Realities of Growth: Using Growth Avenue, SWOT Analysis and S.MA.R.T. Goals to increase pizzeria sales

Stability is a false promise. In the pizza business you are either growing or decaying. But striving for growth is risky if you choose the wrong avenue or fail to have the correct resources.

For this article, growth is defined as either more same-store sales compared to the same period last year, or more locations. In other words, getting more and more people to consume more and more of your pizza, more and more often.

No amount of preparation will insulate you entirely from failure whenever you strive for growth. Growth requires you to be an adventurer, an entrepreneur, a student. Risk will be present. However, if you are reading this, then you already understand that mitigation of this risk involves study. Let’s begin the lesson by introducing my business growth formula:

• Growth Avenue

• SWOT Analysis

• S.M.A.R.T. Goal

Growth Avenue

First you will need to choose your Growth Avenue. Consider which of the following are Growth Avenues for your pizzeria.

• Same Store Sales

• Dine-in
• Delivery
• Take-out
• Catering
• New Menu Items
• Virtual Brands
• 3rd party Relationships

• Physically expanding an existing location

• Moving from an existing location to a new location

• Adding a new location

I believe that EVERY Growth Avenue should be addressed. In other words, you may end up with more than one Growth Avenue in your current plan.

SWOT Analysis

Once you have identified your Growth Avenues, the next step is to SWOT them. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. For every Growth Avenue you are considering, do a SWOT analysis.

S.M.A.R.T. Goal

SMART is the difference between a goal and a dream. Make your dream a goal by making it: Specific Measurable Attainable Relevant Time Based.

If you are like me, theory is fine, but tangible examples are more effective for learning. Here are two real-life examples of this formula put to the test.

Case Study #1

Growth Avenue:

New Menu Item – Pizza Burger

SWOT Analysis

Strengths:

• Pizza Burger can be consistently cooked the same every time using existing pizza ovens.
• As a smaller company, our minimum wage is $4.00 less than the fast-food chains, so we are not forced to increase prices as much as those restaurants.
• 9 locations allow us to effectively introduce a new product to the market.

Weaknesses:

• The public does not know what a Pizza Burger is.
• Dressing the burger after cooking in the oven adds operational complexity.
• Adding 3 SKUs increases inventory complexity.

Opportunities:

• Product does not exist in our market, a mashup of pizza and hamburger.
• Fast food companies are forced to charge more for a quarter pound hamburger due to minimum wage hikes to $20/hour.
• Priced at $5.00 with a 30% food cost gives us a profitable product with a marketing advantage over fast food.

Threats:

Our competitors may copy the product.

Customers may not buy the product.

Putting marketing dollars toward promoting the Pizza Burger takes marketing dollars away from other avenues.

S.M.A.R.T. Goal:

• Specific. We will add a $5.00 Pizza Burger to the menu of all 9 locations.
• Measurable. Goal is 1,000 Pizza Burgers sold per week by June, sustaining or increasing this number in perpetuity.
• Attainable. 1000 sold per week would be less than 2% of sales. Reasonably attainable.
• Relevant. We have created a delicious product that many say is BETTER than a cheeseburger. This is a powerful way to tap into the burger sales of restaurants previously not seen as a competitor.
• Time Based. January, begin testing product at our Santa Clara, collection of customer feedback, final product decided. February, obtain all smallwares and packaging required, training aids, food photography and outline marketing. March, train all employees, secure products with Sysco, and schedule marketing roll-out. April 1st launch.

Result: Pizza Burger Sales achieved 1,157 by June 2024 and have steadily increased to date.

Case Study #2

Growth Avenue

Delivery Sales – increase by 10%

SWOT Analysis

Strengths:

• One-Number Phone Center.
• Recognized brand in the market.
• Long-term driver teams and kitchen teams capable of handling more deliveries.

Weaknesses:

• Declining delivery sales. Customers are choosing to pick up their pizza due to rising costs of delivery, saving delivery fees and tips.
• We only offer delivery via telephone or online website ordering.
• We do not have the marketing dollars that the 3rd Party companies have.

Opportunities:

• Third-party platforms offer more ways for customers to order.
• Apps have become more popular for placing orders and have easier access for customers.
• Customers indicate that they want more ways to order from PMD.

Threats:

• Decreased deliveries means less money for our drivers, making it difficult to keep staff.
• Third-party companies, like Uber Eats and DoorDash offer their drivers schedule flexibility so we may lose drivers to them.
• Third-party companies are spending more marketing dollars.

S.M.A.R.T. Goal:

• Specific. By adding a PMD App for both Apple and Android phones and partnering with Uber Eats, DoorDash and Grubhub to appear on their platforms (self-delivering), we will increase same-store delivery sales by 10%.
• Measurable. Delivery sales for June 2024 will be 10% above the same period 2023.
• Attainable. All three third-party companies have expressed interest in partnering. Our POS company has agreed that three months is enough time to develop our App.
• Relevant. All resources in the Pizza Industry indicate that the use of Apps and 3rd Party companies are prolific among pizza customers. This is also true in our market and has been tracked as desired by our customers.
• Time Based. We will negotiate terms with these third-party companies in 1st Quarter 2024. We will launch on all three platforms by April 1st, 2024. We will work with our POS company to develop our PMD App during 1st Quarter 2024. We will launch our PMD App by April 1st, 2024.

Result: Delivery Sales June +11.5%

Investing in Growth can be risky, but if you apply this business formula, you will increase your success rate substantially. Considering the alternative, the gradual decline of your business, it is time to lead your company into the future!

DAN COLLIER is the founder of Pizza Man Dan’s in California and a speaker at International Pizza Expo.