Also find this article over at Pizza Quest
Chances are that, if you are opening a pizzeria, you will be out of business sooner rather than later. Typically, 60% will fail in the first three years; at least this is what statistics tell us. Why? Is it because there is too much competition? Maybe the economy isn’t doing very well? Perhaps it’s the government and high taxes? Or better yet, it’s probably because of those darn millennials who just don’t want to work — that’s the answer everyone safely falls back on when all other excuses run out.
But, I’ll tell you why I think most pizzerias go out of business, and hear me out because I choose these words intentionally: it’s because they suck! They suck because their owners suck. They suck because the owners don’t know anything about accounting. They suck because they lack necessary business skills. They suck because they were under-capitalized. They suck because they don’t have a clue about marketing or customer service. They suck because the owners have an ego that needs to be fed. They suck because they don’t know how to make good pizza. They suck because their product is generally lackluster. They suck because they don’t know how to treat employees or customers. Most importantly, they suck because, even if they do make good or even great pizza, the owners severely underestimated the amount of work and knowledge that goes into building a business other than making pizza, and they refuse to invest the time needed to complete that work.
Making pizza is the least of your worries; making a good pizza is easy but running a business is hard.
If you make fantastic pizza and no one knows about it, what good is it? If you make an excellent pizza, but you don’t make a profit, what good is it? If you make an excellent pizza, but you can’t get your staff to make it consistently, what good is it? You have to hit on all cylinders the majority of the time. A few misses here and there won’t kill your business but, to be successful, you need to do it right most of the time.
Business owners are the true jacks-of-all-trades — or at least they should be. No one is going to do it for you, no one will be invested as much as you.
So, if you are new to the pizza business (or to any business,), you should expect to have and be able to exercise a basic understanding of the following:
- Accounting
- Tax Law
- Business Law
- Time Management
- How to Delegate
- Marketing
- Social Media
- Construction, Plumbing, Electrical
- Maintenance & Repair
- Computer Basics
- Labor and Food Cost
“Basic understanding” is the key phrase here. You don’t have to be an expert in all these areas, but you need basic understanding so that when your accountant is explaining the difference between an expense and a depreciated asset, you understand. You need a basic knowledge of how to repair your oven, so when the commercial parts-repair company tries to rip you off, you can spot it or make an on the spot repair Friday night during the rush.
Outsourcing and delegation are crucial but only when you can afford it and can responsibly measure those results for which you are asking of others.
Don’t underestimate the amount of time you will need to invest in your pizzeria. I always tell everyone wanting to open their first pizzeria to expect to live in the pizzeria for at least the first year. Virtually 24/7/365, no matter how well you are prepared. You first need to understand the operation top to bottom, inside and out, before you can responsibly delegate. Someone needs to be there to grind out the marketing that needs to happen seven days a week, hold trainees hands, and shake hands and kiss babies. Owning a pizzeria is an 80-hour a week job, minimum, for the first year.
If you don’t have that time, don’t have the ability to discern when to work harder or smarter, aren’t a self-starter, and can’t keep yourself responsibly on track, then save yourself some pain and pay your best friend $100 to punch you in the mouth as hard as they can and you’ll kind of know what it is like to operate a pizzeria. It’s like a good friend of mine once said, “The best day of your life as a pizzeria owner isn’t when you open your pizzeria; no, that’s the second-best day. The best day is when you sell it!” The pizza business is a glorious business that is full of fun, passion, and excitement but it isn’t for everyone.
~ Michael
Check out all of our startup resources including Finacial Projection Models, a Step by Step Guide, Business Plan Templates, and Employee Handbook Templates. Click here to join now!
