What Should You Consider to Determine a Pizza Shop’s Profitability?

If you are thinking about the cost to open a pizza business, one of the things that come into mind is the profit margin of a new venture, particularly for aspiring franchisees. The prospect of owning a pizza shop in the U.S. is quite lucrative, given that there were more than 76,000 restaurants in the country in 2017. Pizza sales in the same year reached $44 billion, so it is unsurprising that many are interested in becoming a business owner in this food service niche. Aside from sales, other ways to determine your profit margin include unit costs and overhead expenses.

Determining Your Pizza Business Model

Some of the available concepts for a pizza business include a stand-alone restaurant or a shop that only offers take-out or delivery orders. Whether or not you choose to buy a pizza franchise, take note that your chosen business model will affect your overhead costs. The advantages of a franchise business, however, involves having an established brand and customer base from the beginning.

Those who prefer to focus on selling the product should consider this business model, instead of starting your own enterprise. Solo entrepreneurship can incur lower start-up costs and more flexibility in business decisions, but you will have to come up with a marketing plan to sell your product.

Pizza Preferences by State

Pizza

Another thing to consider when planning a pizza business involves the popular options in your chosen state. It is essential to be familiar with the best-selling pizza options and use this information to know your customers’ preferences. For instance, most people love pepperoni in their pizzas, although those in West Virginia are particular fans of this topping unlike most consumers in Vermont and Wyoming.

You might think that people in Hawaii are the only ones who like pineapple in their pizza, but it turns out that pizza lovers in Washington also don’t mind having this topping on their pies. Cheese is a classic choice, and it is arguably the most popular topping for Americans, no matter where they live in the country.

Understanding Different Consumer Trends

Most pizza shops, whether independently owned or franchised, choose to market their products to children. Those who are between two and 19 years old tend to be the most frequent consumers, as 20% of them are likely to eat a slice than 11% of adults.

Men also eat more slices than women, as the latter accounts for 11% of overall consumption versus male customers who are responsible for 15% of total sales. A pizza delivery business isn’t a bad choice for a business model too since almost 60% of people prefer to eat pizza at home.

In the end, when choosing a franchise business for your planned pizza shop, remember that having marketing support provides you with an edge to keep your business afloat. It’s also easier to determine the profitability of a business brand that has been operating for several years since you could have access to historical figures such as sales and revenue.