Have you ever heard of a pizza shop with a three-month waiting list?
Don’t worry if you haven’t. I love pizza, worked in the industry for nearly a decade, and have even fantasized about how to open a pizza business. The strategy Lee Kindell uses at Moto Pizza blows my mind!
It all comes down to one thing:
We’ll share how Lee started a pizza shop in the middle of the pandemic and is already making $3.6 million across four locations. Plus, we’ll reveal his secrets to hiring, marketing, and running a successful pizza business.
Whether you want to open a pizzeria or you’re interested in a different style of business, there’s plenty to learn from Lee’s strategies.
There are two ways to discover more about how to open a pizza shop. You can either continue reading or click on any of the links below to jump to that section:
Get ready to learn how to open a pizzeria.
Pizza Business Case Study: Moto Pizza
Lee and his wife previously owned a hotel, but it got shut down because of COVID restrictions. That forced them to pivot, and they decided to pursue Lee’s love for the pizza business.
He decided to buy the house right next to his condo, convert it to commercial zoning, and start his pizza shop.
He attributes most of his success to being unique, but he explained what a pizza shop can do to stand out against the major pizza businesses like Pizza Hut, Papa Johns, and Dominos:
His journey hasn’t been without its challenges, though. Opening a pizza shop in a repurposed residential building has created issues. For instance, when Lee’s pizza shop gets food deliveries, it’s more difficult to bring in supplies because of the stairs.
Lee has received over $3.6 million in seed money since opening a pizza restaurant. He plans to open pizza restaurant number five in the near future and two more after that.
Check out our interview with Lee to learn more about starting a pizza shop:
Learn About the Pizza Industry
Understanding the pros and cons of owning a pizza shop will help you decide whether it’s worth pursuing your pizza shop business plan.
Is pizza a good business to start?
Yes! The year 2022 set a record high with $46.9 billion in pizza restaurant sales across the U.S. pizza industry. Pizza shops also have profit margins of 10% to 15%. There are also numerous profitable pizza franchise business opportunities.
People like owning pizza shops because they are:
- Easily understood: Everyone is familiar with the business model to run a traditional pizza shop.
- Highly interactive: A pizza shop business owner will be working with employees and customers every day.
- Fast paced: Pizza is a favorite food in the United States, which means restaurants that develop a good reputation stay busy.
Some disadvantages of running pizza shops include:
- Liability: Owning a pizza delivery business means that you’re exposed to higher insurance premiums to protect against liability while delivery drivers transport your pizza.
- Equipment repairs: You’re completely dependent on your pizza oven working. If it needs costly repairs, you can’t work until the oven is fixed.
- 24/7 availability: Many pizza shops offer 24/7 service to capitalize on the times when the major pizza franchises are closed. As the owner, you may be on call around the clock.
- Food costs: Over the last four years, food costs have outpaced overall inflation. Restaurant owners should expect to spend 28% to 35% of revenue on food. If your supply costs go up, you need to raise prices or reduce profit margins.
How much does it cost to open a pizza shop?
The cost to start a pizza shop will vary based on factors like ingredients and obtaining a food service license. The cost for a restaurant may be $50K to over $200K. Lee explained the startup costs for five levels of a pizza business.
- Home-based pizza shop: According to Lee, the least expensive way to start a pizza shop is to create a home-based shop and advertise on social media. The startup cost for this strategy is less than $2,000 to create a business entity, buy ingredients, and get business licenses.
- Farmers market: You’ll just need a pizza oven, ingredients, pizza boxes, and a tent. Then you can serve slices of pizza at farmers markets and other events. Expect to spend between $2k and $10K opening a pizza shop this way.
- Ghost kitchen: You can rent a kitchen for $5K to $6K. However, you’ll also have the costs of business licensing, creating an entity, getting your ingredients, and buying pizza boxes. Expect to spend $8K to $25K when opening a delivery pizza shop this way.
- Food truck: Selling pizza out of a food truck is another way to serve your pizza recipes and make a great living. Expect to spend between $15K and $250K to start a food truck.
- Sit-down pizzeria: Starting a pizza place where people dine in is a major affair. You’ll need a business license, food service license, restaurant equipment, lots of tables and seating, and a full team. Expect startup costs of over $200K for a new pizza shop where people can dine in.
Lee told us:
As you can see, the cost to open a pizza shop can vary depending on factors like shop size, location, and menu.
What is the most popular pizza franchise?
According to Statista, Domino’s is the leading franchise in the pizza industry, but there are plenty of other amazing pizza franchises such as Pizza Hut, Little Caesars, and Papa Johns.
Given you’ll likely need a small business loan to open a pizza shop franchise, I would strongly recommend picking the pizza place you enjoy the most. That way, you genuinely enjoy the food.
How to Open a Pizza Shop
Starting a pizza shop is a complicated process. We suggest the following steps to start a pizza parlor:
- Write a business plan.
- Choose a business structure.
- Open a business bank account.
- Secure business funding.
- Find a business location.
- Obtain licenses and permits.
- Buy equipment.
- Find suppliers.
- Hire employees.
- Market your business.
- Provide excellent customer service.
Keep reading to learn how each step can help you achieve your dream of running a successful pizza shop. Let’s start by discussing how to write a solid business plan for pizza shop operations.
