Main Sections In This Post
Steps To Starting A Pizza Shop
Points to Consider
Resources
Knowledge Is Power
Featured Video
The topics covered in this post include; how to start a pizza business, industry statistics and trends, startup equipment, insurance, employee requirements, business name ideas, and business loans.
Let’s begin with a summary of the steps, then a few points to consider and more details. Finally, the resources section will give you a deeper understanding of the pizza industry.
Steps to Starting a Pizza Shop
1. Research The Industry
It’s important to research the pizza industry before you start. There are ways to see what you’re in for before you start, and going through the process is to your advantage. See An Inside Look Into the Business You Want To Start to get the details.
2. Choosing a Business Location
Choosing the right location for your pizza shop can be the difference between success and failure.
See Choosing The Best Location for Your Business for more information.
3. Choose a Business Name
The name you choose requires careful consideration because business names rarely change; therefore, spend the time needed.
Below is a list of catchy business names for a Pizza Shop to spark your creativity. Before finalizing your choice, remember to conduct a name search to ensure another company hasn’t registered it.
- Dough Delights
- Pizza Paradise
- Crust & Co.
- Slice City
- The Pizza Piazza
- Crispy Crusts
- Pizza Perfection
- The Pizza Hub
- Sizzle & Slice
- Dough & Tomato
- Oven-Fresh Pies
- Mamma Mia Pizzeria
- The Cheesy Crust
- Tasty Toppings
- The Pizza Joint
- Doughlicious Pizzas
- Pie Haven
- Pizza Masters
- The Pizzaria
- Crust Corner
- Pizza Land
- Slice Station
- Pizzazz Pizzas
- The Pizza Oven
- Tantalizing Toppings
- Crispy Slice
- Pizza Express
- The Slice Factory
- Dough Depot
- Pizza Palace
When choosing a name, consider its uniqueness, brand identity, and how well it represents your pizza shop.
See How to Choose a Business Name for tips and insights to choose one that’s right for you.
4. Legalizing Your Business
To own and operate a legitimate business, you must register and understand the laws in your area. This must be completed before any physical activity occurs at your location.
This section will give you an overview of your necessary licenses and permits.
You’ll want to check with your state and local governments to find what permits you need in your location. They’ll have updated information and guide you on what you need.
Sample List of some common types of licenses and permits to consider:
- Business License: This license is required to operate any business legally in a specific area.
- Employer Identification Number (EIN): This is not exactly a permit but a federal requirement for businesses. The IRS uses this number to identify your business for tax purposes.
- Food Service License: This license is necessary for any establishment that will be preparing and serving food. The requirements will vary by state and city, but it typically involves a health department inspection.
- Liquor License: If you plan on selling alcoholic beverages, such as beer or wine, in your pizza shop, you will need a liquor license. The process and requirements for obtaining a liquor license vary greatly by state and city.
- Sign Permit: Many cities require a permit to create any type of signage for your business.
- Building Health and Safety Permits: Depending on the location and condition of the building, you may need permits related to fire safety, public health standards, and other building codes.
- Zoning and Land Use Permits: These permits ensure that your pizza shop is in an area zoned for this type of business.
- Music License: If you plan to play music in your shop, you may need a license from a music rights organization to legally play copyrighted music.
- Seller’s Permit (Sales Tax Permit): This permit may be required to sell goods. It allows you to collect sales tax, which you are responsible for forwarding to the state.
- Certificate of Occupancy: This certificate verifies that your building suits your type of business and can safely accommodate your customers and employees.
- Food Handler’s Permit: Depending on your location, your employees may need individual food handler’s permits, verifying they have been trained in safe food handling practices.
Remember, the exact permits, licenses, and certifications needed can vary greatly by location and the specific details of your business, so it’s always a good idea to consult with a business attorney or your local small business development center to ensure you have everything covered.
You may want to check out this article for the Permits and Licenses You’ll Need to Open a Restaurant | FSR magazine
See How to Register your Business.
