How Much Does It Cost to Open a Pizza Shop

Hello and welcome! If you are a restaurant owner looking for an answer to the question How Much Does It Cost to Open a Pizza Shop you are in the right place. This article will give you the answer you are looking for. We will also answer several other important questions about starting a pizza restaurant.

How much does it cost to open a pizza shop? It depends on a lot of factors such as the size and location of the store, whether you go with new or used equipment, the amount of inventory you start with and more.   On average, you need between $75,000 to $500,000 to start a pizza shop. 

How Do I Start a Pizza Shop?

Starting your pizza restaurant is not challenging; as with any other type of business, you first need to develop a business strategy.

Developing a sound business strategy is crucial in opening a prosperous pizza shop. Your goals for the pizza restaurant, whether annual or monthly, should be outlined in the business plan you create.

Create a business plan for your pizza shop?

 A business plan is a well-detailed guide containing the future goals of a business or corporation, solutions to the challenges that a firm is facing, etc., as discussed earlier in this section. A firm that does not have a plan is doomed to fail, and this maxim also holds for the pizza shop business.

The first section of your business plan should be devoted to a concise company summary. Second, the number of current workers and their salaries are within your financial means based on your budget. Because it is self-evident that pizza does not produce itself, the equipment and utensils necessary for manufacturing this quick cuisine should also be given top priority.

Choose a business structure.

Before opening your pizza restaurant, choosing the appropriate business structure is a crucial first step. A business structure is an internal body that influences the daily activities of the business. There are five major types of business structures: sole proprietorship, partnership, limited liability company, popularly called LLC, and the infamous S corporation.

It is important to note that each business structure has different effects on your pizzeria, so choosing the right business structure must be done carefully.

Pickup or delivery

Pickup or delivery implies the route the already-made pizza takes to the customers. And in the pizza business, there are two major ways the pizza reaches the end-users: the pickup and the delivery system. 

Pickup implies that the customers place and take their pizza orders themselves. On the other hand, the delivery system involves intermediaries known as delivery men, who transport customers’ already-made pizza. The delivery system is the most common because it relieves customers’ stress of moving out of their comfort zone. 

Pizza shop type

This is greatly dependent on your start-up capital. Building your pizza shop will be great if you have large start-up capital. Building your pizzeria, including all expenses like land purchase, etc., ranges between $500,000 to as much as $2 million. 

If you want to start something small, a canteen can serve as your shop. Setting up a canteen can range from $75,000 to $150,000. A pizza canteen can be a great way to start if you have a low budget and small staff requirements. 

Decide on a location for your pizza shop.

Deciding on your business location should be seriously considered before setting out on your pizza dream. Just like commercial real estate, the wrong location is the beginning of the downfall of your business. Your pizza shop needs to be situated where it will gain attention.

Attention is the sole driving force of any food business. When your pizza shop is easily accessible, scaling it up fast becomes a reality. Carefully observe the areas within which you wish to start your pizza business. Map out the areas with high popularity. Within the area, carefully map out the best spot; this should be easily noticed and not hidden. 

Register your Pizza shop.

 First, register your pizza shop with the United States Department of Labor. Registering your pizza shop in the United States is simple. You must pay $75 and complete an application form with your local authorities. 

Including information about the type of food, you plan on serving, any special dietary requirements for guests, and how often you plan to sell items from your menu.

The application form includes requests for your business’s name and address so inspectors can confirm that everything is up-to-date and accurate before granting you a license when they visit your site during inspections.

Get any required licenses or permits for your pizza shop.

 Starting your business without the documents, permits, or licenses to run your business effectively will be completely unsafe. Some of these include a permit if you are using a rented space, an insurance license, and legal documents showing ownership of your pizzeria if you built or owned the building, amongst others. 

Employee Identification Number: Your pizzeria needs an Employer Identification Number, or EIN, for tax payments. The state’s internal revenue agency provides this number, and you must fill out an IRS form before submitting your application.

Create a financial plan and get funding for your pizza shop

 No matter how wonderful the dream and the plan are, your finances determine how far your business idea will go or how long it will survive.

If you have a solid financial backup, then carefully track and plan how much each sector of your business should consume. You can hire a financial advisor to do the calculations in case you can’t trust your estimates. 

Open a business bank account for your pizza shop.

A business bank account with your brand’s name creates a connection. It builds brand trust with your customers or potential customers. Now that most businesses accept cashless transactions, having a common name in your bank account will look unprofessional and suspicious. 

What Types of Equipment Do I Need to Start a Pizza Shop?

After deciding on a good site for your pizza business and the style of pizza restaurant to open, your following step should be to acquire the necessary equipment and supplies. Consumer satisfaction is the utmost goal of any business; this does not always imply your pizza but also your environmental equipment and materials. 

How Much Does It Cost to Open a Pizza Shop?

After seeing some of the necessities above, we can conclude that, on average, you need between $75,000 to $500,000 to start a pizza shop. This includes the cost of renting, acquiring, or building your pizza shop or pizzeria; getting complete documentation and licenses; internal equipment; staff payments; food purchases; and general shop maintenance. 

