How a 22 Year Old Built a $2.4M Pizza Shop

[00:00:00]Sell pizza and ice cream to hungry humans. 22 years old, we're currently at 2.4 million in revenue, 30% profit margin. Um >> Great.

[00:00:09]>> Would love to be at 10 million in revenue in the >> How many stores?

[00:00:11]>> What did you say?

[00:00:12]>> How many stores?

[00:00:12]>> Just one.

[00:00:13]>> Nice.

[00:00:14]>> Um would love to be at 10 million in revenue in 8 years.

[00:00:18]Um So what's stopping me right now is kind of balancing opening second location versus maxing out our current location and pushing.

[00:00:26]>> Yeah.

[00:00:26]>> Um so my opinion like we're pretty close to being maxed out our current location.

[00:00:30]>> Uh-huh.

[00:00:31]>> Um we'll do like 5 6 700 pizzas in a day.

[00:00:34]>> Amazing.

[00:00:34]>> Um So there's another caveat with this. So current ownership of this location is 33%.

[00:00:42]>> Okay.

[00:00:42]>> Cuz I bought I bought in with my dad.

[00:00:44]>> Okay.

[00:00:45]>> Uh [snorts] is he at 67?

[00:00:46]>> Yeah.

[00:00:46]>> Okay.

[00:00:47]>> So then every other location I open up, so the second location is 50/50 and then the third location is 100% me.

[00:00:52]>> Okay.

[00:00:53]>> Everything after the deal you made with him?

[00:00:54]>> Yeah.

[00:00:54]>> Okay.

[00:00:55]>> So everything on top of that is 100. So like I'm incentivized to open up other locations.

[00:00:59]>> Sure.

[00:00:59]>> Um So I've just been kind of getting conflicting um if we should open up the like second location.

[00:01:05]Um currently hired a GM to pretty much just like stand beside me for 6 months, like for the next 6 months. He starts in 2 weeks. To just be like this is everything I do at the current location.

[00:01:16]Um Reciprocate that while I open up the second location. Backfill.

[00:01:22]Um yeah.

[00:01:22]>> Yeah.

[00:01:22]>> So >> So a couple things. So um first off, kudos.

[00:01:26]>> Thanks, man.

[00:01:27]>> Um second with >> [sighs and gasps] >> So whenever So this goes for everybody, but like if you have a single brick and mortar store, like we say nail then scale. You've probably heard that multiple times today.

[00:01:37]>> Yeah.

[00:01:37]>> Um and so if you think that you're like cuz you said do I open this other thing or do I max this one out? What what what levers are you not maxing out at this existing location?

[00:01:47]>> Um probably >> Without offering new [ __ ] >> Yeah, without offering new stuff, probably pricing.

[00:01:52]>> Okay.

[00:01:53]>> But like from a from a from a demand perspective like we are slammed.

[00:01:57]>> Okay.

[00:01:57]>> 24/7.

[00:01:58]>> Got it.

[00:01:59]>> So.

[00:01:59]>> Okay. So, um you bring in the GM, cool. I would encourage you to give them some sort of small profit share that they can earn into.

[00:02:07]>> already are.

[00:02:08]>> Okay, great. Um what what period of time are you doing it over?

[00:02:13]>> What do you what period >> That you're giving them the profit share that they can invest into.

[00:02:16]>> Um so, I started them off at like a salary a base salary and then at the So, the goal is for me to go open up the second location and then have him run that second location. Um >> You mean the first location?

[00:02:28]>> N- No, so >> Okay.

[00:02:30]>> Um essentially, I will go open up the second location for a period of like 3 to 6 months and then have him kind of fill that role in the new >> And then who's going to fill it back at the first location?

[00:02:41]>> Probab- So, the the goal is that he hires somebody to do that for him.

[00:02:44]>> Okay.

[00:02:46]Okay.

[00:02:49]>> Or I could go back into the other one or do the thing.

[00:02:51]>> Yeah, yeah.

[00:02:52]Um >> And but to answer your question, so um he starts out at 5% if he hits like KPIs um and then he gets 1% uh like profit share on top of that with each uh year that he's with the business then it caps at 10.

[00:03:05]>> Okay. Okay.

[00:03:08]Yeah, it's okay. I mean it probably wouldn't have been the way I did it, but it's it's fine. Um okay, so you have >> I'm super new to this, so I >> man. You're good. I mean, you're obviously doing great. You have 30% margins in, you know, fast casual with pizza and ice cream. Like, you're doing great. You're doing 2.4 million. It's your first business?

[00:03:24]>> Uh pretty much.

[00:03:25]>> First real business? Yeah, sure.

[00:03:27]>> Yeah, dude, you're doing great.

[00:03:29]Um okay, so by the way, we can all hear you. Just FYI. Um so, my ADD kicks in and I'm like whoa.