5. Create Your Corporate ID
Your corporate identity is a collection of components with a standard design, for example, your business cards, logo, stationary, website, business sign, etc.
See A Complete Introduction to Corporate Identity Packages.
6. Plan for The Equipment You’ll Need
In this section, you’ll gain ideas for the equipment you need to start. Your choice of equipment will affect your business operations, whether new, used, or top-of-the-line.
Avoid purchasing equipment that is substandard and may break down.
Imagine purchasing a cheap oven that takes twice as long to bake a pizza or continually breaks down. A substandard oven will cost you dearly in downtime, loss of business, and costly repairs.
Sample List to give you an idea of what to expect when researching.
Please note that these are only estimates, and prices vary widely based on brand, quality, size, and specific features. I recommend checking with local or online suppliers for the most accurate prices.
- Pizza Oven: Depending on whether you want a traditional wood-fired oven, a deck oven, or a conveyor oven, prices can vary. Commercial pizza ovens start at about $5,000 and can go up to $30,000 or more for high-end models.
- Dough Mixer: A good quality commercial dough mixer can cost between $1,000 and $5,000.
- Refrigeration System: You’ll need a place to store fresh ingredients. Depending on size and features, a commercial refrigerator can range from $2,000 to $10,000.
- Preparation Tables: Stainless steel prep tables with refrigerated sections for ingredients can cost anywhere from $1,500 to $4,000.
- Pizza Prep Table: A refrigerated pizza prep table with topping containers can cost around $2,000 to $5,000.
- Pizza Cutters: A commercial-grade pizza cutter typically costs between $10 and $50.
- Pizza Peels: Used to place and remove pizzas from the oven. These can range from $15 to $60 each.
- Pizza Screens and Pans: These typically cost between $2 and $10 each, depending on size.
- Scales: A commercial kitchen scale can range from $50 to $200.
- Commercial Dishwasher: Prices vary based on size and capacity but typically range from $3,000 to $10,000.
- Serving Utensils and Dishes: These costs can add up. Budget around $500 to $1,000 for a basic setup.
- POS System: A point-of-sale system for handling orders, payments, and sometimes even inventory can cost anywhere from $1,000 to $3,000.
- Ventilation System: Depending on your local regulations, you may need a commercial ventilation hood and system for your oven, which can cost between $1,000 to $10,000.
- Uniforms: This will depend on the number of employees, but the budget is around $20 to $50 per uniform.
- Signage: The cost of signage will depend on its size, complexity, and whether it’s lit. Budget between $1,000 and $5,000.
- Furniture: Tables, chairs, and booths for your customers can add up. Budget at least $5,000 to $15,000 for a start-up.
Minimum total: $24,295 Maximum total: $98,910
So, the estimated grand total cost for opening a pizza shop could range from around $24,295 to $98,910 for just the equipment.
This doesn’t include other costs like building lease or purchase, renovation, business licenses, insurance, utility setup, and more.
You need the right equipment for the job. For more, see Search Results for – Pizza Shop Equipment
7. Estimating Your Start-up and Operating Cost
You need to know how much money you’ll need to start your pizza shop and stay in operation for the first few months.
Below you’ll find a general overview of what costs to expect when starting a new pizza shop. Please note that actual costs can vary significantly depending on the location, size, concept, and various other factors of your business.
