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So my wife inherited a defunct commercial building with a leaky roof and crumbling corner. $12,000 later it’s dry and sound. We’re paying taxes on it and waiting for the next thing to cost money so we decided to either sell it or use it. The building is located by a busy street a few minutes from a 1,000 student high school. Cars go by every ten to fifteen seconds throughout the day with a decent morning rush hour. For this reason I intend to make the building into a drive-through coffee and donuts kind of place. I’d imagine that from 6am to 10am we could conservatively sell 800 drinks and 800 donuts netting double what the two of us make now.- I’ve sourced a donut machine that claims to be capable of 40 dozen donuts an hour. I’ve been picking up espresso machines and coffee pots when they’re cheap. I can cut concrete, set drains, run gas and water. I’ve been a plumber for ten years and I’ve built quite a few kitchens but I’ve never designed one. One current sticking point is a grease hood. I’d like a 5x12’ island hood in the middle of the kitchen but I can’t find one. Then there’s also the layout consideration. I’ve never done much food service work and I’d hate to build my enterprise suboptimally. Long story short I’m capable of doing most of what needs done I just don’t know exactly what that is. I can budget maybe 75,000 for this because that’s all the time I have before our projected open date and we’re funding this with our wages. If any of you goons would like to weigh in I’d appreciate it.
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Sep 13, 2022 16:37
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in'
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| # ? Apr 26, 2024 01:23 |
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How much would you make just selling it? Have you looked at other similar types of donuts and coffee operations? Have you ever managed staff? Have you ever done the accounting for a business? How will you manage cash flow? Do you actually want to work at a donuts and coffee shop? Would you make more money by hiring someone else to run the thing for you and keep making wages? Have you considered just franchising - you could consider becoming a Krispy Kreme. You might have 0 desire to become a Krispy Kreme franchise, but the you might learn a lot about how you have to run a business. Same thing, I'd at least look into becoming a Krispy Kreme and or Dunkin Donuts just to see what the business model, cash flows, etc.. look like.
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Sep 13, 2022 17:09
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There’s really no telling how much we’re able to sell it for. I know it wouldn’t pay for a better location, though. I’ve been scoping out all the local cafes and bakeries and talking to the people in them. One guy told me he hands about 2k through the window in a typical shift. One lady manages a kk and told me they’ll move 45k in donuts a week. I’ve managed up to fourteen people at a given time, which I imagine is way more than I’ll need for a typical day. I’ve done some accounting in my time but it usually boils down to “we can maybe get that in three months” As far as cash flow, I figure we’re either selling or we’re not. If the store doesn’t turn $25 of flour into $200 of donuts we won’t need another $25 in flour. As I onboard people I’d like to pay them well. It’s hosed up to have a guy bring in 2k and send him home with $87. In the early going I’d almost have to work it myself. I don’t trust anyone who is available to get it off the ground for me. I never really -wanted- to do anything but the more I look into donut making the more intrigued I am by the artistry that you’ll see. I think it’d be really rewarding to fill display cases with bear claws and poo poo. I’ll keep my union dues current, though. I also don’t want to franchise I want well-paid workers in my community.
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Sep 13, 2022 20:17
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You seem to be committed to treating your workers well, which is admirable. Have you considered a worker co-op ownership and management model? I don't know a lot about these except for the few that I've been to, which seem to thrive in a certain kind of American city.
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Sep 13, 2022 20:45
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Looks like Krispy Kreme’s latest operating income is around 2%-4%, as a reference point. Lots of shrink in donuts and coffee since they are so perishable.
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Sep 13, 2022 20:47
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Have you worked in this line of business before?
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Sep 13, 2022 22:46
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Democratic Pirate posted:Looks like Krispy Kreme’s latest operating income is around 2%-4%, as a reference point. Lots of shrink in donuts and coffee since they are so perishable. Absolutely perishable so rather than selling old donuts and coffee one should donate them to the local charitable organizations at closing time and write it off
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Sep 13, 2022 23:44
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KYOON GRIFFEY JR posted:Have you worked in this line of business before? I’ve never done food service but for all of 2013 I worked on a crew of Mexicans so I can do anything now. But seriously we’re taking the servsafe class in like six weeks.
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Sep 13, 2022 23:47
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kreeningsons posted:You seem to be committed to treating your workers well, which is admirable. Have you considered a worker co-op ownership and management model? I don't know a lot about these except for the few that I've been to, which seem to thrive in a certain kind of American city. I don’t know how easily I’ll part with my stake once we’re up and running but I’m trying to figure a pay schedule that rewards volume and efficiency. The majority of customers are likely driving to work or school and so the more cars we move the more money everyone makes. Something like 5% of the till or $100, whichever is more.
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Sep 13, 2022 23:50
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How involved do you really want to be? If it were me, I would view your plan as "buying myself a part-time job", and I would find a professional management company and leasing agent who would place a tenant in the building and handle all maintenance and landscaping and simply put a check in the mail for me once a month after skimming a little off the top. But I sense enthusiasm here, and you want to be involved, and specifically want to do this donut plan, yeah? Mostly looking for feedback on this particular course of action vs looking for the best way to monetize an inherited commercial building? (What's the square footage, anyway? Is it a single-story? What year was it built and how big is the lot that it's on? Any parking lot attached to it?)
