Who doesn't love pizza? With more than half of the whole UK eating pizza at least once every ten days, and the average American eating up to 40 pizzas a year, it seems that both nations are pretty pizza crazy.
If you're keen to take your enthusiasm one step further by opening your very own pizzeria, then look no further. Within this guide, we'll tell you everything you need to know about how to open a pizzeria business.
Carrying out market research for a pizzeria
Before launching any business, it's essential to conduct market research. Doing so will not only enable you to verify whether there's enough demand for you to successfully open your pizzeria (and 'make bank'), but also help you develop the best strategy for selling your pizzas.
Market research will not be complete without an in-depth analysis of three key factors:
- current industry trends
- who your competitors are and how they're doing
- who your potential customers are and what they're looking for in a pizzeria
The pizzeria market
Pizzerias and Italian restaurants are among the most popular type of restaurants within the UK, with a report by Dr. Oetker indicating that the UK pizzeria market was worth £4.9 billion in 2017. The UK is a nation of pizza lovers, with pizza being one of the top three most-picked menu items.
American's take this love of pizza one step further, with almost one-fifth (17%) of all restaurants in the States comprising of pizzerias - bringing the US pizza market to a staggering $46 billion in retail sales per year.
The popularity of pizza is due massively to its reasonable cost and versatility: it can be eaten hot or cold, at home or al fresco, delivered quickly, and reheated at home.
On the business side, it's a pretty easy product to cook, requiring no special knowledge and presenting very few contamination risks.
Hot trends in the pizzeria market
As with the rest of the fast-food industry, UK consumers are looking for an upgrade from the traditional dining experience. Whether it's fresh or daring pizza toppings, sourdough bases or drink pairing options - there's growing popularity of independent pizza chains that are offering these experiences, with places such as Franco Manca and Homeslice experiencing a 25% increase of revenue in 2017.
The pizza takeaway and delivery market have also seen significant growth. An increasing desire amongst consumers to share and enjoy slices from the comfort of their homes has led to a 73% growth in the takeaway delivery market in the last decade.
The same pattern follows in America, with pizza delivery giant Dominos capturing 19% of the total US pizza sales in 2019.
The rules and regulations for opening a pizzeria
When opening a pizzeria, it's mandatory to respect the same regulations as you would when setting up a restaurant.
First things first, safety and hygiene. There are several regulatory requirements you'll need to satisfy when it comes to food safety. Before opening your pizzeria, you'll have to register the premises with your local authority's environmental health service at least 28 days before you start trading.
It's important to note that this process doesn't cost any money. It simply involves allowing a local official to visit your premises to check out the space you'll be using to prepare food and ensure it's safe and hygienic. To register for a visit from your local authority, check out the UK Government website.
It's also mandatory for new business owners to draft a plan based on the Hazard Analysis and Critical Control Point (HACCP) Principles. This plan will ensure your food is safe from biological, chemical, and physical hazards, as well as allowing you to identify potential hazards.
You'll also be required to comply with any rules established by the Food Standards Agency - a government body providing guidelines on hygiene standards, sampling, labelling, and traceability.
Finally, if you wish to sell alcohol, you'll need to apply for a premises license. This will also enable you to play live and recorded music and serve hot food and drinks after 11 pm.
For more information on how to obtain the licenses above, you can visit the Gov.uk license finder.
In the US, you will be required to register for a business license. You can visit the SBA website for more details on how to obtain this.
You will also need a food service license, a food handler’s permit and a liquor license for serving alcohol. Each state has its own Alcohol Beverage Control Board that regulates the serving of alcohol.
To obtain a liquor license, you must contact your state's ABC board. You can find a national directory of ABC boards here.
Opening a franchised or independent pizzeria
Now that we've looked at the market research, the next stage in our guide on how to open a pizzeria is helping you decide what type of pizzeria you want to open.
Launching an independent pizzeria will give you more freedom in allowing you to manage it and be as experimental with your menu as you wish. Adversely, by deciding to join a pizzeria chain, you can benefit from operational support from the get-go - as well as a glittering reputation from an already established chain and a base of loyal customers.
Another possibility is to investigate the takeaway pizzeria market. The pizza delivery and takeaway market is flourishing - and operating in this way will massively reduce your set-up costs.
