My Donut Business.com

Archive for the ‘New Business’ Category

So you interested in making easy money, who isn't? As you know there are four of us in this little doughnut venture that we have been doing or thinking about for almost a year now. It was conceived in Rehoboth Beach, after discussing some projects we wanted to get into in the future. The four of us have two or three meetings every year discussing the details of what we are doing. We look to find new projects, assess what we have done in the past and looke for what we're going to do in the future. Each of us come from a different background, and each of us bring something unique to the table, which makes it a very nice business marriage.

Like anything in business,the donut business is not a get rich quick scheme. Like everything else in life, it takes work and dedication. As those who manage their time and learn from their mistakes that will be successful. You've heard the old adage when you first learned to ride a bicycle, when you fall, you get up and try again until you learn how to do it correctly. This is what happens in business. Myself, I've had a lot of failures. I have made many many mistakes. I try to learn from my mistakes and I never give up. There is nothing better than the school of hard knocks.

There's a lot to do from the inception of your idea to the point when you are making money. Many of you are tired of your jobs, afraid of what is around the corner And overall just burnouts on everything. The best advice I can give you before you start to make the so-called easy money is try to get your debts paid off, the bad debt. This is something that will never go away and will hunt you the rest of your life. Did you knows that bill collectors can come after you Pretty much the rest of your life, as long as it has not been paid? The debt just gets sold over and over and over and over and over. It may have been erased from your credit score, and I'm not telling you to pay it, but it still can haunt you. Please do not go into debt, especially on frivolous things that you do not need. Using debt wisely, such as to finance a fledgling business, can be a wise thing if done correctly. It is not wise however, to use debt to finance things such as vacations, clothes, cars etc. Of course the donut businesses is not the only way to make the so-called easy money, There are more ideas than I can even put in this one blog post. Bottom line is keep your mind open and stay out of debt. That can be a good thing, but as I previously said, do not use it to finance things you do not need. Saved debt to finance business ideas where you have a solid business plan and a way to get out of the business of necessary.

We have discussed this before several weeks ago but I wanted to bring out a couple more things about the importance of a business plan when you start out your donut business. The business plan of your doughnut business is how investors will see your company if you need them. It also includes your marketing operations and sales process. It is the blueprint of your business.

When you meet what the committees that runs at fairs and festivals in your area or other areas, or you are trying to negotiate a lease for your donut shop, is your business plan that would do most of the talking. Your business plan will let everyone know your projected sales and expenses and what you plan to achieve with your business. You can also look at this later to see if you are actually realizing the goals you have set out in your donut business plan. In your business plan you will also want to take note of who your competition is, this is something that we did not mention before. We will do a blog post about competition and how it relates to your donut business in the next several weeks. Competition is an important factor in how much money you make. But I think everyone knows that, they just don't think about it when they open up their business.

Your business plan will give you focus on your development. It will also provide a logical framework for which you to work and establish goals for your company. Your donut business plan will provide information to investors, banks and shareholders if you decide to go that route. As we have mentioned before, it also will let you know how well you are doing as you move forward in your business.

Not having a business plan, is like driving somewhere you have never been, without a roadmap. Is never a good idea to start or operate a business without a business plan. It is no exception for your doughnut shop, be smart and develop a business plan. The time it takes now to write one will save you a lot of headaches later.

There are advantages and disadvantages to having business partners in the doughnut business. In this post I will discuss the advantages of having business partners. As you know there are four people involved in our doughnut business and thus far it has not been a problem. The four of us are partners and other ventures, beside the doughnut venture, and we have been successful. I am not saying that we do not disagree on things, actually we disagree on a lot of things, but we end up agreeing to disagree. We are lucky that we all give and just enough and realize the role each one of us plays in the business. Respect is an important part of having a business partner and we all respect each other for what and who we are.

Having a business partner is not always a good idea. You really need to know the person and what they are about. How long have you known your potential business partner? Do they have good credit? Do they have money? What do they bring to the table that you do not have? Can you trust this person? Do they have other interests besides what you are trying to do? All these questions need to be answered before you even consider a person to be your business partner. There are many a horror story of partnerships gone bad. One of my business partners Brothers lost over $100,000 in a motorcycle shop business that did not turn out well, basically went out of business. He mortgaged his home for the money and lost every cent of it. There was no recourse against his business partner because he went bankrupt. It is a sad situation but one that he has recovered from nicely. There is no education like experience, though it can be costly.

So you think you have a potential business partner for your fledgling doughnut business? The question is, do you really need him? What are they bringing to the table that you do not have? Maybe it is money that they have and you do not have. If so, you need to spell out exactly what they want in return. Maybe it would be better if they were a silent investor instead of a partner. I have found a lot of times it works better for both parties if one has money and the other doesn't, that's a person who has the money simply invest the money and gets a set rate of return on their cash. Set up a venture capital deal with someone where they get a guaranteed rate of return. You can afford to pay a higher rate of return, make it attractive to a potential investor, especially considering that you could give up 50% of the business if you became partners. Plus the business partner would have control over your business and you would have less of a say than if they were just a venture capital investor.

