Do you want to start a pizza shop from home? If YES, here is a complete guide to starting a pizza shop business with NO money and no experience.
Okay, so we have provided you an in-depth sample pizza shop business plan template. We also took it further by analyzing and drafting a sample pizza shop marketing plan backed up by actionable guerrilla marketing ideas for pizza shops. In this article, we will be considering all the requirements for starting a pizza shop business. So put on your entrepreneurial hat and let’s proceed.
Why Start a Pizza Shop?
We all know what Pizza is. Its taste, style and even the shape of the pizza can be a point of local pride. Chicago-style deep dish aficionados pit themselves against NY thin-crust lovers, California designer pizza fans and everyone else. Everyone claims to have the best pie and discussions get heated. But even with all the arguments and differences, everyone agrees that pizza is a food everyone enjoys. It might be a cheap meal after a game, a date night, a weekly treat, a quick lunch, or even a breakfast.
Americans eat a lot of pizza – on average 23 pounds each year. From just looking around, we will note the growing amount of parlours, stands, shops, kiosks and counters peddling their own varieties of pie. Even with the clear availability of pizza nearly everywhere, extremely strong demand together with the evolving tastes of the American consumer provides ample opportunity for entrepreneurs.
A pizza shop has everything ready to produce great profits, but the means of starting and running a successful operation needs adequate planning and patience. Have it in mind that with the huge amount of pizza shops in America, anyone hoping to start a new pizza shop has to bring something unique to the market.
ou also have to understand that pizza shop owners must follow state health regulations, and a failure to do so results in fines and license revocation. We believe that building and running a pizza shop is an exciting process and knowing the steps to take will prepare you to start a successful business.
Even though the thought of a pizza parlour may elicit feelings of nostalgia, the reality is that most people who crave a good pie often don’t want to be limited to eating it in a shop. When thinking about how to open a pizza shop, there are many options for bringing your famous recipe to the masses.
Just in the United States, it’s obvious that even small towns can support a number of pizza joints, so location may not be as key as your concept. Indeed you may want a place with adequate parking and heavy traffic, but if your food is better than that served by an eatery down the street, most customers will make the effort to return.
Starting a Pizza Shop Business from Home With No Money – A Complete Guide
- Industry Overview
This lucrative industry is made up to of businesses that make and serve pizza and other related items. The industry includes both full-service shops and quick-service businesses. In 2016, experts estimated the top four industry businesses to represent 39.9% of total industry revenue, which shows clearly a low level of concentration among the industry’s largest establishments.
We agree there are well-established and well-known pizza brands in the industry, yet there are also a large number of small, independent and locally focused pizza shops across the United States. Reports have it that about 55.3% of US pizza stores are small independently owned shops.
We believe that this is very consistent with the broader shops sector. Industry experts believe that within the past five years to 2016, the industry concentration has grown slightly. As unprofitable businesses have left the industry, survivors have captured a larger portion of demand, increasing their presence in the Pizza Shops industry.
You need to understand that this industry has growing slowly over the past five years while battling anemic consumer spending and changing preferences. We believe that heated external competition from a variety of new food-services concepts and an increase in health consciousness among consumers have also not favoured the industry.
But even with these challenges, a lot of industry businesses have performed well, adapting their menus and investing in advanced technology, including sophisticated web-based ordering systems, to boost efficiency and improve profit margins. Experts believe that in the coming years, the industry will continue to rise as the economy improves and consumers spend more on eating out.
They also believe that consumer preferences will continually force pizza shops to adapt or change strategy. Also have it in mind that Pizza chains catering to lower incomes are competing in a very saturated marketplace.
Starting a Pizza Shop Business from Home – Market Feasibility and Research
- Demographics and Psychographics
Research has shown that the more typical consumer of this business product is actually younger females with a healthy workout schedule. Reports has it that 63% of self-identified “pizza lovers” are women. The average consumer is now health conscious and works out twice a week.
This change reflects the broader movement among the population to live a healthier, more balanced lifestyle. Have it in mind that the 80 million millennials buying pizza are expected to outspend baby boomers by 2017.
