How to Start a New Pizza Place

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How to Start a New Pizza Place

Starting a new pizza place from scratch!

There are many great books to read  on how to start a new pizza place,  and many resources that will help and many are available on the web and the truth is you can never know enough in this business. One of my favorite resources is Restaurant Owner .com a great resource page that can provide you with all types of forms and even start-up business plans.  Some of the things I have learned from opening many successful places are: The guys and gals with the real passion  and a well thought out plan always find a way to make it work. What does that mean? Simple, when someone really wants to do something he goes out and learns all about it, practices and builds his knowledge and confidence and  knowing above all that he doesn’t know it all.

Don’t know it all!

I have personally witnessed many a failure because the operator “knew best” .  That lead them to be “hard headed” and wind up not being able to truly create his concept correctly or  evaluate  his market . 

 Example: Classically trained pizza man from Naples opens a place in the South where the consumer is used to a big 18″ pie cut in slices with sauce, processed shredded cheese and lots of meat toppings. What does he make- a tiny fresh mozzarella pie with minimal toppings that is burnt to hell in the consumer’s eye-total failure and no clue why. Example: another “pizzaman” takes his typical cheap conveyor belt white flour, processed cheese, and canned sauce pizza to an upscale Brooklyn neighborhood with half a dozen high-end gourmet pizza shops all around him making a super artisan pizza. Aside from having too much competition he also has to battle a superior product at every turn not a recipe for success.  These are kind of obvious to an outsider  such as you or me.  But when you are personally involved and have fixed ideas  it can be hard to see what the real scene is . People have different ideas and prejudices which can easily lead to bad decisions and bad  ideas. The point I’m trying to make is simple  that none of us know it all, and we can all learn something,  in some area or another so read on and learn.

Location, Location, Location ,Location!

How many times have those words been thrown around? What does that really mean ?

It might not be the first thing on your mind, but truly it will be one of the most critical and could make or break you . Of course, you need great  products, too, but how will anyone know about that product unless you get them through the door?”In the brick-and-mortar retail world, it’s said that the three most important decisions you’ll make are location, location, and location,” Careful determination , evaluation  for you new site is critical.

Demographics Study!

Making these determinations can be as simple or as complex as you make it. There are, for instance, sophisticated location analysis tools available on the web  that include traffic pattern information, demographic and lifestyle data, and competitive analyses. For a price, a retailer can get questions answered that are key . What ‘If I’m looking to add a store to a particular market, what’s the optimum level of traffic as it relates to the specifically targeted trade areas? What is the overall type of traffic age, occupation etc.? what do consumers spend on eating what is the Avg income in my area ? How  many homes are there in a 3-mile area? what is the traffic count  How many competitors are in my market?

“Do your due diligence, Get a demographic overview of the area you’re looking at age, income, households, etc. Many major companies spend a lot of time and resources doing this. Sometimes you can follow one who does this already.  In addition, you should look at neighborhood traffic generators, such as other similar concepts big box stores  that draw people to the area, like  industrial or office parks, power malls, schools, colleges and hospital complexes hot nightlife areas.

You’ll also want to look at both highway and foot traffic.  If the number don’t work walk away. Unless the location has big  future potential expansion such as major chains malls etc being built nearby and  most importantly  you must have the cash and staying power to wait it out if that’s your strategy . Sometimes those projects take a long time even when approved and cause traffic pattern disruptions  etc.

“REVIEW”  Your Competitors!

Many experts agree, though, that the answer to where you should locate is more straightforward than many entrepreneurs make it. “Quite simply, the best place to be is as close to your biggest competitor as you can be,” By being in close proximity to your competitors, you can benefit from their marketing efforts.” Example if your looking for a fast casual location and your city has companies like Chipotle you can be sure they have done a good study of the market. It might behoove you to open as close to them as possible. Take into consideration also that the marketing of many big companies, who draw clients to your area is something that you can benefit from. Why?  Because  your competitors chose their locations based on the ideal demographics of a particular area, In many cases, they’ve also devoted large portions of their advertising budget toward driving traffic to their locations. “Why  spend the money when they are already  spending  it for you?” it’s that easy.” Just be sure that you are visible with good signage and lighting.

Being located near your competition can  give you more recognition in the consumer’s mind “Competition is good, “It makes you better and competition breeds more business, more traffic, and that’s a positive thing . If your confident in what you do just gout there and crush the competition if you think not then get better fast!

Of course, it’s still a smart  idea to make your own evaluations of a particular property, even if your competitors seem to be thriving in the area. Staying ahead of the game in this regard will help your business grow should you decide, for instance, that you later want to open another location.

The lease is Key and- is your asset
Your job just begins when  you think you’ve found a good location . Negotiating a good  lease that works for you and your business is just as important as the location itself.

“It’s very important that you have a good real-estate lawyer who can negotiate your lease- though that’s another cost,”says Tartt. Your attorney can help you look at things like the term of the lease, build out allowance, hidden small print,  your sale of the business, options for more years just to name a few. Your attorney should be a real-estate attorney and also knows his business . If need be he  can help you talk to the landlord (or do the talking for you)  so you can  ask the right questions.