Having a business partner can Be a good thing or a can be a living nightmare. Do your research on the person and find out how they will fit in to what you are planning on doing with your donut business. A lot of times not making them a business partner but giving them a guaranteed rate of return on their money Is the best thing to do for both parties.

What will each partner bring to the table? Agree on how much money each person will contribute to the venture. If outside funding is needed, like to purchase donut making equipment, who will ask for it and assume
the responsibility for payments? There are also more things to consider than just money including time and property.
Partners need to decide how decisions will be made before it is ever required. Perhaps one should give certain responsibilities to the other knowing that there may be some unpopular decisions made. There are disagreements in every type of relationship, and a business partnership is no different. Will every decision require the consent of each partner? Perhaps the various responsibilities of each partner should be spelled out in written form.
Will partners divide profits equally? The split could depend on what each one brings to the table, how much risk is taken, and how much work each puts into the success of the company. As with everything else this should be worked out ahead of time to prevent any misunderstanding once the company begins to make money. On a similar note, partners need to decide who owns any copyrights, physical property, and intellectual property that is obtained or created.
Partners should develop contingency plans ahead of time for when the relationship ends. A partner may want out or one my die. Will one partner be able to buy out the other and how will the the assets being transfered be valued? An exit strategy should also be agreed upon if the company becomes too much to handle so that partners part amicably, fairly, and legally.
Partners need to agree on what constitutes a conflict of interest. One may engage in other business activities that could compete with the company or have other ventures that take efforts away from the potential success of the company.
In summary, a partnership can be mutually beneficial by decreasing risk and start up costs for each individual making the idea of a business a reality. There are also many points that need to be considered to keep the relationship healthy and the business moving forward. To not discuss and plan for the issues mentioned could mean disaster.

There are many benefits to having a doughnut business. We are focusing on the small doughnut business, and not the franchise donut business model. The franchise donut business model Is not an effective way to sell small doughnuts, which typically are just one product. People who sell small doughnuts may sell milk, coffee or a different flavor donut but that is the extent of what they sell.

One good thing about the doughnut business are the low startup costs. You can typically buy the equipment anywhere from $5000-$20,000, depending on the route you want to go. If you just want a small fryer to set up shop at flea markets or even in your kitchen selling doughnuts, then you can get by with investing $5000 or less. If you want a concession type stand for your doughnut business then you will spend $20,000 or more on start up cost. Donut stands are good if you are selling your doughnuts at festivals, fairs, carnivals, sporting events or any other outdoor activity. Having a doughnut concession stand is a good way to generate a lot of revenue very quickly.

Doughnuts sell! As long as you have a crowd or an audience for your doughnuts, they will pretty much sell themselves. It is hard to avoid the smell of the doughnut, this is what gets them to your stand. Once they are there people can barely resist buying your doughnuts. The overhead is low for making doughnuts. You will have very little cost on the ingredients and equipment. The return on investment can be quite high.

If you can find a good place to sell your doughnuts, with a lot of traffic, you will make money. You will need to keep in mind the rent you are paying and how much you pay your employees for their time. As with all business endeavors, you will need to keep check of all expenses. Another thing that you will need to find, is a good donut recipe. You can try the recipes that can be found on the banner below this post, that website also will teach you how to start and operate your donut business. It is an excellent way to get the support and ideas from someone without having to purchase a franchise. It is well worth the money to invest in the system.

Setting up your business can be an overwhelming task at first. You are excited about your idea and you know that you can make a lot of money. There are only a couple of things that stand in your way. Hopefully, you have your business and operations plan ready to implement. You are aware of your market and projected revenues. Now all you have to deal with are the state and local governments, and comply with their standards.

The first thing you will need to do is register your business with your state government. Most of the time you will find this information online. It is a good idea to classify your business as an LLC ( limited liability company) and not as a sole proprietorship. After you register your business with the state, You'll need to get a food handlers permit and a business permit from your local government. Again, your state's government webpage will point you in the direction of where to go and what forms to fill out.

After you have your food handlers permit and business permit, you will need to apply for a federal ID number. You can go to IRS.gov to apply for the ID number. You'll use this number to report the income that your company makes. You will want to record all revenue and expenses that you incur as related to your business. This will also help you on your personal taxes.

After you have your federal ID number for your doughnut business, you will need to register with the state's employment office if you intend on having employees. You will need to record each employee that you intend on hiring with the state. It is always a good idea to be certain you are within the law when you hire employees. It is a hassle, but worth it in the end, so that you may sleep at night knowing that all your employees are legal. Having your company an LLC, will give you some level of protection as well, in case you are sued.

