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How To Start A Pizza Business

 How To Start A Pizza Business

Want To Start a pizza business? It can be a challenging,  but quite a rewarding endeavor. Here are a few key steps and ideas to consider when getting  started and some food for thought!

Develop a business plan

This is one of the best fundamental tools you can use so you can achieve a better understanding of what it is your trying to accomplish. The plan  should include your target market, menu offerings, pricing strategy, marketing plan, construction  cost startup cost, and financial projections.

Any newbie to the industry should really have a true knowledge  of what it takes to make things work and all the cost involved to start a pizza business . Its not as easy as sauce and dough although we wish it was. The industry gas changed through the years ,the competition and other  options are now extremely  greater than ever.

You will need to understand your fixed costs.   In other words the cost you must pay even if nobody walks in the door.  Typically you pay these monthly and they don’t fluctuate. Like rent, loans non hourly salaries, insurance,  marketing etc. Your labor cost (probably one of the greatest expenses you will have) and how to control them,  your food cost and how to price your menu. As well as managing finances and financial planning!

Secure funding

Determine how much money you will need to start your business and explore funding options such as loans form your local banks who are SBA lenders or with  investors. Your business plan will give you a lot of insight into the amounts needed. Although estimates are estimates with start up cost you have to add some margin of error plan high and try to come in low.   . The pitfalls can be many and being overfunded in case is the proper way to plan. You can always prepay loans as long as the loan has that stipulation. The last thing you want to do is open up a business without proper finance and be under stress when you open.

Choosing  a location

Look for a location that is easily accessible and visible to potential customers. Consider factors such as rent, zoning regulations, and competition in the area. There are many demographic tools available on the web  that you can utilize to understand your target market.  Remember knowledge is power so do the research !

High traffic areas: If the location is near a high traffic area, it may offset your advertising costs. Anchor tenants, such as department or chain stores, can increase traffic to your business. More traffic allows you to spend less on advertising so you can pay for a higher rent and have a captive audience. its true that “Better Locations” can cost more and the best location should always be your goal as long as its within reason and with in your financial means.

. Trying to save money on rent as a focus for  your location may be a disaster and has been to  down fall of many businesses.

Here is a quick simple example:  location “A” is more downtown with  lots of business for lunch and a night life that can be tapped into . The rent is about ten thousand for 2,500 square feet.  Location “B” has a cheaper rent about half and is in a quieter area.  Your investment will be the same more or less to open.  The efforts just as great to keep it going. But location “A” might have a greater value due to the fact that it can  generates $1,000 dollars in lunch sales daily over Location “B”.

  • You would have the same staffing, but you might do an extra $30,000 in sales monthly.  With food cost at 25% for pizza that would mean $22,500 more  a month that your business can potentially make  for a cost of 5,000 more in rent. Still netting an extra $17,500. So is a few more thousand a month worth it for a better location? Do the Math And Think It Through! Because   Rent is defiantly a very important consideration,  but potential business verses spending more marketing dollars is something to take into serious consideration. This can also be viewed as per demaogrphcs based upon extendible income. Some areas have higher incomes and a better customer base to serve.

Property purchase verses Rent

If you can afford to purchase rather then rent this can be quite advantageous to your long term goals and plans.    Many people get stuck in a lease and put long hard years of there lives dedicating it to a business. They also invest a lot of money into a building,  while maintaining it as well and  paying  insurance.   In the end when the lease is up you might have  a landlord that decides to   becomes your partner by raising your rent double  or even not re- negotiating your lease.

Owning the property and paying your mortgage down is  truly the best move.  . Historically property increases in value as we all know,  and at the end of ten years or more you will have built a lot of equity and be able to sell your business if you wish  or the building  or sell both . Or  just collect the rent yourself.  It might be a tight squeeze to get a building from the get go  but real-estate is a safe investment and in the end you will have an exit strategy with options  .  Think of it this way , if your all in you might as well get the property  too and do it right!

Other ways to cut opening cost are to find existing spaces that use to be a restaurant.

This way your build out cost will be significantly less. You won’t incur the cost of bathrooms commercial air conditioning gas lines and electrical services being put in. Although you might have to upgrade fix or renovate these services it will be a major savings in the end.    Be sure that you check with local municipalities as well for any red flags on any new locations you consider before purchasing or renting do a search for any  open violations, permits or changes that where not legally done to the premises.

Free Rent while you build. This is something that needs to be negotiated carefully and you should be aware of the fact that its not as easy as lets  just start building. The permitting processes and hiring the right contactors can take months.  So negotiate as long a time as possible for free rent until you are at least permitted to start building and then some.

A tenant improvement allowance

also known as TI, TIA, or TA, is a pre-negotiated sum of money that a landlord will provide the tenant in order to cover all or a portion of construction costs.

