Donut Business Ideas

Donut Business Ideas

The best ideas to start a donut business

I believe the idea of opening a donut business was happily instilled into our passion for donuts as children when we discovered the savory treat for the very first time. As a child, I remember starring at donut holes bigger than my eyes while gleefully admiring the donut showcase in anticipation to be served fresh donut holes. I had the idea of opening a donut shop from a very early age as my uncle owned multiple donut businesses in the San Francisco Bay area. 

At the age of 16 I started my donut training, and little did I know at the time donut making was quickly becoming a lost art as the bakers from yesteryear guarded their donut formulas well. The idea of bakers sharing tested and perfected recipes and formulas was very rare and stands true today.

In the 1980;s the muffin craze was kicking in and many people in the donut industry was very concerned about donuts being replaced by the muffin.

Flash forward to 2022 and we will have discovered “the donut” will never be a fading trend to be replaced by muffins and/or any other comfort food.

In fact, it turns out that not only has the donut been reinvented to a gourmet  comfort food status, but the donut is the calling card needed to up sale and cross sale related products such as coffee, ice-cream, pizza (You name it).

This brings us to donut business ideas. As I am sure you aware the donut industry has become very competitive. That said:  Whatever part of the donut business you choose to enter should begin with the idea of taking the local donut market by storm.

Donut Business Ideas

Donut Business Idea #1. Traditional Retail Donut Business

Donut Business Idea #1.

Traditional Retail Donut Business

The traditional donut retail location should have the décor to reflect a fun and exciting atmosphere but convey a comfortable place to enjoy daily with family and friends. The design should include Wi-Fi for the businessperson and ideally the business will offer a mobile app whereby customers can order in advance.  Ideally the business will be located at an end cap location and if possible, the donut business will offer a drive thru. If a drive thru is not possible, consider a mobile donut truck to increase sales and to brand the retail donut business.

The donut business should accommodate birthday parties for kiddos and offer a pamphlet or menu to promote donuts for pickup to include specialty orders. A digital menu is great for displaying cross sale and up sale offers. On a budget a digital photo album can be used.  

The traditional donut retail location should be designed with expansion of the business from the onset. This includes an oversized exhaust hood to accommodate an increase in donut production. One of biggest mistakes people make when designing the donut kitchen is not allocating enough room under the exhaust hood to accommodate a second donut fryer needed for donut wholesale or specialty orders and kettle burner outfitted with a copper kettle to make home donut fillings in volume.

I recommend a location having a minimal of 1800 Sq. Ft (500 Sq. Ft allocated for storage). A good idea to promote the donut business is to send postcards out within a five-mile radius of the donut business inviting the local community to attend the soft opening.

I also recommend building an email list as soon as possible because the money is in the list. Instead of giving away customer appreciation cards ask the customer to sign up to your newsletter to receive special offers and promotions. In this way, when the holidays come around you can email your list with your special offers and promotions.

This is easy to achieve utilizing a tablet that can be refreshed for each customer to sign up to the newsletter. Getresponse.com will host your subscriber page for free.

Donut Business Idea #2. Donut Wholesale Business

Donut Business Idea #2.

Donut Wholesale Business

The infrastructure needed for a donut wholesale business is similar to traditional donut retail locations however less square footage is needed (approximately 500 Sq. Ft. less). A doughnut wholesale business can be implemented into an industrial area/building and this is key because you can still sell donuts to local businesses around you all while delivering donuts to daily contractual clients. The business will be licensed through the Department of Agriculture and not the health department because this is not a retail business.

The business opportunities really open with a donut wholesale business because you have more control over donut production because fewer donut varieties are made daily, allowing you to focus solely on donut production.

I recommend focusing on making basic yeast raise glazed donuts and cake donuts finished with three or four gourmet donut glazes to ensure you can make donuts in volume. I would offer a classic vanilla glaze, caramel glaze (Top with sugar crystal/sea salt), orange glaze and a chocolate glaze. This will be enough to acquire daily contractual donut wholesale accounts through hotels, motels, convenience stores and supply specialty orders for corporate events.

An added benefit to utilizing an industrial location is rent and leases are more affordable. Also, should you want to open a full-service donut business, the donuts can be delivered to the satellite locations. This business model idea is cost effective to implement and replicate.   

You will also have the ability to provide donuts to a fleet of mobile donut trucks that can be implemented into this donut business model should you choose to do so..

Donut Business Idea #3. Traditional Donut Retail with Donut Wholesale

Donut Business Idea #3.