Once you have registered with state, local, and the federal government, you are pretty much ready to start selling doughnuts. All you need to do is market the product. But you have already taken care of this in your business plan, so you know exactly how you are going to market your donut business. Being organized when starting a business is never a bad idea. Also being compliant with federal state and local laws will help you sleep at night. The doughnut business can be very profitable, but if you do not play the game correctly, you can end up owing a lot in fines and penaltiesTo the government, because you did not pay the appropriate taxes on your business. Be smart and get off to a good start.

Been getting some calls from the Lil Orbits sales people.... I haven't really talked to them... been putting this project on hold.  I called a popular entertainment complex in our area about renting some space but they never called back... It is simply amazing to me that people will not return or answer phone calls..  A friend of mine said he thought you could get a "special events" deal where we could only sell the donuts during special events outside.. One of his relatives was going to sell balloons down there this way.  I would loved to have known how that turned out.  When and if we ever get this off the ground,  I will post revenue projections as well as actual revenue... details about EVERYTHING..  We are just having difficult getting this off the ground right now..

Well,   just recieved some information from the donut company....  I skimmed through the materials,  you really need to work this business....    The idea situation (from what I am thinking right now) is we invest in the machine,  find someone who really has the time to work this business, and we split the profit... hmmmmm  who could that be?   We could st the business up, purchase the machine, obtain licenses and do all the beginning work, get someone else to run around and sell the business, but on a purely commission/profit sharing basis.     There are so many problems with that idea,  I will discuss them later.... Basically, one of my partners thinks that sharing profits always ends up being a bad thing.... and people get greedy, they think they are putting more into it than you,  they could "just do it on their own, etc"   I just  don't know if I could handle something else to do... I mean,  personally I would not have the time to devote to this (after reading the material and thinking about it) and give it the attention it needs.  I COULD set the business up and hand it over to someone else to market it, then split the profits.  I mean 50% of something is better than 50% of nothing!   I REALLY think we should find someone hungry enough for money who has integrity, a self starter and motivated.  Wow what an order,  I think it could be done.

So we have begun our research into this business.... this is what has happened this week..  I made contact with a rather large vendor of the tiny donut machines,  they are a non-franchise enterprise who make most of their money on selling the machines and supplies for the product.  I talked to a very informative lady who is supposed to send us some material on the whole idea.  We have an idea of where we are going to locate,  my partners were doing a site visit on Sunday, so I will have more information at  a later time  Right now we are waiting on the materials from the machine vendor and whether we will be able to locate our business in the high traffic location thtat we have been hoping for. Wish us luck.

This website is devoted to our fledgling donut business.  My partner and I have been to California (more specifically San Francisco and the Santa Clara Valley area) off and on for a few years...  On our travels there we noticed a mini donut shop on Pier 39 that (unlike other shops on the pier) has remained open.  We could not believe how "nuts" people were going over these simple pastries.  We vowed to look into it but actually, like so many things that intrigue us, never did anything about it.  It was not until a recent trip with our other partners that the subject was brought up again.  It came up after noticing a  donut shop on the boardwalk in Rehoboth Beach, Delaware.  They were not the mini donuts that we saw on Pier 39 in San Francisco,  they were large with a choice of several fillings.

We liked the simplicity of the mini donuts,  they basically came in 3 varieties: plain, sugar and cinnamon.   This is our first venture as a company into anything food related.  I have never heard anything positive about going into the food industry, but we feel this is entirely different.

I have been in several different business ventures and always thought it would be interesting to log everything from conception to success or failure..  what we did, who we called, every detail that made the business a reality.   When I see a business,  I often think to myself how insanely interesting it would be if they blogged about nothing else but their business, and with a lot of detail.   How exactly was the idea concieved, who they called, was it a success or failure.. when did they decide to call it quits and why...  and everything in between.  Of course, I am not going to be giving away this information for free....  This is going to be a private website for a long time until something comes of it....  but I can assure you, we are going to follow through until we determine whether it is worthwhile for our company to pursue.   We are currently in the research phase and will be posting our findings...   I am going to expose everything on this website that we do.....   I already told you about how we conceived the idea.. I always thought it would be interesting to follow a business owner from the time they first had the idea to the time they could make it on their own or close up shop.  Either way,  it would be interesting.  Readers now have the opportunity to do just that.  They can follow us from conception and see what happens.  I will hold nothing back...  Think of it as kind of a "reality show"....  but on the internet and in blog format.    Again,  many parts of this website will be private and only accessible to investors and company members.    I will decide at some point when to release everything unedited to the public.  But for now, readers of this blog will only read what we want them to know.  Here we go... so many projects and not enough time.

**EDIT**

I have recieved a couple of emails from those who "think" they are language elitists or experts arguing that I have not spelled donut correctly in my domain.  I assure you that it is a common and accepted spelling,  but for those that are bothered,  I have also the domain mydoughnutbusiness.com with the "other" spelling.   It is not live at the time of this post.