Get to know the landlord?

It’s good to talk to other tenants, find out as much as you can about your prospective landlord .   Don’t take anything for granted and never go on any verbal agreements or promises its just bad business you must  get it all in righting first.  “You’re marrying your landlord for a long-term contract agreement . There are a lot of unscrupulous people  out there that only care about them, not you. It’s a two-way street you going to be paying them $100,000 of thousands through the lease terms  so make sure your ok too. As for personal guarantees perhaps a year or so. Don’t get in over your head. And don’t be afraid to ask for things like key money landlord improvement credits, several months for free etc. Start high and settle for what you need. He needs you too!

You  and can and should make use of a local real estate professional who understands your customers and the markets you are looking at  you .  They should know what’s available some histories on locations as well as what is going to be available .Depending on what type of place  you’re opening  I believe that in every market  there is some real estate guru a professional who knows his  city backward and forward, deals that are coming and insight that he or she only has.

Business Plan!

Having someone help you with your business plan before you even begin the location search can be invaluable as well.  This will let you understand costs and get you grounded with a reality of things .  It is a great practice and quite an eye opener for some people. Your plan should be detailed well  and give you a picture with several scenarios of all your cost and all  future projections of sales with several scenarios good and bad .

Being aware of all location costs involved (and there are many that can and will be overlooked by first-time entrepreneurs )with starting your business will do wonders for your ability to weather any storms that might and likely will come your way.  Underestimating the costs and being underfunded  as well as not understanding the time involved with launching a new  -is one of the most common startup mistakes and one you can avoid if you plan properly.If you take into account everything from a broker, attorney, engineering and architect fees to zoning and planning hearings, you can see that both the costs and the time to startup can vary widely.The best advice? “Talk to other people in the business , people in the area you looking at, learn from them  listen to them and find out what they’ve experienced. They can tell you what some of the pitfalls are and what things to look out for.  “You’ve gotta do your homework, you have to be willing to learn all you can and strategically plan yo succeed . You can and must  protect yourself, be diligent s your success depends on it.

Some basic questions to consider :

Is the location  zoned properly for your type of business? Ask this first, getting a variance for zoning can be a long had and sometimes not even possible process .

Is the location the right size too big, or too small for what you plan on doing  enough for your business? Does it offer room for all the storage equipment , office, prep stations sinks refrigeration counters handy cap ramps and bathrooms? Does it have enough electrical service does it have big enough gas service. Does it need more air conditioning ? Is it easy to vent, Venting can be costly and tricky, talk to a local reliable venting  companies!
Does it meet your layout requirements too many walls to narrow?
Does the building need any repairs? foundation roof etc look, look ,look.
Are the lease terms and rent favorable? Be honest just because you love the location run the numbers make sure you understand the sales volume you need to do.
Is the location far from  where you live? Travel time and cost can dampen one’s spirit. remember it’s going to be your lifestyle.
What about labor is the market high? Are there employees readily available this can be a challenge in some markets.

Does your clientele live nearby,  Is the population density of the area sufficient for your sales needs?  how big is your market area?
Is the area heavily dependent on seasonal business tourist, colleges ?                                                                                                                                                                                                                                       Will  insurance be prohibitively expensive? Flood zones fire etc?

Do you need a beer and wine license ? Are they available and at what cost? Some towns have to give approval by committee you should get that done first or have a contingency plan in your lease.
If you choose a location that’s relatively remote from your customer base, will you be able to afford the higher advertising expenses? They need to know you are there and be reminded all the time. Social marketing is good, direct mail, etc but takes money and time.
Is the building  and other stores in your area  consistent with the image and brand  you’d like to maintain?
Is the building  located in a safe neighborhood with a low crime rate ? Is the area  improving or changing for the worst?
Can you put up big signage? Signage is sometimes limited to the square footage of the building front. Some landlords won’t let you use specific colors or lighting check the lease. Is exterior lighting in the area adequate to attract evening shoppers ?

Are neighboring businesses doing good ? Are they likely to attract customers who will also patronize your business?
Are there any competitors located close to the facility? If so, can you compete with them successfully what makes you better?
Is the facility easily accessible to your potential customers?
Is parking space available and adequate?
Can suppliers make deliveries conveniently at this location?
And so- on! You can never have enough questions.

There is a lot to think with and a lot to learn .

So be aware of your location and the expectations of your local consumers. Then make sure you have your overall concept planned out well to provide whatever type of pizza you expect to produce in an appropriate space for that style of pizza .  Your concept can be full service,  or  you may consider setting up shop like the new fast-casual pizza concepts.  Be sure to use a  high a production revolving brick oven so you can make the operation simpler and fast . If you happen to be off the beaten path you may just go the traditional route with full service and a comfortable dine-in atmosphere a “destination” place. If you are new to the game I highly recommend you do lots of  research and visit as many places as you can  take notes . You truly need to determine what type of place will best suit your dreams and needs first.  Then find the location that fits it.   

Pizza school of New York

To learn the art of pizza we recommend attending pizza school at the Pizza School of New York. You can never learn enough!  

Good Luck and Enjoy the ride!


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