Starting a Donut Business

Need Money for Your Business?

I found this really cool website where you may want to get funding for your fledgling donut business,  it is a peer to peer loan network...  I like to compare it to the Ebay of Loaning Money...It is a VERY cool concept.. Watch the video for a tour of the site.  If you are looking to finance your donut venture but have been turned down by banks,  this may be a viable option for you.... Definitely worth a shot without all the hassle!

Peer to Peer Loan Network

Click Below for the Website I'm talking about in video

Peer to Peer Loan Network

Business Advice from an Experienced Donut Seller

Below is Part 4 of the email I received from a successful vendor who sells mini donuts and other items at his trailers. Thanks Dave for sharing this info with our readers!

Also, you never want to get too far ahead of yourself with making the donuts. I'll start the morning off with one batch, which gets me about 12 bags. When I get down to 2 bags, I'll start another batch. When I start frying, I turn my exhaust hood on, and the aroma gets drawn out of the trailer into the field. And this aroma draws people to my trailer! Smell sells when it comes to donuts! I've seen some vendors with smell-sensitive things like kettle corn or mini donuts who want to make their entire product first thing in the morning, so they can just sit there and sell and collect money for the rest of the day. Then they sit there and wonder why they can't move their product. Smell sells... trust me! Make them as you need them, that way the smell will keep drawing people to you, and people will get them nice and hot when they're best. And if people get donuts that they think are really good, they'll be repeat customers. It took me 5 years selling at the same location to build my business to where it now is. That trailer is a stationary unit by the way... it stays at the market year-round, and has not moved from that spot since 2006. I usually sell between 150 and 200 bags of donuts on a typical day now... I think my record day in 2010 was 236 bags. There are days I cannot keep up with the demand... I've got people placing orders and waiting, and I just keep making them as fast as I can. It takes the machine about 1 minute to make 1 bag of donuts. So there are mornings I'm literally making $3 a minute for hours. And that's just on donuts. I sell so much coffee that I needed to invest in a second commercial airpot coffee maker. I could not keep up with just one machine. I sell usually around 30 airpots worth of coffee in a morning. I also do tea, hot chocolate, iced tea, iced coffee, smoothies, canned soda, and bottled water. It is a relatively simple menu, but the trailer runs like a well-oiled machine, and everything I sell is very high profit. I buy bottled water cases at Costco... it amounts to about 15 cents a bottle, and I sell it for $1.50. On a hot summer day, I could easily sell 50-70 bottles of water. Another thing I should mention, which I think is a large part of why I have been successful there at the market, is because I keep my trailer very clean. People like to see that. I also like to use all professional signage... I think hand made signage is tacky and looks unprofessional. I got those "Dave's Donuts" signs made up last year at a professional sign shop. People want to shop at a trailer that looks professional and clean, and if you have a good aroma coming from it, that's a plus as well.

Back in 2007, a fresh squeezed lemonade stand opened up 2 spots up from my donut trailer. It was a simple setup, just a table and umbrella and ice bucket, but damn... they did a good business! They'd have a line on any sunny hot day during the summer. That space had been vacant for a while, and I was kicking myself for not starting up something like that on my own. I told myself, if and when the time comes that they close, I'll take over. Well, 2009 came along and they never returned. 2010 came and the spot was still vacant. So I finally took some initiative and talked to the market manager, and he agreed to rent me the spot to sell lemonade. So then I had to find a trailer, outfit it how I would need it for lemonade, and get it to the market ASAP because the hot summer days were quickly ticking away. I found a used 6'x10' concession trailer on Craigslist that I thought would do the trick. It's my only "real" concession trailer... a Haulmark, not a homemade job. And what a difference in quality! I will NEVER buy another homemade concession trailer. The Haulmark is very well built. No leaks, and a solid floor. Here's a video of what it looked like when I first bought it:
http://www.youtube.com/watch?v=3V2w5cNmDIU

Stay tuned tomorrow when Dave talks about the importance of your stand or trailer and why it should look good.  He gives you some advice on where to find wraps and things to make it look its best!

