How to Open a Pizza Shop | LendingTree

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site ( such as the order ). LendingTree does not include all lenders, savings products, or lend options available in the marketplace. LendingTree is compensated by companies on this locate and this recompense may impact how and where offers appears on this site ( such as the regulate ). LendingTree does not include all lenders, savings products, or loan options available in the market. editorial note : The message of this article is based on the writer ’ south opinions and recommendations alone. It may not have been reviewed, commissioned or otherwise endorsed by any of our network partners. Pizza is a mealtime favorite for many Americans, so you might be thinking about opening a pizza shop in your area. Being a restaurateur and little business owner is not easily, but if you ’ re determined to share your pizza recipe, here ’ s how to open a pizza workshop.

1. Write a business plan

When opening a pizza denounce, start with writing a business design. This will help you decide how to turn your mind for a pizza restaurant into a profitable business speculation. A business plan for a pizza restaurant should include a grocery store analysis, which will involve researching what rival restaurants are doing to be successful in your area. You ’ ll besides want to ask yourself how you will be able to differentiate your pizza shop in the industry. Will it be your unique toppings, fast pitch service or secret sauce ?
Your business plan for your pizza shop should besides include your commercialize scheme for how to attract and keep customers, ampere well as offer fiscal projections for your restaurant for the future five years with your forecast income and expenditures .

2. Consider buying a pizza franchise

If starting a pizza business from the ground up, consider buying a pizza franchise business. When you buy a franchise, you benefit from the stigmatize recognition of the existing business. Most of the marketplace research is done for you, which you can use to make inform market decisions. The franchiser might even help you find a suitable placement, provide back with training raw employees and get you access to bulk products to keep your expenses abject .
That guidance will be helpful if you ’ re modern to entrepreneurship, but franchising comes with high upfront costs. Most franchises have stringent fiscal requirements, such as a certain internet worth and fluid assets, to be eligible to purchase. Franchising a Pizza Hut, for example, requires you to come up with an upfront fee plus ongoing royalties which vary depending on the franchiser ’ randomness gross sales. FranchiseDirect estimates that initial costs for a Pizza Hut franchise would cost between $ 367,000 and $ 2,063,500, while a Domino ’ sulfur franchise would fall into the range between $ 101,450 and $ 667,500 .

3. Choose a business structure

The future footprint in how to open a pizza denounce is choosing a occupation structure. Selecting the correct business entity for your pizza shop will determine which liability protections you ’ ll have and how you ’ ll pay taxes .
A pizza business may want to consider a limited indebtedness company ( LLC ), S pot or C corporation as each of these entities limits personal liability. If you opt for a exclusive proprietorship, you could be held personally liable for anything that might occur at your plaza of business. That means if a customer falls in your shop and is injured, they could go after your personal assets in a lawsuit .
Your choice of occupation entity will impact how you file and pay taxes, so consider consulting with a tax professional before making a decision.

4. Decide on a location for your pizza shop

The future step in opening a pizza denounce is to choose the justly location for your business. You ’ ll want to find out which areas are zoned for commercial practice and compare modal rents in each area. You may not want to locate besides close to early pizza businesses, but a busy commercial area with early types of restaurants and shops could bring more traffic to your restaurant. You ’ ll besides want to make sure the outer space itself is set up for starting a pizza shop and has room for your commercial enterprise to grow. Unless you have the cash for a down payment, you may want to consider renting the space at first .

5. Get funding

once you have a plan for your occupation and a placement picked out, you ’ re going to need fund to get started. The cost to open a pizza shop can vary between approximately $ 95,000 and $ 2 million, depending on whether you ’ re opening a small, counter-serve location or a larger sit-down restaurant. With startup costs for restaurants indeed high, you may want to consider a small business loan .
here ’ s a few different financing options to help open your pizzeria :

  • Commercial real estate loan: If you’ve decided you’d like to buy instead of rent, a commercial real estate loan can help you purchase the real estate for your pizza shop. If you qualify for a loan backed by the Small Business Administration (SBA), you’ll likely get better rates than you would with a traditional loan.
  • Equipment financing: The equipment required for a pizza shop — including pizza ovens, refrigerators and other large appliances  — can be costly. Instead of paying the costs upfront, equipment financing allows you to purchase needed business equipment usually with a low down payment. You’ll pay the loan back in installments and at the end of the term, own the equipment outright. Equipment leasing gives you the option to rent the equipment you need for a set period of time, but you won’t own it at the end of the lease.
  • Line of credit: From stocking your kitchen with ingredients, decorating the restaurant or investing in marketing, there’s a lot of operating costs to open a pizza shop. A business line of credit could be a good option for these types of expenses, as it is a flexible form of funding that offers you access to a revolving credit to draw from. You’ll only pay interest on the amount you borrow from the credit line.

6. Obtain licenses and permits

When opening a pizza shop, check local laws to find out what are the license and permit requirements for restaurants in your area. You ’ ll probable at least need a business license, a food serve license and a resale let. If you ’ ll be selling alcohol at your pizza business, you ’ ll besides need a liquor license, which can be expensive .
You ’ ll besides likely need to apply for an EIN or Employer Identification Number. This international relations and security network ’ thymine a license or a permit, but may be required by the IRS to monitor your business activities. Your EIN is your tax ID number that you ’ ll use to apply for financing, file your taxes and open a commercial enterprise bank account. You can apply for your EIN on-line with the IRS .

7. Hire employees and get small business insurance

You ’ ll credibly want to hire some employees to help cook, serve and deliver those pies. If you do, you ’ ll need respective types of little commercial enterprise insurance to protect your employees, including disability indemnity, unemployment insurance and actor ’ south recompense indemnity. even though it ’ s technically not a type of business policy, if you have over 50 employees, you ’ ll besides be required to provide health insurance for employees or pay a punishment.

Regardless of your employees, you may want general liability indemnity and commercial property indemnity, and you may besides want business income policy coverage. General indebtedness coverage helps cover your legal fees and judgments against you for lawsuits related to things like bodily wound, property damage and false advertising. commercial property indemnity is exchangeable to a homeowners policy — it covers your pizza denounce equipment in the event of an unexpected event like a fire. And clientele income indemnity helps you continue to pay your lease or mortgage after such an event, even if your business is closed and not earn income. You may be able to find a clientele owner ’ sulfur policy that offers most or all of the coverage you need in one policy .

8. Open a business bank account

As you prepare to open your pizza shop, it ’ randomness important to keep your business expenses separate from your personal expenses if you want to avoid a concern come tax time. The best small clientele bank accounts allow you to avoid monthly fees, earn matter to and offer fee-free transactions each calendar month .

9. Track your cash flow

now that you know how to start a pizza denounce, the concluding pace is to monitor your cash flow. A cash flow analysis allows you to evaluate whether you ’ rhenium earning enough income to pay your business expenses and if you ’ re earning a profit. Your goal should be to generate positive cash flow, and then to reinvest some of that supernumerary income into growing your pizza occupation .