Finding the right location for your pizzeria
Next up in our guide on how to open a pizzeria is scoping out your ideal location. Where your pizzeria is based will have a massive impact on its level of success - as it will determine how many customers come in and out of your store.
The key is to choose a location that has enough traffic and is in an area that attracts the sort of people that enjoy a slice or two of pizza.
Ask yourself what type of customers you want to target. If you're after a young clientele, setting up shop close to a secondary school or university would keep you from staying empty at lunchtime.
Or if you'd rather turn your focus to offering a takeaway and delivery service in the evenings and on weekends, it might be an idea to open in a residential area with limited takeaway options.
You must also take a look at the rival restaurants already operating in the area. Ask yourself:
- Are they popular amongst the local community?
- What type of cuisine do they serve?
- Do they sell pizzas?
- What is their average price for a meal in comparison to yours?
Finally, you can also choose to take over an existing pizzeria. This will allow you to benefit from an already kitted-out restaurant and an existing flow of loyal customers. For more information, read our guide on how to successfully takeover a pizzeria.
Choosing the legal structure for your pizzeria
The next step in setting up a pizzeria is choosing the legal structure of your business. Choosing your pizzeria's legal form is a vital step as it will impact:
- How much your business is taxed
- Your taxation at a personal level
- Your responsibility for the company's debts in the event of bankruptcy
To help you make your choice, you can find more detailed information on the different legal forms available to you on the gov.uk guide for UK business owners and SBA guide for those of you based in the US.
The equipment and staffing requirements of opening a pizzeria
Once you have chosen the concept of your pizzeria, settled on a location, and figured out its legal structure, it’s time to think about the equipment and people needed to open and run the business efficiently.
First of all, you'll need to kit-out your premises with furniture and kitchen equipment (including a pizza oven) in accordance with health and safety regulations.
You'll also need to buy in your initial stock of ingredients and drinks, purchase a few card machines and a till, and all the resources required for the smooth management of your restaurant, including accounting and payroll management software.
Also think about marketing investments (including your menus, restaurant sign and website) and legal investments such as employment contracts and licensing costs.
The next step is finding staff you can depend on. The success of a restaurant depends significantly on the culinary prowess of its chef and the hospitality of its waiters. When drawing up your recruitment plan, estimate the number of people you'll need for each position, whether it be a kitchen or front-of-house staff, and then recruit enthusiastic people with the right qualifications.
Launching a pizzeria also requires you to take out insurance to make sure the restaurant is covered in the event of any on-site incidents. Depending on the size of your restaurant, you may also want to enlist help from specialists such as a chartered accountant or marketing agency, so make sure you factor these costs into your financial forecast, too.
Setting out the marketing plan for a pizzeria
To promote your pizzeria and build customer loyalty, you'll need a strong marketing plan.
There are many options at your disposal here, including handing out flyers on the street, setting up a website and social media profiles, paying for a billboard to be put up in your town centre or having your pizzeria featured on online resources including Google Maps and city guides.
The costs of these actions vary and some might be more successful at attracting customers than others, so take some time to test different marketing actions out and focus on the ones that prove to be the most effective.
Writing the business plan for a pizzeria
Writing a business plan is another essential step along the road to opening a pizzeria.
The business plan is the document with which you will present your business idea and try to secure financing from your bank or potential investors, so you need to make it impeccable.
If you are not used to writing business plans, a good solution would be to use online business plan software.
There are several advantages to using specialized software:
- You are guided through the writing process by detailed instructions and examples for each part of the plan.
- You can be inspired by already written business plan templates
- You can easily make your financial forecast by letting the software take care of the financial aspects for you.
- You get a professional document, formatted and ready to be sent to your bank.
If you are interested in this type of solution, you can try our software for free by signing up here.
You can also have a look at our pizzeria business plan template if you want to get some inspiration.
Securing funding to launch your pizzeria
Once the business plan for your pizzeria has been drafted up, the last step is to secure the funding required to launch your business.
Opening a pizzeria without any money is difficult, but with the tricks, it's not impossible. To find out more about funding options available, check out our guide on how to open a pizzeria with no money.
Now you know everything there is to know about how to open a pizzeria. We hope you found this article useful. If you have any questions or queries at all please do not hesitate to contact our team.
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