Starting Up A Donut Shop

Starting Up A Donut Shop? You wouldn’t be alone. We have seen our overall equipment sales go down slightly with the poor economy, but for some reason donut shops appear to be going strong as ever. Every week we get at least a couple calls from people planning to open a new donut shop in their area. If you are one of these people, here are some tips from an equipment supplier’s perspective:

Continued…

The first big thing is funding a start-up. The current financial world is challenged to provide leases or loans to new food related businesses like a bakery, unless you have good credit history and/or you are willing to live with fairly high interest rates. Even then, the amount of money they can get for you may only be a fraction of what you really need to get the business going. You can’t cheap out either. Yes, every entrepreneur starting a new business has to be frugal to an extent, but starting a business like this is truly somewhat of a “go big or go home” endeavor. Beyond budgeting for the build-out, you need additional funds to cover ingredient replenishment, marketing efforts, the first several weeks of rent or mortgage payments, utility bills, and staff payroll, etc, etc. Many unexpected costs can also come before you even open your doors to start making some revenue, such as from your trades/general contractor (costly delays, oversights or mistakes are inevitable), inspections, city approvals and licenses, and so on. And even when you do open, your sales at first may not come fast and furious enough to dig you out of a financial hole while you are continuing to incur more expenses. You must have a fairly significant reserve to get over the opening hump.

Location, location, location! Yes, the success of your business is largely dependent on your site selection. But here are a few other things to keep in mind in choosing a location, with regards to equipment:
1. Having three phase electricity available at your panel will be helpful when it comes time to shop for equipment. Many of the commercial machines require three phase by default. If you only have standard single phase power, it may restrict your selection of equipment to some degree. For example, if you have decided that a 60 quart mixer is right for you, most of what you see on the market, new or used, will be 208-220V/3ph/60Hz. So you may have to dig deeper into the used market, possibly even special order a new one with alternative electrical requirements, or consider using a phase converter. You can usually get three phase power brought in to the building from the nearest source, but it can be wildly expensive to do this.
2. Having street level rear access with at least a double wide door is great. Not only for receiving your equipment, but also for receiving your regular shipments of ingredients. Can you imagine having to schlep a pallet of donut mixes every week up a flight of stairs?
3. An adequate natural gas supply to the space. Although electric fryers have gained some popularity over recent years, gas is still the utility of choice to heat a donut fryer (or commercial oven). If you intend to fry with gas, and there is no gas supply to the building, you’ll have to look into the cost of getting it installed by your local gas company.
4. It’s nice to have at least 500 square feet for your production area. Of course, you will find a way to cope with a small area, but more room is better.
5. Do your research, using any local resources you can identify and contact, on all potential zoning and permit issues, as well as finding out what inspections you would be subject to prior to opening and what their criteria are. Lastly you need to look at what your locale or local codes will require for venting and fire suppression. Believe it or not, many bakery equipment dealers don’t sell exhaust hoods and such because they are regulated by local authorities, even potentially down to your landlord and the lease agreement you are signing, and vary from one location to another. So I recommend you use a local established and reputable HVAC contractor with restaurant and commercial food experience, to design, fabricate and install your exhaust hood for over the fryer. A company like this should know the local code, including with regards to fire suppression.

Good luck and happy planning!

26 Responses to “Starting Up A Donut Shop”

  • chinmay says:

    wana open donut shop in india what will be the actual cost of it including machines and staff and which equipments are required please suggest..thanx hav a nice day….

  • Hello,

    I read through your website and would like to start some dialogue on purchasing a complete set up to get us off the ground for our expansion into the donut market. I currently own and operate a very successful bakery, café. I understand the need for mixers, coolers, fryers, proof boxes, etc. I could work on piecing together the equipment; however, I am looking for a simpler approach. I do not need help with the cost benefit of this operation or financing or marketing, etc. Do you have the capacity to put together an accurate quote with some additional provided information? Please feel free to reach me by email. Depending on a couple variables we could be ready to open our second location with the donut emphasis in less than 3 months.

    Steven J Gomez
    steven@GomezEstates.com
    575-937-8306

    • donutadmin says:

      Steven,
      Sure I can put together a quotation, even easier if you already know what you need from being experienced in running a bakery. If you don’t already have a list we can talk on the phone and come up with one. So either email me your list or call me at 888-869-5737 ext 225. I am usually in the office Mon – Fri, 730AM – 4PM Pacific Time

  • Elline says:

    I want to open a donut shop in Ethiopia can you please contact me

  • john says:

    Want to open a donut shop in India.
    Please let me know the equipments required and the prices.