Traditional Donut Retail with Donut Wholesale

Utilizing the information from the above business idea #2) and 3) would be to integrate the retail aspect with the wholesale aspect of the donut business models. I must be honest with you here. This donut business idea is on another level of operation because of the significant startup costs, however doable.

The retail aspect of this business model will involve offering not only gourmet donuts but gourmet coffee drinks in reference to lattes, cappuccino and specialty drinks. Moreover, donut businesses on this level of operation offer breakfast sandwiches and deli sandwiches and even ice cream needed to capture afternoon sales. Some donut shops even offer pizza to include delivery needed to capture evening sales and offering donut delivery with pizza. If you want an example of this business model see island craves donut franchise located in Kawaii Hawaii. I provided complete training to implement all the above products (video testimonial found on my website).  

The point here is to monetize the donut business to its fullest potential with attention to meeting community wants and needs. The goal is to take the local donut, coffee business by storm and become the local donut authority. I recommend a location having a minimal of 1800 Sq. Ft (500 Sq. Ft allocated for storage).

Donut Business Idea #4. Traditional Donut Retail with Satellite Locations

Donut Business Idea #4.

Traditional Donut Retail with Satellite Locations

Imagine for a moment opening a flagship donut shop operation as referenced above with the donut business idea of opening 2 or 3  satellite locations nearly simultaneously upon opening the flagship or primary donut business. In essence developing a small chain of donut businesses designed to capture the local donut market.

This business model is ideal should you plan on exiting the donut business within a 5-year period and then sell the chain of donut shops based on a healthy business valuation. The satellite locations are economical to start for you are delivering the finished product to each satellite location. I do recommend offering proof and baked sweet rolls and Pershing’s (Prepared in your commercial kitchen) to give off the aroma of fresh baked goods as customers enter the donut shop. I recommend a location having a minimal of 2500 Sq. Ft (500 Sq. Ft allocated for storage).

Donut Business Idea #5.Mobile donut business

Donut Business Idea #5.

Mobile donut business

The mobile donut concession truck or trailer and/or kiosk offers a unique set of opportunities ranging from offering gourmet cake donuts, mini donuts and related goods.

The mobile donut business should meet specific business objectives which is 4 fold:

  1. A standalone business

This is the ideal business for the person who wants to sell donuts as a solo operator. I recommend choosing 3 or 4 gourmet cake donuts but however you decide, be the best at it. Offer gourmet donuts, glazes and toppings and always upsell and cross sell gourmet coffee with your donuts. Some entrepreneurs would like to implement a yeast donut line however you will be limited on space unless you have a 20-foot trailer to prepare such a donut line. I believe in keeping it small and keeping it all in reference to profits and staffing. An added benefit to the mobile donut concession truck is when you are ready to open a donut shop the community will be familiar with the gourmet line of donuts you offer.

  • To brand your donut line based on an existing donut shop

An effective way to brand a new donut shop business is to implement a mobile donut business in a premium location whereby you offer gourmet donuts and coffee. Imagine driving around in your truck branded with your business name and donuts throughout the community you serve. This is highly effective marketing and branding.

  • To scout potential satellite locations and confirm the demand for donuts in said location

Aside from the highly effective cost-effective marketing and branded associated with a mobile donut business. This is an ideal method for scouting new satellite locations. Applied creativity must be used here. I recommend renting a corner end-cap location for approximately a two-month period before implementing a donut satellite location. If there is a location for lease request permission to set the mobile unit up for a month and analyze the results. You will receive valuable feedback from the community that will aid you to make an educated decision to implement a new satellite location.

  • To enter highly sought-after fairs, carnivals and specialty community events

One of the benefits of having an expert donut business consultant and master donut maker writing this article is the article can and will make you a ton of money. It would not be honest for me to state: “you can actually enter the above events with yeast or cake donuts alone”.

The fairs and carnivalshave been saturated with cake donuts, yeast donuts, fried cakes, elephant ears and other products. In fact, event managers for such events already have all the vendors they need for these products. Today, I would like to introduce you to a new donut product that will take specialty events by storm.

The donut product I am referring to is donut sticks for kids. The donut consists of a yeast donut and a cake donut on a stick integrated into one specialty donut. 

Available in multiple colors and flavors. Please contact me for more information.

Donut Business Idea #6.Mini donut business

Donut Business Idea #6.

Mini donut business

The mini donut business is the same as made to order cake donut business (MTO) whereby the cake donuts are made at the time the customer places the order chosen from a menu. In order for any one of these businesses ideas to be successful. It is critical to have the business located in a high foot traffic location with great visibility. Also, an effective marketing and branding campaign should be implemented.

