Thursday, January 24, 2008

Visit: Pizza Port Carlsbad

My wife and I had a few hours without the kids last night so we went to Pizza Port, rated the best small brewery in the US at the recent American Brew Festival. The pizza was great, I had a pint of the California Honey beer, which was very good. The problem is the place is so crowded (on a rainy Wednesday night) that my wife doesn't ever want to go back.

From an owners perspective, having standing room only, everyone with a pint in hand, is a good thing. I wouldn't expect them to change anything. How much money flows through that place each evening/week/month I wonder:

We paid $22 for a ceasar salad and a 3 topping medium pizza, plus 4.25 for the beer. The pizza was baked in a normal conveyor pizza oven, so I imagine the gross margin on it was 80%, and the margin on the beer must be at least 80%. Our only staff interaction was an order taker for 1 minute, a bartender for 1 minute, and a bus-boy for 15 seconds. Of the $27 we paid, I estimate that 21.50 was gross profit. If my wife had had a beer it would have been $25, or 12.50 per person.

The capacity was listed at 145, and I am sure that they were at capacity or above it. People appeared to be staying for ~1 hour which permits 3 turns easily since we arrived at 6:30 and left at 7:30 and the place was still crowded. During nice weather more people can fit comfortably since they have at least 40 seats outside. So 145*3*12.50 = 5437 per evening. Lunch should bring about 1/6 that (smaller portions, less alcohol, fewer turns), so roughly $1000. I saw 8 staff members, each probably paid ~ $12/hr (burdened cost), and working 12 hours per day, for a labor cost each day of $1150 (Excluding management). That makes for a daily gross margin after labor of $5400 on weekdays, probably $7600 on weekends, that is $42k per week in gross margin, or $182,000 per month, probably quite a bit more since I think my estimates were conservative.

Not too shabby.


Goose said...

I like your logical conclusions on their profits. Hardly scientific, but some fairly good guesstimation. I seem to recall a number of conversations in a time long long ago, in a place far far away, where we've used the exact same logic. :)

Good to know some things don't change...

Eric said...

Yeah, some things stay the same...

I think I was pretty conservative on the math, the trouble of it all is that I don't really want to be in the restaurant business.

Making beer sounds fun, but even as simple as pizza port's restaurant business is, I don't think I would enjoy it at all.

Jack Gentle said...

I agree that the restaurant business must undoubtedly be a challenging endeavor through the startup phase, but would have to imagine that a place that serves pizza and beer without much else would be on the easy end of that business type's spectrum.

Running any business is going to have its share of headaches, but taking your revenue estimate for this business and imagining a situation where capable management is handling most day to day operations, the idea of owning a pizza and beer joint is appealing indeed.