Actually, we hit it in June. But it took a while for our finance people to crunch the numbers and come up with the P&L spreadsheet for June. Our business plan published almost a year ago predicted that the pizzeria would lose money for at least half a year. Lately, we had a hunch that the forecast was probably too pessimistic. Still, $1,791 in profits in June took us all by surprise.
I should clear something up right away. This profit is relative. In our P&L, we don’t include some expenses that we consider investments in the US branch in general and not in only one pizzeria (such as top management salaries or accommodations for the team in Oxford). A lot of support we get from our head office, such as website development or Facebook management, is out of the equation as well—at least for now.
In broad strokes, we try to look at Dodo Pizza Oxford as if it were just another pizza place in our chain. So when we say that this pizzeria is profitable, it doesn’t mean that at this point our US branch is profitable—it isn’t, and it won’t be for quite a while, because we’re going to invest even more than we already have.
Keeping this in mind, let’s take a look at the numbers.
A few side notes.
- We expected Dodo Pizza Oxford to make $20,000 in the third full month of operations. With more than $30,000 in sales, we are $10,000 ahead of our plan.
- Since we aimed to use the best ingredients on the market, we assumed that food cost would skyrocket up to 29%. We got it wrong—so far, FC is only 18%. It helps to have the prices a bit higher than the market average.
- Labor cost predictions happened to be more accurate. We assumed that we’d spend $18,000 and in reality spent $16,134. Still, LC makes up 53% of the revenue—the number is huge, and what’s worse, we’ll have to live with it for a while. We aimed to be the fastest pizza delivery in town. That forces us to keep a few more people on the shift, and that drives up our LC. I consider these expenses as investment made in our brand and its future on the market.
Fast deliveries mean hot pizza, hot pizza means happy customers, happy customers mean good business.
I wonder what the spreadsheet will look like when the summer ends, the students come back to Oxford, and the sports season begins. Your bets?