Author Topic: Quality Margins ?  (Read 387 times)

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Offline Crustation Nation

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Quality Margins ?
« on: May 11, 2015, 10:25:28 AM »
Hi Everyone:
I come seeking honest answers in regards to my new Neapolitan pizzeria endeavor. I have committed myself to the Neapolitan pizza and the usage of the necessary quality driven products ( to which I firmly believe in) like the Caputo type "00" flour, San Marzano tomatoes (freshly milled as the sauce) and the fresh mozzarella (have not yet decided if I am making this in house).  My question is can anyone offer the actual margins achieved using these products ? as we all know they are the highest quality and a necessity to achieve the VPN to which I seek for my pizzeria.  I understand there are several factors to assume to know a margin of a restaurant but for arguments sake, lets assume we all know the givens and I am mostly speaking of the products aspect.  Typically we see Pizza in our geographic area that will bring in 15$ to 28$ for a large pie, 18".  I want to be careful enough not to price myself out of the business before I am out of the gate.  With a marketing degree and a great sense of the demographics, my plan is to consider the less margin up front and make it up with volume, which as we know in the pizza business volume takes care of a lot of things on it's own. I am curious to see if my business plan hits home with anyone of the tried and true nature using these products.   
Thank you !


Offline TXCraig1

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Re: Quality Margins ?
« Reply #1 on: May 11, 2015, 12:06:21 PM »
I come seeking honest answers in regards to my new Neapolitan pizzeria endeavor.

This will probably sound harsh, and in some ways it is. You want honest, this is honest. The last thing you need when considering opening a restaurant is to listen to people feeding you a bunch of happy horse sh*t. You can think of the good stuff on your own. Seek out people who will challenge your assumptions and point out your problems. Listen to those people.

For one thing, I'd suggest not locking yourself into SM tomatoes. You can almost certainly find better tomatoes at a significantly lower price. VPN is a joke designed to line the pockets of the folks at VPN. It is a complete waste of your money and it's probably a coin flip whether it will do you more harm than good.

I'm always curious when people come here saying they are going to open a pizzeria and in the same breath ask about margins. Have you done the calculations? Have you built a model? Do you know how much the price of Caputo flour in your market? Margins tell you if it's potentially a good business to go into. Margins don't tell you how to price something, and if you don't know how to price something, you don't know the margin. You are putting the cart ahead of the horse. 

I'd also suggest that you don't think things like "we know in the pizza business volume takes care of a lot of things on it's own." There is some truth to the idea that volume drives profit and volume can hide mistakes, but volume does not guarantee success nor are all pizzerias successful. Pizza doesn't guarantee volume for that matter. You need to do your homework, and you need to be diligent. Don't rely on the pizza to do the work for you. Pizza doesn't care if you lose money.
"We make great pizza, with sourdough when we can, commercial yeast when we must, but always great pizza."
Craig's Neapolitan Garage

Offline theppgcowboy

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  • Location: Montana
Re: Quality Margins ?
« Reply #2 on: May 11, 2015, 12:20:11 PM »
My price for Neo pies start at $9 for an 10 to 11 inch pie each topping is $1.00.  I make them out of my mobile pizza trailer.   You will occasionally get a new customer who thinks it is a little on the pricey side, but if they are standing next to a repeat, the repeat, they will usually step in and tell them that this pizza is worth it at even twice the price. Make a quality pizza and it will sell itself.  I also live in a very depressed economy, over 50% of the kids that go to the local school are in family's on subsistence programs. and usually run out of dough before I run out of customers, or usually return home with just a couple if I do not make pitas or pies for myself. I offer buy 10 get the 11th free punch cards.
The last event we did was from 4 to 8:00, we took 90 doughs, and also sold knotts and bread pudding.  My girlfriend and I are the only ones there.  We hump it and it works for us.

Offline theppgcowboy

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Re: Quality Margins ?
« Reply #3 on: May 11, 2015, 12:31:01 PM »
Craig and I must have been writing at the same time.  I always say if you currently have a happy home life, kids, weekends, time with buds, Be prepared to give that all up.  Oh, there are times you will only sell 6 pies.  It is not always all great.  If you want to do this, your market is going to be different than most others here that are doing it and making it work.  You need to find what works for you, and your market, not someone elses market.  Good luck in your decision.

Offline misterschu

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Re: Quality Margins ?
« Reply #4 on: May 11, 2015, 03:51:04 PM »
theppgcowboy, I don't know the food prep laws near you, but have you looked into packaging par-baked/baked pies for sale in retail?

Offline Crustation Nation

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Re: Quality Margins ?
« Reply #5 on: May 12, 2015, 10:15:49 AM »
Great feedback and thank you all.  A few points id'e like to clarify;
1. Completely agree with the VPN comment
2. Not sure I have found anything thus far that will offer the taste and quality of the SM tomatoes , but am willing to try others.
3. I do know the cost of the Caputo here in my region the margins I was referring to was specifically geared towards the use of these products, not the business itself.  I do agree and understands your comments regarding the knowledge of margins and pricing. I have built a successful business model and yes it has credible margins.  I was simply seeking advice on others that may use these products and wat if any they are achieving for margins in their given areas.

Much thanks to you all for your comments. I appreciate them.

Offline Crustation Nation

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Re: Quality Margins ?
« Reply #6 on: May 12, 2015, 10:20:03 AM »
Craig:

Beautiful looking pie's BTW, love your style, very similar to mine.

My Best,

Offline TXCraig1

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Re: Quality Margins ?
« Reply #7 on: May 12, 2015, 11:06:59 AM »
There are lots of good tomatoes out there. If you can get Caputo, you should be able to get Ciao tomatoes. Thy are imported by the same group (Orlando Foods).
"We make great pizza, with sourdough when we can, commercial yeast when we must, but always great pizza."
Craig's Neapolitan Garage


 

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