[00:03:36]>> [laughter] >> Um okay, so the question is fundamental let's let's iron this down to one question. So, what is it? Is it that do you go and start up the next location or do you what?

[00:03:49]Or do you want permission to start the next location?

[00:03:50]>> No, so like I'm in on the second location.

[00:03:54]>> Okay. Not only from an equity perspective cuz I'm like, well, I get I get the money and >> Yeah.

[00:03:58]>> Ed Ed's just saying like nail it then scale it.

[00:04:01]>> Yeah, of course.

[00:04:01]>> We have an insane data constraint. Like, I don't know where these customers are coming. Yes, we have an insane product, but >> Okay. So, this is what we're talking about when I said like, what levers would we pull? So, if you don't have good tracking and things like that, it's worth doing it up front.

[00:04:13]>> Okay.

[00:04:13]>> Cuz it will only get harder and messier to do. And you'll it'll be and each decision you make without data will have greater and greater stakes.

[00:04:20]>> Cool.

[00:04:20]>> So, you want to have that set up first and you can do that now. And since you're you're going to have extra overhead technically, well, not extra I'm depending on how much you're taking for yourself, right? But like you and this other guy is going to be there, so you should have bandwidth even during the training to get some of this other stuff dialed in.

[00:04:34]>> Okay.

[00:04:34]>> Is the goal long-term to franchise it or just privately own a bunch of them?

[00:04:37]>> I would just love to privately own a bunch of them.

[00:04:39]>> Cool. Then, yeah, the the privately owned brick and mortar um almost always has a manager that has a profit share that's in place.

[00:04:48]>> Okay.

[00:04:48]>> Typically, um OTE, so I'm target earnings should be somewhere there, but all in of like a hundred-ish.

[00:04:54]Um if they crush it, you know, 120, 130.

[00:04:57]If they suck, 75. That's usually kind of the range for that type of manager. Um and I have yet to see it where that works without that.

[00:05:05]>> Okay.

[00:05:06]>> That's privately held.

[00:05:07]>> Okay.

[00:05:07]>> And not franchised out. So, no, I think I think you're on the right path.

[00:05:10]Um I think opening the next location makes sense. But my preference, like if you'd told me what the like I would have expected the plan to be I'm going to train this guy up.

[00:05:19]>> Mhm.

[00:05:20]>> I'm going to give him 3 months afterwards that I'm going to be scouting and just doing all back office crap. Um and if the location that our number one location in any way dips while he's doing his 3 months, I now know that I shouldn't start the next location.

[00:05:36]>> Okay.

[00:05:37]>> So, I like to give 3 to 6 months of I'm on vacation because you're going to be because you're going to be doing this other thing.

[00:05:43]>> Yeah.

[00:05:44]>> And so, what happens most times is that a business owner will basically get out of the quote day-to-day and be like, "Okay, look, I'm out of the day-to-day.

[00:05:51]This thing runs itself." But then they're still working 16 hours a day.

[00:05:55]So, it's like just because I don't train the sessions doesn't mean I don't own the business or I don't run the business. It's the same thing as the CEO versus the people who are actually like delivering services in a business. Like there's still a job, it's just not customer facing.

[00:06:06]>> Yeah.

[00:06:06]>> And so you have to get it so that the general manager can actually do the job in its entirety without you and the business sustains or grows. If those things occur, then you've got the right guy and you can open up the next one.

[00:06:17]>> Okay.

[00:06:17]>> That's the litmus test that I've given to every every brick and mortar four walls. And unfortunately, we always are in a rush cuz we want to expand, we want to make more money. The thing is is that it is way, you can ask anybody here who has overexpanded, when you have two and now you have something wrong at both, it is way harder to undo.

[00:06:34]>> Yeah.

[00:06:35]>> So, I'd rather you just nail it and then scale it. And if you know that it takes 6 more months, who cares? If it takes a year, on the long term, >> Mhm.

[00:06:42]>> if it takes you an extra year now, it'll shave four off the back.

[00:06:45]>> Got it.

[00:06:46]So, [snorts] the only kind of follow-up would be So, we haven't signed a lease agreement quite yet, but we've like gone under not under contract, but we've like signed a builder started the process with that.

[00:06:57]So, you're saying to delay that process like 3 to 6 months out in order to give time?

[00:07:02]>> I hate saying it cuz I know you're in in in the in the middle of it. I'm like the thing is is that just talking to you, you're the type person who's going to win either way.

[00:07:10]>> Okay.

[00:07:10]>> So, I'm just being real with you. You'll probably win either way. If I was to give you what I would consider to be sound advice, the sound advice would be make sure the guy that you have can actually operate it at sustainable or higher without you doing anything.

[00:07:21]>> Okay.

[00:07:21]>> That is the correct advice. If you win, you win no matter what because you're a winner.

[00:07:26]>> Thanks, man. Appreciate you.

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