2011 April: Business Solutions

Did you know that a 14-inch pizza actually has nearly twice the surface area of a 10-inch pizza? It’s true, and all it takes to show customers that fact is a little simple math. Let’s turn back the clock to your school days, where we’re sure you learned in math class that “pie” equals 3.14.

To determine the area of a pizza, you take pie (3.14) and multiply it by the radius (which is half of the diameter) squared.

What?

It’s easier than we just made it sound:

The radius of a 10-inch pizza is five (remember, radius is half the diameter). Five squared is 25. Twenty-five multiplied by 3.14 is 78.5. So the area of a 10-inch pizza is 78.5 square inches.

By contrast, the area of a 14-inch pizza is 154 square inches.

Since your 14-inch pizza is practically double the size of your 10-inch pizza, you’re presumably using twice the sauce, twice the cheese, twice the pepperoni, etc. to make your 14-inch pizza. But are you charging double? Probably not.

Let’s look at another popular size, the 16-inch. It is 201 square inches — approximately 31 percent larger than a 14-inch. Does this mean your 16-inch pizza should be priced 31 percent higher than your 14-inch pizza? Probably so. If a 14-inch cheese pizza is priced at $8.99, for example, then a 16-inch should be priced at $11.75.

Unfortunately, some customers aren’t willing to pay $11.75 for a cheese pizza when they can get one loaded with toppings from a major chain for under $10. That’s okay — you don’t want those customers to start with!

Ultimately, the best method for
determining the final price of your
pizza would be to figure your food costs, then find an acceptable markup from there. You likely won’t make as much per pie on your larger pizzas, but you won’t alienate your customers, either.

Finally, if you are resigning yourself to making more profit on a small pizza than a large, there’s no need to fret. Push your smaller pies as part of a bundle that includes appetizers, dessert, drinks, etc. That will allow you to increase ticket averages while increasing sales of the more profitable pizzas.

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