It’s very important to state that these younger crowds are constantly on the lookout for the healthier options and they also consider themselves “foodies” – interested in the experience of eating more than for sustenance. They love custom, and they want to talk about it – online, of course. Note that today consumers want to frequent a business with social consciousness. We believe they want to feel good about supporting businesses that focus on sustainability and natural ingredients.
List of Niche ideas in the Pizza Shop Business
Before you start getting the required licenses, you need to first choose the kind of pizza you hope to sell. We suggest you start by writing a business plan that includes a description of your Pizza Shop, the market you intend to sell to, your marketing strategy, projected revenue, taxes, and start-up costs.
Have it in mind that there are a lot of pizza shops, so spend some time thinking about what kind you want to create. There are family-style pizza joints, pizzerias with traditional wood stoves, buffet style pizza places, pizza by the slice, among others. You should also choose whether you want to offer delivery service or dine in and take out only.
There are also many styles of pizza to choose between – like Chicago-style deep dish, Sicilian, Neopolitan, thin crust, gourmet, etc. Choosing the kinds of food you want to serve is very crucial, but remember that most pizza consumers prefer quality over quantity.
We believe you will also need to decide on what complementary food to serve. You may want to include salads for your more health-conscious customers. Or maybe you’ll want to include an excellent dessert menu with tiramisu and flan. Some more common menu items at pizza shops are varieties of pasta dishes, breadsticks, calzones.
The Level of Competition in the Pizza Shop Business
Reports have it that chains in the Pizza industry have been stealing market share from independents for years, and 2015 saw a 2% shift in their direction. Chains now account for 61% of the total market. We believe that most of this continuing shift can be attributed to the flexibility of bigger companies to meet the changing requirements of the consumer. A lot of today’s pizza eaters want to be able to order online or from their smartphone, both of which are prohibitively costly to implement for the typical mom-and-pop slice shop.
People do not just prefer the convenience of digital ordering, but research has shown that people spend more when they order online. They are also more likely to order again – once they’ve ordered, chain stores can market directly to these consumers again. They’ve also likely saved their payment information and possibly stored delivery preferences.
Experts estimate that 50% of Domino’s sales come from this type of ordering. Higher sales per ticket and repeat business are crucial to shops – and many independent operators are missing the boat. Among the many chain Pizza Shops in the United States, market share is seriously concentrated among the top ten – 43.8% of the total market belongs to them.
List of Well Known Pizza Shop Brands
- Pizza Hut
- Little Caesars
- Papa John’s
We believe there are so many opportunities in the Pizza industry. There are a number of key trends to keep in mind if you’re thinking about taking the plunge. First and foremost is the influx of healthy options ingredients the industry. Everyday the American consumer is trying to improve their lifestyle.
They are exercising more, shopping for more natural and wholesome foods, and frequenting shops that offer the same. Have it in mind that pizza shops that provide a diverse menu, most offer robust salad options already, will continue to gain from this. Also have it in mind that people are beginning to frequent businesses that want to do more than make a dollar, or at the very least, make that dollar in a responsible manner.
You need to understand that casual shops are the fastest growing segment of the shop market, and the “step-up from fast food” is finding great success in the pizza market. Fast casual pizza is focused on winning the lunch crowd, while traditional pizza stores focus on dinner and delivery. These new chains are thought to compete more with shops like Chipotle than the local pizza shop.
We also believe that pizza chains are making great strides by creating a robust online presence and providing easy online and mobile ordering. But note that it all depends on your local market, if you’re interested in pursuing a Pizza Shop, make sure you understand the local tastes and or course the competition.
Starting a Pizza Shop from Scratch or Buying a Franchise
First and foremost, you need to understand that both have advantages and disadvantages. A franchise pizza shop provides instant brand recognition and a committed customer base. On the flip side, your dreams of entrepreneurship and creativity may be tempered.