Hire Employees and Get Small Business Insurance

 Yes, you need employees! You can’t possibly do the dishes, prepare the pizza, serve the customers, take their orders, and so on. Hire well-behaved and committed staff because this also speaks to your customers. Hire staff that treats customers with maximum respect, can control emotions amidst heated customer retaliations, and are cool and easygoing. 

Efficient staff training and reorientation: professionally train your staff on quality service to customers. Bad workers can chase away customers. Employees responsible for food service and delivery should be trained on a positive consumer approach and sorting out customer needs effectively. 

Track Your Cash Flow

 Keep track of how much goes in and out of your business. You could hire an accountant to do the job for you, or you can do so yourself, which helps you know whether you are gaining or losing. 

The easiest way to keep track of cash flow in your pizzeria is by having a record of the total number of items sold and delivered. You can do this by issuing receipts to your customers, reviewing the duplicates, and considering how much was made for the day. 

Compare the results with the amount spent on purchasing the items used in the pizza product and see if you oversold (made a profit) or undersold (secured a loss). This is the basic form of keeping track of your business cash flow. On the other hand, accountants are trained to use ‘balance sheets to keep track of your business expenditures, liabilities, and cash inflows. 

Cost to Open a Pizza Shop

 Opening a pizza shop, as earlier emphasized, usually costs between $75,000 to $2 million. The price is dependent on some factors earlier explained in this article. 

5 Pizzeria Startup Costs to Know

 Below is a summary of the average costs of setting up a pizza shop or pizzeria. 

Location Costs

Location cost varies based on the location of your pizzeria and should average about $40,000 to $500,000.

Marketing Costs 

Your marketing cost covers advertising via various media outlets (social media, flyers, billboards, etc.), roughly around $35,000.

Administrative Costs

Maintaining your business administration should average between $15,000 to $50,000.

Staff Costs 

Staff costs, mainly around their hourly wages, revolve around $10,000 to $20,000, depending on the number of working staff you employ and the agreed hourly wages. 

Equipment and Inventory Costs 

All inventories and equipment costs usually hover between $30,000 to $50,000. You can choose to be cost-effective by buying cheap products, but maintenance will always be a burning issue. 

What Pizzeria Supplies Are Needed for Business?

Your major pizza supplies as a beginner should cover your kitchen and delivery. It would help if you had quality pizza pans, customized pizza boxes (for delivery purposes), pizza cutters, pizza oven tools, etc. 

• Pizza pans: A pizza pan is an aluminum dish like a plate with tiny holes. It is used to bake pizza. These usually cost $21.99 per pan. 
• Pizza boxes: Pizza boxes are used to deliver pizza. They are the official package model for pizzas. Pizza boxes also bear the company’s logo to help facilitate a return purchase. 
• Pizza Cutters: As the name implies, these are tools used to cut the pizza into desired shapes. Pizza is baked in a wholesome circular shape; the pizza cutters give the perfect triangular shape cuttings on the pizza. They usually cost around $7.00.
• Dough Mixers: As the name implies, their major function is mixing dough efficiently before other processes follow suit. This is one of the necessary tools needed in a pizzeria. 
• Safety tools: These include: gloves, sanitary buckets, aprons, first aid kits, fire extinguishers, etc. 
• Dough Sheeters: A dough shelter is an equipment used to make dough in large quantities quickly.
• Ranges, Grills, And Ventilation: These include the gas range (cooking gas that uses house gas as a heat source). The induction cooktops use electricity instead of thermal heat. Smokers are tools used for preparing barbecue at controlled temperatures. The flat range is a cooking apparatus that resembles the kitchen grill; the major difference is that anything can fit on a flat top, such as pots, pans, etc. They’re used for cooking. 
• Freezers And Refrigerators: These are used to preserve leftovers in the pizzeria.
• Food Prep Equipment: These include all materials needed to prepare pizza. They include; knives, cutting boards, pizza paddles, pots, and pans. 

Is opening a pizza restaurant profitable?

Yes, pizza restaurants are highly profitable when your brand is known. A pizza restaurant’s estimated profit margin is about 15%.

How much does a pizza Restaurant owner make?

Pizza restaurant owners make an interesting amount of money. On average, one can make between $50,000 to $120,000. Estimate figures show that some Domino’s pizza owners make between $100,000 to $120,000 per annum. 

Conclusion

Many costs are involved when starting a pizza shop, especially when you factor in the initial start-up costs. And while it might seem like the pizza industry is booming, you will have to compete with other new pizza joints opening nationwide. 

Jeff Smith is a Restaurant Consultant with over 20 years of hospitality experience ranging from server to owner and general manager.  He focuses on Restaurant POS technology as well as restaurant marketing.  Check out our world-famous restaurant resources page for a comprehensive offering of hand-picked resources and tools to help your business.  You can also check out some of our other restaurant business articles.