!!

Good luck. 

PS Any good pizza in Montclair?

I agree with you man. Surprisingly, all of the pizza places in Montclair seem to be your run-of-the-mill pizzeria's... nothing special at all. Ideally, I want to go work for a pizzeria for a year or so and learn the ins and outs. I just can't find one I like enough.

[jerry bark]

Ideally, I want to go work for a pizzeria for a year or so and learn the ins and outs. I just can't find one I like enough.

hi,

i have no experience running a pizza place but have run two other businesses, one failed the other prospered while i ran it then failed later.

so what you wrote above is good thinking, get a test drive. so what if you don't like their pizza??? you are there to learn processes, ingredient sources, dough preparation and management so it really does not matter if you like the product. heck you could learn a lot at pizza hut, they have to do most of the same things you will.

as far as how to start out, i have given this some thought and my thinking is baltimore would be a lousy place to start. too much competition. IF i were going to do this i would go find a smallish town with one pizza joint that is up for sale (maybe one other at most). then i would buy it reformulate and go. in this case i bet you can buy for the right price, make some money if your product is good and position yourself to open additional locations in larger towns nearby.  the Samuel Mancino's franchise (which is common in michigan and indiana) started this way in the 70's. Sam used to stop in to the gas station where i worked to buy soda nd milk every now and then on a busy weekend night and now his son frankie runs the franchise brand and a few other restaurants in the area.

good luck
jerry

[BurntFingers]

Be careful to what you wish for.  You might get it.  It is a great experience.  But it is a 24/7 operation if you want to be successful.  Make sure you have lots of capitol if you start out until you weather the first 5 years.  Remember Location Location Location... Red Bank is for tony sit down places.  Go talk to Chris Mariano at Buena Sera in Red Bank, about starting out.  He helped my son learn the business.  I am sure he will be glad to give you an eye opener.

[CaptSammy]

Thanks Captn! Our preference is to start from scratch. I have thought about buying an existing pizzeria and was shocked at how many options really are out there. I assumed that buying an existing pizzeria will be easier to start up and we can just change it around to suit our needs. PMQ looks like an awesome website. I can't wait to check it out. Thanks a lot!

 If you are going to start from scratch, them PMQ will be a great resource for you. You can send a post to George Mills on that site, he can help you getting your layout and equipment as well as a bunch of others on the site. As I said you will find them all very helpful.You said in your orginal post that you have been making pizza your whold life, so I'm not sure why you want to go to work in a pizzeria. Once you decide how you want to proceed; scratch or existing business, the next step is to formulate your buisness plan. Once again once you have an idea of what kind of pizzeria you want example sit down or take out etc., people would be in a better position to help you with what equipment you will need, costs etc.  You could also do your menu 1st and from their you can find out what equipment you will need. As far as the business side of a business, it's ususally the #1 reason why new businesses fail; People don't pay as much attention to the business side of the business as they do to the food side of the business. But again there's all kind of help for that side of your pizzeria: PMQ, SBA, lawyer, accountant, banker etc.
Good Luck

[hohonj]

You said in your orginal post that you have been making pizza your whold life, so I'm not sure why you want to go to work in a pizzeria.

Capt,
The reason I wanted to go work in a Pizzeria was to learn about the "busines" side of it. The food/menu side of it, I am completely ready and comfortable with. We always talk about our menu, how it would be distinguished from other pizzeria's and what would be included and excluded. I thought 6 months to a year at a pizzeria would teach me a lot about the stuff I didnt even know I didn't know. My wife keeps telling me I should get an apprenticeship with an established pizza chef.

[DonGinos]

I think there are a couple of things you need to decide.

What type of shop? Pick-up only, Take and Bake, Buffet, DELCO, Sit Down, fast casual, are you going to add a pick up window, Food court etc.
This decision will affect a lot of other things?