You may not be able to offer all the items you’ve dreamed of serving if your franchise won’t allow substitutions. You also gain a dedicated fan base but it comes with set expectations.
If you don’t have the ability to live up to those standards, you could be worse off than if you started with an original brand. It’s very important to note that franchising can be costly when starting up, but the revenue generated from an established brand may outweigh those costs in the long run.
Buying into a franchise gives you the chance to capitalize on the brand’s name, and royalties help cover the franchisor’s costs associated with advertising and the like. These fees will also most likely cover training, site selection, and outfitting, and help with the initial launch of your business.
Reports have it that there are roughly 60,000 pizza shops in the United States today. 40 percent of these shops started from the scratch. Specialty toppings and trend-specific ingredients mean there’s nowhere to go but up with a well-conceived pie that stands out in the crowd. So go ahead and grab a slice of that action.
Possible Challenges and Threats of Starting a Pizza Shop
A lot of arguments have been made about which type of pizza is the best, but any food-service business owner will sure tell you one thing: starting a successful pizza shop won’t be a simple stroll in the park. Note that there are a thousand decisions to make, and the few barriers you might face may include;
- Choosing a suitable niche
- Gaining experience
- Menu development
- Applying for permits
- Purchasing inventory
- Writing a business plan
- Industry competition
Starting a Pizza Shop Business from Home – Legal Aspect
- Best legal entity for a Pizza shop
Note that so many factors should be weighed when choosing the best form of business structure for your Pizza shop. We believe that the type of business structure you choose can have an impact on multiple aspects of your business, including taxes, liability, and your exit strategy.
When starting your Pizza shop, we believe that a LLC structure is the best because is simpler and more flexible. Unlike both types of corporations, it doesn’t need a board of directors, shareholder meetings and other managerial formalities. You can simply divide up the profits any way you choose, as opposed to shareholders in corporations, who have to carve them up in proportion to their percentage ownership in the company.
Also note that in an LLC, you can easily entice talented employees with a share of the profits, even if those employees didn’t pony up their own equity in the beginning. The LLC structure also gives tax-treatment flexibility. An LLC’s profits can be taxed as a corporate entity (a C corporation) or as a “pass through” entity (an S corporation), meaning that the company avoids paying tax on both corporate profits and the owners’ personal income.
Most LLCs choose the pass-through option. However, in some cases, LLCs can choose a C corporation tax structure and save money by funnelling profits back into the business tax-free.
Catchy Business Name ideas for a Pizza Shop
- American Pizza
- Keystone Pizza
- Big Knuckle’s Pizza
- Mountain Pizza
- Blowing Pizza
- Tasty Pizza
- Star Cooking
- Uncle Ben Pizza
- Tiny World
- Pizza sauce
- Hot Boss
- Heavenly Eateries
- Ring of Fire
There is no denying that insurance is a must-have for any business, and especially when starting a pizza shop. Note that even with every safety measure possible in place, there is always the chance of sickness or theft, either of which could leave your business floundering if your insurance doesn’t cover the menace.
Have it in mind that general business liability insurance protects you from the costs of any litigation that may come up against your business as a result of sickness or if an accident or injury occurs on your property. Then business crime insurance is also important for your pizza shop, and it also covers employee theft. We strongly advice that you speak with an experienced insurance agent to make sure you get all the coverage you need to financially protect your shop from troubles.
Intellectual Property Protection
With the advent of technology and global financial crisis, the creation, exploitation and protection of intellectual property (IP) rights are very necessary to the success of most retailers. In the Pizza shop, intellectual property protection and Trademark are needed to serve as
- Brand and image rights
- Protection and registration of designs
- Enforcement and dispute resolution
- Anti-counterfeiting and piracy
- Patents laws
- Trade mark filing and opposition
- Brand audits and watching services
- Securing trademarks and passing off
- Domain name strategies and disputes
- Data and database rights
- Competition law
- Protection of technology and innovation
- Advertising and marketing issues
Is Professional Certification Needed to Run a Pizza Shop Business?