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Sep 14, 2022 00:02
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Probably not.
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Sep 14, 2022 01:45
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GoGoGadgetChris posted:How involved do you really want to be? If it were me, I would view your plan as "buying myself a part-time job", and I would find a professional management company and leasing agent who would place a tenant in the building and handle all maintenance and landscaping and simply put a check in the mail for me once a month after skimming a little off the top. In the early going I anticipate being there all the time. If it fails I’ll shut it down and see if there are any jobs at the union hall. If it succeeds I’ll hire people to run it and take the kids camping. If it’s just limping along at the five year mark I’ll probably pull the plug. The building is 80x24 and the lot is 150x50. It’s a block single story they built in 1964. The parking situation will get wonky with the drive through but six or seven people asked about a dining room so I guess it should have one. Currently the lot is grass that I mow. There isn’t another dunkin, Starbucks, Panera, or anything for fifteen minutes in any direction. It’s possible that the line will be full for hours every morning. The idea behind donuts was to make each ticket a little bigger without adding much work during peak times. I was going to spend money on a Gucci espresso machine and have a few baristas run it but lol nobody here gives a poo poo about coffee. I’m seeing dollar signs though. Filling an order every 36 seconds means filling 100 orders an hour. Automatic espresso machines, the donuts are already made. During service we can maybe get by with just four people Aside from selling donuts out the window I can send truckloads to office parks, construction sites, and factories. I could wholesale to caterers or grocery stores. I could prank my friends by filling their cars with donuts.
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Sep 14, 2022 01:54
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Do you know how to make good donuts? Do you have a set recipe? What flavors will you have? Can you do cream filled? What about bars? What about a double chocolate donut, do you have another recipe lined up for that? Will you make gluten free donuts? How early in the morning do you plan on going in to get things started?
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Sep 14, 2022 02:11
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Rationale posted:There isn’t another dunkin, Starbucks, Panera, or anything for fifteen minutes in any direction. It’s possible that the line will be full for hours every morning. The idea behind donuts was to make each ticket a little bigger without adding much work during peak times. I was going to spend money on a Gucci espresso machine and have a few baristas run it but lol nobody here gives a poo poo about coffee. Bolded bit is important. Is there not a lot of development around, or could there be other reasons stopping them?
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Sep 14, 2022 05:27
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Is 36 seconds per order a estimate based on anything? Never have I ever received a Dunkin Donuts order within 36 seconds, or three people at three registers in <2 minutes. High school kids are going to want fancy fraps and other starbucks drinks, and not plain regular coffee. That takes more specialized equipment and significant time to prep on demand. Rationale posted:As far as cash flow, I figure we’re either selling or we’re not. If the store doesn’t turn $25 of flour into $200 of donuts we won’t need another $25 in flour. I totally appreciate wanting to pay your employees well. Have you done a business plan and figured out the margins and how much you can devote to pay? Have you started to write down all the poo poo you don't think about? (Drive-through speaker system, insurance, inspections, signs, branding, advertising, paying off yelp, etc.) Also, not to be a jerk but have you ever made a donut? (A dozen donuts? Six flavors of donuts?) I totally get the "there are so many and they're beautiful and I want to look at a row of them" but idk if that's the best basis for starting a business.
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Sep 14, 2022 07:11
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i like nice words
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Hotel Kpro posted:Do you know how to make good donuts? Do you have a set recipe? What flavors will you have? Can you do cream filled? What about bars? What about a double chocolate donut, do you have another recipe lined up for that? Will you make gluten free donuts? How early in the morning do you plan on going in to get things started? There’s a good supplier with every variety of cake donut mix as well as filling frosting glaze and on and on that will even come out and show you how to get busy. The guy whose donut machine I’m looking at said they saw him icing donuts with a knife and dunked all the donuts in the icing two at a time and saved him hours of his life. They sell three grades of stuff and while the top grade is a bit pricey for cake batter the taste and texture more than make up for it. Dude also has a pedal-operated filler so I would t have to play around with piping bags. I plan on getting going at maybe one or two in the morning. It takes time to proof dough and you’ve got to do it twice to make yeast donuts. I can get dough in the proofer, mix up some glazes, form donuts and get them in the proofer, bang out a bunch of cake donuts, fry all my dough, and then dress all the donuts up with toppings and what have you. Chocolate cake donuts with orange frosting are haloween festive. Maple cream with bacon bits will absolutely be a hit at least with me. As far as gluten-free and other more niche products if I hear about it every week I’ll probably get it on the menu. One thing I’ve been toying with lately is a savory breakfast donut. Like maybe stick ham and bechamel in a raised round and broil some cheese on top? I don’t know. I just don’t want people to pass me by because they’re not feeling a sweet tooth. This dude Lester chastain put out a dvd about making donuts and I think he demonstrates like fifty varieties of just raised yeast.
