Whether you’re looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) for your pizzeria, you will first need to prepare a solid business plan.
In this article we go through, step-by-step, all the different sections you need in the business plan of your pizzeria. Use this template to create a complete, clear and solid business plan that get you funded.
For more information on pizza shops, make sure to check our guides below: How To Open a Pizzeria in 9 Steps: Complete Guide How Much Does It Cost To Open a Pizzeria? How To Build a Financial Model for a Pizzeria
1. Pizzeria Executive Summary
The executive summary of a business plan gives a sneak peek of the information about your business plan to lenders and/or investors.
If the information you provide here is not concise, informative, and scannable, potential lenders and investors will lose interest.
Though the executive summary is the first and the most important section, it should normally be the last section you write because it will have the summary of different sections included in the entire plan.
Why do you need a business plan for a pizzeria?
The purpose of a business plan is to secure funding through one of the following channels:
- Obtain bank financing or secure a loan from other lenders (such as a SBA loan)
- Obtain private investments from investment funds, angel investors, etc.
- Obtain a public or a private grant
How to write your pizzeria’s executive summary?
Provide a precise and high-level summary of every section that you have included in the business plan of your pizzeria. The information and the data you include in this segment should grab the attention of potential investors and lenders immediately.
Also make sure that the executive summary doesn’t exceed 2 pages in total: it’s supposed to be a summary for investors and lenders who don’t have time to scroll through 40-50 pages, so keep it short and brief.
The executive summary usually consists of 5 major sub-sections:
- Business overview: start by introducing your pizzeria and give a brief description of the type of pizzeria you want to start (sit-in vs. takeaway ; franchise vs. independent shop). Also mention the menu, and average product prices, where your shop will be located, how many customers you can receive, etc. Also, since pizza shops are very popular businesses, do not forget to mention the niche or the specialty that will differentiate your pizzeria from your competition
- Market analysis: the market analysis segment will contain an overview of the expected market size, target audience, and demography. Also provide here a quick overview of your competitors
- People: first, introduce your pizzeria’s management. Provide a brief (no more than a couple of sentences each) of the experience and track record of the team. Also, speak about your hiring plans: in other words, how you intend to run the business (what are the different teams and how many employees will you hire?)
- Financial plan: how much profit and revenue do you expect in the next 5 years? When will you reach the break-even point and start making profits? You can also include here a chart with your key financials (revenue, gross profit, net profit)
- Funding ask: what loan/investment/grant are you seeking? How much do you need? How long will this last?
2. Pizzeria Business Overview
This is where you will get into the details and explain what your pizzeria represents and why you want to open a pizzeria. There are many important questions that you must answer in this segment because investors usually want to know the answers to these questions. Here are a few questions that you must answer:
- What is the rationale behind you opening a pizzeria today?
- Where will your pizza shop be located? Why did you select that location?
- Why did you select the type of pizzeria you want to open?
- What will be your menu?
- What will be your pricing strategy and why?
- Will your operating days and hours be the same as your competitors?
- Who is your target audience?
- How many orders/customers do you expect per month? How many customers can sit-in in your pizzeria (if you have a sit-in restaurant)?
- What will be the legal structure of your company?
a) History of the Project
Any business overview must start with explaining the history of the project. There are 2 components here:
- Passion & experience of the business owner
- Rationale behind starting a pizzeria today
Passion & experience
You may or may not have prior experience. If you have experience, speak about it and how it will help you to run your business. For instance, you may have been the lead pizza chef in one of the country’s leading pizza franchise for 9 years, and now you want to start your own pizzeria and use your knowledge to run it more efficiently.
Is there a certain problem (or perhaps, a set of problems) that your pizzeria will try to solve? For example, there may not be any restaurant pizzeria within the 3-mile radius of the location where you want to open a pizzeria, despite a strong demand for it (e.g. people might resort to delivery-only apps).
But that’s not all! The market must be suitable for a business to exist and thrive. For instance, if you are trying to open your full-service pizzeria in a location where people have a very busy lifestyle and prefer takeout and/or delivery pizza, your business model might be as successful. Similarly, if the population of the target market has a high percentage of vegans and you want to sell only non-vegetarian pizza at your pizzeria, you will surely not receive as many customers as you would expect.
b) Business Model
This sub-section of the Business Overview will explain your business model. Describe the following points briefly:
- Will you buy an existing pizzeria and do some remodeling, or will you start a new pizzeria and design it from scratch?
- The type of pizzeria you want to open and why
- Will you buy a franchise or do you plan to open an independent pizza shop instead?
What are the different types of pizza shops?
