Worried sick about failing

[Utilityman1]

I opened my 1st business which happens to be a pizza and sub shop (and pasta, chicken...) in the downtown of a major metropolitan city 45 days ago. I have come from many years of retail but never owned my own restaurant.
Although the rent is high, this was the location of my dreams as all local government offices, bars, concert halls, offices are literally on the same block. This is probably the busiest part of the city. Also there are major housing complexes and residential neighborhoods nearby!
To sum it up, as I was preparing to open, everyone congratulated me telling me how great the location was and that I was going to make alot of money.
Since I don't have much experience in this type of business, I recruited the cook of a very successful pizza shop by my house (he is currently splitting time in both locations). He has assured me that my food is far superior to the other shop he works at. He also helped me recruit 2 other cooks who are doing very well!
Unfortunately, business has been very slow and I am very concerned about closing shop because of lack of profit. When we 1st opened, we made about $800/day the 1st week and it started dwindling and it's now at $400/day which I believe to be a horrible figure thats not close to being sustainable. I thought it was a food issue and even solicited the help of a pizza shop owner who came in and tasted everything on the menu and said that everything was on point.
I am pretty much here all the time and I provide great and friendly service to all customers, the store environment is very clean.
I am having trouble understanding what the issues are. Most of the customers I have are repeat and also compliment the food and the service.
A customer walked into my store last week was wondering why it was so slow in here compared to the shop down the street (they sell similar stuff minus the pizza) that has a terrible reputation but rakes in a ton of $$$ (and thats also more expensive).
She said she doesnt understand why people would even go there now that I opened. 
I had such high hopes, I put everything I've saved during a lucrative 15-year career into this, now I am almost out of money and quite frankly depressed and very worried.
The delivery business, which should bring the bulk of revenue is practically non-existent although I have hired one gentleman whose sole responsibility is to pass out flyers in surrounding neighborhoods (I have checked his work and he works with the utmost integrity and is as disappointed as I am and I have to force him to take his pay).
I am new to this forum and hope to get any advice.

[Pete-zza]

Utilityman1,

In parallel with your post, you might also want to register and post your questions at the PMQ Think Tank at http://thinktank.pmq.com/forums/the-think-tank.6/. That is a forum frequented mostly by pizza professionals.

Peter

[dineomite]

Good rec, Pete. I was thinking the same thing. I hate to hear stories like this.

[mkevenson]

Utilityman, wow, what a story. I feel your concern. I am not a business/restaurant owner but all my life have heard that many don't make it. I have also heard that you should have enough money to survive a year without turning a profit. Don't know if these things are indeed true BUT....... Since you have been open 45 days, perhaps time will improve the business, if you can afford to keep the doors open?
The best to you!

Mark

[Kostakis1985]

I know how you feel, I wanted to tell you a few things that helped us when we were slow in the beginning.


     Its all about changing peoples habits, that place down the street is just what people are used to.
you need to get people to try the food what worked best for us was on slow $400 days my brother would go up to office bldgs before lunch and get in touch with whose in charge in that department, we'd say we are a new business and we would like to bring the office a few pizzas and salads to try us out tomorrow (office bldgs love salads btw) we would bring the food along with menus and sometimes an incentive based coupon. this type of marketing has worked so much better then any direct mailing program or advertising that I ever done. its worth a shot the phones will be ringing off the hook soon enough hang in there

[Chicago Bob]

I have also heard that you should have enough money to survive a year without turning a profit.

Mark

And not 1 day less in my book.

You hang in there Utilityman.....this thing will turn the corner for you soon. 

CB

[ChristianVerschaeren]

Hang in there, 45 days is nothing. If your product s good, you'll succeed.

[Gags]

I agree with Jamie.  While I'm not an operator, I think aggressive marketing will yield better returns than waiting it out.

Contacting administrative assistants in the office buildings, soliciting their business for department lunches, catered meetings, etc. will build awareness and hopefully participation.  Distributing your menus to the admins and offering them a free salad or dish will go a long way.  The admins I know in my industry usually have a folder with menus from which they'll order for company meetings.  That might be a great way to tap into your immediate audience.

Good luck!