    Thanks

  • donutadmin says:

    Unfortunately, there is no “easy button” to get into the bakery business. The process of taking someone who has never run (or even worked in) a bakery before, and teaching them everything they need to know to open a donut shop, is a long and involved process. You can’t possibly expect to get that level of consulting for free on the phone or from a comment on some website. If you are serious, you will find your own way to get the knowledge and experience you seek. Try working in a donut shop, for example. Or at least hire a legitimate consultant to work with you in depth, one on one, preferably in person. If you have substantial financial backing, maybe even consider a franchise. Calling up some company you just googled and asking them for a “complete list of everything I need to open a donut shop” is the same thing as asking for the easy button, and it doesn’t exist. I mean this in the most helpful way possible.

  • John says:

    Hello.
    Wow you’re site is awesome. I live in a very cute neighborhood and am sure I would be successful with a donut shop. I don’t have any baking experience at the moment but am a quick learner. I would like to offer at least 70-80 different varieties of donuts and the best coffee ever. Can you send me some information so I can learn the ropes? I love donuts so I just know that with your guidance and professional advice I will quickly be in the “dough”. I see $$$ already. Wow! This is gonna be great. Also, do you have any contacts that can lend me the start up capital? Thanks so much for your help.

    • donutadmin says:

      Hi I appreciate your enthusiasm and wish you luck on your journey. Feel free to call me to discuss donut equipment, but note that I am a commission paid equipment salesperson, not an educator or consultant. I would recommend applying for a job in a donut shop, and work in it for as many months as you can take. Study as much as you can while you are there. As for financing, any leasing company could discuss your options of getting funded. So you can google to find a few and make a short list from there. I can tell you that as a start-up with little to no experience that most lenders see you as a huge risk and will not make anywhere near enough funds available to get a business up and running, and what they do manage to lend you will be at astronomical interest rates. Sorry to sound discouraging, John, keep plugging away.

  • Sweet NOLA Cupcakes says:

    Hi everyone. I started Sweet NOLA Cupcakes two years ago. I thought the same as many of you. I went around town to see if someone anyone would mentor me. Almost everyone turned me away. I did not have any experience with commercial ovens. So,when I thought I was ready I just started and taught myself. When I opened my shop it was very hard and it still is hard. However, each time I messed up, I knew that there was only one way for us – UP. You learn best by doing. Before you open your shops look at the location. You must have foot traffic. We do not have foot traffic and it hurts our slow days. Before you sign on the dotted line, step back and look for the beauty in the building. Don’t be blind sighted by your “I Got to have it and I gotta have it Now!” fever. Be sure you have money for down the road. Supplies run out fast every week. I have learned so much just by doing. I can tell you there are at least 20 more things you will need to stay in business. Equipment is just one aspect. Tele marketers and sales companies like Google call every day. When you are on the outside looking in, it looks like you just have to show up. It a hard road to climb but it gets better.

  • Edithe says:

    Hi
    I was interested in opening a Shipley Donuts in an area where there is absolutely no competition, a small town where winters are long and there are 4 Starbuck shops.. so people around here are HUGE pastry and coffee drinkers (The franchise fee is about 40k).. Would you be able to tell me the success rate for the Shipley Donuts franchisee??

    • donutadmin says:

      Sorry for the late reply, I am usually notified by email when new comments come in that make it through the spam catcher, but it hadn’t been working correctly. For what it’s worth now, I am not in the know on the Shipley Donuts chain, so unfortunately I couldn’t give you any good advice on that.

  • Danny says:

    do you sell used items? I need a couple 10qt mixers, and have been looking into a system like lil orbits donut machine that drops the cake donuts into oil and flips them when needed.i have been buying items here and their no need for a loan I want to open my doors with as little overhead as possible. thank you

  • Dave says:

    Wow, I can’t tell if most of these comments are spam or people that didn’t read anything. My dream would be to open a donut shop in my area, where I can count the number of decent donuts shops within a 50 mile radius on 1 hand. Sadly, I am still only in the dream stage, searching the web for articles to quench my thirst of industry knowledge. Maybe someday I will try to turn it into a reality, but either way, thanks for the informative post and all of the nuggets of wisdom.

