Pazzini’s Pizzeria is a new restaurant set to open in Cleveland, Ohio. The privately owned business will specialize in making pizza, snacks and fast foods such as French fries, burgers and hotdogs. Cleveland is an ideal location for the pizzeria because of the city’s large population and bubbling restaurant industry. Market analysts claim that the city’s restaurant industry still has room for growth, meaning that Pazzini’s could take advantage of this situation by providing excellent food and services that satisfy the needs and demands of a wide range of customers.
Pazzini’s Pizzeria will be set up as a limited liability company with Giampaolo and Mariana Pazzini being the sole owners of the business. The restaurant will be managed by Antonio Matri, who has more than a decade of experience in the running and management of restaurants, and a college degree from the Glion Institute of Higher Education. Working in the restaurant will be a team of six chefs, headed by Alberto Gambini, with more than a decade of experience between them. Three of the chefs will specialize in preparing the oven-baked pizzas, while the rest will deal with the snacks, fast food, salads and beverages.
The restaurant’s main product will be the pizzas. The pizzas will be oven baked and prepared according to the customers’ preferences with regard to toppings, crusts and contents. Other foods prepared at the restaurant will be fast foods such as hot dogs, burgers, french fries, an array of salads and beverages. The restaurant’s atmosphere will be an important aspect of its products and services, as it will be a family friendly atmosphere inspired by Italian customs and traditions. Analysts state that the restaurant business in Cleveland still has room for expansion and Pazzini’s will be seeking to exploit this space. The city’s 390,000 occupants enjoy dining in elegant restaurants, and Pazzini’s will provide a much-needed alternative to expensive restaurants in light of the recent economic downturn. The restaurant’s target market will be middle class residents in Cleveland, with the services primed to please families. Most of the competition facing Pazzini’s will come from other pizzerias within Cleveland such as Farinacci’s and Bar Cento.
To start the business, the owners will both contribute $150,000 to finance the purchasing of the restaurant’s equipment, initial stock, business licenses and payment of the rent deposit. The $300,000 starting capital is also expected to cater for the recurring costs of the first few months as the business strives to break even. The first three years are expected to earn $240,000, $290,000 and $310,000 in sales revenues.
The vision of the business is to become the most recognized pizzeria in Cleveland, providing authentic Italian pizzas for clients within a family setting. The mission of the pizzeria is to provide authentic, affordable Italian pizzas targeting middle class families in Cleveland. Pazzini’s pizzeria will base its operations on the core values of quality, authenticity and satisfaction. Quality will be a fundamental aspect of the pizzeria’s operations. It will be important to make sure that the customer’s receive food that is prepared to perfection. The authenticity of the restaurant and pizzas will be a key selling point for the restaurant. If the restaurant is able to make its products feel Italian, then customers will be attracted to Pazzini’s. Lastly, Pazzini’s intends to make sure that customers are always satisfied with the restaurant in all areas including the quantity of the food and the price that they paid for it.
Market Size, Trend and Attractiveness
According to data collected by the US Census Bureau (2012), Cleveland’s population currently stands at 390, 000 citizens. The city’s large population provides the restaurant with a large potential customer base. From the 390,000 inhabitants of Cleveland, Pazzini’s Pizzeria can guarantee itself steady business if it carries out its marketing and promotion campaigns effectively. Additionally, drawing customers from a large population gives Pazzini’s Pizzeria an opportunity to diversify its products and services. This makes it possible for the restaurant to attract a wide range of customers who have different needs and demands.
Market analysts have outlined certain trends that are likely to have an impact on the Pizzeria’s performance. Firstly, experts expect snack shops and fast/casual restaurants to have a lot of traffic in the coming year (Wolf, 2013). One of the reasons for this trend is that consumers are looking for cheaper dining options to match the current economic climate. Additionally, many people do not take their meals during the traditional times, meaning that they prefer to have snacks and fast foods, as opposed to whole meals (Wolf, 2013). Experts also predict that mobile technology and social media will have an impact on the restaurant business in the future. Social networking sites will become vital components of marketing and promotion (Ruggless, 2013). Lastly, analysts predict that health issues will become key determinants in the decisions that consumers make concerning their food (Ruggless, 2013).