Here are some rough estimates:
- Startup Costs:
- Leasehold Improvements (e.g., renovations, installations): $50,000 – $200,000
- Kitchen Equipment (e.g., pizza oven, refrigeration, prep tables): $30,000 – $100,000
- Initial Inventory (e.g., ingredients, packaging): $2,000 – $6,000
- Licenses and Permits (e.g., business license, health department permit): $500 – $2,000
- Insurance: $1,000 – $3,000 per year
- Point of Sale System: $1,000 – $2,500
- Initial Marketing and Advertising: $3,000 – $10,000
- Staff Training: $500 – $2,000
- Legal and Consulting Fees: $1,000 – $5,000
- Contingency Fund (Unexpected expenses): $5,000 – $10,000
- Total Startup Costs: $94,000 – $340,500
- Monthly Expenses:
- Rent/Lease Payment: $2,000 – $10,000
- Utilities (e.g., electricity, gas, water, trash): $500 – $2,000
- Salaries (e.g., chefs, wait staff, delivery drivers): $8,000 – $25,000
- Inventory Restocking: $2,000 – $6,000
- Marketing and Advertising: $500 – $3,000
- Insurance: $80 – $250 (if paid monthly)
- Maintenance and Repairs: $200 – $1,000
- Miscellaneous (e.g., office supplies, cleaning supplies): $100 – $500
- Total Monthly Expenses: $13,380 – $47,750
Again, these are rough estimates and more about the expenses you need to consider. Actual costs can vary significantly. Also, some startup costs are one-time expenses, while others may recur annually or more frequently.
Doing thorough research and financial planning before starting a pizza shop or any other business is important.
See Estimating Start-up Costs: Are You Missing Anything?
8. Write Your Business Plan
Your business plan will help you develop a clear vision and keep you on track. It’s also a document required to process a business loan or attract investors.
Below is a simple sample to guide you and get you started when creating your business plan. You can use a template or software or hire a specialist to create your if you want. A business plan is an important document, so you want to make sure if appealing before you present it.
Executive Summary
Business Name: Pizzalicious
Business Location: Downtown Springfield
Business Structure: Limited Liability Company (LLC)
Vision Statement: To become Springfield’s leading pizza shop offering our customers unique, delicious, and high-quality pizzas.
Mission Statement: To provide a unique pizza dining experience for all our customers, ensuring their satisfaction by offering exceptional service, quality ingredients, and innovative pizza recipes.
Business Objectives:
- Grow Pizzalicious to have a loyal customer base within Springfield in the first year.
- Expand the business to multiple locations within the first five years.
- Continuously innovate our menu to ensure customer satisfaction and repeat business.
Products and Services
- Variety of Pizzas (Classic, Vegetarian, Vegan, Gluten-Free)
- Salads
- Soft Drinks, Craft Beers, and Wines
- Desserts
- Catering Services
Market Analysis
Market: Our target market includes families, students, business people, and tourists seeking a quick, affordable, and high-quality meal.
Competition: Existing pizza shops and restaurants in Springfield. We aim to differentiate ourselves by focusing on a unique pizza menu, quality ingredients, and exceptional customer service.
Marketing Strategy
Product: High-quality, diverse pizza offerings catering to different dietary preferences.
Price: Competitive pricing strategy with occasional promotional discounts.
Place: Convenient downtown location and delivery services for all of Springfield.
Promotion: Strategic online marketing, including social media and local SEO, and traditional marketing, such as flyers and local newspaper ads.
Organization and Management Team
- CEO: John Doe
- CFO: Jane Doe
- Head Chef: Maria Rossi
- Marketing Manager: Paul Smith
Sales Strategy
We will utilize a physical storefront in a high-traffic location and an online ordering system for delivery and pickup. We will also establish partnerships with local businesses and schools for catering opportunities.
Funding Request
We seek $200,000 in funding to cover the initial setup cost, including lease, renovation, equipment, inventory, marketing, and operational expenses for the first year.
Financial Projections
We project steady growth in our revenue for the first five years. With careful management of our costs, we anticipate breaking even in the second year and becoming profitable in the third year.
Exit Strategy
Our goal is to successfully run and grow Pizzalicious. However, should the need arise to exit, the strategies include selling the business to another entrepreneur or a larger food service company.
Conclusion
Pizzalicious promises to bring an exciting, delicious pizza dining experience to the residents of Springfield. With a solid business plan, dedicated team, and commitment to quality, we are confident that we will achieve our business objectives.
See How to Write a Business Plan for the details.
9. Setup a Business Banking Account
Your shop’s finances must be organized and kept separate from your personal finances. The easiest way to start is to open a separate business checking account.