  • Nettie Baker says:

    Hi,
    Very interested in opening a doughnut shop. I have gathered information on equipment. Is there someone who sells commercial doughnut recipes? I don’t really want to use mixes from Pillsbury of other food services, do to the additives. If you can point me in the right direction, I would be very grateful.
    Thank you,
    Nettie

    • donutadmin says:

      Sorry about the late reply Nettie. If you haven’t already worked it out, all I could suggest is more googling for scratch recipes, as well as using the search tool on this website using keywords like “recipe”. But note that commercial mixes have additives, some of which are considered “clean label”, for a reason, and it’s not always the reason you might think. While it is correct to say that some additives may be chemical in origin and may serve purposes such as to increase shelf life, others are there to make the dough more resilient to inconsistencies in the day to day make-up process. Some of these dough conditioners are natural, enzyme based, and therefore considered relatively clean. Getting consistent results from one day to the next, with one baker to the next, and from season to season, even when slight mistakes are made in the process (overproofing/underproofing etc) takes all the help it can get. I appreciate that we are growing as a culture in our awareness of what is in our food and what it is doing to our health. But a treat such as a donut is far from being positioned as a health food and therefore may not be as label sensitive. Ask your supplier of choice about clean label mixes. And if you are concerned about commercial mixes being “me too” or too generic, the dough formula itself is only a part of the final product. It’s what you do with it, and how it’s finished or decorated that makes it your own unique offering. Just my humble opinion.

  • Nenono1 says:

    Hi,
    I want to open donut store in Macedonia, but i don’t have any experience in this .So please, if anyone can help me about it, give me some advices what basic equipment i need etc, i will be thankful.Thanks in advance .

    • donutadmin says:

      Sorry but it’s not that simple. The reality is that there are so many people looking for this kind of help, from all around the world. Given that there’s no such thing as an “Acme Donut Shop In A Box”, understanding why you might want to choose one type of mixer or fryer over another is a lengthy two way consulting process, not just a quick answer that I can provide in the comments section of one of my articles. Hiring a professional consultant may be your best course of action.

  • David O says:

    Hello,

    Does anyone have a good offsite bakery location in Chicago? I will not be making my donuts at my shop. I need some contacts to offsite bakery shop that can make my Donuts.

    • Nicole says:

      I suggest. The original doughnut shop on 112 the street in Chicago they have the best doughnuts and is still a family owned business. I still visit there when I travel to chi-town. You will not be disappointed

  • Erwin says:

    Hello, I want start step by step an own Donut Franchise biz. In the country where I am from in EU there are no Donut shops at all, but of course donuts are known from some big supermarket chains as Tesco or Walmarts with very limited types of donuts, mostly one or two types only. The main problem is we will have an quite difficult supply of donut mixes because brands as dawn are not available too. But thats giving opportunities as well as we would be the first ones with donuts here. We struggled where to start from with the organisation of the equipment, so we was quite happy to find your page. We are serious and ready to buy an initial package of all strongly required equipment and in our point of view initialy it the Mark VI would be a part of it as in one of your articels we saw it is basicly the only one worth to make yeast rised donuts and a automatic one. The initial equipment would be an experimental one within we would test the capacity, interest of the folk, their reaction on the donuts itselfe and later with deeper knowledge we will surely go much easier for an bigger investement in the production equipment. So please give us your offer for an start biz of donut production incl. mark VI machine and your suggestions of equipment we will need for the very first begin. Take into account the daily sales what we might have initialy would be arround 400-500 donuts. Knowing that many franchisees in Germany per example use to sell frozen donuts which are in the morning taken out of the freezing device, do you know if they are shocked frosted before and do you suggest such shock froster as well? I assume not many donut shops are able to produce in a night shift in order to sell every day fresh donuts. We want use the frozen way of biz in order to be able to supply bigger qty and offer and franchise solutions. Other options would be too complicated. Thanks and keep in touch by email. Bye

    • donutadmin says:

      Sorry your post was incorrectly tagged as spam, and I just came across and rescued it. Wow that’s a lot of information and a big task ahead for you. As a simple equipment supplier I would think you have mixers, sheeters, refrigeration, and other support equipment available closer to you, that would save a tremendous amount of shipping cost and would be in your correct local electrical specification. So I’m guessing it’s only the main donut making equipment that is needed. With that, I can offer a Mark VI cake and yeast donut making package with the thermoglazer for the fresh and frozen donuts for US$20,000 but this is used equipment originally manufactured for North American voltage, so you would need to convert or supply a transformer at installation. Contact me through http://www.bakeryequipment.com

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