These trends are likely to have major implications on Pazzini’s Pizzeria. Some of the trends will give the business an upper hand over its competition by making its services and products more preferable to the customers. For instance, customers who prefer to eat from affordable establishments or to have snacks instead of meals may find Pazzini’s to be a better choice than established fine dining restaurants. Additionally, the growth in influence of social media means that Pazzini’s Pizzeria will be able to carry out effective marketing and promotion campaigns at very little costs.
Pazzini’s Pizzeria mainly deals with customers from Cleveland. The city’s 390,000 people population means that the restaurant has a large base from which it draws customers and clients. The large population also means that customers have a wide range of needs and desires. The pizzeria industry has many players in Cleveland, suggesting that the city’s residents enjoy pizzas. Additionally, the prevalence of other snack bars and fast food stands implies that small meals and snacks such as hot dogs, burgers and tacos are popular within the city. Among the residents of Cleveland, Pazzini’s will specifically be targeting middle class citizens. The restaurant’s atmosphere will be suitable for families as it will be calm and pleasant. The pizzeria will derive the inspiration for its design from Italian customs and traditions, to target those customers who seek an authentic experience.
The restaurant industry in Cleveland is highly competitive. The industry contains two main parts. The first part entails the expensive establishments that serve consumers preferring fine wining and dining. The second part involves smaller restaurants that are affordable and more casual. These restaurants range from fast-food joints to hot-dog stands, taco places and pizzerias such as Pazzini’s. Currently, there are more than 15 Pizzerias operating in Cleveland city. The large variety of restaurants and pizzerias in the industry means that competition is stiff, making it crucial for Pazzini’s Pizzeria to create a competitive advantage for itself. On a positive note, however, analysts claim that the industry still has room for expansion in Cleveland, meaning that it will be possible for Pazzini’s Pizzeria to perform reasonably well.
The key products that Pazzini’s Pizzeria provides are pizzas, snacks and salads. The pizzas that the restaurant makes are oven baked by a team of specialists with more than a decade of experience between them. The restaurants main service will be to provide high quality pizza to consumers hailing from a city where many people like pizzas. Pazzini’s will also offer various snacks to suit the needs of other customers. These will include beef burgers, cheeseburgers, hotdogs, French fries and sandwiches. The restaurant will also serve beverages, specifically soda and freshly squeezed fruit juices. The last kind of product that the restaurant will offer will be salads, to cater for the clients who are conscious about their diet.
The restaurant will mainly promote and advertise itself using social media. Social networking sites such as Facebook, Twitter, Google Plus, LinkedIn, Pinterest and Instagram. Social networking sites have grown a great deal over the past few years, and they can now provide access to millions of people all over the world. For example, Facebook and Twitter (the two largest sites) receive a combined total of over one billion hits per month. Pazzini’s Pizzeria intends to use these websites to advertise itself and create awareness about its existence. The pizzeria will create accounts and profiles on each of the websites and then exploit the social networks connected to employee profiles on the sites. To attract customers, the pizzeria will hold different promotions on the websites, which will provide people with a chance of winning a range of attractive prices such as free meals and vouchers.
Pazzini’s Pizzeria considers the pricing of its products and services to be a very important facet of the entire business operation. The restaurant intends to come up with competitive prices that make it more attractive for costumers, in comparison to other restaurants and pizzerias in Cleveland. To achieve this, the restaurant will need to exploit every possible competitive advantage that is available.
Distribution for the restaurant will mainly involve food delivery. The restaurant will deliver products to customers living within the Cleveland area and its outskirts. This will act as an added incentive that will attract customers to the pizzeria. The restaurant will have to acquire several motorbikes to cater for the deliveries. Having a large number of delivery vehicles will ensure that Pazzini’s customers get their food in time, and this is likely to become a crucial aspect of the restaurant’s service.