[Donjo911]

  with all the advice above.  My experience has been largely on the ordering from and selecting caterers for sales meetings, conferences and executive briefings.  Google your address and look for hi tech companies (Cisco, VMware, EMC.. , regional sales offices of real estate brokers, these companies/offices will typically hold weekly sales meetings for their teams and have monthly partner meetings for groups between 10 & 50.  Many times, the receptionist at these offices will be the person who tells regional managers who is reliable and consistent which can be in my experience almost more important than food quality.  I reused the same sandwich, chips, apple in a box sandwich shop at the same office in Los Angels because I lived 40 miles away and did not know the local area well for caterers.  The were known & reliable so I continued to used them for over a year because the were reliable (it was Corner Bakery now that I think of it).  If you do not have an issue with greasing the skids a bit... You may consider offering these key administrators & receptionists something you make very well at the appropriate time (not pizza for breakfast - not an omelet for lunch.) and let them know that you'd appreciate their help and that you'd make it worth their while when they com in.  Another thing that works really well is to just deliver some food to "the break room or lunch room as no free food ever goes un-eaten in these types of offices. Some cleverly placed coupons (customized by you for that company by name specifically) to return let's say that week will let you measure your return on investment in the freebie and tell you which companies you are building loyalty with and where you should redouble or change to a new target.

Oh, also if you have any (there is probably a term for these types of facilities but I'll call them 'Executive Suites/Offices) Regus Offices this would be a good place to apply the above.  In these cases the receptionist and meeting room is shared amongst all of the tenants.  However, these are professionals who generally work in the field (read out of their cars) but need to have an office to meet clients, do training meetings, etc. if you get the handful of receptionists to recommend you it may have a multiplying effect across multiple businesses.

If you food is awesome and you make up packaged (lunch boxes, styrofoam clam boxes, etc.) don't forget to put a flyer or business card in the 'package.'  In this case too you find that the people attending your customers meeting and eating your food are the local folks that are likely to want to come back to your business.

Have you done any collaborative marketing with other local vendors.  Every business next to yours and down the street (storefronts) have staff.  You could arrange a deal with a business who's product/service made sense (or no sense like say- a dry cleaner where you could offer to pay for all/part of their receipt tapes or clothing tickets if you could add your marketing/coupon to the back of these innocuous slips of paper) as it's it builds a bond with your neighbor. You know what I mean..maybe you have your tablecloths and whites cleaned professionally. Perhaps using a neighbor business pays a dividend you may not be getting for a uniform delivery outfit?

Depending on your local laws and license restrictions, I used to visit a number of offices and as my meetings were reoccurring weekly/monthly I would run into vendors with a big Igloo coolers selling either nuts, cookies, or organic free range boneless kelp stick in the lobby of or in the elevator foyer on each floor.  If the building your targeting does not have a in building restaurant or snack shop and you can get the property management company's permission  - this too is a good way to get to the people who need to eat at a place close by and you will reach some perhaps small but cult like following.  It's critical that you show up at the same time and day every time like every Tuesday at 12:45 - you'll reach the people that don't have time to run out that day and get something and the people who had a weight-loss shake for lunch but would rather get a hot slice of your pepperoni for a fiver in place of a Snickers bar from the vending machine. Which reminds me of your soda vendor.  Find out who the district manager is or which route driver has to restock the diet coke or Pepsi machines all the time.  Where lots of sodas are being consumed - you have people eating at their desks, sales meetings, etc as suggested above.

You're far more brave than I.  And I'd love to see you succeed!  These are just the things that I would do if I were in your shoes.  It may take some loss-leader upfront cost/loss but I think if done correctly you'll be able to measure where/who/when your seeing a return on the investment. 

Lastly, if you are in a major metropolitan area you almost certainly have a local business journal.  Every year they publish a "book of lists" which you can also get as a download for like $500 bucks or so.  And it's free or available at a considerable discount if you subscribe to it - which you should because this will have all the local news of who's leasing new business space in the hi-rises and what hot new tech start up just got a trillion dollars from an angel investor, etc. all great opportunities to target the companies with lots of employees in your area and keep you ahead of others in your networking to build your brand.

