Posts Tagged ‘Starting Out’
The Importance of a Business Plan for Your Donut Business
April 26, 2010 | 
Author 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.
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Importance of Having a Business Plan – Update
I realize we've discussed this before but I found some really good business plans on Ebay the other day and I wanted to share them with you... they are below... a few things to look for when purchasing a donut business plan:
Is it specific to the donut business?
Is it customizable and includes a template?
Does it automatically calculate spreadsheets, tables and graphs?
The above are important to make your life easier when developing your plan.....
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Donut Shop Business Plan Bundle |  |
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US $39.95 | 16d 7h 39m |
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Donut & Bagel Shop Start Up Business Plan NEW | |
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US $19.95 | 14d 11m |
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How To MAKE MONEY Sell FOOD Start CONCESSION STAND Business Mini Donuts Corn Dog | |
0 Bid | US $16.95 | 1d 3h 3m |
| Powered by phpBay Pro |
|
Donut Shop Business Plan Bundle | |
|
US $39.95 | 16d 7h 39m |
|
Donut & Bagel Shop Start Up Business Plan NEW | |
|
US $19.95 | 14d 11m |
|
How To MAKE MONEY Sell FOOD Start CONCESSION STAND Business Mini Donuts Corn Dog | |
0 Bid | US $16.95 | 1d 3h 3m |
| Powered by phpBay Pro |
Having Business Partners in Your Donut Business
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.
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.
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.