Advertising and promotion will be one of the most crucial aspects of the pizzeria. As a new business, the pizzeria will need to establish a strong customer base from the residents of Cleveland. The best way to do this would be through a strong marketing and advertising campaign. The internet will be the main tool used in this campaign, as the restaurant intends to set up a website and create accounts in each of the popular social media networks. By focusing on the internet, the pizzeria will be able to gain access to a large and varied range of potential customers at a relatively low cost.
Social media sites will be the main marketing avenue for Pazzini’s Pizzeria. The restaurant will set up accounts on Facebook, Twitter, Pinterest, Google Plus, Instagram and LinkedIn that will promote and advertise the products that it makes. To publicize the restaurant’s profiles in the sites, the social networks of willing employees and their family members will be used to create the initial awareness. Through proper management and frequent updates, the accounts will grow steadily, enabling them to reach out to an increasing number of users on the websites. Pazzini’s will use Twitter to provide updates on new products, offers and services. The pizzeria will mainly use Facebook and Instagram to popularize new products because of the ease of sharing photographs on the sites. To make sure that the social media accounts are constantly maintained and updated, the restaurant will hire an intern who will mainly work within the marketing department.
In addition to the social media accounts, the pizzeria will also carry out its marketing and promotion campaign using a dedicated website. The restaurant will set up a dedicated website that will provide all of the information that customers need in relation to the restaurant. The site will be simple in design with hosting provided by Yahoo! Web Services. This will make sure that costs associated with running it are low. The pizzeria will hire a graphic artist to design the interface, logo and graphics. To ensure that the cost of running the site does not rise, the restaurant management will carry out further maintenance of the site.
The website will be a key component of the restaurant’s business. The site will have a comprehensive list of all the products and services that the restaurant provides, complete with pictures and full details of the products. This site will also act as one of the main public relations tools of the restaurant. Through it, customers will be able to make requests, rate the meals and products, suggest new ideas or products and file complaints on various issues. As the restaurant grows, customers will soon be able to order food through the website.
Pazzini’s main products will be the pizzas. The pizzas will be oven baked and served within two categories, vegetarian and meaty pizzas. Within each category, the customers will be able to choose between various options such as thin and thick crusts, spicy and mild flavors and stuffed and normal crusts. Along with these options, customers will also have an array of toppings from which they can choose. The restaurant will have 8 different types of vegetarian pizzas and 10 types of meaty pizzas. The following vegetarian pizzas will be available pepperoni mushroom, veggie delight, spinach and feta, roasted pepper, mozzarella cheese special, margherita, quattro stagioni and puttanesca delight. The meaty pizzas available will be the super supremo, barbecue delight, Hawaiian special, spicy pepperoni, spicy beef, bacon pancetta, capricciosa, chicken delight, meatball special and carne di oliva.
Along with the pizza options above, customers will be able to choose customized pizzas that the restaurant will prepare to their specifications. Clients who prefer stuffed crust pizzas will be able to choose between different two different kinds of stuffing, cheese and hot dog roll. All pizzas will be available in an array of spices except the spicy beef and pepperoni, which will only be prepared with strong spicing. Lastly, customers will have the option of choosing special toppings for their pizza. Those who wish will be able to choose two different toppings to create a “half and half special”. The other option will be a fully customized topping, where clients select the specific ingredients that they would like to have in their pizza.
Along with the pizzas, the restaurant will also prepare fast foods, beverages and salads for customers. Three different kinds of fast food will be prepared, hot dogs, burgers and french fries. The fast foods will cater for those clients who only wish to have a small meal or do not like pizza, while the salads will be an alternative for clients who are conscious about the health benefits of the food that they consume. Two kinds of beverages will be served, soda and fruit juices. The restaurant will make the fruit juices by squeezing fresh juices. The process will not use any artificial sweeteners such as sugar, with honey being the preferred healthy alternative.