Still wondering where to sell your donuts?  Ever thought about selling them concession style?   Below is an excellent site to get you started, it will help you answer a lot of questions you may have.  There is no limit to the number of questions a future business owner can ask,  this site really breaks it down for you.  Definitely a good read.

Click for Help with Starting  your Concession Business

Flea Markets Aren’t a Guaranteed Money Maker?

Below is Part 3 of the email I received from Dave.  I am posting it for everyone to learn from, with his permission.

It didn't start off easy for me at the flea market.  My first week, I paid $125 in rent and took in $148 from sales.  It was hard for me to sell the donuts.  People didn't know what mini donuts were, and to be quite honest, I don't even know if people knew what I was selling.  I would put a sample cup of donuts on my coffee table to try to sell them, but still, I would only move maybe 10-15 bags (I sell them in bags of 13) in a day.  I started up my ice cream machine, and blew the whole flea market out of power two weeks in a row.  There wasn't enough amperage to run it, come to find out.  I was told I couldn't run it off the flea market electricity, and would have to use a generator if I wanted to sell ice cream.  I didn't want to bother with that, so sold the machine back on ebay.  I only had 6' under my fume hood to work with, and there didn't end up being enough room for both my donut machine and the fryolator where I was going to fry the ribbon fries.  So I had to pick either ribbon fries or donuts, and I chose donuts because basically it's an early morning market and I thought they would go better.  Sales for year 1 were bleak.  I thought I was going to have to go out of business.  I was discouraged, but figured I'd keep plugging along.  Year 2 came and went, and my numbers had improved some, but still it was not to the point where I wanted it.  I tried adding menu items like cheese steak sandwiches and sausage and pepper sandwiches, to increase revenue.  I found that there was a lot of waste with those items (rolls can only be re-frozen so many times, etc.).  Plus, mark up was only 100%.  I was putting $3 into a $6 sandwich.

For year three, I decided I'd focus on my most profitable items, and market the hell out of them.  Donuts cost me 50 cents a bag to make, and I get $3 for them.  Smoothies cost me $1.12 and I get $3.50... an airpot of coffee costs me $1.13 to brew, and I get about $10 out of it by the time it's sold.  I called up my smoothie company (Island Oasis) and asked for any free promotional material they could send me.  Companies like this often give away their promo material, because they know it's going to help you to sell more of their products, so it will bring them more sales in the long run.  I got a nice tin sign, a huge banner, and a menu board with changeable flavor slats from the smoothie company.  Then, I went to decalzone.com and ordered some big, bold 9" lettering that says FRESH MADE MINI DONUTS.  I noticed that my trailer was the only trailer at the market that you couldn't see what I was selling from across the field.  I wanted to change that.  I put up those letters above my windows so you could read it from across the field.
Here is a picture of my trailer after making those improvements:


Simplifying my menu to include only a few items (my most profitable ones) allowed me to streamline operations and to serve customers faster.  My business really started to pick up.  I think that people really didn't know what I had up till that point.  So take that as a lesson... people must be able to see what you are selling from afar.  When people buy your products, they must be something that makes them want to come back.  I serve the only brand name coffee there... Green Mountain.  I bet I sell more coffee than all the other food vendors combined.  People love it.  My mini donuts are good because I try to look into any problems people may bring to my attention.  For example, Little Orbits says to fry the donuts at 375 degrees.  The fact of the matter is, the cool donut batter cools down the oil if you set the machine at 375, so you are actually probably frying at 10 degrees below that for most of the time, since you are constantly depositing cool donut batter into the oil when running the machine.  The trick is to set your temp knob half way between 375 and 400.  That way, when you factor in the cooling of the oil from the batter, you are actually frying at around 375.  If you fry at too low a temperature, more oil gets absorbed into the donut and it comes out greasy.  Also, it is best to use oil that is solid at room temperature to fry the donuts in.  I use Wesson MFB Shortening.  It is a little harder than Crisco in consistency.  I melt it down in my hot fudge warmer, which I keep behind the donut machine, and ladle it into the trough as the level gets low.  If you use oil that is liquid at room temp, more of the oil will get absorbed into the donut.  People don't like greasy donuts!
Thanks again Dave!  Tomorrow Dave will talk about about how many bags of donuts he sells in a typical day,  how to start your day off as a vendor and some advice on signage for you trailer.

