Who doesn't love a good pizza right? It's a low cost food that appeals to all ages and genders. Buying an established pizza restaurant is a great way to avoid startup costs and buying an independent pizza restaurant is a great way to avoid franchise fees. According to IBISWorld.com, pizza restaurants were projected to generate nearly $43 billion in revenue in 2012 and independent pizzerias control almost 52% of those sales. So, when you see a pizza restaurant for sale, give it some consideration because there is definitely money to be made. If you are already considering it here is what you need to know.
As the owner, you most likely be spending a lot of time at the business. I've seen pizzeria owner's put in 60-70 hour work weeks so you may want to find an established pizza restaurant that is for sale close to your own home. Pizzerias are most successful when the owner is onsite and a part of the day to day operation. Like many other businesses, there is potential for employee theft given the high volume of cash going in and out of most established pizza restaurants. Labor costs in this business should be below 20 percent, not including the manager's salary, but be careful not to cut this too short. You want to be adequately staffed and have the right team in place to provide good customer service.
Next, and this may sound ridiculous but make sure the pizza is good at the restaurant you are considering! If the pizza isn't that great, you may not be buying into a loyal customer base. If that's the case, you will have to change the pizza recipe, perfect it and re-introduce it to the market. You would basically be building the business from the ground up like you would a startup. This will most likely increase your marketing and advertising costs significantly too, so be sure the pizza restaurant is already producing a quality product.
The most common places for an established pizza restaurant are either in a stand-alone building, a strip mall or a shopping center. Almost 48% are found in standalone buildings so unless you are specifically seeking out a shopping center/strip mall location, you will likely find an established business in its own facility. Regardless of where it is located, consider the rent or lease agreement. Rent and utilities should be less than 9% of your total costs. Also, consider the competition that is within a 10 mile radius. Obviously the fewer competitors the better, then when your customers need to grab something quick on their way home from work, they will have less options to choose from and hopefully end up at your counter!
Next you want to look their financials. Dig into their records and get a handle on their expenses, revenue, profit, and debt. Have an accountant take a look, as well, so you have an accurate range of expected revenue. In looking at the company's inventory, check to make sure they are keeping food costs below 30 percent. Taking benchmarks like this into consideration will help you to be sure that you buying into an efficiently run business. You may also want to have your professional team, such as your attorney or accountant, take a look at everything you find as they may be able to provide additional insight as to what you would actually be getting should you purchase this pizza restaurant.
So if you have a love for pizza, don't mind long hours and have found an efficiently run established pizza business for sale, you have the potential to generate some good revenue. Despite our sluggish economy, the pizza industry is expected to grow as new variations of pizza are being introduced into the market regularly, which ultimately expands your potential customer base.
View all: California Pizza Restaurants For Sale
Need Help?: Pizza Restaurant Business Brokers & Agents To Assist You
About This Contributor: Peter Siegel, MBA is the Founder & Senior Advisor (ProBuy & ProSell Programs) at BizBen.com (established 1994, 8000+ California businesses for sale, 500 new & refreshed postings/posts daily) working with business buyers, small business owners/sellers, business brokers, agents, investors, and advisors). Phone him at 925-785-3118 to discuss strategies regarding buying, selling, (or financing a puchase of) California businesses.
|Helpful Resources To Assist In Selling And Buying California Businesses|
|Steve Zimmerman: Restaurant Broker Specialist
Steve founded Restaurant Realty in 1996. He has personally sold/leased over 900 restaurants, bars & clubs, & completed over 3000 valuations. The author of "Restaurant Dealmaker - An Insider's Trade Secrets For Buying a Restaurant, Bar or Club" available on Amazon. Reach Steve direct at 415-945-9701.
|Jeff Sacher, Business Broker - North Bay Restaurant, Retail Specialist
Jeff is a leader in business brokering in the North Bay. Since joining Santa Rosa Business And Commercial in 1999 he has assisted Buyers and Sellers in over 200 business sales and acquisitions. Jeff provides other services for his clients as well. Reach Jeff and his team at 707-888-4972.
|Bob Baumgarten, Business Broker: Orange, LA Counties
National Business Brokerage is a full service brokerage company that has been serving buyers and sellers of Southern California businesses since 1994. We are dedicated to providing the highest standards of professional service for our clients. Phone Bob direct at 949-588-8727.
|Chris Seaman, Business Broker - San Diego County Area
Founded in 1994, First Choice Business Brokers has accelerated to become one of the most successful Business Sales Organizations in the world. Our team of agents have gone through extensive training to become experts in the field of business brokerage. Call Chris at 858-578-4111 for more info.
|Michael Floorman, Business Broker, BTI, San Francisco Bay Area
Business Team, San Jose (Campbell) located in the Pruneyard Towers at Bascom and Hamilton. Established in 1981 Business Team with over 6600 sales to date has 1000 business listings to choose from, paid Google advertising. We offer highly trained and experienced professionals.
|Cheryl Maloney: Restaurant Broker Specialist - San Francisco
Cheryl is a business owner herself, Over 20 years bar/restaurant experience, and a law degree she's well-versed in real estate rules, regulations and best practices. She works tirelessly to create successful strategies and effective negotiations for those wishing to sell or purchase their business.
|Harry Sidhu, CBB, Broker: SF Bay Area, Central Valley, SAC Region
Assisting both sellers and buyers of businesses - dealing mainly with Liquor Stores, Grocery Markets, Gas Stations, Smoke Shops, Restaurant Related, Retail Related, Service Related. Serving SF Bay Area, North Bay, Sacramento area. Call Harry Sidhu, CBB for assistance at 510-366-6130.
|Ryan Clark, Business Broker, Southern California
The Veld Group provides a refreshing approach to Business Brokerage, Mergers & Acquisitions and Business Consulting and Valuations. From Your Street to Wall Street, we cater to Main Street Businesses as well as more complex Strategic Firms and Start-Ups. Phone Ryan at 310-652-8353.
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