The major limitation and my primary concern with these business models is donut robots are used to make the donuts. Donut robots are limited to how many donuts produced, per hour as the volume of Donut made will not keep up with the retail and donut wholesale orders. Simply watch a YouTube video and you will discover the donut making process is painfully slow utilizing a donut machine.

Donut robots will produce enough donuts needed for retail sells however any specialty orders and/or wholesale orders and you will quickly discover you have bottlenecked your business using solely a donut robot.

If I was to enter this part of the business tomorrow. I would have a donut robot on the front end and a upright commercial donut fryer to accommodate large wholesale orders on the back end.

A quick word about the Belshaw insider. The ventless exhaust system does a good job removing the smoke however not so much removing the carbon in the air. After a few hours of operation your eyes will start burning. It does not matter how much you clean the filtration system the problem still lies in having a ventless hood system. The owner of Division One Donuts located in Ohio constantly complained about carbon not being filtered and burning his eyes and the customer’s eyes throughout the day. These units would be ideal in a very large Mall or airport whereby you do not have a low-lying ceiling capturing the carbon.

Donut Business Idea #7.Made to order cake donut business (MTO)

Donut Business Idea #7.

Made to order cake donut business (MTO)

This business model is identical to the mini donut business however you will be preparing and serving regular sized cake donuts. If you are not familiar with this business model, please watch the this video where I walk you through a made to order cake donut business.

Donut Business Idea #8.Specialty Donut Businesses

Donut Business Idea #8.

Specialty Donut Businesses

Unlike all the above donut business ideas the specialty donut business could potentially be the most profitable aside from opening a chain of donut shops.

When I think of a specialty donut business all kinds of ideas come to mind but the first criteria this business model must meet is a having the ability to make specialty donuts based on producing donuts utilizing an assembly line type of manufacturing. Donuts must be made in volume in order to make money.

I want this article to be actionable and valuable. I would like to share a few ideas with you that I believe you will appreciate to assist you to come up with donut business ideas.

1). Consider manufacturing donut ice cream sandwiches. I teach to make a marbled Bismarck donut based on a traditional yeast donut. From the marbled Bismarck I make ice cream donut sandwiches for my clients to help them monetize the donut business.

Here’s how it works: I make marbled Bismarck’s, fry the donuts, freeze the donuts, and then fill the donuts with ice cream utilizing a soft serve ice cream machine outfitted with an injector attachment. I then wrapped the marbled Bismarck donuts in wax paper and refreeze them. Customers roll up to the drive-thru on a hot and or cold day and order the donut ice cream sandwich. The donuts sell very well and now you know another donut business idea.

2). Consider manufacturing donut cones for ice cream parlors.

Here’s how it works: utilizing ice cream cone stainless steel molds. I prepare a batch of my cake donut dough based on my buttermilk bars which is a soft dough and not a drop batter. I then wrap the molds with my dough cut approximately half an inch wide and wrapped the dough strips all the way around the mold and bake for approximately 15 minutes at 325 Fahrenheit.

The neat thing about this product multiple colors can implemented to represent the flavor of the donut cones i.e. blue for blueberry, red for cherry, black for chocolate etc., and the flavors of ice cream cones can be prepared utilizing different flavored doughs. You need an excellent recipe for this product to taste amazing.

Donut Business Idea #9.Specialty Donut Businesses

Donut Business Idea #9.

Specialty Donut Businesses

Look no further than goldbely.com for inspiration for new donut business ideas. I believe the key here or the recipe to success is utilizing a flash freezer to preserve the quality and freshness of the donuts to be shipped.

I ordered specialty Donuts from goldbely.com (pure curiosity) and the donuts did not taste fresh because the donuts were nearly three days old when I received them. I believe this is why no one has taken this market fully to its potential scalability. I believe to make this business model a successful business. You will need to incorporate flash freezers needed to deliver fresh donuts. A flash freezer is expensive and you will then need a freezer room to hold the frozen donuts until you ship them.

There is a fair amount of competition on goldbely.com however if you are seeking to enter this part of the business? I have developed a donut product that is second to none. Please contact me for more information. I highly recommend hiring a professional consultant to help you navigate the business startup and to provide expert donut training. When starting a new donut business reinventing the wheel is NOT recommended.

I hope you enjoyed the article donut business ideas. Please read the article profits in donuts.

Until the next time. All the best and always to your success!

Lester Chastain