Starting a Donut Shop/Gelateria - Wisdom wanted!

[HungryC]

I'd love to figure out some sort of cart... our city is in the midst of a street-food battle, with a contingency trying to outlaw/overregulate food trucks and the like (stupid, I know...). That said, I'm a little hesitant to put any money into something that might be illegal/red-tape-filled in a year or so.... but It's definitely on my radar.

Are you in a university town? If so, network with the student affairs/programs/organizations coordinator (or greek affairs) on any nearby campuses. Doughnut sales are an easy and popular fundraiser; students pick up the fresh doughnuts and then sell 'em on campus. It's also excellent exposure for your products.

[Lisa Shock]

I'd love to figure out some sort of cart... our city is in the midst of a street-food battle, with a contingency trying to outlaw/overregulate food trucks and the like (stupid, I know...). That said, I'm a little hesitant to put any money into something that might be illegal/red-tape-filled in a year or so.... but It's definitely on my radar.

Wholesale sales may be your answer. Get other people who have trucks to buy your product by the dozen, with discounts for 5+ dozen of any one flavor. At this point, I don't think it's wise to try and start both a brick & mortar place and a truck. In some areas, the planning and inspections for both are similar and getting a truck will just slow you down -and cost extra money.

Other places that may buy product wholesale would other coffee shops, tea houses, breakfast joints.

[jrshaul]

Holly: that's exactly something I'll be working with: farmers-market filled donuts. We get great seasonal produce, so all filled sweets will have homemade jams in them! I can't imagine why your old bosses didn't see how great of an idea that is!

When producing seasonal goods using ingredients with short shelf life and highly variable cost, keep accurate metrics of all inputs. A seasonal good does not have established sales patterns, making it very easy to lose big money on overproduction. The margins on donuts are not large to begin with, and the inputs to a Krispy Kreme are a lot less variable than farmers' market produce.

. In some areas, the planning and inspections for both are similar and getting a truck will just slow you down -and cost extra money.

Where I live, this very regulation has resulted in a significant takeover of food carts by established restaurants - the campus donut cart is now owned by a large casual restaurant & caterer. The certifications have become so stringent as to be prohibitive to anyone not owning a private kitchen. Keep an eye on the news.

Are you in a university town? If so, network with the student affairs/programs/organizations coordinator (or greek affairs) on any nearby campuses. Doughnut sales are an easy and popular fundraiser; students pick up the fresh doughnuts and then sell 'em on campus. It's also excellent exposure for your products.

It's also worth considering product to major events on campus. Professional conferences are an awfully efficient way of gathering huge quantities of potential donut buyers into one location. A local start-up accelerator event seems to have no trouble with sponsorship from caterers; perhaps you can look into something similar.

[TheStarvingArtist]

I definitely am planning to position myself near our few downtown colleges. The problem on the University's campus is that they've got an exclusivity contract signed with their awful national catering corporation, so I wouldn't be able to get on there (I know, because I argued against the contract when I went to school there...hah).

Here's another question: I did a budgetary estimation.... build-out, equipment, startup costs, plus six months of rent, payroll, and ingredients. I came out to just about $50,000. Having never done anything like this, does that sound like a lot? A deal? Reasonable expectations? I know restaurants can be stupidly expensive, but $50,000 isn't that cheap in my book, so I don't know where it falls on the scale of "acceptable expenses".

[Lisa Shock]

It seems low. I know a banker who specializes in restaurant loans and he won't write a loan for less than $200,000.

On the buildout, be aware that you will probably have to deal with plumbing issues. On payroll, remember that you have to pay the employer portion of SS plus unemployment insurance, etc. You'll have licenses to pay and inspections with fees as well. It's usually a good idea to have enough to cover payroll for a year.

Don't forget that you're going to have to purchase a couple thousand dollars worth of food and dry supplies before starting.

And, the big one, you need to have a couple thousand socked away for emergencies like when the walk-in dies or the roof leaks or the sewers back up and flood the place.

[jrshaul]

I definitely am planning to position myself near our few downtown colleges. The problem on the University's campus is that they've got an exclusivity contract signed with their awful national catering corporation, so I wouldn't be able to get on there (I know, because I argued against the contract when I went to school there...hah).

You'd be amazed how much occurs outside the thumb of the university proper. Professional and student groups often meet outside the bounds of the campus proper; pick the right ones, and you can get great exposure.

Or you could throw a few cartons to the Rotary meeting. Couldn't hurt.