See, How to Open a Business Bank Account. You’ll also need a way to revive credit card payments. See What a Merchant Account and How to Get One.
10. Get Funding
If you don’t have the money to finance your pizza shop, you’ll need to get investors or a business loan. Then, it’s time to make copies of your business plan and meet with lenders.
Considerations when meeting with a loan officer:
- Loan Purpose: Clearly articulate the purpose of the loan and how it will benefit your new pizza shop. Provide a detailed business plan that includes your vision, target market, competition analysis, revenue projections, and marketing strategy.
- Loan Amount: Determine the specific amount you need and be prepared to explain how you arrived at that figure. Provide supporting documents, such as equipment, supplies, renovations, or working capital cost estimates.
- Repayment Plan: Develop a solid repayment plan demonstrating your ability to generate sufficient cash flow to cover loan payments. Include financial projections, sales forecasts, and expense breakdowns to showcase your business’s financial stability and growth potential.
- Credit History: Prepare your personal and business credit histories. Be ready to discuss any negative marks or previous loan defaults, along with the steps you have taken to address and improve your credit situation.
- Collateral: Determine if you have any collateral to secure the loan, such as property, equipment, or inventory. Prepare documents and valuations for these assets to demonstrate their value and potential for collateral use.
- Industry Knowledge: Showcase your knowledge and experience in the pizza industry. Provide details about your relevant background, including any certifications or training you have completed. Demonstrate your understanding of the market, competition, and potential challenges.
- Loan Terms: Familiarize yourself with different loan types, such as term loans, lines of credit, or Small Business Administration (SBA) loans. Understand the interest rates, repayment schedules, and any associated fees or penalties. Discuss these terms with the loan officer and ask for clarification if needed.
Sample List of Documents Needed to Apply for a Business Loan for a NEW pizza shop:
- Business Plan: A comprehensive document outlining your pizza shop’s concept, target market, marketing strategy, financial projections, and growth plans.
- Personal Identification: To verify your identity, a valid government-issued ID, such as a driver’s license or passport.
- Financial Statements: Prepare your personal and business financial statements, including balance sheets, income statements, and cash flow statements. Provide at least three years of personal tax returns and any available business tax returns.
- Bank Statements: Recent bank statements for personal and business accounts typically cover the last three to six months. This helps the loan officer assess your cash flow and financial stability.
- Credit History: Obtain copies of your personal and business credit reports. Review them for accuracy and address any discrepancies or negative marks.
- Collateral Documentation: If you have collateral to secure the loan, gather documents related to the asset’s ownership, valuation, and insurance coverage.
- Business Licenses and Permits: Provide copies of all necessary licenses and permits required to operate a pizza shop in your location. This includes food handling permits, health inspections, and zoning permits.
- Lease Agreement: If you rent the premises for your pizza shop, provide a copy of the lease agreement or rental contract.
- Vendor Contracts: Include any contracts or agreements with suppliers, distributors, or vendors who will provide ingredients, equipment, or other necessary items for your pizza shop.
- Resumes and References: Provide resumes of key personnel involved in the business, such as yourself and any partners or managers. Include professional references who can vouch for your qualifications and abilities.
Remember to consult with your specific loan officer or financial institution to determine the documents required for a business loan application, as requirements may vary.
See Getting a Small Business Loan For tips to prepare for a loan.
11. Software Setup
You will need to look at the software available for a pizza shop and decide which is best. Then, you can check reviews to see what others have experienced and speak with other pizza shop owners that you’re not competing with.
Check out Google’s Latest Search Results for Software Packages Related to a Pizza Shop.
12. Get Your Business Insured
You must have the proper coverage before any activity occurs at your location. Any incident can put you out of business even before you get started.
See the latest Google Search Results for Pizza Shop Insurance.
13. Pizza Shop Layout and Setup
You must set up your pizza shop and ensure everything flows well for customers, including your storage area, kitchen, refrigerators, etc.
You’ll also want a good setup for your office because you’ll be managing your business from there. Therefore, you want it to be set up so you are productive.