TIA is typically expressed as a per square foot amount. For example, if a landlord is offering $20.00 per square foot on a 2,500 square foot commercial space, the landlord has agreed to reimburse the tenant for $50,000 worth of construction costs. While a tenant improvement allowance can certainly be applied to all build-out expenses, including labor, do not expect your TIA to also cover the cost of furniture or other moving/start-up costs not directly related to physical improvements to or alterations of the space. While you and your broker may have negotiated a phenomenal tenant improvement allowance, do keep in mind that you will more than likely still need to have the capital to cover construction costs up front.

Once the work is complete, your landlord will then be able to reimburse you the negotiated allowance. Returning to our previous example, if a landlord has agreed to a $50,000 improvement allowance, the tenant must still be prepared to use their own funds to initially cover construction. The landlord will provide the tenant with the $50,000 allowance upon proof of completion, which may include receipts, lien waivers, etc.

Obtaining  necessary permits and licenses

Research and obtain any necessary permits and licenses required by your local government and municipalities , such as a business license, food service permit, and health department inspections. Make sure your location has a friendly landlord and it’s  going to be ok to vent the space  without  crazy cost and run a food establishment out of the said location. Another  things to consider amongst the many are grease traps.  Some states have very strict grease trap regulations.  If your putting in anew one you should research that before you commit  as it can be a very costly last minute fix and a serious time delay.

Gas and Electric

Does the building have sufficient gas pressure?  How big is the line? How much gas will you need? These are some fundamentals .Getting all your equipment in without check the meters first is an amateur mistake. Your architect should know this and check the meter for BTU usage of all your equipment and be sure your meter is big enough to handle the load. This is also something you can check when looking at a space before you lease or purchase.  Gas service that is too small can take months  and even up to a year to get completed .

Gas pressure test.  If it’s a preexisting building and you are going to be using the existing lines you should preform a gas pressure test and have the landlord take any responsibility for the cost if the lines do not hold pressure. If they don’t and you don’t know where that leak is you might have to run all new lines at a major cost!

Electrical:   Another thing to look at is :  How Many Amp service will I need? Is there enough room and power in the electrical panel box? Again, you would have to calculate all equipment usage as well as lights and air-conditioning.   Do I need 300-amp service 400- amp or more? That all depends on your renovation and equipment that you are using and the size of the location.

How To Start A Pizza Business the list goes on and on!

Setting  up your kitchen: Purchase equipment and supplies, designing  your kitchen layout, and developing  standard operating procedures for food preparation and safety.The best thing to do is hire a restaurant designer. An experienced restaurant designer (and Consultant)  will be able to help you with the correct layout for your business based upon your menu. He will help you with the basic layout and equipment needs and specifications.

Local architects: They might know the codes and are needed .   But they are usually not versed in restaurant layout, work flows and what type of equipment is truly needed to design the proper work space and fit your menu .  A person  needs to be able  to design with the menu in mind to get the best design.  That person  should know his trade well .

  The Equipment

Equipment needs  for a pizza business can vary depending on the size and type of operation, but here are some common pieces of equipment

Pizza Ovens 

This is the most essential piece of equipment. There are different types of pizza ovens, such as wood-fired, gas, or electric.  Choose the one that best fits your needs and gets the job done.

High production is what you will need when it comes to pizza because you are not in it to fail and you need to be busy to succeed! .

The New York Brick Oven Company makes high production  wood fired and gas revolving brick ovens that can make up to  200 pies per hour. It’s always better to be ready for Friday nights rush  than not be ready with an inferior oven or an oven that is two small and takes to long to cook pizza. The revolving brick oven also takes the skill out of the operation and allows operators to save tens of thousands in labor, make consistent pizza as well.  Pizza Trends have headed to “gourmet” style brick oven pizza. With everyone being a “pizza expert” you will  need to be the best and stand out from the chains and other competition  in your market. How To Start a Pizza Business

Refrigeration Equipment

This includes refrigerators, freezers, and prep tables to store and prepare toppings, dough, and other ingredients. Some people go for used equipment as they want to save money. But with out good equipment especially refrigeration you will have nothing but problems, and In the end wind up with more waste and more costly repairs .

Most quality companies give up to five year warranties on equipment compressors. So look at what works not brand but warranty and service. Dough mixer: This is used to mix and knead pizza dough quickly and efficiently.  The truth is there are many types and depending on your operation and style of pizza will dictate the mixer type .

One of the industry standards for pizza is a Hobart Mixer they last forever so it seems. I’ve seen some out there for 80 years and had one myself that was sixty years old and used for thirty years without any problems.  It’s been said that a Used “Hobart” is Hobarts biggest competition. So if you find a good 60 quart mixer used I would get it!

