Archive for March 2010
Getting into Fairs and Festivals to Sell Your Doughnuts
March 27, 2010 | 
Author As we talked about In the previous post finding a good location for your donut business is a top priority. We personally are staying away from pricey malls that charge a lot for rent and where the overhead is a lot and the traffic may not be what we expect. I have paid a lot of attention to food places in the mall, people selling fudge, candied popcorn and every kind of sweet you can imagine, and it seems that many do not stay very long. I would love to know the reasoning behind this. One cookie store, actually opened up another small stand in the center aisle of one of the mall coridoors. I assumed that they must be doing quite well to open up another store. But regardless, we do not plan on opening a doughnut shop in the mall.
As we mentioned last week, we are trying to get in a flea market where we can sell doughnuts. I think we might have mentioned before, that we are also interested in selling doughnuts at fairs and festivals. People at fairs and festivals are pretty much a captive audience. Eating tasty foods is almost a tradition at these places. Instead of leaving when they get hungry, they find places to eat there. When you are selling small doughnuts at fairs and festivals, you are also selling convenience.
When you are selling doughnuts at a fair or festival the rent is usually a lot less than if you had a storefront establishment. In addition you are only paying when people, a lot of people are there. When you rent a spot at the mall, you are paying when there might not be very many people at the mall. If you make your business portable, you can travel to a lot of the fairs and festivals all over the country. If you feel financially secure to do so and are not tied to your job this may be an an excellent opportunity for you. Traveling from Festival to Festival is not for everyone, But can be very rewarding monetarily.
It can be very difficult to get your foot in the door at fairs and festivals. There is often times a waiting list just to set up shop. Many times if you have something different such as a doughnut, you may have a better chance of getting your foot in the door. I always thought it would be a neat idea if they had some sort of bidding process for the food vendors, it would be interesting to see how it went. It may price some people out of the market.
The Downfalls of a Donut Business Franchise
We talked yesterday about the benefits of having a doughnut businessness franchise. Today we will discuss the downfalls of having a doughnut franchise. There are many reasons why going with a franchise may not benefit you or be best for your particular situation. The first reason why having a donut franchise May not be the best idea are the very high startup costs. Not only will you have a high startup costs, but the donut franchise will expect you to have a reasonable cash flow and high net worth. These two things alone will keep many people from being able to afford a donut business franchise. Opening a good business franchise usually requires that you have been successful in either another business or your job. Often times you can pool the resources of a few people in order to meet the requirements. It is never a good idea to get into a business, especially a franchise situation, when you are strapped for cash or do not have your financial affairs in order. Another downfall of the franchise system is you lose some level of control over your business. You will be told when to do it and how to do it, after all is not your brand, and you do not own the brand. If the franchise wants you to change the look of your restaurant, you will have to comply with their request. Anything that the donut franchise would want you to do, you will need to pretty much do what they say. You have little if any control over what they may request. You are at their mercy most of the time. Not only will the donut franchise control how you run your business, but they take a chunk of your revenue as a royalty. This royalty is rarely negotiated and is Told to you up front before you buy into the franchise. The cost of doing business under a donut franchise system is very high. You have the cost of the building, utilities and several employees to be concerned about. We want to keep things small and simple, this is why we are going with the single menu item donut business model. The cost or low end of profits can potentially be very high. When you start having to build buildings and being involved in a franchise it gets very expensive very quickly. You will need much more money in order to survive opening a franchise.
Good Place to Get Donut Equipment
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** BAKERY CONCESSION TRAILER ** |  |
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US $72,000.00 | 10d 17h 2m |
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8064 BLANCHARD Model 11-20 Rotary Surface Grinder | |
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US $22,500.00 | 15d 15h 54m |
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CECO MODEL 42- BTT CARTONING MACHINE | |
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US $16,000.00 | 11h 48m |
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KING MODEL SC6L STAINLESS STEEL SLAT COUNTER | |
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US $12,500.00 | 5d 13h 54m |
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MPM AP 25 / 27 Automatic Screen Printer | |
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US $12,500.00 | 28d 14h 29m |
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Location Advice for Starting a Donut Business
Location means everything, not only in business but where you live. I have seen a lot of businesses go in and out of our local mall. For example, there was a hot dog stand, for lack of a better word, that I had liked to go to work about 10 years. Admittedly, it was not in the food court of the mall but a wave from the buzz. For the past couple years, I would go there by myself and eat a hotdog. At first I would buy a combo meal and eat two hot dogs chips and a drink. Then I scaled back and just bought one hotdog and entry, I always enjoyed their root beer. The people that work there were not very friendly but I enjoyed the food. I always assumed that they did well, since they had been there so long. There was a sandwich place that was there before them that close unexpectedly. I had never been here. I was at the mall about a week ago and noticed that the hot dog place had gone out of business. I would love to have known what caused them to leave. I could only imagine that they were not making any money. It always baffled me why someone would put a restaurant or food placed in a location that a previous restaurant had failed. This just goes to show you that location means everything.
I would say that the mall would not be a very good location for a doughnut business. Their rent on a space at the mall would be tremendous, you would have to sell a lot of doughnut. In addition there's a lot of wasted time at the mall because they are not busy. The best times would be on the weekends when there are the most people. Unfortunately you cannot set up shop at the mall on the weekends. Where I live malls are still a big thing, But everywhere else most seem to be dying out. There is an interesting website on the Internet about malls that are dying. It is contrary to what is happening in our area. But admittedly of the need up any kind of food related business is scary, but other name one... mall is very scary. I would much rather start out small selling doughnuts to churches and schools then to have the huge overhead that a mall environment would entail.
