A pizza shop's food cost is easy to like: a 14-inch cheese pie costs about $4.83 to make, dough, sauce, cheese, the box and the card fee, and sells for $16. The plan turns on three other numbers. Cheese is the biggest ingredient and its price moves, so a pie's cost moves with it. Delivery apps take a large share of every order they bring, so an app order keeps far less than a pickup. And a pizza shop is expensive to open: ovens, a hood and fire suppression, and a walk-in come before the first slice, which means a long road to earn the startup back. The plan below works in categories per $100 of sales. In the example, a Newark pizza shop opens with $232,000, ends its first year about $28,700 behind before the owner's pay while sales build, and makes about $4,000 a month at full speed. Below is each part of the plan, the first year month by month, the startup budget, and a free template.
The short version
- Describe the shop in a paragraph: the block, who's ordering, what's missing nearby, the goals.
- Cost each pie from dough, sauce, cheese, toppings, the box and the card fee; cheese is the biggest part.
- Plan sales by category per $100: whole pies, slices, sides, drinks, delivery app orders.
- An app order keeps much less than pickup; count the commission in its cost.
- The build-out, ovens and hood make the startup large; budget working cash for the slow months.
- Slices from the counter keep the most of each dollar.
- TaroStack makes each pie a recipe, so its true cost follows the price of cheese. More below.
Part 1: the business description
Ironbound Pizza Co., a made-up pizza shop in Newark, New Jersey, writes:
Ironbound Pizza Co. is a 1,600-square-foot pizza shop with deck ovens, selling whole pies for pickup and dine-in, slices at the counter at lunch, wings, salads and sides, drinks and beer, and delivery through the apps. In its first year it aims to reach $48,000 of sales a month.
Part 2: what a pie and a slice cost
| Item | Dough | Sauce | Cheese | Toppings | Box or plate | Card fee | Cost | Price | Cost share |
|---|---|---|---|---|---|---|---|---|---|
| 14 in cheese pie | $0.95 | $0.45 | $2.10 | $0.85 | $0.48 | $4.83 | $16.00 | 30.2% | |
| 14 in pepperoni pie | $0.95 | $0.45 | $2.10 | $0.90 | $0.85 | $0.57 | $5.82 | $19.00 | 30.6% |
| 18 in cheese pie | $1.40 | $0.70 | $3.20 | $1.10 | $0.66 | $7.06 | $22.00 | 32.1% | |
| Cheese slice, an eighth of an 18 in | $0.18 | $0.09 | $0.40 | $0.05 | $0.12 | $0.83 | $4.00 | 20.8% |
The cheese is over 40% of a cheese pie's cost, so a 20% jump in the price of mozzarella adds about 42 cents to every 14-inch pie. A slice keeps the most of each dollar, since eight slices sell for more than the pie and there's no box. Dough made in house or bought is in how to package pizza dough for sale, and the plate cost method in plate cost formula.
Part 3: customers and the apps
Pickup and dine-in are the core, with slices at lunch for the offices nearby. The delivery apps bring orders the shop wouldn't otherwise get, at the example's 25% commission, so an app pie keeps about 44 cents of each dollar against 69 for pickup. The shop prices its app menu 10% higher, and puts a card in every app order for its own pickup line. The ghost kitchen side of the same math is in ghost kitchen business plan.
Part 4: what each category earns
| Category | Sales | Variable cost | Contribution | Margin | Hundreds a month at full speed |
|---|---|---|---|---|---|
| Whole pizzas, pickup and dine-in | $100.00 | $31.00 | $69.00 | 69.0% | 250 |
| Slices at the counter | $100.00 | $22.00 | $78.00 | 78.0% | 60 |
| Wings, salads and sides | $100.00 | $38.00 | $62.00 | 62.0% | 50 |
| Drinks and beer | $100.00 | $30.00 | $70.00 | 70.0% | 40 |
| Delivery app orders | $100.00 | $56.00 | $44.00 | 44.0% | 80 |
Variable costs include food, boxes, card fees, waste and, for app orders, the commission. At full speed the shop sells $48,000 a month and keeps $31,350, 65.3%; whole pies bring $17,250 of it.
Part 5: the first year, month by month
Fixed costs are $27,300 every month: rent ($5,000), wages ($18,000), utilities and oven gas ($2,200), insurance ($500), the register and software ($300), ads ($600), and other costs ($700). Sales start at half of full speed:
| Month | Sales | Profit | Cash, year to date |
|---|---|---|---|
| 1 | $24,000 | −$11,625 | −$11,625 |
| 2 | $26,900 | −$9,732 | −$21,357 |
| 3 | $29,800 | −$7,847 | −$29,204 |
| 4 | $32,600 | −$5,998 | −$35,202 |
| 5 | $35,500 | −$4,113 | −$39,315 |
| 6 | $38,400 | −$2,220 | −$41,535 |
| 7 | $40,900 | −$587 | −$42,122 |
| 8 | $42,800 | $655 | −$41,467 |
| 9 | $44,700 | $1,905 | −$39,562 |
| 10 | $46,100 | $2,808 | −$36,754 |
| 11 | $48,000 | $4,050 | −$32,704 |
| 12 | $48,000 | $4,050 | −$28,654 |
The year's sales are $457,700, and the shop ends it $28,654 behind, before the owner's pay. It breaks even at about $41,800 of sales a month, in the eighth month; the lowest cash point, −$42,122 in month 7, fits inside the $45,000 of working cash. Football season and Friday nights are the busy stretches; a shop that opens in late summer reaches them while it's still building.
Part 6: the startup budget
| Item | Example |
|---|---|
| Build-out and signs | $70,000 |
| Deck ovens | $30,000 |
| Hood and fire suppression | $25,000 |
| Walk-in cooler | $14,000 |
| Dough mixer and prep tables | $12,000 |
| Lease deposit and first month | $10,000 |
| Furniture | $8,000 |
| Opening inventory | $6,000 |
| Smallwares | $5,000 |
| Licenses and permits, beer included | $4,000 |
| Register | $3,000 |
| Working cash | $45,000 |
| Total to start | $232,000 |
The $187,000 before working cash takes almost four years to earn back at full speed, which is why a space that was a restaurant before, with a hood already in, can be worth more rent. What a hood needs is in commercial kitchen hood requirements.
Get the template
Download the pizza shop business plan workbook. Four sheets: your categories, each per $100 of sales with its variable cost and hundreds a month at full speed; the first year, month by month, with sales ramping up, profit, cash, the first profitable month, the lowest cash point and whether the working cash covers it; your fixed costs; and the startup budget. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The plan uses one cost a pie. The kitchen goes through cheese by the case, at a price that changes with every delivery, and dough by the batch, and by Saturday nobody knows whether the walk-in has enough mozzarella for the weekend.
How TaroStack does it
TaroStack makes each pie a recipe, so its true cost follows the price of cheese.
Pies as recipes. A 14-inch cheese pie is a recipe by weight: a dough ball, 6 ounces of sauce, 10 ounces of cheese and a box, so its cost moves when the cheese price does.
Dough as a batch. Each dough mix is a batch from its recipe, with its lot and date, taking flour and yeast off stock.
Reorders. The reorder list shows cheese, flour and boxes in days of cover, before the weekend.
| The job | Notebook | In TaroStack |
|---|---|---|
| What a pie costs this week | Worked out once | True cost from the recipe |
| Cheese before the weekend | A look in the walk-in | The reorder list |
| Which dough to use first | Tape on the tub | Lots, oldest first |
Recipes, batches and the reorder list are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.