How much does it cost to open a pizza store?
Startup costs are critical to the smooth running of any pizza business. However, we aren’t interested in just any type of business. But seek to discuss the cost implications of starting a pizza shop.
Are you interested in starting one yourself? You’d find this business plan quite handy and we will also cover everything relating to pizza store startup cost.
Your Scale of Operations
Cost cannot be fully explained without discussing your scale of operations.
In other words, the bigger your scale of operation, the more cost will be incurred. But like most new pizza shops, it’s safe to assume that your business is a small startup. So, as a prospective pizza shop owner, you’d find this aspect of your startup very necessary.
For a better explanation of things, larger pizza shops will require more equipment. This will also mean more employees which will translate to a larger wage bill. There are additional running costs as well. These among several others raises the cost of doing business.
The reverse is also the case for a smaller sized pizza shops. So, where do you belong?
Franchise or Fresh Startup?
As an entrepreneur, you have options to choose from. There are two major options. These include starting your pizza shop the franchise way or starting from scratch.
Of course each comes with its advantages as well as disadvantages. Let’s discuss each of these briefly;
Pizza Shop Franchise
So many pizza franchise opportunities you can buy. The cost implications are as varied as they are. Though the franchise cost may be steep in some cases, it is mostly worth your investments.
Why? Because these pizza franchises are mostly established businesses. In other words, you are backed by a solid business system that largely guarantees your success.
So, in the case of cost, you’d need to find which franchise opportunity has the lowest cost.
In addition to cost, you’d need to find out how successful the pizza brand is. The more successful it is; the better opportunities are available. You are also saved from the stress of having to build a pizza shop from scratch. This is because you’d have a template or business model to work with.
What do we mean by this? It simply translates to starting your pizza shop from scratch. Though this may sound exciting, the challenges aren’t. But this isn’t to dampen your spirit though.
Here, you’d need to figure out all that is needed. This is where the issue of cost comes into play. A lot of planning is also involved.
All your expenses have to be worked out. Which is why we have come up with the cost implications. Unlike a pizza franchise where cost is worked out, you’d have to do this yourself.
Hence the need to identify specific areas that will take up your expenses.
What Constitutes Cost of Opening a Pizza Store?
We’ve discussed some basic concepts in the lead up to identifying the cost implications. However, we also need to know what actually constitutes cost. Understanding this gives you a better idea of how much is needed. Therefore, we turn to the question of what constitutes cost.
Starting a pizza shop first requires renting a business space, equipment purchase, running costs in addition to other costs.
Cost of Renting a Space
Renting a business space is a basic requirement. However not every location is suitable. You’d have to choose a great location such as an urban area with a dense population. But the cost of real estate in your preferred location will attract higher rent fees. There’s no flat rate for renting an office space across cities. The same holds true for rent costs within a city.
So, the size of your space will determine how much you pay. This will fall within the range of $1,200 to $2,500 per month. But as business picks up, more space may be required. This may result in expanding your space or opening new outlets. Under such circumstances, rent costs may increase. Additional modelling may apply which may increase cost too.
This is an additional area that will take up a significant part of your expenses. But you’d need to know what equipment to purchase. The quality, brand and efficiency of such equipment also matter. We recommend getting the best. However, you can get used equipment if you’re working on a tight budget. This should only be done with the aim of getting new ones once the pizza shop stabilizes.
Equipment required include pizza ovens, mixers, pizza prep accessories, and dough sheeters. Others are; walk-in coolers, shelving, custom stainless equipment, pizza prep make-line tables and ventilation options among others.
These will cost you anywhere from $10,000 to $15,000.
Pizza Business Operational Costs
This is an important cost requirement for running a successful pizza shop. It constitutes several things. These include purchase of inventory, wages, maintenance cost, utility fees, advert and marketing costs among others.
Therefore, a part of your startup cost will need to be kept aside for this. It is expected that you’d be running at a lost for the first three months. During this time, your operational or running cost should be able to sustain your pizza shop.
So, how much is it to start a pizza shop? Based on the scale, your operational costs may vary from $80,000 to $150,000. This, when added to other expenses will make up your startup costs.
As we’ve seen, several things contribute to cost. But no matter how detailed our cost breakdown, you’d need to conduct a feasibility study. This is done with the aim of finding out the cost specifics. So, a thorough job needs to be done in that regard.
Every information you’ve read is crucial to determining the cost of starting a pizza shop. But also important is your capacity to plan adequately for this undertaking. Such will come in the area of marketing, choice of suitable location as well as your customer care.