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Should You Start a Doughnut Business in a Slow Economy Part 2
February 27, 2010 | 
Author A lot of potential would-be business owners face the dilemma of starting out on their own on a daily basis. They know that they have a good product, doughnuts, but they are afraid that the slow economy will prohibit them from doing well in the donut business. They fear they will not be able to make it through the very difficult startup period When overhead is high and revenue is low.
The first thing you should do when starting a new business or thinking about starting a new donut business, save your money and get debt that you have currently paid off. If you are overrun with that and have no savings, when you experience bad times in your donut business, they will be amplified. If you are having difficulty making ends meet and have additional bills related to donut business venture You'll be in very bad state very quickly. If I don't give you any advice that you do not take, be advised that you need to have savings and most of your debt paid off before venturing out into having your own business. This becomes increasingly important when you have a family to support and only one income. If you do not do anything else before you start your done the business, get your debt paid and build your savings.
If you have enough money to live for two years saved, then you will have a very significant amount of money to help you when times are tough. Keep in mind you need to have enough money saved to pay your mortgage, utility bills, and any other debt that you may have. These bills have to be paid every month, you really do not have much of a choice.
The next thing you should do when contemplating starting a donut business, is setting up a timeline. You can use this timeline to set your goals of where you want to be and when. You can also use the timeline to develop a strategy for your donut business. Use the timeline to determine the amount of time you'll spend on developing and marketing the business. You will use it to plot times when you will work on the business. Do not set unrealistic goals, like working in the middle of the night if you do not have a history of doing something like that. Setting unrealistic goals when starting your donut business will only push you that much closer to failure. Be realistic and setting your goals And you will set yourself up for success in business.
Another thing you will want to do is analyze the opportunities you have in your area for setting up a donut business. Are there a lot of schools and churches that you could possibly sell your doughnuts to, maybe set up charity events to help push your doughnuts. The more people that taste your doughnuts, the better chance you have of people falling in love with them and wanting them. You want to make sure that there is a market for your business. How many people in your area are selling donuts? Have they been in business for very long? Do you have a unique donut recipe that you can share? Do you have a passion for what you are selling? All of these questions will get you closer to having a successful donut business and keeping you happy And a wave from your job.
Getting Capital for your Donut Business
You have an excellent donut recipe, You have a location and an audience to sell your too... and you are certain that they will sell very well. Now you just need to get equipment licensing and other things rolling in order to get your business started. Yet found a great place to get equipment, but you have found that it can be very expensive. If you do not have any money saved but you are financially secure, i.e. you have enough money to make ends meet. Then he may want to get the capital to run your donut business from other sources.
Do you have good or decent credit? If so, then you may be able to get a small business loan from your local bank. Local banks are usually easier to deal with than big banks that just look at numbers. Credit unions are excellent places to get loans for $10,000 or less. If possible attempt to get a loan at a bank that you frequent often. You may be surprised how easy it is. They will want to know what the money is for of course and what you intend on doing with it. This will help you get the necessary capital that is required to get your business venture up and running.
If getting a loan from a bank or credit union is not an option, Have you considered borrowing the money from a family member? Maybe you can borrow the money from a close friend who could possibly be a business partner? We explained the differences between a business partner and a venture capitalist and a previous post. But to summarize, when someone invests (capital) in your company they will have little control over the day-to-day operations of the business. It is simply your responsibility to pay the loan off when you start to make money, or whatever arrangement that you may have with the venture capitalists. Having a business partner can be a sticky situation if you are not careful. The business partner in your donut business could be difficult to work with or have different ideas on how things should be handled. As previously mentioned you can pay a higher rate on the loan than giving 50% of the company to someone who will not be actively involved in it. Be very careful about taking money from people and the contracts that you sign.
The business partner model has worked for us and our situation, but it may not for you. Assess your needs and what everyone brings to the table before you make a decision. This lone decision Could mean the success or failure of your venture. Not to mention the overall happiness that you will have our not have by going into the doughnut business.
Fairs and Festivals–Ideal for the Donut Business
Donuts can be an ideal food to sell at fairs and festivals for a number of reasons. The main point is that you are selling something different than the competition in the other trailers. People get tired of seeing the same old offerings like hot dogs, corn dogs, nachos, and pizza. Marketing research has consistently indicated that to a consumer, seeing something "different" in a background of "same" will at least bring you attention. Then it's your job to hook them on the product.