When starting your Pizza shop, gaining food and safety certifications will go a long way to show how experienced you are in the business. You will also benefit from earning a few certifications which may include retailing certifications. Other certifications may include;
- Customer Service and Sales Certification (CSCS)
- Advanced Customer Service and Sales Certification (ACSSC)
- Retail Management Certification (RMC)
- certified food protection manager (CFPM)
- Master Baking Certificate Program
- Retail Business Credential (RBC)
Legal Documents Needed for a Pizza Shop
No matter how eager you are to start making profits from this business, we suggest you keep your business on the right side of the law; you will need to apply for a number of licenses and permits. Do not forget that every state and city varies in their requirements, so a good place to start is to contact your local chamber of commerce or city hall. Documents you will need will include;
- Building Permits
We believe you will need a building permit if you plan to do any renovating. Have it in mind that these permits generally need your contractor to submit the plans for approval. Immediately your building is ready for business, you will need to get a building inspection and certificate of occupancy, which usually come from the fire commissioner.
- Food Handling Permits
You also have to obtain a food handling permit; you will generally need to take a course in safe food handling practices. A lot of states also offer government-sponsored courses, and some require an on-site inspection in addition to taking a class.
- Business License
Note that you have to register your business with several levels of government usually including local, state and federal. A business license registers you locally and in some cases goes together with the state’s retail sales license which allows you to charge sales tax.
Then the federal government will issue you an Employer Identification Number (EIN) or Tax ID number to allow the IRS to start records on your business. We strongly advice that you consider registering your business name, as it both makes sure that the name is not already taken and prevents any other local businesses from using that name.
- Sign Permits
We believe that many local governments have restrictions on where you can put signs and how tall they can be. This is why you may need to submit plans for your signs to be approved before you can begin construction or installation.
Financing your Pizza Shop Business
You are ready to go if you already have the amount needed to start and run your pizza shop. But if you need additional funds before you start your Pizza shop, then we believe you will need to approach an investor, the government, a bank, or some other loan-giving establishment. At this point your business plan will have to become even more instrumental. Ways of getting funds for your Pizza shop may include…
- Getting initial capital from family and friends
- Getting Capital from Angel Investors
- funds from Venture capitalists
- Taking your company public through IPO
- Getting small business loans
- Getting funds through Crowdfunding
- Raise Funds through Mergers and Acquisitions
- Finance your Business Expansion with Equipment Leasing
Choosing a Suitable Location for your Pizza Shop
We believe that the most suitable location for your shop will go a long way in helping you pizza shop attain its expected height. When you start searching for locations, have a basic idea of the size you need for both the dining room and the kitchen.
Note that too large a space may have you paying more rent than you can afford, but not enough space may restrict your ability to grow your business. You have to make sure your kitchen holds enough equipment to cook for your customers in a timely manner and the dining room can comfortably accommodate the number of tables you need for your business.
Don’t forget to take onto consideration the activities happening outside the building, this is because it is as important as what is inside. We suggest you visit the location at different times of the day on weekends and weekdays to get a feel for traffic patterns for the days and times you plan to be open.
Also check and ascertain if the location is visible to a large number of people. We also suggest you ask yourself if it is near a large residential area or business park that might bring business. Is the traffic more vehicular than pedestrian, do you have adequate parking? If the location was not a shop previously, does the city’s zoning allow you to open one there? Are there any other pizza places nearby that you will be competing with?
We also advice that you try not to exceed your budget and be careful to not overreach, but don’t be afraid to look at places a little out of your price range, as most property owners are open to some negotiation. We advise that you discuss the length and cost of the lease, as well as whether the owner will handle lawn care or building maintenance.
Starting a Pizza Shop Business – Technical and Manpower Requirements
Research has shown that the very first pizzas were baked in wood-fired masonry ovens, and that is still the way most purists would have them all be made. But the advent of technology and industry trends has changed the way pizzas are baked.
When the industry began utilizing deck ovens, pizzerias began using low-moisture mozzarella cheese because the cheese breaks down before the crust gets baked. Note that all of the pizza oven options have various benefits and a disadvantage, which is why you’ll need to choose an oven based on your individual volume and menu options.