If you are interested in starting a concession business,  you owe it to yourself to check out the mobile catering site,  where it discusses
1. The tools, techniques and strategies of how to easily plan your mobile catering operation to a point that practically guarantees your success in getting financing to start your new venture no matter what your background or history.
2. How to find the perfect catering unit that will not only last for years to come and pass all health checks but also attract huge numbers of paying customers from far and wide to buy your food and snacks at the prices you choose.
And Much, Much More!

Selling Donuts – Email from Someone who is actually doing it

This is part 2 of the email I received from the concession vendor who sells everything from donuts to ice treats. He gives some advice on where to respond to ads and mentions a website that he uses and had success with. If you are interested in the selling your donuts concession style, you really owe it to yourself to check out the site mobile catering business... don't let the word "mobile catering" confuse you, it is just another way to say concession business.

Here is part 2:

Another event I did my first year with the ice trailer I saw an ad for in the newspaper "Vendors wanted" for some fall festival.  I called about it, and they wanted $500 for the weekend.  I thought "wow, $500... this must be HUGE!"  I was all excited.  I paid the $500 and secured myself a spot.  What a disappointment that turned out to be.  I think there were about 30 vendors, all set up in a semi-circle, and I doubt if 100 people came through there all weekend.  I did $180 in business over two days after paying $500 to get in there.  Plus, I took time off from my regular job so I could do this.  A huge waste of time and money.  So that was a costly lesson for me... do not respond to newspaper ads looking for vendors!  If the event is any good, they won't need to be advertising in the classifieds for vendors.
I also placed an ad on this website:


I have actually gotten calls from this ad from various organizations wanting to hire me to do events.  The ad listing on that site is free by the way.
So now it's 2006, and I had varying levels of success in 2005 with the Italian ice trailer, and being the entrepreneur I am, I was itching to expand.  I had been selling plants at a local flea market for the garden center I work at for a couple of years, and noticed that they had several places selling egg sandwiches, but nobody selling mini donuts.  There was also no brand name coffee there, no ribbon fries, no smoothies, no clam chowder, and no soft serve ice cream.  So, I figured I'd start a trailer selling just that.  This is New England's largest flea market by the way... we have 400+ vendors on a typical sunny summer day.  It has been in operation since 1975 and is very well attended.  When I first approached the market manager with my idea, he told me he was not allowing in any more food vendors.  But I was persistent, and finally he asked me to submit a menu.  He approved it.  So now I had to find a trailer, and buy all my equipment.  After all the trouble I had buying that used Italian ice trailer on ebay, I decided I wanted one that was brand new.  I found a guy who built new trailers and sold them on ebay for pretty cheap.  I drew out a plan, and sent it to him.  He did a lot of hair-brain things, didn't wire the circuits how I had specified, gave me a 30 amp service when I specified I needed a 50 amp, and improperly installed my roof top AC so the roof leaked before the first year was even over.  He is going by the name AFFORDABLE CONCESSION TRAILERS on ebay now... out of Huntingdon, PA.  I'd steer clear of him.  This was all back in the day when credit card companies were giving out credit cards like candy, so I would get 0% balance transfer offers in the mail, and would just keep taking out new credit cards and transferring balances.  And if the 0% time would run out with one card, I'd simply take out another card and transfer the balance to avoid any interest.  I drove myself into about $25K worth of debt with this second trailer, all on credit cards, and because of the way I juggled my balances, I ended up paying less than $100 interest on all that borrowed money.

I use a Little Orbits donut machine.  The other brand you might get is a Belshaw.  The main difference is that the Belshaw is belt driven (donuts brought through on a belt) and the Little Orbits is current driven (donuts float on oil, and flow through the machine on current).  The main problem I find with the Little Orbits machine is that, if the oil level gets too low, the donuts will not go into the flipper baskets, and things will get backed up.  They call it a fully automatic machine, but in reality, you can't take your eyes off it for too long.

Here's a video of me making donuts, and you'll see one donut that doesn't quite make it into the flipper basket, and I have to help it along with my wooden stick:

Thanks Dave for all the first class advice you have given to me and our readers.  Looks like you really know this business!  Be sure to visit tomorrow for Part 3 of his email.  Yes,  it is quite an extensive email, thanks again Dave!