There are multiple types of pizzerias. Some of them that you may consider include, but are not limited to:
- Full-Service Pizzeria
This type of pizzeria works on the concept of offering food and drinks. If you plan to open a full-service pizzeria, you must cater to a dine-in facility paired with a bar.
You can either choose to offer a high-end experience to your customers with an upscale restaurant with a pizza-only menu. Instead, you can open a laid-back pizzeria restaurant with a bar, TVs for the sports crowd or by inviting live-music bands for celebrations.
- Takeout and/or Delivery Pizzeria
For a delivery pizzeria, you will have to plan for in-house drivers who can deliver the pizza to the customers. Alternatively, you can collaborate with a delivery partner who can take care of the deliveries.
- Food Truck Pizzeria
The mobility offered by a food truck pizzeria is one of its prime advantages. If you plan to open a food truck pizzeria, you can move around places where it’s easier to find customers. This model is the best fit for business districts, college areas, etc. Yet, you might need special licenses if you want to open a food truck pizzeria. For more information on how to write a business plan for a food truck instead, check out our article here.
- Ghost Kitchen Pizzeria
The pandemic has popularised a new type of business model: ghost kitchens. A ghost kitchen pizzeria would only cater to online orders, so it does not need any storefront. For more information, read our article here.
Irrespective of the type of pizzeria you are opening, you must ensure that there is enough demand in the location that you will serve. For example, if food trucks aren’t popular in the location, it makes sense to ditch the idea of a food truck pizzeria and settle for a different model instead.
c) Products & Services
Just because you are opening a pizzeria, it doesn’t mean that you must restrict your product offerings to pizzas only. In fact, pizzerias offer more than just pizzas. Pizzerias usually sell pizzas, appetizers, sandwiches, salads, drinks (non-alcoholic or alcoholic), desserts, etc.
Since pizzas have many types and a vast array of toppings, it may not be possible to list all your products and services (save it for the appendix). Instead, make it clear here whether you just want to offer pizzas (and approximately how many different pizzas), or if you plan to offer other dishes too (antipasti, salads, pasta, etc.).
d) Pricing Strategy
In this section, reveal your pricing strategy and also provide the rationale behind the pricing structure. For instance, if you may charge higher than your competitors if you are:
- Sourcing your raw materials from organic farms
- Using a special ingredient imported from some other country
Your pricing strategy will also significantly depend on the spending capability of the target audience in your area of operation.
For example, if you are trying to sell expensive pizzas in a middle class area, you may not be successful. Thus, you must be aware of the spending capabilities of your target audience and determine the menu and prices accordingly.
Create a pricing chart and ensure to provide an average price range for your products. Yet, you don’t need to provide exact pricing for each product. For example, if you are selling veggie pizzas with a wide array of toppings that can heavily alter the price, you don’t need to list each variant. Instead, you can just say something like: veggie pizzas – $8.90 to $15.90.
Offering a pricing table is important because your pricing strategy will allow investors to tie your pricing strategy with your financial projections (see “Financial Plan” below).
e) Legal Structure
Finally, your business overview section should specify what type of business structure you want. Is this a corporation or a partnership (LLC)? Who are the investors? How much equity percentage do they own? Is there a Board of Directors? If so, whom? Do they have experience in the industry?
3. Pizzeria Market Overview
You must understand the market you wish to operate. For example, if you are trying to sell Hawaiian-style pizzas with pineapple toppings in an area that is popular for its high meat consumption ratio, you may run into losses. In this case, you will most likely attract a bigger customer base if you are offering meat-based toppings.
Therefore, you must cover here 3 important areas:
- Market size & growth: how big is the pizza industry in your area? What is its growth rate (or decline rate) and what are the factors contributing to its growth or decline?
- Competition overview: how many competitors are there? How do they compare vs. your business? How can you differentiate yourself from them?
- Customer analysis: who is your target audience? What type of pizzas do they prefer? How regularly do they visit or order from pizzerias? What type of pizzas do they prefer to eat? What other things do they order along with pizzas? How much do they spend on pizzas each month?
a) Pizzeria Market Size & Growth
How big is the pizzeria industry in the US?
According to Statista, the total sales of the pizza industry in the US was $46 billion in 2020. The total number of pizza restaurants in the country was 75,000+ in 2020: that’s an average turnover of $600,000 per pizzeria..!
How big is the pizzeria industry in your area?
After getting a clear picture of the dental industry in the US as a whole, narrow down to your location. It’s very likely that you won’t find the number anywhere (at least not for free). In which case, read our article on how to estimate TAM, SAM and SOM for your startup. Let’s see how to do it below:
We know that the average annual revenue for each pizzeria is ~$600,000 in the US. Therefore, if the area where you want to open your pizzeria has 20 pizzerias already (say in a 5 miles radius), you can safely assume that the pizza industry in the area is worth approximately $12 million.
