how to start a business

How to Lose Your Dough Investing in a Pizza Restaurant

Who doesn’t love pizza? That’s great, but just loving pizza won’t cut it when you hope to open a successful pizza place.

Thursday, April 1, 2021, 9 a.m. my paralegal, Anne, buzzed me: “Two of your readers – Seth and Mia – are on the line and need to speak with you right away. The husband is about to sign a lease for a pizza restaurant he plans to open, but his wife thinks he is completely out of his mind.”

I took the call and asked Mia why she was so worried.

“Seth is a long-haul truck driver and has never run his own business. We have considerable savings that he wants to put into this pizza restaurant that will be managed by his brother, who completed a culinary course while in prison for embezzlement!”

Is that correct? I asked Seth. It was, and he explained, “Pizza restaurants have done very well this past year, and I want to cash in now! My brother made a mistake – because of drugs and a gambling addition – but he is cured. He got all A’s in the pizza section of his prison course, so I trust him to do a good job.”

The couple were serious. This was not an April Fool’s joke.

I ran their story by Cyndi Hicks who “grew up in the pizza business” and owns several Rusty’s Pizza Parlors in Southern California.  Her initial comment? “While I commend Seth for wanting to better their lives financially, I see him headed for failure.”

So, what does it take to lose your shirt – not to mention lots of dough – in the pizza business?  Cyndi provided a by-the-numbers guaranteed way to fail.

1. Care only about the money. Lack passion for the restaurant business.

Consequences: People will see that you just don’t care about them. Your employees will feel your disinterest. Customers will sense that as well. Do not think that you can simply make a lot of money in it. You need to be onsite. If you are going to be in this business, it takes a lot of time and work.

2. Fail to keep consistent hours of operation.

Consequences: You will confuse your customers. Employees will resent having their hours cut and not have enough they can count on for a paycheck. If customers show up after a movie and you are not open, they will go somewhere else.

3. Have inconsistent portion size. Refuse to use scales to measure portions. Fail to show that you are concerned and observant of portioning.

Consequences: Customers will never know what they are going to get. Costs will go up without tight portion control. It is critical to use scales to measure ingredients and toppings. Left to the decision of the pizza maker, over-portioning will certainly result, especially when friends and family visit – employees will load up their pizzas! Or, under-portioning, which upsets customers.

4. Fail to have a good accountant, attorney, reputable payroll servicer and especially HR in your back pocket.

Consequences: You will not make good decisions, especially in the HR realm. Disciple, termination, promotion – do this incorrectly and you will face lawsuits.

5. Fail to keep the place clean, refreshed, clearing tables promptly, emptying trash cans. Unclean restrooms.

Consequences: Who wants to consume food in a place that is not clean? You will chase customers away.

6. Charge a premium price for an average, run of the mill pizza.

Consequences: Customers are not stupid! You will not have return business. Determine if you want a discount operation for people who seek the lowest price but not the best quality, or, do you want to serve the highest quality food, which will command a higher price to customers who appreciate the difference?

Quality and service will bring customers back.  They go hand in hand. Customers are observant. They know if your price/quality structure does not add up.

7. Don’t know your ingredients, how to put them together and how to make a good pizza.

Consequences: You run the risk of that so-called experienced pizza maker you just hired is a complete incompetent and ruining your business. For anyone who has not been in the pizza business, it is so important to attend one of the “pizza schools” located all over the country. Some possibilities (although others can be found by reading Pizza Today magazine or PMQ Pizza Magazine):

  • The International School of Pizza in San Francisco
  • Napoli Culinary Academy in Sacramento
  • Pizza University & Culinary Arts Center, Beltsville, Md.
  • The North American Pizza and Culinary Academy located in Lisle, Ill.
  • Pizza School of New York

Or, go to work for someone else at a good pizza restaurant and learn the business before opening your own restaurant.

Concluding our chat, Cyndi points out: “It is so important to work with your employees and encourage them to have a positive customer service attitude. That’s what it all boils down to – customer service. You want people to have a nice experience having a meal with friends and family and feel happy to return.”

Finally, what happened to our readers, Seth and Mia? Well, Seth’s brother violated the terms of parole and was sent back to the same prison, where he was welcomed into the culinary program as a teaching assistant! And truck driver Seth decided to save his money and purchase his own truck, “Because that is something I know.”

About the Author

H. Dennis Beaver, Esq.

Attorney at Law, Author of "You and the Law"

After attending Loyola University School of Law, H. Dennis Beaver joined California's Kern County District Attorney's Office, where he established a Consumer Fraud section. He is in the general practice of law and writes a syndicated newspaper column, "You and the Law." Through his column he offers readers in need of down-to-earth advice his help free of charge. "I know it sounds corny, but I just love to be able to use my education and experience to help, simply to help. When a reader contacts me, it is a gift." 

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