- Conveyor Oven
These types of ovens have made a niche for themselves in high-volume chain shops because they can help increase production, particularly with unskilled workers. Reports have shown that these ovens are essentially hands-free once you place the prepared pizza on the feeder.
The constant available heat within the oven and the adjustable speed of the belt create an oven that can bake pies nearly as quickly as you can make them. The major disadvantage of the conveyor ovens is their large size, they can be stacked up to three conveyors high for even greater output while taking up less space in your kitchen.
Another consideration is that you can’t bake different types of pizza, like Chicago-style deep dish and New York-style thin crust, at the same time.
- Brick Ovens
Full size, all-brick ovens have been around, essentially, since antiquity and a lot of pizza purists believe they impart the most authentic pie flavour and texture. Note that these ovens tend to be large ovens and not every kitchen has the room for one. These ovens can cook between 10 and 12 pies at a time, a feat that is very handy in high-volume pizzerias.
We also believe they can be very attractive and can make a great focal point for the front of the house. In a brick pizza oven, the temperature gets much hotter and the heat radiates more effectively; thus, the mozzarella remains intact because it doesn’t have time to break down.
- Impinger Oven
We believe that the impinger oven is suitable for a Pizza shop because the hot bursts of air that affects the cold halo that surrounds food has been found to speed up the cooking time by as much as 30 percent. Note that it saves production costs and will give customers maximum satisfaction because they won’t have to wait so long to get their pizza. Often, impingement is coupled with a conveyor, so the cooking is hands-free, quick and even. These ovens may be countertop or floor models with one or two levels.
- Convection Oven
In this oven the circulation of the air allows pizzas to cook fairly rapidly; but yet the capacity of these ovens is limited to one or two pies. The convection oven would probably be best suited for low-volume shops. We believe that the use of a pizza stone will aid direct the heat to the right place and create a similar crust to the kind that can be achieved in a brick oven.
Also note there are countertop versions that would be ideal for snack bars and concessions stands. There are also units that can be stacked to give up to twelve levels of baking. One major disadvantage of these ovens is that they may need long recovery times, the time it takes an oven to get back up to temperature when products are added or the oven door is opened. They may also not offer the same crispy vegetables or the perfect soft, chewy crust.
- Deck Oven
Research has shown that deck ovens are very popular in a lot of pizza shops. The ones that are brick-lined and have stone bottoms offer very similar results to a brick oven. We believe there are available in compact, countertop models and stackable units that can be up to six decks high. Each deck can accommodate between four and six pizzas at once. Deck ovens with stone bottoms and brick liners have come close to replicating the traditional Sicilian pie.
- The Dough Mixer
You need to understand, if you don’t already know, that your crust will be the thing that makes or breaks your pizza recipe and, in turn, your shop. A lot of chains furnish dough, but if you’re making your own, you’ll need a dough mixer that has the appropriate power to stand up to demand.
Dough (or spiral) mixers are specially designed to mix, knead, and stretch dense dough constantly and consistently. A planetary mixer will not be able to handle the demands of dense dough. Other equipment may include
- Reach-in refrigerators
- Work tables
- Pizza prep tables
- Dough prep equipment
- Peels and peel holders
- Pizza pans
- Hot holding cabinets
- Delivery bags
The Service Process Involved in a Pizza Shop
Have it in mind that a lot of your prospective customers will want to order more than just a pie when you start a Pizza shop. We believe that by expanding your menu to include pasta dishes, sandwiches, soups, salads, appetizers, and desserts, you can entice more customers and fatten your bottom line. In order to do this, however, you’ll need to invest in some additional equipment:
We all know that Wings, cheese sticks, and breaded vegetables are popular additions to any pizza shop menu. Note that a deep fryer is the best way to achieve appetizers that are as flavourful and popular as the pies themselves.