If you are interested in starting a concession business,  you owe it to yourself to check out the mobile catering site,  where it discusses
1. The tools, techniques and strategies of how to easily plan your mobile catering operation to a point that practically guarantees your success in getting financing to start your new venture no matter what your background or history.
2. How to find the perfect catering unit that will not only last for years to come and pass all health checks but also attract huge numbers of paying customers from far and wide to buy your food and snacks at the prices you choose.
3. How to quickly launch your own mobile food business with minimal risk no matter where you are and start earning BIG MONEY from your food sales from a job that you not only enjoy but a job and a business you are actually proud of.
4. The formulas and techniques of how to get into the highly profitable and all-important pitches and events that earn you serious sums of money that most mobile catering businesses can only dream of, and have organizers who frequently turn down most other mobile catering trailers actually approach you!
5. How to easily attract huge numbers of customers to your catering outlet in any location and literally douse your competition selling up to 5 times the amount of products than any of your competitor..
Be sure to check it out,  the link again is mobile catering site,

Walking the Walk – Selling Donuts – Italian Ice

Hi Everyone,   I wanted to share with you an email that I received from one of our blog readers...  I am posting it here with his permission.  I think our readers will gain a lot from his experience in the field.   It is a lenghtly, informative email so I am going to break it down into 3 or 4 sections posted in 3 or 4 days.  Hope you enjoy.  Below is discusses how he got started and a little advice for setting up your trailer.   A lot of people reading this blog are interesting in selling the donuts concession style, for example at flea markets and the like.   If you are interested in doing that,  there is a great website that will basically "hold your hand" and teach you the ropes in explicit detail,  head on over to:

Concession Trailer Business

I don't do a lot of promotion of the site, except in the forums I've added a banner.. but it truly is a good resource.   Here is Part 1 of the email,  thanks again Dave for your excellent advice!  I have found (and as I have told Dave) that people in the concession business are so secretive with their information so this is a rare glimpse in someone that is actually walking the walk.

Hi John,
I have been in the concession business since 2005.  I started with my Italian ice trailer.  Actually, that trailer I originally intended to be a full service ice cream shop on wheels.  I went and bought a used soft serve ice cream machine on ebay, a flurry machine, milk shake machine, hot fudge warmer, etc.  I had bought the trailer used on ebay also, sight unseen, and had it shipped to CT from Minnesota.  It got here, and was in deplorable condition.  Nobody ever caulked the seams in the roof, and for years, water had leaked into the roof, down the walls, and completely rotted out the floor to the point that the plywood actually came up in handfulls.  This trailer was advertised as "could use new linoleum".  Yes, it did need new linoleum, but it also needed new floor framing and plywood!  I was busy trying to get the trailer in order before my first event, and time was ticking.  I had to have it ready for a certain date because I was supposed to be selling at a blueberry festival.  Well, I didn't have all my ducks in a row with the ice cream stuff, so I just ended up putting one of the freezers back in there after repairing the floor, and did Italian ice only at that first event.  It was a two day event, and I took in $650 in two days.  I had never made that much money that quickly in my life.  From then on, I was hooked.  I decided that the Italian ice went so well, and was rather simple to do, so I would just make it an Italian ice trailer... forget about all the ice cream stuff.
This is a picture of that trailer on my first day of business:
It looks a little different now.  I've found that "flash is cash".  The more flashy your trailer is, the more it will catch people's eye and make them want to buy from you.  Especially if you are a travelling unit, where people really don't know you or what kind of product you sell.  You have to attract them to you with flash.
It takes time to build a good route for a concession trailer.  I still don't have every weekend booked during the summer months.  I have found some events that advertise 10K people, and I doubt if they get half that.  So if I don't do good, I don't go back.  And some events keep changing their weekend from year to year, so it will conflict with something else, and then I'll have to choose which one to do because I can't be in two places at once.  So my schedule always varies to some extent every year.  I think it's always a good idea to visit an event first before putting up money to vend there.  See what you think of it, and if you think it would be worth while.  Do they get good foot traffic?  What other vendors do they have selling similar merchandise?  How many years have the existing vendors been vending there?  If they are repeat vendors and have been vending there for years, chances are it’s a good event for them.  A bunch of new vendors is indicative of high turnover because vendors are unhappy and don’t return.
Be sure to come back tomorrow for Part 2 of His email...  he will be talking specifically about his experiences on getting into festivals and the like.  He will also be talking about his experiences with a popular donut machine.   Don't forget to check out the website Concession Trailer Business,  it is an excellent resource for those interested in the concession business, also called mobile food trailers.... ( I didn't know that either)