Small Wares

Pizza warmer: This is used to keep pizzas warm until they are ready to be picked up and or delivered . Hatco is one of the leaders in the industry  .

Point-of-sale system:  Process orders and track sales. Shop and Learn ask for reviews and customers that use the product! They can be costly and charge a lot of fees for your credit card processing.

Dishware and utensils: This includes plates, cups, utensils, and napkins for serving customers.

Pizza peels cutting boards, knives, scales, and other utensils used to prepare toppings’.  The small ware’s can really add up. The list is long depending upon your service a good local dealer who knows his business should be able top to provide you with such a list.

Cleaning supplies: This includes cleaning chemicals, mops, buckets, and other supplies needed to keep the kitchen and dining area clean and sanitary. You may want to outsource some of that to big companies but they charge a premium for there service. Check all the pricing and compare before you commit to any contracts.

Dishwashers Lease Or Purchase

There are several options when it comes to dish machines. Several national companies like Eco lab  have lease programs that will allow you to get the machine serviced as long as you pay the lease. They  also charge per load  use as well as for chemicals.  These chemicals and service comes at a cost. Other options like buying your own machine with a good warranty and service company that can service it can save you a lot of dough in the long run.

To talk with a Professional  and for more information  on how to start a pizza business  call today!

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Starting a Brick Oven Pizza Place

best pizza brick ovens

  Starting a brick oven pizza place begins with a dream. You wake up one day and say ” hey I think I’d like to start a pizza place”. Maybe you have business experience and maybe you don’t, but either way, you have to go through a similar thought process. Different people have different motivations but it comes down to a few basic commercial pizza motivations. First and usually the one that drives most entrepreneurs is the idea of having my own business and working for myself. Then comes I can make a lot of money followed by I can make a great product and make a name for myself. Depending on who you are and what type of person you are, any of these motivations can get you started. Your own drive, motivation, perseverance will determine how far you get. Remember this-YOU CAN”T FAIL IF YOU DON”T QUIT! Sounds awfully simple but it is a basic truth in life. That being said how do you get started? Different people have different ideas on this and a lot depends on your access to capital but unless you are taking over an existing business that is successful you will have to make a few decisions. What kind of pizza will I be making? This is a personal choice of course but it may be in your best interest to see what people like in your area or what they are lacking. What type of place will it be? Fast-casual with no table service? Dine-in? Delivery? Perhaps a combination of them. Then comes deciding how large of a place your pizza concept needs. Once you decide that there comes the reality of what is available and what type of location is it.  Is it a stand-alone, strip mall, gas station, or part of a brewery, pub, or bar? Is it a destination location or in a high traffic area? Once that is done next comes figuring out your build costs, equipment choice, insurance, etc. Then come your finance, leasing or buying the place and getting to work! 

Andrew Scudera Pizza School of NY

Top 3 Ways to Fail in the Pizza Business

The top 3 ways to fail in the pizza business are obvious to some but not all operators. Avoid these basic mistakes and it will help you prevent failure.

  1.  Trying to be everything to everybody. You can’t please everybody all the time so don’t bother trying. Pick a style of pizza that you are a master of such as the NY slice style, Detroit style or Brick oven Style and do one style great. The same advice goes for having an incredibly large menu that gives too many choices, requires incredible prep and storage(resulting in waste) and too many mediocre dishes.  Be famous and well known for one signature pizza like the Vodka Pie created by the Original Goodfella’s Brick Oven Pizza on Hylan Blvd, in Staten Island NY back in the early ’90s. Then there is the famous Sicilian(square) pie from Spumoni Gardens in Bensonhurst or the Clam Pie from Peppi’s in Connecticut.  You get the idea and probably have a local pizza place that is famous in its own right for doing something spectacular.

2. Bad location.  This one seems obvious but it is a killer. The things that you should be aware of are No parking, inconvenient to get to, too small a place, too big a place, too much renovation required. Then there are restrictions-like no delivery or no pizza competition. Then there is the neighborhood itself. Is there a lunch crowd, a dinner crowd?

3. Not paying attention to your customers. This one comes in many forms but the bottom line is: Ignore your customers at your own peril.  What does this mean? It means to be courteous and thankful for feedback not annoyed or argumentive. If a customer tells you the bathroom needs cleaning-clean it and keep it clean because he is not the only one who noticed it. Rarely will a customer complain out loud these days so listen and be thankful because most just will simply be upset and not return.  If you keep running out of grape soda-stock more. When customers like a dish-get it on the menu and the opposite is also true if it doesn’t sell improve it or get rid of it.