- Pasta dishes
It is important to state that dishes like eggplant or chicken parmesan, manicotti, and fettuccini alfredo are must-haves if you’re going to deviate. We believe that these dishes can be added by simply incorporating a pasta cooker into your line. We suggest you add some specialty dishes to serve them in.
Then if you are going upscale, you may want to put into consideration a dessert cart for displaying your selection of Italian cream cake, cheesecake, tiramisu, and cannoli.
- Sandwiches and salads
Offering these are very easy because you’ll already have many of the primary ingredients and equipment needed for both of these on hand. Note that you may need to round out your inventory with buns and fresh produce that you normally wouldn’t see on a pizza, like lettuce.
We also believe that offering beverages such as tea and soft drinks can provide a nice profit. Soft drink distributors will generally provide drink machines, but for other beverages, you’ll need drink dispensers, ice machines, and cup dispensers are an investment that will see positive returns quickly.
Starting a Pizza Shop Business from Home – The Marketing Plan
- Marketing Strategies for a Pizza shop
Since pizza will be your main product, you have to understand how to prepare and cook delicious tasting pizza. But if you can’t cook yourself; we suggest you hire an excellent pizza chef. To keep your edge above the competition, see to it that you get only the freshest and highest quality ingredients.
We believe that a successful pizza shop owner must have the passion for the cuisine and likes dealing with people. As a pizza shop owner, one of your main responsibilities is to act as a host to your patrons. You will be tasked to manage the full operation of your shop.
Among your many duties are bookkeeping and administrative tasks, complying with local and state government regulations, developing menus, managing your employees, marketing and promoting your pizza shop, purchasing supplies and food stock, and so on. Profitable ways to market your pizza shop may include…
- Increase Sales Per Unit Using NPS and Retention Marketing
- Get Professional Visuals
- Make Transaction Data Part Of The Pizza Marketing Arsenal
- Create Transparent Customer Communication
- Offer pizza by the slice
- Tailor Your Marketing Strategy To Millennials
- Do NOT Launch A Daily Deals Promotion Unless You Have A Retention Marketing Strategy In Place
- Replace Plastic Punch Cards with Digital Check-in
Strategies for Winning Competitors in the Pizza Business
With the level of competition in this business and with Pizza shops rising from all corners of the country, you have to make consumers aware of your shop. In this business, each region and community is different and some marketing tactics will work in some areas and others will not.
Have it in mind that the key is to try different things and find what works for you. Note that what worked yesterday might not work tomorrow. We believe that the only limit to your marketing is your own creativity. Some ideas can be expensive, but there are plenty that are not.
- School fundraisers with your local elementary school
- Coupon mailers
- Daily deal websites
- Create a flavour contest
- Loyalty programs
- Group contest
- Street marketing
- Sponsor or advertise at local races
- Social marketing
- Cross market with local businesses
- Online marketing
Strategies to Boost Brand Awareness and Creating a Corporate identity in the Pizza Business
Pizza is one of the most consumed foods in the world today. In some research studies, it is even listed as one of the Top 5 most craved foods. Frozen pizzas take up entire sections of a grocery store and pre-made ingredients even help people make their own pizzas at home.
Facts has shown that brand awareness and affinity serves several objectives for retail companies searching to boost sales in the marketplace and it can do same for your Pizza business. You have to understand that your brand awareness campaign needs to be flexible enough to grow with the business and adjust if needed.
To keep your pizza business going, it is essential that your product taste good. Before marketing it to others, create different types with different ingredients. Ask people to sample it, and listen to feedback. Improve the most popular flavour, give it a name, and offer that to your customers.
Price your pizza reasonably in order to attract more customers. Make sure you account for all the ingredients that went into your pizza, and that you’re making enough to profit from the business. The various strategies to promote brand awareness and create a corporate identity for your
Pizza business may include holding an event, exhibiting yourself, sponsor something, create an experiential stunt, take to social media, organize a public relation campaign, invest in promotional merchandise, join forces with other businesses etc. Creating a solid and beneficial corporate identity through good brand awareness strategies will go a long way to sustain your business and maximize your business profits.