People at fairs and festivals are a captive audience. Do they usually bring their own food from home to eat while they walk around? No! They look for something tasty. When they get hungry they buy food rather than leave. And the donuts you will sell will be small, bite-sized delicious morsels of flavor. People buy a bag and walk around eating them one at a time. Think about these questions. Which is easier to eat while on the move? A piece of pizza, a funnel cake, a hamburger, nachos, or a bite-sized donut? What can be easily wrapped up to eat later if the person doesn't want to finish the food item? A corn dot, a fried pie, a turkey leg, or a bag of bite-sized donuts? Which of those previously mentioned foods is less messy? Say for a mother feeding her young child? Why, donuts of course! You're selling convenience as well as a high quality product.
Fairs and festivals generally have lower rent compared to storefront establishments. Below you will find some trailers to sell your donuts in, they can be quite inexpensive.
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NEW 8.5 x 29 GOOSENECK ENCLOSED CONCESSION FOOD TRAILER OLE HICKORY SMOKER |  |
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US $49,895.00 | 4d 15h 31m |
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NEW 24' CONCESSION CATERING FOOD TRAILER WITH APPLIANCES & FIRE SUPPRESSION | |
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US $37,999.00 | 23d 11h 28m |
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AVAILABLE NOW "NEW" IN STOCK 8.5x20 CONCESSION TRAILER | |
0 Bid | US $32,995.00 | 10h 19m |
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8'6" WIDE x 28' LONG CONCESSION / CATERING TRAILER | |
0 Bid | US $31,990.00 | 10h 19m |
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NEW 8 x 24 ENCLOSED Concession Trailer with Grease Hood | |
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US $28,999.00 | 22d 11h 6m |
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Here's a very important tip for anyone looking to sell fair and festival concessions--do what you can to get your foot in the door with your business. I was surprised to find that the older ones only let in a certain number of food vendors and that they typically give preferential treatment to those that have been coming the longest. Sometimes there's a waiting list just to set up shop. But, this is another advantage of selling donuts--it's original. I was informed by more than one concession planning committee that if I had something different I would get more consideration. You could also target newer fairs that haven't been in existence for very long and therefore don't have an established clientèle.
Recieved Information in the Mail
We recieved some information in the mail from the vendor we may use for the donut business. I have yet to go through it, I may make copies to distribute to the group... We have not considered other venues for the business, there are other flea markets in the area, the Proctorville Flea Market? I believe interest in this project is winding down... only time will tell.
Posted in Uncategorized | 
Tags: area, business, donut, Information, interest, Market, project, Recieved, time, vendor | 
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Are we taking away from our other interests?
That is one of the concerns one of my partners is having.... We are primarily in business to do real estate but just saw the opportunity in this awhile back.... One of our partners pulled an article out of Fast Company that discussed a "small donut" shop in Seattle, they are a street vendor I believe.. It was part of the "Why Seattle is the Most Creative City of 2009. A link to the Fast Company Article is here.. I love Fast Company, I used to read it religiously... after this article that my partner found, I will revisit the magazine.
Our flea market idea is pretty much a no go.. we will consider another possibilit, it is just very important tha we have the traffic necessary to sustain this type of business.... I wish we had a busy downtown area... actually we do but only part of the time.... there is a new development that gets a lot of entertainment type traffic... there are not a lot of business men or women in our downtown area, so not a real big need for street vending, too bad.
Posted in Uncategorized | Tags: business, development, donut, Fast, idea, link, need, shop, street, type | No Comments »
Still Have Not Recieved Any Information
Checked the mail today, we are awaiting information on the donut business and the machines themselves.... I called the company and requested more info.... I didn't get his name, but hopefully someone will get back with me and/or send some informaton. It is just amazing to me how companies that are supposedly successful do not send out requested literature or at least make a phone call to a hungry buyer. Are they so large and have so much business they do not need to respond? I have come into that a lot lately.... people not responding to emails or phone calls..... It simply amazes me! I am very curious what the booklet they send has to say...
Posted in Uncategorized | Tags: business, call, donut, info, informaton, literature, mail, phone, Recieved, today | No Comments »
Donut Machines, Mini Donut Machines and Doughnut Machines
This is the equipment we are most likely going to go with, but are definitely considering others... I personally like the idea that there are no franchise fees involved and we can use the name Lil' Orbits with no royalties (from my understanding)... We are still awaiting the informational booklet that they promised to send... If I do not get it in a few days I will call them and see what happened. I liked what I heard from the lady I had spoken with, her name was Donnie, she was very informative.. I am not certain whether I can ask for her directly or not. She was supposed to call me but never did. We will see. I am in the process of finding other vendors at this moment... One thing I found interesting about this company is I read somewhere that they get over a million (I believe) hits through there network of sites... I find this very intriguing as an internet marketer. I am going to be talking with my partners this week about their flea market visit.. from my understanding they are only allowing a couple food vendors at a time and there is a waiting list. I will update you on what they say this weekend.