How fast is the pizzeria industry growing in the area?
Looking at publicly available reports online, we know that the average annual growth of the industry was 1.1% from 2017 to 2022. But what about where you live?
US national averages can be a great addition to your business plan, yet they don’t necessarily help to assess the pizzeria industry where you plan to operate. For example, the industry might be growing in the US, but declining in your region for a number of reasons (decreasing population or disposable income, etc.).
Instead, you can use the number of pizzerias as a proxy to find the market growth in your area. For instance, if there were 18 pizzerias in 2018 and 20 pizzerias in 2022, the average annual growth rate is ~3%, higher than the US average.
b) Pizzeria Competition Overview
Studying your competitors’ business models is vital. Indeed, you must clearly understand what makes them successful or why they failed.
It is always a good idea to do some research (if necessary, physically visit your competitors without revealing your business intentions) and create a comparative table summarizing their products, shop design and size, marketing strategies, online presence (e.g. reviews), target audience, etc.
Here is a sample table that you can use:
|Competitor #1||Competitor #2||Competitor #3|
|Business model||Full-Service||Ghost Pizzeria||Takeout|
|Products & services offered||Pizzas|
|Online delivery||No||Yes (Uber Eats)||Yes (DoorDash)|
Social media content
|Social media content|
Social media content
|Google Rating||4.6 (720+)||4.4 (270+)||4.8 (340+)|
|Pizza price range||$9.9 – $18.5||$8.9 – $15.9||$9.5 – $16.9|
|Shop size||1,900 sq. ft.||600 sq. ft.||600 sq. ft.|
Pizzeria SWOT Analysis
Try to provide here a SWOT analysis (SWOT stands for Strength, Weakness, Opportunities, and Threats).
For example, here is a sample that you can use for a pizzeria:
- Strengths: you may have worked as a head chef of one of the leading pizzeria franchises in the country
- Weaknesses: startup cost, zero reputation
- Opportunities: only one full-service pizzeria serving a 3-mile radius, an affluent area with high spending capacity
- Threats: dominant brands like Papa John’s, Little Caesars, and Pizza Hut are making inroads.
A clear understanding of your strengths and weakness along with opportunities and threats in the real market can also help you to design your marketing strategy. In addition, it helps potential investors to assess the risk and reward profile of your business.
c) Customer Analysis
This is the sub-section where you will provide a detailed analysis of your target audience (your ideal customer(s)). Some important points that you must include in your customer analysis include:
- Age and gender distribution (you can get local demographic data from census.gov)
- Frequency of pizzeria visits
- Average monthly income and disposable income
- Average yearly or monthly spending at pizzerias
- Types of pizzas preferred in the area
- Other foods and drinks usually ordered along with pizzas
- Inclination towards loyalty programs, gift cards, and coupons
- Things they dislike about existing pizzerias and what they expect to be improved
- Preference for big brands vs. independent pizzerias
You can add as many data points as required to validate your business decision. The idea here is to display your deep understanding of the target audience and their needs, preferences, and expectations. This knowledge can help you to tailor your products & services to attract new customers.
4. Sales & Marketing
This is the segment where you outline your customer acquisition strategy. Try to answer the following questions:
- What is your USP?
- What are the different marketing strategies you will use?
- How do you intend to track the success of your marketing strategy?
- What is your CAC or customer acquisition cost?
- What is your marketing budget?
- What introductory promos and offers do you intend to provide for attracting new customers?
What marketing channels do pizzerias use?
A few marketing channels that pizzerias typically use are:
- PPC ads, Facebook ads, etc.
- Social media content
- Billboards & signages
- Loyalty programs
- Food delivery platforms
- Online food directories (The Fork, Open Table, Google Business, etc.)
- Coupons & gift cards
- Word of mouth, recommendations
What is your unique selling proposition?
In other words, how do you differentiate yourself vs. competitors? This is very important as you might need to win customers from competitors.
A few examples of USPs are:
- Authentic Pizza: you may offer authentic Neapolitan-style pizza from a trained pizza chef
- Location: your pizzeria may be located closer to your target audience and/or closer to a busy street where new potential customers can see your signage
- Price: your services may be cheaper vs. competitors
- Offers and promos: you may offer discount rates on subsequent visits
Your USP will depend on your business model, competitor analysis, and target audience. Whatever your USP be, it should appeal to your potential customers and attract them. Plus, The USP you offer should be convincing enough for investors and lenders.
5. Management & People
You must address two things here:
- The management team and their experience/track record
- The organizational structure: different team members and who reports to whom?