Step #1. Write a Business Plan
There’s a lot to do when you decide to open a pizza shop. Writing a business plan for pizza restaurant ideas is a great way to confirm you’re ready to start your business.
Like any business plan, a pizzeria business plan should include your business idea and market research. It should also include:
- Recipes
- Equipment
- A marketing plan
- A budget
- Financing ideas
The pizza business plan will be helpful when pursuing loans or funding from investors and banks. Learn more about writing a restaurant business plan.
Step #2. Choose a Business Structure
Next, you’ll want to set up your business structure. Consider starting a limited liability company (LLC) or corporation. They create a separate entity to keep your business finances separate from your personal finances.
You’ll also need to get an employer identification number from the IRS. This is necessary for employer organizations.
Learn more about choosing a business structure and forming an LLC.
Step #3. Open a Business Bank Account
To make it easier to manage your new pizza restaurant, you’ll want to open a business bank account. A business checking account makes it easier to accept credit card payments, deposit cash, pay pizza shop monthly expenses, and qualify for startup funding loans.
You’ll probably also want a business credit card to start building your business credit score. It takes a new business some time to build its credit score just like a personal score.
Step #4. Secure Business Funding
Most small business owners won’t have the full amount they need when starting a pizza shop. Cost estimates, financial projections, and a business plan will be necessary to get loans.
When you start a pizza business, you can apply for secured loans using real estate as collateral for the loan or equipment financing. Learn how to get a $100K loan to cover the cost of starting a pizza business.
Step #5. Find a Business Location
You’ll need to find a location for your pizza business. Most pizza shops do best near lots of residential areas. In addition, a pizzeria owner might want to make sure the location has enough space for pizzeria customers and delivery drivers to park.
When Lee chose a location for his pizzeria, he chose a converted house because of its unique visual appeal. But he also warns local businesses that buying a house and converting it into a business was one of his biggest mistakes:
Learn more about choosing a pizzeria location.
Step #6. Obtain Your Food Service License and Other Permits
States and cities commonly have special requirements for the restaurant industry. Depending on your area, you’ll most likely need the following:
- Business license
- Food service permit
- Building health permit
- Occupancy permit
- Fire inspection
- Tax ID number
Check with your local business office to find out how to start a pizza business in your location. You may also need general liability insurance and other types of business insurance for your restaurant business.
Step #7. Buy Pizza Ovens and Other Equipment
New pizza shops will need to purchase equipment to operate effectively. Here’s a basic list of the most essential items:
- Pizza ovens
- Proofing racks
- Pizza cutters
- Prep tables
- Refrigerators
- Freezers
- Point-of-sale and online ordering systems
Most of these can be purchased from a local supply store, but Lee has some really cool pizza business ideas for equipment. Check out the segment on equipment below:
Want some unique equipment? Lee told us:
Step #8. Find Suppliers
You’ll need suppliers for your pizzeria menu. Whether you’re serving New York–style pizza, Italian dishes, or a unique pizza concept, you’re going to need suppliers for:
- Food ingredients: Bellissimo Foods Company, Rich Products Corporation, and Full-Red are some suppliers of high-quality pizza ingredients.
- Pizza boxes: WebstaurantStore has multiple custom pizza box offerings starting at $22.78 for a bundle of 50 pizza boxes.
- Print materials: Pizza shops open their businesses to lots of repeat customers by providing coupons and promotional offers. Build a relationship with a great print shop.
Lee elaborated on his ingredients:
Step #9. Hire Employees
Before you open your pizza place for the grand opening, you’ll probably want some employees. That means you’ll need to set up a payroll system and comply with labor laws.
According to the Equal Employment Opportunity Commission, it’s illegal to discriminate based on a “person’s race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability or genetic information.”
Lee has a unique style of hiring and managing employees. He told us:
In addition, he explained a business owner’s job:
Learn more about how to hire employees. Remarkably, Moto Pizza has never used ads. Lee explains the secret to his success: He also explained some of the ways he distinguishes his brand: He also suggests sharing everything on social media and showing your true self. Lee’s favorite is Instagram, but TikTok can also be useful for a pizza business. Collaborations are another creative marketing strategy Lee likes to attract customers. Partnering with well know businesses like sports teams is a great way to get in front of a large audience. You should probably also list your small pizza shop on business directories like Google Business Profile, Yelp, and other places that your target market use to find restaurant ideas. Providing excellent customer service is the secret sauce at Moto Pizza. People have to book his delicious recipes three months out using online ordering. Customers often see the pizza shop open and try to walk in. Lee told us: Lee Kindell and Moto Pizza should inspire pizza enthusiasts and aspiring entrepreneurs alike. Lee’s dedication to quality, innovation, and exceptional customer service has propelled his pizza business to remarkable heights despite starting with just $60K on a credit card. We shared his journey from converting a residential building into a thriving pizza haven with multiple locations. Lee’s success is about more than just opening pizza shops. You have to express yourself and connect with people. Lee’s strategies and insights show how opening a full service pizzeria can be a rewarding career. Remember these three parts of Lee’s story in all your pursuits: What pizza shop service style would you use for your business?Step #10. Market Your Pizzeria
Step #11. Provide Excellent Customer Service
Closing