Are you going to sell acohol?
What's going to make people buy from you? What makes you unqiue?
What are you going to carry on your menu? too much and its too complicated to track and you have spoilage problems too little and you could be losing sales.
I would say one of the most important things to do is cost out your menu and weighing/measuring every item that goes out the door.  I lost probably 50k opening my first store because my food cost was way out of line. we tripled sales in 8 months of taking the place over, but we were still losing money.
How are you going to advertise? Coupons?
Do you know what your break even point is? how many customers?
one thing I did to compare location was go to infousa.com and look at how many house where in a 3 mile radius. Then I looked at how many pizza shops where and divided.
Also, if there are a lot of little shop doing very little business a little money can knock them out pretty quickly.
how much do you pay people? how many hours?
Another hint check out some one the chains franchise websites and look at the numbers they use to get an idea about costs.
for instance most chains spend about 7.5% on advertising.
I read somewhere that prime cost should be no more than 65% in any restaurant.
Prime cost = labor+food cost + payroll taxes
labor also would include your salary.
most restaurants operate on a 5-10% profit margin.
That leaves about 17.5% - 22.5% for rent, utilities, CC fees and bank fees, Insurance, Misc.

you need to hire a manager you can trust for your days off. nothing worse than coming in after your day off having virtually no sales and all your supplies are gone.

Don't get credit at your suppliers.
get a point of sale system that can print out 30/60 day lazy customers. so your can mail to them. collect email address from as many customers as possible so your can email to them.
Door hangers are about $.15 after printing and paying someone to deliver them.
Co-op Coupon books are about $.02-$.05 they're easy to use but after all is said and done your sales go up just enough to pay them it seems like.
Don't borrow to open the store.
that 5% to 10% that's left over can real quickly turn to negative if you borrow the money.
Don't open a second store until the first one is paid off.


 

[PETE]

Take everything with a grain of salt, keep your rent under 10%, offer a good product, have a niche, in the right location and don't let anyone say you can't do it.  Check out your local SCORE/SBA for help.  I am over people (especially on the pmq think tank, stating if you dont have $500k you can't open a pizzeria.  Do your homework, the location is key, it is not key if you are paying too much rent.  I live in S. Cal. and it took me 2 years to find a place, and it was much cheaper to buy a place then start from scratch (too many permits city red tape).  I love this board, but my 2 most important factors above location and rent, is oven and mixer, (neopolitan for me), but you have to make sure you know your life is over, 80 weeks (unless you want to hire maners, assistant mangers etc..).  I made a nice living as a big manager at a national bank, (until it closed) worked for close to 11 years in pizzeria's (4 years high schools 7 years SDSU), and with the help of my family we are opening a pizzeriza (neapolitan), in Southern California.  Listen to the people on this board, they know what they are talking about.  Good luck.

[tdeane]

most restaurants operate on a 5-10% profit margin.
That leaves about 17.5% - 22.5% for rent, utilities, CC fees and bank fees, Insurance, Misc.

you need to hire a manager you can trust for your days off. nothing worse than coming in after your day off having virtually no sales and all your supplies are gone.

Don't get credit at your suppliers.
get a point of sale system that can print out 30/60 day lazy customers. so your can mail to them. collect email address from as many customers as possible so your can email to them.
Door hangers are about $.15 after printing and paying someone to deliver them.
Co-op Coupon books are about $.02-$.05 they're easy to use but after all is said and done your sales go up just enough to pay them it seems like.
Don't borrow to open the store.
that 5% to 10% that's left over can real quickly turn to negative if you borrow the money.
Don't open a second store until the first one is paid off.

If restaurants worked on a 5-10% profit margin, why would anyone open a restaurant? I would avoid coupons. They devalue your product and customers that come in because they have a coupon typically don't come back until they get another coupon

[Mo]

Don't borrow to open the store.
that 5% to 10% that's left over can real quickly turn to negative if you borrow the money.
Don't open a second store until the first one is paid off.


 

So, cash only to open a place? You're right, I'm sure no successful businesses borrow money to finance start-up, operations or expansions.
 

[hohonj]

I think there are a couple of things you need to decide.

DonGino,
Thanks so much for all of that info. A lot of what you mentioned I already have thought about and gathered information on, however some of what you mentioned was completely new.
This was great info and a lot to digest. I think I'm gonna make a fresh margherita pie tonight and re read it and take notes.

Also, some of the other posts after this were also very insightful. I have given a lot of thought to my oven, but almost no thought to my mixer... that was good advice.

I realize that I will be going from a fairly cush coprorate job to a high hour/low paying job (at first), but I keep thinking, won't it be much more rewarding to be doing what I love, reaping all of the benefits (instead of some boss in my office), and building somethign from the ground up? I can't be the only one who thinks this will be way easier then counting the minutes go by until 5 oclock.

