Sample Business Plan Pizza

Cost of running a pizza joint??

So for business class I’m supposed to figure out the fixed annual costs of running a pizza restaurant. (I didn’t even pick this class! I’m stuck in there!)

I don’t know where to find sample business plans for a restaurant. The business is pretty simple, after all, and everybody knows it: you feed the people that show up. With a pizza shop, you also feed the people who phone in and ask for delivery.

A restaurant generally should keep food costs to 30%. I know of some Big Boy restaurants that are proud of keeping food costs below 27%, but I suspect I’m not the only one who avoids eating there.

Another 30% goes for labor.

Another 30% goes for rent, paper good, linen rental, cleaning products, advertising, maintenance, utilities, etc.

That leaves 10% for gross profit. In fact, it’s hard to make 5%, because it’s almost impossible to keep the other three areas under 30%.

If your business has few customers, the last third will eat you alive, and the second third will be burdensome. The rent is the same, whether you have one customer in the dining room or two hundred.

If your business has tons of customers, though, you can (and probably should) spend more than 30% on food that keeps the dining room bulging.

The key to the whole business is your waitstaff. Great waitresses keep smiling even when their backs and their feet are killing them, making the customers feel happy to be there. Happy customers buy desserts, running up the check, and tip heavily. A 25% tip on a $30 ticket is $7.50. A 15% tip on a $20 ticket is $3.00. The smart manager teaches his waitstaff to earn $7.50 per table, not $3.00, and as they get rich, he has less trouble keeping waitresses, less trouble recruiting top waitresses, in fact, his job gets a *whole* lot more fun.

Successful restaurants don’t spend a lot on advertising. Many chain pizza places do, however, and it’s always cost-cutting. If you’re smart, you will be careful with your advertising, not just in terms of spending less, but in terms of getting more.

The pizza place down the street has been running a special for at least 5 years, two 16-inch cheese pizzas for $9.99, walk-in only. This is a joint with no tables. As such, they have taught their customers that their large pizza is worth $5, no more,. no less, and people are reluctant to buy their more expensive pizza loaded with toppings.

Instead of selling at a reduced price, which destroys price credibility, it makes more sense to give away samples for free. Start making small pizzas – not personal pan pizzas, but ones *half* that size, or maybe you just want to give away individually packaged *slices* – and send out a delivery man with 20 of them. He just walks down the street, knocking on every door. “Hi, ma’am, I’d like to give you a free sample of our pizza and a price list. If you like it, you can phone for a full size pizza, here in just 20 minutes, hot and good.” No sales pitch, no discussion, just pizza, and a price list, and hurry to the next door.

Can you think of a better way to make friends? Can you think of a better way to get people to taste your pizza? Can you think of another way to accomplish this without destroying price credibility? That house may be in the habit of ordering $14 pizzas from Pizza Hut, but they’re likely to consider a $17 pizza from your store next time around – and chances are good that they will order one *tonight*.

And if they don’t, you know what’s going to happen next day at the water cooler? “Funniest thing happened last night. Guy came to the door, gave me a slice and a price list, and was gone before I knew it. Good pizza, too.” And the coworkers are going to ask who it was. They haven’t even *tasted* your pizza, but they already think you’re great. Someone is going to look in the phone book, and see if you deliver to their place of work for lunch.

It’s not easy to run a restaurant. Everybody wants to eat at the same time, you compete with every amateur cook in America, and it’s hard work. But there’s no excuse for doing a *stupid* job of running it. Guerrilla marketing – sampling, doing cross promotions, etc. – can get your product in people’s minds as a highly desirable product, very much worth every penny you ask for it.

Pizza Business Plan Ordering Information

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