Business and Operations
The Pizza Chef: November 2012
By Diana Coutu
By Diana Coutu
As the keynote speaker for the first Canadian Pizza Business Forum this
past June, I had the opportunity to speak to several independent
As the keynote speaker for the first Canadian Pizza Business Forum this past June, I had the opportunity to speak to several independent pizzeria owners.
I chose to focus my presentation on low-cost effective marketing strategies to increase sales and profits, and by midday it was clear that this business forum was needed. Everyone in attendance was glad they came. It should come as no surprise that many echoed my questions, concerns, challenges and frustrations. How do we compete against the low-priced chains? How do we attract and retain good staff? How do I train my staff to do things the way I want them done? How many staff should I have on my schedule? How do I deal with a problem employee? What should my labour cost be? How do I negotiate a better price for my ingredients with my suppliers? What kind of profitability can I reasonably expect in this industry? How come so many of us don’t last more than a year? Most of us are aware that there are landfills of carcasses and barely breathing bodies who all thought the pizza industry was easy and lucrative. At dinner one night, Scott Anthony and I were asked why many independents don’t make it in the pizza business.
One common and often fatal mistake is that many new operators get into the business thinking that they can make a better pizza than the chains do and offer it at a lower price. Filling the first criteria isn’t that difficult, but doing it for less is impossible. You cannot sell premium quality ingredients at a low price. The math simply doesn’t support this model. New operators rarely understand food cost, recipe mapping and the high costs of labour that this industry demands. And when they finally do grasp this, it’s not until they run out of money and have to close their doors. I can’t begin to count the number of independents who have made this mistake and ended up losing their shirts. There are even veteran independents who don’t know their numbers. A few years ago I worked with a client whose yearly sales exceeded 1.8 million yet he didn’t make a dime in profit. His costs were out of control, mainly because he’d never figured out what they were or implemented systems to keep on top of them. These things are very important in order to be profitable from the start.
Part of the problem is that we aren’t exposed to the business aspect of our industry. We get into the business thinking it’s about one thing: making and baking a great pizza. My husband and I made the same assumption over 14 years ago. Sometimes we’re pretty good at making great pizza from the start, but more often than not we need help in this area. It’s one thing to consistently make great pizzas for friends and family in your home kitchen, but quite another to make the leap to a professional pizzeria kitchen. Even if we do manage the making and baking well, we soon discover that’s only a small slice of what owning and operating a pizzeria requires. Operations and marketing are key aspects that, if overlooked for too long, will lead to the inevitable expensive and quick death of your concept.
With so much to look after and nowhere to gain the experience and knowledge needed to succeed, it’s no wonder we are an endangered group. After the business forum I realized that there is a great need for a pizza school that covers these aspects and gives independent pizzeria operators the knowledge they need to make it in this tough industry. I’ve been a guest speaker at other pizza courses and none covers all the important topics. With more than 20 years’ experience in the real-world school of hard knocks, I can say that my husband and I have mastered the important aspects of the business and we even continue to invest in our skills by reading business books, going to seminars and workshops, and then applying what we learn to our concept. In order to create content for our course, we reviewed each consulting job we’ve worked on in the past seven years and made a list of the top 10 challenges. Then we added a few things that we wish we’d known before we opened our pizzeria. Using this list, we created a pizza business course designed specifically for independent pizzeria operators.
This course is the first ever created by two top independent pizzeria owners for their fellow independent pizzeria owners. It’s meant to provide a solid foundation for existing and future independent pizzeria owners, to provide real-world answers and trusted experience to those who need it the most. It’s our goal to help more of us succeed and be around for years to come. For more information about the course, please visit www.dianaspizzaschoolofbusiness.ca .
Diana Coutu is a two-time Canadian Pizza magazine chef of the year champion, internationally recognized gourmet pizzaiolo, co-owner of Diana’s Gourmet Pizzeria in Winnipeg, Man., and member of the board of directors for the CRFA. In addition to creating award-winning recipes, Diana is a consultant to other pizzeria owner/operators in menu development, creating systems to run a pizzeria on autopilot, along with marketing and positioning to help operators grow their business effectively and strategically. She is available for consulting on a limited basis; for more information, contact her at Diana@dianasgourmetpizzeria.ca.