[Davydd]

As an architect I had many clients in the restaurant business. One thing I noted was the successful ones had a great deal of confidence and had well defined goals and solid business plans. The successful ones did not go into a venture with questions they didn't already pretty much know the answer. Their questions were for verification and confirmation. Most of the successful ones were working from a hard knocks experience background. I don't recall any that hadn't at one time had to get themselves up off the floor and go another round. That kind of defines an entrepreneur.

[pizzablogger]

@ hohonj:

First of all, good luck with your pizza venture! 

I have lived in Baltimore, MD for ten years now and have visited nearly all of the pizza establishments of note in the city and many of the crappy pizzerias as well. I will eventually open a pizzeria in Baltimore, but am not quite in a position to do so yet (either from a monetary or recipe standpoint).

Alot of great advice already in this thread, but certainly a very clear vision of exactly who your ideal target audience is and then obtaining a location in/near where your targeted demographic is concentrated is one of many steps.

There is certainly a growing scene of new pizzerias in Baltimore, with Joe Squared and Iggies leading the way. In addition, Woodberry Kitchen (rated by Bon Appetit as a top 10 best new restaurant in the country) and B&O American Brasserie have started offering flatbreads and pizzas as well. A brand new pizzeria is opening in the desireable Harbor East location by the end of September. Some pizzerias people like in Baltimore, by neighborhood are listed below. Not saying I personally like all of these, but they are successful and popular. I'm guessing you have been to many of these:

(Penn North) Joe Squared website: http://www.joesquared.com/
(Mount Vernon) Iggies website: http://www.iggiespizza.com/
(Southwest Baltimore/SoWeBo) Zellas Pizzeria: http://www.zellaspizzeria.com/
(Federal Hill) Pub Dog Pizza: http://www.pubdog.net/
(Harbor East) Bagby Pizza Company: http://bagbypizza.com/about.php
(Downtown/Close To Inner Harbor) B&O American Brasserie: http://www.bandorestaurant.com/
(Falls Road) Woodberry Kitchen: http://www.woodberrykitchen.com/
(Highlandtown) Matthew's Pizza: http://www.matthewspizza.com/
(Fells Point) Brick Oven Pizza: http://boppizza.com/
(Little Italy) Isabella's Brick Oven Pizza and Panini: http://isabellasbrickoven.net/default.aspx

You could add Pasta Mista in Canton (no website) could be added to the list.

Coal Fire Pizza in Ellicott City has opened to mostly successful reviews and is typically crowded, while Py Wood Fired pizza in Canton Square failed about a year ago. Knowing why this is wouldn't hurt either.

I know someone who is very close to opening a pizzeria in New York City. A lifelong friend of mine who is in commercial real estate and tends to wind up knowing everyone in a neighborhood lives in the same 'hood where this other friend of mine is looking to open his pizzeria. They met in my lifelong friend's neighborhood and my friend was very impressed by how the aspiring pizza owner literally "knew my neighborhood like the back of his hand....business owners, locations, real estate agents, people on the street, etc"...and my lifelong friend is not easily impressed by such things.

Knowing your target market like the back of your hand, before committing to a space, certainly can't hurt in developing a very strong business plan. If I were you and likely looking to spend a lot of money opening a pizzeria, I would be spending a LOT of time in Baltimore getting to know people and also visiting existing pizzerias repeatedly, asking patrons why they like the place, getting your feet wet so to speak.

There is not a lot of good pizza in Baltimore. Too many places, even older favorites, have a lack of focus in my opinion....selling pizzas, subs, cookies, hot sauces, coffee drinks, wings and 20 other items. These types of places tend to still pack people in when in a good location, but I know for a fact there is a large, and growing, segment of pizza lovers in Baltimore that are frustrated we do not have a pizzeria which can truly lock horns with pizzerias on the national scene.

I truly hope you can come to Baltimore and offer a really solid product......I for one would be there often if there is really good pizza being sold.

One day I will open a pizzeria in Baltimore and I know this sounds completely hokey, but my goal will be to offer nothing less than great pizza which can hold its head proudly against any pizzeria on the planet.

Good luck the rest of the way and I'd be happy to talk with you offline and meet you in Baltimore to show you around, if need be. 

pizzablogger01@gmail.com

Of course, I can't see anything more important than having a great product, before opening your doors. --PB