Location, location, location Finding the right spot to spin the dough
By Brandon Farrell | Stones Pizza

We have all heard the old adage, but many assume that “Location, Location, Location” pertains solely to maximum exposure. Although this is true for some businesses (for example: you won’t find a McDonald’s on the road less travelled), but for the typical pizzeria owner we don’t necessarily need to be competing for the attention of passers by with all the other flashing signs on the Las Vegas strip.

The busiest streets have the added issue of little or no parking, and especially if you are a takeaway business, this is vital. Your customers want to be able to get in and out easily, so the visibility you have on a street with 250,000 cars passing daily is voided if there is nowhere for those cars to stop. Ideally we want to be on a busy street with our own parking, or in a busy strip mall, again with plenty of parking. The higher the passing traffic of course means higher rent. Is it really worth it? Say you are looking at two different premises with one having a huge amount of traffic going by, no parking and is $20k more per year than the second location that has plenty of parking and is on a quieter street. Do you think you might be better off spending that extra $20,000 on advertising to let customers know where you are? A new restaurant should spend more on advertising for the first two years to build up a clientele and require less as years go by (unless you have a forgettable product). So this difference in rent can basically be pocketed once the business is established.

I have a collection of pizza menus from every pizzeria I have been to or walked past over the past few years. What astounds me the most is that 50% of them have the exact same menu and 70% have only the slightest variation. This is something to keep in mind when scouting out the competition in your area. If you have a BBQ Chicken or an Aussie, if cabanossi is a listed ingredient on your “meat lovers”, if your pizzeria is called Mario’s, Gino’s or any other Italian name and your name is Dave, chances are that you will have the same menu as another pizzeria in the area.And if so, why would anyone come to you instead? If there is an established business in the area with a very similar product you need to either change your product or find another location. Opening up a “Mario’s” in the same suburb as a “Gino’s” that has been there for the past 10 years on the basis that you use a better quality cabanossi is not a good idea... there is no such thing as a better cabanossi. Look somewhere else.

We all want to be the only pizzeria in the busiest part of town, but reality is that there is already someone there.You have to have a point of difference whether you are the best (and we all think that we’re the best) or the cheapest, you have to be different to compete, and if you are different enough the other local pizzeria will not even count as competition. There is a Domino’s near my store and I don’t care. Back to the actual premises. Now I realise that most people reading this are in the pizza business already. Some will have learned some valuable lessons what not to look for when starting up. Some will have learned reasons why their location is so good that they didn’t even realise when they first started up. Or maybe your name is Dave and you inherited the “Luigi’s” from your uncle Luigi, you make your own cabanossi smoked in wormwood and think I’m a dick.

If you are just starting up one of the biggest considerations is the local council requirements. You will need plenty of tiles, floor drains, handwashing sinks, dishwashing sinks etc... In some cases you can get away without requiring a grease trap, and at a cost of $5,000-$10,000, this is a considerable expense. Perhaps instead of converting that ex-hair salon, you should get the old Shanghai Palace down the road that has been empty for years. If it meets all or most of the council requirements already, it might be worth another look.

Size is the next consideration: 50 sqm might seem fine to open up with, but what happens when you actually get busy? Where can you store 300 dough balls for a Friday night if there is no space for a coolroom. There are many operators that get by with less, but for the sake of efficiency I would want no less than 70 sqm, with 90 as the ideal for a takeaway premises.You have to have enough room to make more money.

If you have been doing this for awhile and are looking to open another store, you know this already.And this is where I am now. With the selection of a second store, I feel that I can trade on the name I have already established if my second store is close enough to my first. I can boast my accomplishments from the first store as advertising for the second and if the second is close enough, it increases the chances that potential customers will have already heard my name.With this marketing angle I feel that I can take on a location that does not necessarily have all the exposure that I might desire (as long as it has plenty of parking!). With a wide area outside your current service zone, where is the next place to look? If you do deliveries, this is your first place of reference. We all get calls from people wanting deliveries from outside our zone. Pay attention to where most of those calls come from!

Hmmm...think a second store where you already have a customer base might be a good idea?

A logical step might be to buy an existing pizzeria and rebadge it to your brand. This presents a number of advantages with the first of course being that people know there is a pizzeria at that location. Make sure that everything adheres to council regulations, and if it all is not up to scratch make it a requirement for settlement or use it as a bargaining tool. If possible, keep the existing telephone numbers…someone calling “Mario’s” for a BBQ chicken might just be swayed to try your “Quail and aparagus with camembert and quince”. You could even run it for a few weeks as the business you just bought to get to know their customers and then inform them directly of the coming change and take the time to tell them what you’re all about. You need to make the best of the goodwill that you would have paid for that will be lost when you change your name from “Mario’s” to “Luigi’s”...Dave. Conversely, if the place you have just bought has very little business and a reputation for less than stellar pizza, change everything immediately.

The biggest thing I can’t possibly stress enough is “Don’t be in a rush” to open another store. If you are to be able to effectively open a second store, your first must be doing well, not just in profits but in procedures as well and needs to be able to run smoothly without you there If your first store is not doing all that well, opening a second is a fast track to destruction. You may have the bucks behind you to get another off the ground, but if you are splitting your energies everything the first store lacks will be evident in the second. If your first is doing well you will also not have as much financial pressure, and will be able to wait until just the right location comes along. I have been looking for about 8 months, and although the change in our economic climate has placed a few more premises on the market, I am waiting for the right place that ticks all the boxes.