Small businesses often fail because of managerial weaknesses. Thus, having a strong management team is vital. Highlight the experience and education of senior managers that you intend to hire to oversee your pizzeria business.
Describe their duties, responsibilities, and roles. Also, highlight their previous experience and explain how they succeeded in their previous roles.
It is also important here that you explain how their experiences and qualifications help you in implementing the pizzeria you are proposing. If they have specialized training, education, and experience (such as professional pizza-making training, pizza chef with a leading brand, master’s degree in business administration, etc.), add that information.
Even if you haven’t already hired a manager, chefs, waiters, and other relevant staff members, you must provide a chart of the organizational structure defining the hierarchy of reporting like the one below.
6. Financial Plan
The financial plan is perhaps, with the executive summary, the most important section of any business plan for a pizzeria.
Indeed, a solid financial plan tells lenders that your business is viable and can repay the loan you need from them. If you’re looking to raise equity from private investors, a solid financial plan will prove them your pizzeria is an attractive investment.
There should be 2 sections to your financial plan section:
- The startup costs of your project (if you plan to start a new pizzeria, renovate your pizza shop, etc.)
- The 5-year financial projections
a) Startup Costs
Before we expand on 5-year financial projections in the following section, it’s always best practice to start with listing the startup costs of your project. For a pizzeria, startup costs are all the expenses you incur before you open your pizza shop and start making sales. These expenses typically are:
- The leasing deposit for the space (if you rent) or to buy the real estate (if you buy)
- Renovations and improvements
- Equipment & appliances
- Furniture & tableware
Of course, the startup costs depend on a number of factors, like the size of your pizzeria, its location, the facilities, the menu, etc.
On average, it costs $89,000 to $266,000 to open a casual pizzeria (1,500 sq. ft.) in the US.
Note that these costs are for illustrative purposes and may not be fully relevant for your business. For more information on how much it costs to open and run a pizzeria, read our article here.
|Lease security deposit or loan down payment||$11,000 (lease) – $50,000 (buy)|
|Interior Design & Renovation||$20,000 – $40,000|
|Equipment||$50,000 – $150,000|
|Point-of-Sale system (POS)||$2,000 – $5,000|
|Legal fees & Licensing||$1,000|
|Initial inventory||$5,000 – $20,000|
|Total||$89,000 – $266,000|
b) Financial Projections
In addition to startup costs, you will now need to build a solid 5-year financial model for your pizzeria.
Your financial projections should be built using a spreadsheet (e.g. Excel or Google Sheets) and presented in the form of tables and charts in the business plan of your pizzeria.
As usual, keep it concise here and save details (for example detailed financial statements, financial metrics, key assumptions used for the projections) for the appendix instead.
Your financial projections should answer at least the following questions:
- How much revenue do you expect to generate over the next 5 years?
- When do you expect to break even?
- How much cash will you burn until you get there?
- What’s the impact of a change in pricing (say 15%) on your margins?
- What is your average customer acquisition cost?
You should include here your 3 financial statements (income statement, balance sheet and cash flow statement). This means you must forecast:
- The number of covers (customers or orders) over time ;
- Your expected revenue ;
- Operating costs to run the business ;
- Any other cash flow items (e.g. capex, debt repayment, etc.).
When projecting your revenue, make sure to sensitize pricing, cost of raw materials (food supplies) and your sales volume. Indeed, a small change in these assumptions may have a significant impact on your revenues and profits.
7. Use of Funds
This is the last section of the business plan of your pizzeria. Now that we have explained what your pizzeria’s business model and concept are, what is your menu, your marketing strategy, etc., this section must now answer the following questions:
- How much funding do you need?
- What financial instrument(s) do you need: is this equity or debt, or even a free-money public grant?
- How long will this funding last?
- Where else does the money come from? If you apply for a SBA loan for example, where does the other part of the investment come from (your own capital, private investors?)
If you raise debt:
- What percentage of the total funding the loan represents?
- What is the corresponding Debt Service Coverage Ratio?
If you raise equity
- What percentage ownership are you selling as part of this funding round?
- What is the corresponding valuation of your business?
Use of Funds
Any business plan for a pizzeria should include a clear use of funds section. This is where you explain how the money will be spent.
Will you spend most of the loan / investment in paying your employees’ salaries? Or will it cover mostly the cost for the lease deposit and the renovation?
Those are very important questions you should be able to answer in the blink of an eye. Don’t worry, this should come straight from your financial projections. If you’ve built solid projections like in our pizzeria financial model template, you won’t have any issues answering these questions.
For the use of funds, we also recommend using a pie chart like the one we have in our financial model template where we outline the main expenses categories as shown below.