Hi, guys I have decided on setting up a good pizzeria in North Nazimabad (food street), Karachi. My pizzeria will be the take-away, dine-in and delivery type. I have done a lot research but I never get the exact amount of money required to invest. Recently, I made a good list of all equipment required and the amount required to but all of these equipment is 6 lakhs. I can fund as much as 25 lakh, but I am not sure if they will be enough. I will be renting a 3 marla + place for my restaurant. Does anyone here has experience in the field of restaurants? Can someone tell me if I can start a good pizzeria with just 25 lakh?
Re: How much money to invest in to start a good pizzeria?
Hi, guys I have decided on setting up a good pizzeria in North Nazimabad (food street), Karachi. My pizzeria will be the take-away, dine-in and delivery type. I have done a lot research but I never get the exact amount of money required to invest. Recently, I made a good list of all equipment required and the amount required to but all of these equipment is 6 lakhs. I can fund as much as 25 lakh, but I am not sure if they will be enough. I will be renting a 3 marla + place for my restaurant. Does anyone here has experience in the field of restaurants? Can someone tell me if I can start a good pizzeria with just 25 lakh?
Biggest expense in N.Nazimabad food street will be your rent and commercial gas bill. Both will be pretty high. And being a new business, it may take you upto 6 months to breakeven. However, food business has a huge profit margin, so once you break even, you will reap dividends...but be prepared for a difficult period of 6 months to a year.
Re: How much money to invest in to start a good pizzeria?
Biggest expense in N.Nazimabad food street will be your rent and commercial gas bill. Both will be pretty high. And being a new business, it may take you upto 6 months to breakeven. However, food business has a huge profit margin, so once you break even, you will reap dividends...but be prepared for a difficult period of 6 months to a year.
So, is 25 lakh enough to get the job done?
Re: How much money to invest in to start a good pizzeria?
So, is 25 lakh enough to get the job done?
Rent will dictate that. If your location is prime, then your rent could be enough to break your back. Karachi is expensive when it comes to commercial rents.
But if your rent is manageable, (+/-100,000Rs) then you could manage perhaps. You would need at least 6 months to breakeven, assuming your pizzas sell well.
Re: How much money to invest in to start a good pizzeria?
don't have to start big initially. businesses are supposed to grow.
i've one example that i often quote and that is of Mr. Naresh Goyal, CEO and Founder and Owner of Jet Airways of India. he is a very humble man. his father died when he graduated. his mother gave him her total life savings of $1000 and told him to do whatever he wanted to do with it. he started a holding business from that meagre amount and from there on he never looked back and his interest/passion in aviation led him to establish an airline with ONE aircraft which has now grown into a worldwide major airlines that serves more than 150 cities around the world.
his hard work, his clear goal and his persistence bore fruits.
Re: How much money to invest in to start a good pizzeria?
Rent will dictate that. If your location is prime, then your rent could be enough to break your back. Karachi is expensive when it comes to commercial rents. But if your rent is manageable, (+/-100,000Rs) then you could manage perhaps. You would need at least 6 months to breakeven, assuming your pizzas sell well.
Well, you are right about the rent. I have set a budget of 1 lakh for rent, then there is security deposit as well. If I don't get a good location in North Nazimabad within my budget, then I am going to locate my pizzeria in Gulshan-e-Iqbal, where I might find a good location with rent around 1 lakh.
Re: How much money to invest in to start a good pizzeria?
don't have to start big initially. businesses are supposed to grow.
i've one example that i often quote and that is of Mr. Naresh Goyal, CEO and Founder and Owner of Jet Airways of India. he is a very humble man. his father died when he graduated. his mother gave him her total life savings of $1000 and told him to do whatever he wanted to do with it. he started a holding business from that meagre amount and from there on he never looked back and his interest/passion in aviation led him to establish an airline with ONE aircraft which has now grown into a worldwide major airlines that serves more than 150 cities around the world.
his hard work, his clear goal and his persistence bore fruits.
That is quite a successful career but unfortunately not everyone is lucky enough.
Re: How much money to invest in to start a good pizzeria?
OP, you might want to consider setting up a franchise of a known brand. Even if it doesn’t work out, the research will be good enough to give you an idea on the actual cost involved.
Also, check some of the pre-feasibility reports by SMEDA (you’ll have to create an account to download but they are free and updated)
Pre-Feasibility Studies
There can be a lot of extra expenses listed in these reports but you can modify them and that will give you a good enough idea.
Re: How much money to invest in to start a good pizzeria?
Unfortunately have no idea about Karachi, but if it was Lahore would have been able to guide you better. I agree to the bit about breaking even. It can take you anywhere between 3-12 months or maybe a bit more to break even and start making profit, depending on the fact that there's ROI on marketing expenditure etc. So you have to calculate the fixed and variable costs involved in running a restaurant for 6 months and set that money aside. Rest of the money that's left out of your 25 lakhs, you can see whether it will be enough for the running costs. That's gonna be your working capital. It is easy to say restaurants have high profit margins and reap dividends, but when it comes to establishing a new restaurant or business, there's a lot of hassle and hidden costs involved. You'll also have to factor in your marketing budget, your delivery/logistics budget etc. Also, you'll have to look at your suppliers. A restaurant can't run without suppliers, the ones that will provide you with the raw materials/ingredients for your business. This includes raw material for the kitchen and also packaging etc. Good luck, running a business - especially a restaurant is a very tedious and challenging job.
Also don't forget the HR in all of this. Biggest cost to your restaurant apart from the utility and rent will be human resources. This is a cost that is fixed and continues on. You'll have to think about how many personnel your restaurant needs in order to function properly, and then calculate salaries. Those salaries will come out of the 25 lakh too I am assuming.