Mini Donuts are PERFECT for Concession Stands

The easiest way to make a profit is to choose selling concessions with low overhead such as mini donuts. These offer a fantastic opportunity to create easy, fun and favorite food for fairs, festivals or anywhere else hungry people are in abundance. Selling concessions with low overhead like mini donuts require very little start-up capital and are quite simple to run.

You will first need to create a business plan including short and long-term goals. Update this as necessary and allow it to guide you. Then you will want to determine the most profitable location. Also, if you happen to be able to travel any type of distance, you can consider taking your concession stand to regional or state fairs.

Even though selling concessions with low overhead are simple, you will still want to compile market data consisting of analysis and trends of the mini donut business. The easiest way to do this is to observe your competitors including set up and pricing. Chances are, you won't be the only stand selling mini donuts so keep your pricing competitive. Also, always be looking for any new industry developments.

Mini donuts are considered selling concessions with low overhead because they require a minimum amount of inventory. All you need to keep in hand is enough to meet demand. It is helpful to evaluate statistics including the average number of attendees where you will run your concession, this will help you determine your inventory needs. Supply companies can often help provide insight as well.

Even though mini donuts are labeled selling concessions with low overhead, it is still important to properly train yourself and your employees to reduce inventory loss and also guarantee happy customers.

Be sure to obtain proper insurance, you need to protect your funnel cake business and consider the safety of your employees and customers.

Mini donuts are the perfect food if you want to open selling concessions with low overhead. Your fryers are generally the most costly expense but there are also start-up packages that are available from concession stand suppliers.

We Added a Forum

We added a forum to our blog!  You can now talk to others who are interested in the Donut Business.   We will be talking about everything from  the best places to start a donut business to the equipment you will need....  We hope everyone will participate, whether you are a newbie or have your own donut shop.  Everyone has something to share.  You can access the forum by clicking on the tab above or by clicking MyDonutBusiness.com Forum.

Happy Belated Donut Day and Update on What We Are Doing

 

Happy belated donut day everyone....  here is a video update of what we have been up to and where we are headed with us....

Be sure to check out MyConcessionBusiness.com

Update on Finding Events/Festivals to Sell Our Donuts

Doing it Small or Going Big

Do you want to have a small business or do you want to go big? There is basically two things you can do when starting a donut business, you can start small or start big. When you start small, you buy a basic donut making machine from someone, set up at a church or local event, perhaps even a fair or festival. You could travel around to different places close to your area and probably do very well. It would not take very long for people to fall in love with your doughnuts. People fall in love with your doughnuts if you have a good recipe and they follow you, and perhaps tell their friends all about you. You could even set up little doughnut boxes in local businesses.

If you do not want to start small and you have the capital and resources to do so, you may want to go big and buy into a donut franchise. There is an enormous amount of capital required in order to start a donut franchise as you can imagine. The rewards can be great plus you have the backing of someone who is experienced in the industry. This experience can be very valuable as you work your way through the business. You do not have to worry about trial and error, making mistakes as they have your back. I personally was always leery about franchises in other industries. I had once thought about opening up a cleaning business using a franchise system. But luckily I was talked out of it. If I was not talked out of it could be several thousand dollars in debt to this day. Thank goodness I never went through with it that started it on my own. We have a blog about that as well you may want to look into it.

Look up donut franchise on the Internet and you will see several resources regarding this industry. Be sure that you have your financial house in order though, because it will be required in order for you to sign on the dotted line. This is pretty much the case with all franchises, you need to have your financial house in order. You can most definitely make it without a franchise, sometimes it may be even better.

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