See the latest search results for pizza shop layouts, also see, Here are Considerations for The Setup of Your Office.
14. Choosing Suppliers
The suppliers you choose contribute to your success. With the right suppliers, your business has a better chance to succeed, while the wrong ones can hurt your chances of success.
See, How to Choose a Supplier You Can Depend on
15. Create an External Support Team
An external support team is a team of people that aren’t employed by you and are used on an as-needed basis.
See, Building a Team of Professional Advisors for Your Business.
16. Hiring Employees
In the beginning, you may do everything yourself. However, as your customer base grows, you might need help to keep up, and it may be time to hire.
See How and When to Hire a New Employee.
Points to Consider
Why Are You Interested in Starting A Pizza Business?
It’s vital to identify your reasons for starting a business. Some people start a business to become their own boss and avoid having a job. Others are in it for the financial benefits. Then some have a passion for the industry, the products, and the services a business provides.
When you’re passionate about a business, and problems arise, you’ll focus on solutions rather than an exit strategy. Having a passion for your business is one key element for success.
Is This The Type of Business You Want?
Let me ask you this? If you had ten million dollars at your disposal and secured in your bank account, would you open and run a pizza business?
If you answered yes, you are passionate about owning this type of business. If you answered no, then what would you do? And should you be looking into doing that instead?
What Type of Pizza Business Are You Considering?
There are different setups for a pizza business. What are you considering:
- A restaurant?
- A concession stand or food cart type of business?
- Will you focus on take-out only?
- Will you be selling pizza by the slice?
- Will you include other items, such as subs?
- You need to identify what type of business you want so you can estimate startup costs and make sure your startup idea is feasible.
The Demand For Pizza In your Area
It would be best to research the market for the area you’re planning to open your shop.
If there is no demand, there is no use for you to open your pizza business in that area.
With a saturated pizza market, it will be challenging to get into the market. You’ll need to come up with something new that’s missing in the marketplace or offer better products and services.
Regarding a highly competitive market, one of the first issues that business owners will compete on is the price. When a price war occurs, everyone loses; sometimes, the profits are so low it’s not even worth competing.
Your best bet is to find an area with a demand for pizza and the market isn’t saturated.
Getting Inside Information:
Here’s a technique I’d like to share with you to get you inside information about owning and running a pizza business.
Look for pizza businesses listed for sale. Contact the seller to set up an appointment. Prepare all the questions you have before you meet with the owner.
When you arrive at the business location, you may get a tour; you may be able to meet with staff members and speak with them about the business. You may also get a chance to review the company’s profitability, expenses, lease agreements, and other issues.
Include questions like:
- What are the biggest challenges of running this business?
- If you had to start again, what would you do differently?
- What made you want to start this business?
- These types of questions offer insights based on the owner’s experience in the pizza industry.
You can also ask questions like:
- How long have you had this business?
- Did you start from scratch, or did you take it over?
- What advice do you have for someone taking over this operation?
- Why do you want to sell?
- Are you open to financing the purchase?
- Are there any liens or lawsuits against the business?
- Are you planning on opening in a different location?
- How much profit does this business make?
- How high are the monthly expenses?
- What is your highest cost?
- If you had the opportunity, would you expand? And Why
- Have you ever considered opening in multiple locations? And Why?
- Etc.
The above questions offer insights into the current state of the business and why the owner wants to sell it.
With the above approach, you have inside information based on experience that you don’t have but can use to start your pizza business.
Now meet with the next business owner that wants to sell. The more you do this, the more information and knowledge you’ll have.
One more consideration:
Here’s one more consideration of the above approach. You may find that buying one of the businesses you visited is a better route.
If the business is set up the way you want it and ready to make money the day you take over, it’s something to consider. But before you make a deal, there’s one more step.
Check out the option of getting into a franchise. You’ll gain critical information by researching the franchises related to pizza, like when meeting with business owners wanting to sell.
Now you have details for businesses that are for sale, franchise opportunities, and an idea of what it takes to start from scratch. You can take your time to figure out what’s the best approach.