Just a few things to avoid and


Top 3 Things to Avoid When Starting a Pizza Place by NY Brick Oven Co.

the best of luck to you.

Marc at Scots Backyard oven.

Pizza Place Top 10 List for Starting Your Own

Top 10 Reasons to  Open a Pizza Place? Now is the best time for a Start-Up Pizza Place and this is why:
#1 Recipes. There is an infinite amount of recipes available on the internet to choose from with sources like Google, Facebook, Youtube and celebrity chef TV, and the food network. Anyone with basic skills and desire can get online, look for the hottest trends, find a recipe and get busy. Why reinvent the wheel when you can easily what is popular in the food world and duplicate it?
#2  Restaurant type. You can easily take a look at all the different types of locations and layouts such as a slice joint, fast-casual or sit-down waiter service. You can also do some research and see if delivery and take out or even a brew pub-bar will fit in with your plans. Size of Piza Place and type of pizza will be a factor in determining if you do sit down, fast-casual pizza with an assembly line or just slices.
#3  Equipment. It has never been easier to see the different types of Pizza Place equipment being used in successful places than it is now. Currently, the hottest trend is hand-assembled brick oven style pizza with places like Revolve, Spin Neapolitan and Pie Craft leading the way with Revolving Brick Ovens and gourmet pizza. Pizza stations, walk-in boxes, and mixers such as the old reliable Hobart mixers are available new and used for the budget-minded along with tons of information on sizes, capacities along with industry comparisons.
#4  Finance. Today you can basically call up a company like Lease Corp Of America(LCA) fill out your application online and know virtually the same day if you are qualified for a loan. Those of us who remember having to make an appointment with a loan officer, fill out endless paperwork while being scrutinized within an in inch of your life under a microscope will attest that the process is light years from where it has been and tell you how lucky you are.
#5 Printing. This may seem like something too little to mention but with today’s digital media and the ability to do it all virtually online, there is an amazing amount of time, effort and money saved. In the old days, you would have to consult with a printer to make your deal on printing. Then you would have to consult with a graphic designer to do your layout and maybe even a specialized menu designed to help you. This took time, from appointments to initial design to a rough sketch. Then you would have to go back and forth on corrections as you finalized your idea. Once that was done you have to have it proofread and hope you and your proofreader caught all the errors. One error I fondly remember was at the First Goodfella’s Brick Oven Pizza on Staten Island. We were all set and made our first huge purchase of several hundred thousand menus for in house, mailing and door to door delivery but we all missed the “Ground Bee” instead of ground beef on the pizza menu. We laughed about it for a long time since we had to print so many menus to save a few dollars. Fortunately, you don’t have to got through that incredibly time-consuming operation today. Not only that but you can do it all from the comfort of your home and with computers, digital design, limited run printing options, cheap online graphic designers and still save time without taking the big risk of large runs.
#6 Staff. Hiring and finding employees is easier than ever. You don’t have hand a sign in the window and hope someone sees it or spend ridiculous amounts of money on classified ads in the local papers. Graig’s list will get you more applicants than you can shake a stick at in most areas.
#7 Promotion. Getting yourself known is easy and the internet makes it simple. Social media, websites, blogs and press releases will get you known and open the door to customers. If you do a great job with your product, service and presentation people will talk. Your signage, uniforms and design have a lot to do with this.  Yes people will talk so make sure you do it right from the start with all your ducks in a row and a great pizza. You can call the Pizza School of New York if you are not certain of your product.
#8 Marketing. Yes this is different from promoting yourself or your place. This is actually offering your product for sale by way of newspapers, social media, TV, Radio, mailings, door hangers and however else you can get your product in front of a potential customer and tell them to buy it.
#9 Location.
Pizza Place Pizza Start Up

Marc and Scot Cosentino standing in front of the first Goodfella’s Brick Oven Pizza Start-Up on Hylan Blvd. Staten Island

Location scouting for a Pizza Place can be done via many outlets now with many realtors competing for business. With the internet, emails and google earth you can even see a place from a street view and decide if it is even worth looking at before wasting your precious time.
#10 Training. With video, internet, Youtube, DropBox, etc. there are so many ways to present data to your staff, update recipes and procedures and keep everyone on the same page that even multiple locations become easier to manage when you get to that point.
Bonus Reason- Computerization. Point of sale order taking, inventory, ticket printing, and display have made management a great deal more organized. The systems can track best sellers integrate promotional items and sales while even tracking deliveries and scheduling orders of food or reminding you of upcoming catering or previously scheduled deliveries.
Of course, all these wonderful reasons for it being easier still require the entrepreneur to step into the ring and make his purpose known. My respect and admiration go to you my friends that make the attempt. I wish you the best of luck. Marc Cosentino
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