About The Donut Business

Donuts are cheap to produce with a finished donut costing approximately 12 cents. They are second only to potatoes in profitability.

Donut shops have the potential to be very profitable. A difference between donut shops and restaurants is adaptability. Restaurants are limited in their ability to sell wholesale, bulk or expand product lines. Most donut shops sell coffee, espresso and other baked goods creating increased profitability.

After a donut shop is up and running, shop owners can economically open a satellite location known as a “cold spot.” The owner or driver delivers the finished donuts, sweet rolls, etc. A cold spot can be operating within a few weeks. The benefit is that you can carry all the products of your primary shop and be operated by one employee.

Why use a cold spot? If your primary location lacks a drive-through for customer convenience, a cold spot is a great option. Secondly, a cold spot improves "immediate" profits with increased resale value as well! A lone employee just has to sell the finished product-very similar to the increasingly popular drive-through coffee kiosks.

Also, with donuts you have the competitive edge. Donuts sell themselves, and coffee is always associated with donuts.

However, a professionally trained coffee “barista” should be sought to help define your donut and coffee shop as the authentic, local donut authority. Additional avenues to increase profitability are selling proof and bake “yeast” donuts to restaurant supply companies for additional profits. Also, selling donut holes in different varieties and packages can generate easy revenues as kids love them.

The possibilities for growth are truly endless. The Internet is today’s affordable technology. The possibility of turning your donut shop into an Internet café is very appealing to repeat customers. Business people and the self-employed are two groups who especially like to work for a little while each day from a table in your shop.

Products and services closely related will create great growth potential. Implement new products and services your customers want.

Minimal start-up costs make donut shops an attractive opportunity.

The average cost for a complete set of donut equipment needed to run a donut shop (which can be widely purchased used) costs under $5,000. Additional costs including retail rental space may vary by location. A cost-cutting bonus is industrial-grade coffee makers and espresso machines can be obtained for FREE from major coffee suppliers. You must agree to use them as your sole coffee supplier.

Consider that a specialty donut like a bear claw can sell for $1.25 on average. Donuts sold in volume (as well as related products) will make you money. In addition, you control product consistency and quality and you do not have to worry about the counter person selling the donut. (Donuts sell themselves). Therefore, you do not have to hire numerous employees to operate a donut shop.

Think about the donut shop owners work ethic as you consider this: as I was driving to the shop one morning with the radio on, I heard various announcements from local companies and government agencies that were closed for the day due to a very large storm. It must be nice to have a paid day off because of some rain. However, as I was driving, I noticed that a few businesses were starting to open. One was a donut shop.

I knew it would be open-this business and others like it didn’t have stockholders and taxpayers eating the cost of being closed for the day. Also, I knew that this place was about to be packed with people. I find it ironic that the same people who had such a hard time going to work in that extreme weather had no trouble going out for donuts. The reason these people were at this donut shop was because they knew the store would be open, clean, and with a wide selection of freshly prepared donuts.

Donut making gives a person a sense of accomplishment and fulfillment after every baking session. (I still always look at the case and wonder if I could have done it any better or sweeter!) I’m rewarded by my customers, who spend their hard-earned money and compliment me daily which motivates me to do a better bake. The next time one of your friends starts complaining about their job, do what I do: look them in the eye and tell them "take control, be a donut maker."

ABOUT THE AUTHOR: Ed Chastain is a recognized authority on the subject of donuts, breads and pasties. His web site, http://www.donutedvd.com, provides a wealth of information on everything you'll ever need to know about entering the donut business. A professional baker for 15 years and skilled in the art of making and creating quality yeast donuts with attention to traditional, unique and donuts lost over time.

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