Coming straight from Italy, pizza is one of the most consumed foods globally, along with fries and burgers. At first glance, the pizza business seems to be very profitable, so you may be tempted to open a pizzeria yourself. However, you should know that the restaurant business is a highly competitive market that requires careful study. For your business to be profitable, here are the essential points to consider.
The Implementation of the Business Plan
Before rushing into realizing this beautiful project, you must first establish a business plan for your pizzeria. This document is essential to prove the financial and economic feasibility of the project. When looking for financing, credit institutions, investors, and any other future partner of your company will ask you for your business plan.
Setting up a business plan implies carrying out a market study. Upstream, you must:
• Analyze the environment of the planned location: the demand, the competition, the economic policy of the desired catchment area, the geographical eco-system;
• Define your target customers and their needs: in this section, you will determine the potential recipients of your services.
• Detail the global implementation strategy, i.e., the organization of the company;
• Determine the members of your future team and their roles;
• Present the budget for your project;
• Forecast the evolution of your activities and the expected return on investment.
You can request the intervention of a company specialized in the field to assist you in elaborating your business plan. You can also find on the internet models proposed by public entities.
The Pizza Business: A Profitable Activity
The United States, Italy, and France form part of the biggest consumers in terms of pizza consumption. For instance, a French person eats an average of 10 kg of pizzas per year. These figures prove that there is strong consumer demand. However, you will not be the only one to meet their expectations. The competition is very tough. In addition, you have to find the right balance between the actual price of the pizza and the price that customers are willing to pay.
Selling pizzas is a very profitable business. Compared to a classic dish, pizza is easy and quick to prepare. For a classic pizza, you will only need a few toppings.
To determine the price at which you will sell your pizza, you need to calculate
• The manufacturing cost or direct cost of the pizza;
• The indirect cost (the operating costs of your pizzeria: rent, electricity, various services…);
• The profit margin of between 20 and 30%.
• In short, the selling price of a pizza follows the formula
Cost of sales = Direct costs + Indirect costs + Profit margin
The more pizzas you sell, the more profit you will make. And the more customers you get, the better the service. You can also look for ready-to-use frozen pizza dough to optimize your preparation time. All you have to do is put the ingredients and then put your pizzas in the oven.
Choosing the Right Equipment: A Direct Consequence on Profitability
The equipment used to make your pizzas is a crucial element to consider to improve your pizzeria’s profitability. Not only should you consider the cost of the equipment, but also its energy consumption. It is up to you to compare the electric oven, the gas oven, and the wood-fired oven. These three types of ovens each have their advantages and disadvantages.
In addition, if you are going to offer a delivery service, there are a few questions you should ask yourself, including:
• Would it be better to buy scooters or rent them?
• Is having scooters more cost-effective than using bicycles?
• What types of scooters should you choose: electric or gas?
The cost of maintaining the chosen means of transportation will add to the initial investment. Therefore, you must carefully weigh the pros and cons when making your choice.
