Running your own pizza restaurant is surely great, but what about its cost? How much will you need to invest?
In our previous article (check it out here if you missed it), we explained how opening a pizza shop in the US might be an excellent business idea if you set it up properly.
But once you’ve made up your mind and you’ve started to work on your project, the second step is understanding how much you’re gonna pay for it.
With this article, we want to help you at developing your plan by taking into account all the costs and investments you’ll have to bear to open your own pizza restaurant.
Different options lead to different ranges of costs
Of course, as you may already have guessed, different types of pizza restaurants need different kinds of costs and investments.
Dine-in pizzeria VS takeaway
Costs may vary significantly between a takeaway pizza and a dine-in restaurant. For a takeaway you’ll need less space and staff, whereas a sit down restaurant requires a wider building, waiters, furnishings and so on, in addition to the kitchen, the counters, equipment, etc.
If you’re considering opening your own dine-in pizza place you should take into account at least half a million dollars to make it real.
Independent pizza shop VS Franchising
Another key difference in terms of costs is between an independent pizza restaurant and a franchise. Today in the US a rough 60% of pizza restaurants are chains, while the other 40% are independent shops.
Franchising has several advantages: you already have a successful branding, it’s faster to develop and at the beginning it’s way easier to bring in new customers. Of course you don’t have the same freedom as you would have with your own brand, and you can’t scale your business in the same way.
For an independent shop, you should consider an initial investment that goes from 200-300k up to almost a million.
Own building VS Lease
Last but not least, you may buy the building or just pay a monthly lease. If you buy the building, the initial investment will dramatically rise, but you save money in the long term because you won’t have to pay a monthly lease.
On the other hand, choosing to pay a monthly lease is more flexible and easier at the beginning, but more money consuming in the long term.
So, how much does it cost to open my brand new pizza restaurant?
Given the differences we just talked about, let’s see now what essential or optional categories of costs you’ll have to face if you’re planning on embarking on this new business adventure.
Obviously, all the numbers we’ll dig into are just approximations and ranges. There might indeed be so many variables involved around each of them and fluctuations due to the weird age we’re living in.
Moreover, you will have many different options you can choose from. You are the entrepreneur, and that means you can decide whether to focus on quality (we highly recommend that) or to save money by lowering your standards for a cheaper target.
Just keep in mind that the choices you are taking today will determine whether your business will thrive or fail the market challenge.
Let’s now focus on the one-time investments you’ll have to deal with to start your pizza restaurant.
One-time initial investments
1) Building set-up and design
If you buy a building for your pizza shop, whether your plan is setting it up from scratch or remodeling an existing restaurant, this is one of the main investments you will need to bear.
You have to furnish it, work on the rebranding, design your space and set up the kitchen consistently with your business idea. An overall investment that covers all these operations might fluctuate between 200k and 400k depending on several aspects such as location, quality, dimensions.
2) Franchising Fees
If you choose to run a franchising shop, your costs will lower a little bit. You already have the branding ready, and the Franchisor will set some things up for you.
On the other hand, you’ll have to pay the franchising fee, which depends on the chain you chose.
One of the key investments you definitely should mull over about, is the equipment. Because the equipment is what allows you to bake your pizza according to your own recipe, and what sets you apart from your competitors.
First of all, the most important piece of equipment you need to accurately choose is the pizza oven. You really shouldn’t see it as a cost for your pizza restaurant, because with a great oven you’ll make a great product that will attract customers like bees round a honeypot. That’s why we chose only the very best.
Besides, with a fast oven you’ll also be able to cook more pizzas in a small amount of time. That means for sure having happier customers because they are served faster. But it also means ensuring your business to fulfill more requests and therefore boosting your earnings.
Otherwise, choose the wrong pizza oven and you’ll regret it later.
Longer baking times, less customers, partially burnt pizzas, squashy dough… who would come back again to such a pizza restaurant?
Some other essential pieces of equipment are:
- Commercial dishwasher
- Pizza tray
- Dough rollers
- Commercial fridge
A reasonable investment for all this quality kitchen equipment might be around 100-150k $ at least.
If you want a dine-in restaurant, you must also take into account the furnishing costs. You’ll need tables, kitchenware, chairs, etc.
The costs here may vary according to your branding and needs. Also, a bigger space obviously requires a bigger initial investment. We can approximately calculate an estimate of 70-90k $.
5) Legal, payments, insurances
Then comes the annoying part. Opening up a pizza restaurant requires to cover several initial costs in order to fulfill all the legal duties, and to ensure that everything runs smoothly.
You’ll need a lawyer to do the paperworks.
You’ll need to grant accessibility to the disabled people to your dine-in restaurant.
Besides, you’ll need a POS to manage payments.
And you’ll probably be asked for a lease security deposit, and insurance to prevent any disaster to your brand new business.
Summing it all up, you’ll need to consider another rough 50k for all these annoying requirements.
Last but not least, you need to invest in your promotion.
You might have a wonderful product, but no customers are going to enjoy that if you don’t let them know about it.
Therefore, for your grand opening consider at least 10-20-30k for marketing costs. Those have to include a complete and smart marketing plan to grant your business a successful launch strategy.
Investments, not costs!
Are you scared because of these numbers?
We understand they might be a little bit discouraging for many aspiring entrepreneurs in the pizza industry. The US is a costly place to run new businesses. On the other hand, we believe that having clear in mind what you need in advance will prevent many of you from rushing the decision making and incurring in painful mistakes.
On top of that, don’t confuse costs with investments. Opening a pizza restaurant requires putting up a lot of costs, but the numbers we told you about are rather investments. Money you need to spend to make your business thrive and bloom.
Begin your journey with the right investments and you’re halfway to obtain the success you deserve.
At MODALiTA we’re here to help you, as we already did with tons of premium food businesses around the US.
Our commercial pizza ovens and equipment are the top notch solutions on the market and they will boost your pizza shop making it unique, iconic and highly profitable.