Choose a location that fits into your budget. Have you ever thought about going to the flea market? Seemingly, flea markets do very well in our area. We are trying to get into a local flea market, but it has proven to be difficult. Do your research before you set up shop, it will pay off in the long run. As with any thing, location can prove to be a very big deal. The wrong location can put you out of business or the right location can make you a lot of money.
Posted in Finding a Location | 
Tags: dead malls, doughnut business, dying malls, Finding a Location, location advice, mall location | 
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Received call from Lil Orbits
I received a phone call from Rob Sturdy from Lil Orbits yesterday (Wed) regarding my questions about the donut making process with his company's products. I was impressed that he would take time to call me--you don't see that kind of follow up very often in the real business world. He mentioned that when making the donuts by hand with the applicator that they wouldn't come out in a perfect round shape, and the exercise should be used more for a taste test. I told him that we'd already discovered that and that it was a bit of a relief. I thought we were doing something wrong, and he said no probably not as far as the shape is concerned. Rob also confirmed what my partners and I were thinking. Making a small batch of donuts with a small amount of batter is much different than making a large number of donuts with a large amount of batter. Surface area of the batter matters due to evaporation as does the surface area of the heated grease for sufficient cooking with limited absorption. He said better, more consistent results are noted when using their large automated donut making machines. This makes sense to me. We'll be making more donuts this weekend using a new thermometer to control the grease temperature. I am interested to see if the the temperature wheel on the fry daddy is even close. I will blog about the experience later.
Posted in Uncategorized | Tags: applicator, call, donut, exercise, grease, phone, round, surface, taste, test | No Comments »
Want to Open a Donut Business? Know Your Startup Costs
Knowing your startup costs for any business venture is always a good idea. As we have previously discussed the capital needed to start a doughnut business can be very low or very high depending on where you are headed in the business. For example, if you want to start a franchise donut business, of course your start up cost will be much higher than if you start a simple one man operation small doughnut business, with one product to sell. You need to be aware of all the costs associated with starting your business, it just makes sense.
Do you know of anyone else in your network of friends or family who have started a business in the past? They are usually an excellent resource and can answer many of your questions for no charge at all. There are many similarities in businesses, so they do not necessarily have to have a donut business in order to give you good advice. There are many things that can suck money out of you, and you want to be aware of each one of them. There are so many unexpected cost in running and starting a business, you want to plan for the unexpected. It is never fun to realize you have unexpected expenses that you must attend to. Pay attention to the people that offer you advice, especially ones that have had their own business. They are an invaluable resource in your future endeavors. Also make sure you are comparing apples to apples, prices in some cities are different, so you need to be sure about licensing and taxes for different areas.
Remember there is no education like experience, you may find out after starting your donut business, that you have found out more by making mistakes on your own. Sometimes education is experience that is what you do with it that matters. Be sure you are aware of everything that goes on in your business, and the less surprises you have, the better off you are.
Benefits of a Donut Franchise
Opening a donut business can be very frustrating and time-consuming. Going at it alone can be intimidating and overwhelming. Although we have made the decision not to invest in a good franchise, we can see where it could be beneficial. The startup cost and net worth requirements are very high for a good donut franchise. Many times you can pool the resources of two or three people to adhere to the requirements of the donut franchise. These requirements can be very high at times.
One thing the doughnut franchise will give you is support and market research. They will also advertise your store and give you a budget for advertising. Of course they will take a royalty from your revenue, but that is the price of doing business. There are few businesses where I would recommend a franchise, but anything having to do with food, is not a terribly bad idea. Another thing that the doughnut franchise will give you his brand recognition. People will be familiar with the brand and will come into your store simply because they are familiar with the doughnuts that the brand sells. You'll be miles ahead of people getting to enjoy your doughnuts. You will not have to spend years of getting the word out about your brand, because it will pretty much already have been done for you. People are very particular when it comes to food, and if you have an established done that franchise to back to you, you'll be way ahead of the competition. The donut franchise will also give you good ideas on where to locate your doughnut business. They will have extensive experience on where to locate the doughnut shop. This experience can prove to be invaluable, and keep you from making big mistakes.
If you have the money to invest, and are financially fit, then the donut franchise model may be best for you. You'll need to look closely into each one, and decide which one best suits your situation. Some of the donut franchises will require a Hands on approach where others will let you simply be an investor. Again you will need to look closely and find out which one best suits your situation.
Reply to questions from Lil Orbits
As promised, here are the answers to my questions sent to Lil Orbits.
Thanks for your interest in Lil Orbits - here are the answers to your questions -
1) The donut shortening is good for about 40+ hours of cooking time -
You will know when it is time to change it out - it starts a clear dark amber color and as you cook it will become darker - more opaque and brown. It will start to smoke and you may see a film on the top of the shortening - then it is time to change -
The temp. has to be 375 degrees - our machine controls the temp. the best that I know of - our shortenings - cube and liquid are vegetable shortening and blended to work well with our donut mix. Our mix and shortenings are Kosher Certified.
2) Water can effect the taste of the donuts - some water in communities are fine - some have a smell or taste that is poor. Some people have gone to bottled water so that no matter where they are the donuts taste the same. I would not used distilled -
3) We recommend that you allow the mix to set for 10 minutes - first batch of the day to set in the hopper so that it can get down around the cutter and any air bubbles will be gone. The batter in the hopper is good for a few hours but I recommend that you use it sooner than that. It does thicken a little but the cutter in the hopper handles it.
I believe that the temp of the donut fry and it's age have more to do with the taste of the donuts - 350 degrees, does not cook the outside to a crisp and allows too much fry to soak in. 400 degrees cooks the outside too fast and in order to get the middle of the donut cooked the outside gets too dark -
More questions - just ask -
Rob
