About the Donut Business
There is no sugar coating the profits about a donut business
What I like about the donut business? Donuts are cheap to make. They’re the second most profitable food item in the nation, behind only to the potato and the average cost to make and finish a donut is approximately 12 cents. In fact, I just crunched the numbers on what is cost to make my yeast donut on 12-01-22 and discovered my signature donut cost only .7 cents to make. There is no sugar coating the profit a donut shop can make.
Donut shops have the potential to be very profitable. Unlike restaurants, where it’s difficult to sell in bulk, wholesale, or to diversify product, most all donut shops sell coffee, espresso, and other baked goods for bigger profits. Products that go together, grow together—donut shop owners can implement a deli line, soups, sweet rolls, croissants, muffins and acquire donut wholesale accounts relatively easy for donuts sell themselves, (Who doesn’t like a hot, fresh donut?).
A donut business doesn’t have to be complex – it can be as simple as selling specialty donuts at local events. (I personally enjoy selling donuts at gold prospector events – those folks love their donuts!) You may have other, better ideas that are best for you, such as operating a concessions van on the weekends, selling only mini-donuts utilizing a donut making machine. However you decide to approach the donut business, it’s a great way to supplement your income or create a new business from scratch.
Once a donut shop is up and running, shop owners can economically open a satellite location, commonly known as a “cold spot,” where you or a driver delivers the finished donuts, sweet rolls, etc. A cold spot can be operating within a few weeks, carry all the products of your primary shop, and be operated by one employee.
Should your primary location lack a drive-through for customer convenience, a cold spot is a great option for improved “immediate” profits with increase resale value as well! The lone employee just has to sell the finished product, similar to the increasingly popular drive-through coffee kiosks. But 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. Consider 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. For instance, with today’s affordable technology, the possibility of turning your donut shop into an Internet café is very appealing to repeat customers, especially business people and the self-employed who can work for a little while each day from a table in your shop.
Filling this niche is yet another example of how products (and services) that go together, grow together. Only implement new products or services that are based on what is best for you and meets the particular needs of your community.
One very attractive element of starting your own donut business: compared to other opportunities, the start-up cost is very minimal.
The average cost for a complete set of donut equipment needed to run a donut shop (which can be widely purchased used) costs under $15,000 (Other costs, such as retail rental space, vary by location.).
Another cost-cutting bonus: industrial-grade coffee makers and espresso machines can be obtained for FREE from major coffee suppliers if you agree to use them as your sole coffee supplier.
Considering 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 owner, 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, I thought. However, as I was driving, I noticed that a few businesses were starting to open. One of them 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. I also 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. But 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. (But 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, motivating 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.”
Please the article: About donut making