Product prices will be chosen carefully taking into consideration the socio-economic class being targeted by the restaurant. Pazzini’s intends to attract middle class families in the Cleveland area who wish to eat in classy restaurants without having to pay the high costs associated with fine wining and dining. The prices for the pizzas will range between $10 and $15 depending on the toppings and crust that the customer selected. The restaurant will have occasional special offers that will allow customers to get two pizzas at the price of one, or free side dishes with certain pizzas purchased. Prices for other products will range between $1 and $5 depending on the ingredients chosen by the customer and amount preferred.
Pazzini’s will divide its operations plan into two main sections. The first section will deal with the running of the kitchen, food production and customer service. The head chef, Alberto Gambini, will lead this department. The department will have seven additional workers inside it. Five chefs will assist the head in food production, with three chefs working on the pizzas as the others work on the production of the other foods. The other workers in the department will be two waiters who will serve the pizzeria’s clients. The second section of the restaurant will deal with deliveries, accounting and marketing. The restaurant manager will head this section, while also overlooking the operations going on in the kitchen. Assisting the manager will be two delivery boys, a cashier assisting with the accounting and an intern working on marketing.
The owners of the pizzeria, Giampaolo and Mariana Pazzini, will overlook the general running of the business, involving themselves in the planning and strategizing process. They will delegate control of the actual operations to the pizzeria’s manager, who will have a hands-on approach in overlooking the running of the restaurant. The restaurant’s manager, Antonio Matri, will have three main roles in the pizzeria. Firstly, they will be in charge of daily operations making sure that the restaurant operates smoothly. Secondly, they will overlook the pizzeria’s finances and personally take charge of the accounting and money management roles. Lastly, the manager will handle other roles related to the pizzeria’s operations such as marketing, customer service and sales.
Two sets of support staff will work at the pizzeria. The first team will be involved in the kitchen department. As the head chef, Alberto Gambini will be in charge of this team. With seven years experience as a chef, Gambini should have the skills and experience to ensure that the pizzeria’s customers are satisfied with the quality of the food that they get. Working with the chef will be four assistants and two waiters, who will help with the food production and service delivery. The other team in the restaurant will work directly under the manager to ensure that other operations run smoothly. Headed by Antonio Matri, the team will comprise two delivery boys, a cashier and an intern to work in the sales department. The intern will assist the manager in running the marketing department, while the cashier will be directly involved in running the pizzeria’s accounts along with the manager.
As the restaurant grows, it will increase the staff in both teams to ensure customer satisfaction. The pizzeria will emphasize on expanding the kitchen department because it is directly involved in producing the food. Projected sales increase in the first year mean that the restaurant may have to hire two additional waiters within the second year. The restaurant may also require an additional chef in the second year to cater for the increased demand in sales. Increased growth in the following two years will allow the pizzeria to hire a permanent marketing specialist along with another employee to work in the accounting department.
To start the business off, the owners both contributed $150,000. This would cover the cost of hiring the employees, purchasing the necessary equipment and stock and acquiring business licenses from the relevant city departments. A large amount of the money also went towards the deposit and rent for the restaurant’s location. Apart from these startup costs, the starting capital would also cover some of the monthly recurring costs such as employee, salaries and utility bills.
Pro Forma Financial Statements
Monthly income statement.
Total Sales $200,000
Net Sales $200,000
Raw produce $10,000
Delivery cost $1500
Taxes and Licenses $9,000
Total Expenses $141,300
Gross Income $28,700
Other current assets $4,500
Total current assets $34,700
Long-term assets $70,000
Accumulated depreciation $3,500
Total long-term assets $66,500
Total assets $101,200
Pre-tax return on assets 39%
Pre-tax return on equity 44%
Pazzini’s Pizzeria Organizational Chart
Business Logo and Slogan
Ruggless, R. 10 trends shaping the restaurant industry in 2014. Nation’s Restaurant News. Retrieved from http://nrn.com/food-trends/10-trends-shaping-restaurant-industry-2014
US Census Bureau. (2012). Statistical abstract of the United States. Retrieved from http://www.census.gov/prod/2011pubs/12statab/pop.pdf.
Wolf, B. 10 trends for 2013. QSR Magazine. Retrieved from http://www.qsrmagazine.com/reports/10-trends-2013 .
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