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!

18 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:

    People, there is no “easy button” to get into a bakery business. If you are serious, you will find your own way to get educated (try working in a donut shop, for starters) or at least hire a legitimate consultant. If you have substantial financial backing, maybe even consider a franchise. I get these “tell me what I need to get started” requests daily. If you do not know what are doing or what you need to get started, if you don’t have a solid location lined up, if you don’t have a big chunk of change set aside, the last thing you should be doing is talking to equipment dealers and salespeople, our role comes into play much later in the process. 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. Can I send you some info to teach you the ropes? No, sorry 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 effective 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.

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Just to (belatedly) confirm what I told you on the phone, your team did an outstanding job in SLC getting the ovens installed and our people were very pleased. I have spoken with our Ops manager and he is test firing the ovens every day and reports that all looks in good shape. We very much appreciate all the help you have given us to get equipment lined up for this project as we couldn't have done it without you. Please thank your men for us. Rod Coleman -------------------------------------------------------------------------------- Hi, Just wanted to thank you for the fine proofer. Had to take it apart inorder to get it in restaurant. .... Works great and we are very proud of it's appearance. Proofs our rolls very nicely with close cell structure. Completely satisfied. Thanks again. Ron Hughes, Bennie's Junction -------------------------------------------------------------------------------- I recommend Bakery Equipment.com to lots of people. Not only is your web site professional and organized, the salesmen I have dealt with are superb! They are polite, helpful and informed. When I am ready to start my own bakery I will probably buy most, if not all of my equipment through your company. The new web site looks more organized and offers more on the home page. I was happy enough with the old site but as I look more closely I see ways that it has been improved. Thanks so much for all your help! Jean Etue -------------------------------------------------------------------------------- Dear BakeryEquipment.com, I'm writing to inform you of the outstanding customer service that my family has received from your company. Working with the highly knowledgeable staff in your sales and customer service department, we have been entirely impressed with their attention to our needs and concerns as we placed a $1,000+ order with your company -- and, based on this experience, it will not be the last large order that we place with BakeryEquipment.com. We are so impressed, that we have also taken the time to recommend your company to our friends and family, including my brother-in-law, who is a chef by trade! So, thank you again for providing such excellent customer service. Sincerely, Mariah K. Boston -------------------------------------------------------------------------------- I was originally kind of skeptical in purchasing a Hobart L800 mixer from an internet company but I was pleasantly surprised how well everything went from the original order, to delivery, to final installation, and to actual usage. Originally, I had trouble getting the mixer started because of all the built in safety features which I was not familiar with. However, Rick Evans helped me understand how this mixer worked and we eventually got the mixer to operate. He stayed on the phone with me until the mixer was working. If I need anymore restaurant equipment, I will buy it from bakeryequipment.com. Thank you very much. Frank LaBarba Nick's Pizza Newburyport, Mass. -------------------------------------------------------------------------------- Bakery Equipment.com has help my wife and I to realize our dream of opening and operating a small cafe and Pizzeria in Alaska. Darren helped me to figure out what I really needed for equipment, the shipping quote was done in less than a day, and equipment arrived right when promised. Our business is located in bush Alaska and is only accessible only by boat or plane. Darren and BE.com were able to deal with these logistical hurdles and get our deck oven, woodblock table, and mixer up here with out any problems at all. Plus their prices could not be beat. Bakery Equipment.com is a great resource to have and I would definitely use them again. Thanks. Mike Atkins Homeshore Cafe -------------------------------------------------------------------------------- Dear Rick, Got the machine this morning (Friday). I am still unpacking but we should be up and running for the festival. Thank you again for your effort! A lot of people will be pleased at this year's National Folk Festival. Sincerely, Tom Sadowski -------------------------------------------------------------------------------- I just want to thanks you for the excellent service, fast shipping and great price. I have to share a picture of the Kitchen with the Island installed. The John Boos table is an exact match for our GE Profile kitchen and looks great. 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  • Yes, the misspelling of "doughnut" is intentional. Come on in and post recipes, questions, tricks, stories, etc regarding commercial donut business and equipment. Don't forget to visit http://useddonutequipment.com and http://www.bakeryequipment.com

    Thinking of starting up a donut (or doughnut) shop? Or do you already have one and need to add equipment or machinery to expand or automate your production? Need some advice from someone with a fair amount of insight and resourcefulness, as well as hands-on experience, in the world of commercial bak...