Pizza Today - October 2021 - 28

I. Thou shalt never close.
Remain open every minute of your
normal hours. It sounds simple enough,
but if you're going to run on a shoestring,
then you need every penny
possible. If you're opening a new store,
you need to open the doors ASAP, and
if you're in an existing store, never close
- not for equipment replacement or
repairs that can be completed overnight;
not for inclement weather; not
for any reason.
II. Thou shalt know the cost of
everything on your menu.
Think of all your products and
ingredients, from tomatoes to the
tequila behind the bar. Can you name
the cost? This is so you can price your
menu correctly. Especially as a new
business owner, you'll hear a lot about
prime costs and your food cost number,
which affect your profits and bottom
line, so you'll want a full and accurate
understanding of what you're paying for
ingredients and how that translates to
the menu.
III. Thou shalt do a weekly inventory.
Know
exactly what you're using on a
weekly basis. You'll be able to see where
your waste is, and you can see what
parts of the inventory you need to focus
on.
IV. Thou shalt know what your
labor costs are before each week
begins.
Once your schedule is written, do the
math and tally up how much money
you are spending on labor - and don't
forget to account for taxes. If the figure
does not meet your desired labor cost,
rework the schedule until it is where
you want it.
V. Thou shall not replace it until it
is broken.
I don't mean replacing items that are
causing a bottleneck - if replacing
something will increase your volume,
invest in a replacement. But if you
want a new makeline simply because it
28 / PIZZATODAY.COM / OCTOBER 2021
looks fancy, even though your current
equipment still works perfectly, hold off
until something breaks or shows signs
of faltering. Don't get caught in the " I
want it " mentality. If it's not a need or
won't make you more money, skip it.
VI. Thou shalt buy used equipment
when you can - but not
refrigeration.
Dough mixers, ovens, fryers, flat tops,
grills - they're all normally safe to buy
used. You can typically find great deals
online, but show discretion regarding
sellers and be sure the equipment
is in good condition. Refrigeration
equipment is the exception to the
rule. Always buy that new and with a
five-year warranty, at minimum. Used
refrigerators or freezers can have a very
short lifecycle.
VII. Thou shalt negotiate everything.
When
I say " everything, " I mean
everything. If you truly want to operate
on a shoestring budget, you need to pay
the best price possible for everything
in your store, starting with your rent to
the ingredients on your pizzas and just
about everything in between. If you
just say yes to every cost and price you
incur, you will never survive. Knowing
how and when to negotiate is crucial.
Not a natural negotiator? Indeed, it's a
skill, but like all such talents, it can be
learned. There are some great books and
audiobooks out there. I suggest reading
and studying them.
VIII. Thou shalt fix it yourself
before someone else.
Emergencies can't be avoided, nor
can the costs that come with them.
Things will break - probably more
often than you would like - but you
don't always have to immediately grab
the phone book. Trying to fix things
yourself or with the help of a team
member should always be the first step.
Repairs are expensive because you're
not only paying for the repair but trip
charges, truck charges and varying rates
- homeowners know this well. Even
after decades in the industry, I'm not a
very handy guy, but you would be very
surprised how much you can DIY just
by learning it from a YouTube video.
Leaky sinks, running toilets, holes in
the wall and just about everything cosmetic
can be fixed in-house. Another
great way to save on repairs is having a
trusted handyman on speed dial. Negotiate
the rate upfront and it should save
you in the long run.
IX. Thou shalt never overpay for
marketing.
At some point, every advertiser in
your area will try to sell you their " shiny
object, " or a too-good-to-be-true vision
of what working with their firm will
provide. Instead, identify what your
marketing budget will be and set some
of it aside for great deals. In the
advertising world, there are big markups
built into the price. Make sure
whatever you're spending, your advertising
dollars on will get you an ROI.
X. Thou shalt have and review a
monthly P&L on a regular basis.
Remember you're trying to survive on
a monthly basis, and your profit-andloss
(P&L) statement is very much your
vital sign. There are few better tools to
gauge your business' financial health
than your monthly P&L. You should be
receiving this no later than 30 days after
the last day of the month. If you are not
preparing it in-house, your accountant
should be able to do it for you.
And that's it for the sermon - for
now anyway. These 10 commandments
are the foundation for success while
operating a shoestring budget. I'll leave
you with this: After following these
rules for the past nine years, I'm ready
to open my sixth and seventh stores
later this year, so I can confidently say
they work for the budget-conscious
owner. n
NICK BOGACZ is the founder and
president of Caliente Pizza & Draft
House in Pittsburgh. Instagram: @
caliente_pizza
http://www.PIZZATODAY.COM
Pizza Today - October 2021

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