See the resource section for a listing of businesses that are for sale. You’ll also find the franchise opportunities section for a list of available franchises related to the pizza industry.
Next, in this post, you’ll find the resources I have selected and organized in sections for your convenience. It will take time for you to review the resources, so you may want to bookmark this page to return when needed.
Resources
Trends and Statistics
From trends, you’ll get an overview of what to expect from this industry and identify the rise and decline of the pizza market.
Remember that even if you see the industry has billions in revenue, it doesn’t mean you’ll automatically be successful. It just means the industry is strong.
Search Results – Pizza Industry Trends and Statistics.
Employee Considerations
In this section, you’ll consider the number of employees to help run your operation or if you will do everything yourself.
If you offer delivery, then you’ll need someone to do that. If you are open for extended hours, you’ll need support.
If you’re considering a restaurant-style operation, you will need staff to help.
Also, you want to consider if you’ll be running the business or hiring a manager to run the business and oversee operations. Some experienced entrepreneurs will take this approach when running multiple companies.
How to Hire and Retain Better Pizzeria Employees – PMQ Pizza Magazine
How to Finance Your Business
Have you considered how you’re going to fund your pizza shop?
- Do you have savings?
- Are you planning to sell some assets?
- Will you apply for a bank loan
- Will you ask for a loan from friends and family?
Before looking for a loan, you must determine how much you’ll need.
When you determine the amount, I suggest you increase that amount by 10-15% because you may have yet to consider all the costs.
You want to avoid getting to the stage where you are short on funds during the startup and have no other means of raising money. That’s why I would get more money upfront and pay it back immediately if it’s not used.
Search Results – Pizza Shop Financing.
Businesses for Sale
Before starting from scratch, as mentioned in other parts of this post, consider purchasing an established pizza shop for sale. You’ll find a link to the latest search results offering pizza businesses for sale.
Even if you are set on starting your own, seeing what the market offers is beneficial.
Search Results – Pizza Shops For Sale.
Franchise Opportunities
Another option for starting your pizza business is to look into a franchise before you get started.
With a franchise, everything is set and standardized across all locations. You follow instructions, abide by the policies, and are ready for business. It’s like a business in a box; you stick to the plan.
Search Results – Pizza Franchise Opportunities.
Top Pizza Businesses
By looking at other shops, you can get an idea of what’s expected in the industry and ensure you have everything you need.
You might also develop an idea the businesses are missing that you can implement in your business that could be a competitive advantage.
Search Results – Top Pizza Businesses.
Knowledge Is Power When You Use It!
Courses
Courses are a great way to fine-tune and upgrade your skills, whether for managing your business or creating better pizza. You can find the latest courses available from the search results below.
Search Results – Course for Pizza Shop Owners.
Publications
Publications are a good way to stay in touch with your industry.
Subscribe to those publications that keep you informed about the latest information in the pizza industry, whether they are print publications or blogs.
Search Results – Pizza Publications
Terminology
Naturally, you need to be familiar with the terminology of the pizza industry.
So naturally, the more experience you have in the business, the more familiar you’ll be with industry terms. However, you can learn the vocabulary now from the link below.
Search Results – Pizza Terms and Definitions.
Books
Books are another source of information to improve your knowledge of the pizza industry.
One time saver when using non-fiction books is that you don’t have to read the book from cover to cover. Instead, skip to the chapter with the information you need.
Books from Amazon Related to Starting A Pizza Business
News
The news is an excellent way to stay in touch with what is happening in the industry.
You can use a site like Google News and type in your query for instant results of the most popular stories covered by the media.
In addition, you can have the option to create an alert allowing you to receive a notification anytime something new is published.
Latest News Related to Starting A Pizza Business
Featured Video
For More Business Ideas, See our Collection of Business Ideas.
YouTube Videos
You can learn a lot from youtube. Many talented people are out there publishing information to share with the public. You can learn about the pizza industry, business operations, marketing, recipes, etc. Taking the time to review this information is to your advantage!