PS: that store down the street.  Hang out there when they are busy.  If it's not the food and it's more pricey...there is a reason. Perhaps it's a very attractive cashier or a sandwich maker that over weighs the meats and cheeses. maybe they have a unique coffee that you can only get at that shop. You know what I mean... Keep your friend close - your enemy closer.

Best of luck!

[tinroofrusted]

Donjo, I think you just delivered a very valuable set of marketing strategies.  I hope UtilityMan1 can make use of some of them. 

[Donjo911]

Donjo, I think you just delivered a very valuable set of marketing strategies.  I hope UtilityMan1 can make use of some of them.

Thanks TinRoofRusted!  I appreciate it. You're probably doing all of that already in Irvine and NPB! 

[yewsuck]

Donjo,
         Thank you for those tips.   I also do hope that the original poster does well.  I just booked marked this topic to keep those ideas you made.  You should start a new topic just for marketing ideas.   

Everyone,
Thank you all again for the resources that you provide.
-YS

[jeffereynelson]

I know you haven't replied in here since your original post, and I also haven't posted here in a while because I also started a pizza place about 45 days ago too. We opened on March 31st. But I could definitely feel for you in your post. I spend countless hours per week at the store and am constantly stressing about the business just like you. I feel like I have learned a lot in my short time and if you would like to chat more and bounce some ideas around please send me a PM on here. I'm in a similar position where I want things to be busier.

[Pete-zza]

Some more tips from the PMQ Think Tank:

http://thinktank.pmq.com/threads/how-long-before-you-broke-even-on-your-first-location.14617/

Peter

[c0mpl3x]

pricing, marketing, incentive.  are YOUR prices cheap enough to be attractive to a casual first time customer to WANT to come in?

is your advertisement outside the store displaying any good 'deals' or 'specials' that make them want to come in instead of doing elsewhere?

is there any free tastes, samples, etc for people to decide with before they commit their money?

[gabaghool]

Utility man....
if theres a place similar to yours that is doing great......and has been in biz way longer than you........thats GREAT!!  iT tells you that its all a matter of time.  Go there.  Make your prices A BIT cheaper,  your portions a bit more, you help WAY more helpful and cheerful and your service quicker.....

and, after a while, ESPECIALLY with the new media (yelp, ylp, yelp) you will get there......no doubt.....just gotta go through growing pains.

ALso, while I think word of mouth is best....find the best food writer in the city and CALL him or her....USUALLY, they will come and do and interview.........its gold.

[Chicago Bob]

Utility man....
if theres a place similar to yours that is doing great......and has been in biz way longer than you........thats GREAT!!  iT tells you that its all a matter of time.  Go there.  Make your prices A BIT cheaper,  your portions a bit more, you help WAY more helpful and cheerful and your service quicker.....

and, after a while, ESPECIALLY with the new media (yelp, ylp, yelp) you will get there......no doubt.....just gotta go through growing pains.

ALso, while I think word of mouth is best....find the best food writer in the city and CALL him or her....USUALLY, they will come and do and interview.........its gold.

This is all jus waaay too much work for me man. 

CB

[waltertore]

I am sorry your are struggling.  Such experiences are stressfull and unless you are rich and or a master buddist it is hard to not get worried sick.  I lived in a constant financial struggle for 25 years with my music.  I had my good days and my bad days.  Eventually I learned what to do by listening to my heart exclusively and turning my head off.  If you have faith in your soul let it take over.  That is the truth.  Our heads scream all day long but our souls are quiet and will not fight for space with our heads.  The secret is to calm the head-treat it like a little child which it really is- and let your master,  your soul, guide you. I am just getting to this point in life and I think it only comes with trusting the soul not the head.   Walter

[mattbau4343]

Do not feel discouraged. It takes time to change peoples habits and establish a customer base. Make it a point to take one pizza daily with menus to a local business. Give it to them free of charge and introduce yourself. Imagine the impact that this will have over the course of a year!

What is the cost of a pizza for you to make? $3-4? $4 * 5 days per week would result in the best $20 of weekly advertising that you could have.

Do not forget about the remainder of your marketing plan that you devised before you opened. You did have a marketing plan, right?

If not let us help you develop one.

I ran a successful pizzeria for nearly a decade. I would be happy to help if needed.