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Sep 14, 2022 16:52
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Anne Whateley posted:Is 36 seconds per order a estimate based on anything? Never have I ever received a Dunkin Donuts order within 36 seconds, or three people at three registers in <2 minutes. 36 seconds is just an ideal. The automated espresso machines from dunkin might not be able to spit the drink out in 30 seconds but I’m sure kids will love the product. Crazy orders with 11 pumps of 9 different syrups will be a pain in the dick but the idea here is that most of the coffee and all of the food is ready when they pull up. As far as surviving long enough to get customers, we can live on my wife’s money now. My line of work has been very feast or famine with typical weeks paying 1300-2000 dollars and whole months of unexpected time off. As long as we’re not hemorrhaging money we can afford to go on, and the inputs are cheap. If I have to work for free to make sure everyone loves working there.
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Sep 14, 2022 17:09
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In college, a group of friends would always hit up the same donut shop early in the morning. The owner said he gets to work around 3am to start preparing the donuts so that he can open at 6am. If you had a crew, it would be quicker to prep, but he ran the shop all by himself. Are you prepared to give up every evening forever just to get enough sleep for a 3am start?
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Sep 14, 2022 18:15
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Rationale posted:36 seconds is just an ideal. The automated espresso machines from dunkin might not be able to spit the drink out in 30 seconds but I’m sure kids will love the product. Crazy orders with 11 pumps of 9 different syrups will be a pain in the dick but the idea here is that most of the coffee and all of the food is ready when they pull up. Dunkin coolattas require a couple machines like icee machines and then a mixer like a blizzard. These are expensive machines and it takes time to make a drink to order. Starbucks fraps require industrial heavy-duty blenders and special sound-blocking covers. They are also expensive and it takes even more time to make a drink to order. Pumping syrup isn't going to be the holdup -- you would be doing that for regular or iced coffee, too -- it's waiting for the machines to process. How does your math look if it takes 2-3 minutes per order in the drivethrough? What about writing up a business plan, and whether you've ever made a donut?
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Sep 14, 2022 19:53
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I would call up a retail leasing agent, tell them your property's address, and ask them WHY there isn't a Starbucks or a Donut shop within 15 minutes There might be something worth uncovering here...
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Sep 14, 2022 19:54
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Rationale posted:As far as surviving long enough to get customers, we can live on my wife’s money now. My line of work has been very feast or famine with typical weeks paying 1300-2000 dollars and whole months of unexpected time off. As long as we’re not hemorrhaging money we can afford to go on, and the inputs are cheap. I also have a feast of famine work situation. Most of the time I'm working and making good money, but every so often I'll have an unexpected week or month (or more!) off with no pay. I can afford to have this kind of downtime, so I consider these unexpected weeks off to be a perk of the job. It helps that I can collect unemployment benefits during any downtime. Trading that in for waking up at 2am every day while working stressful 60+ hour weeks for little or negative pay sounds like a total nightmare.
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Sep 14, 2022 20:45
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GoGoGadgetChris posted:I would call up a retail leasing agent, tell them your property's address, and ask them WHY there isn't a Starbucks or a Donut shop within 15 minutes It’s the second biggest school district in the state in terms of area but it’s middle of the pack as far as enrollment.
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Sep 14, 2022 21:25
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Out of the few small, independent (vegan) donut shops that I've been to, most will only bake a certain amount and then will post something on instagram saying they are SOLD OUT nearly every day. I guess this prevents a lot of shrink from overbaking. It also hypes the donuts since there is a FOMO factor.
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Sep 15, 2022 06:33
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I think it’s pretty unlikely you come out ahead if you consider quality of life as well as income vs just selling or renting the building and having a 9 to 5 job. You probably need to sink a lot of additional money into this to get built out to code and all that, and that’s assuming it’s a good business idea that you’ll be able to execute.
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Sep 15, 2022 07:22
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kreeningsons posted:Out of the few small, independent (vegan) donut shops that I've been to, most will only bake a certain amount and then will post something on instagram saying they are SOLD OUT nearly every day. I guess this prevents a lot of shrink from overbaking. It also hypes the donuts since there is a FOMO factor. A donut shop actually closed around here lately so I talked to the lady for awhile one day to see why. She didn’t have a drive-through, she didn’t have parking , she only served drip coffee, she did everything by hand herself, she never intended to hire people or automate the process. She would sell out in three or four hours every day. She didn’t want to charge more. She didn’t want to make more “eventually I just hated the smell of donuts.” Which I can believe since she hand-iced and hand-filled everything so there was a hard upward limit on her earning potential. She was sold out by 9 most days but her hours were 6-12. I wonder how many people gave up on stopping by. Selling out every day would be cool but I’d rather have extra. I’d rather give away donuts than close early. I know that this means I’d be actively wasting money to avoid leaving any on the table BUT Around here people go apeshit for a blueberry cake donut that this farm store makes. The lady who makes them says they’re literally just add water instant batter from the distributor. The icing, too. If I can spam the local community with fresh delicious donuts, even if they’re no better than the famous ones, I think people will forego the thirty minute ride and buy mine. They do $1.25 or 12.50/dz. Judging by the distributor’s catalog this is like a 600% profit margin. After gas, grease, power, the whole everything let’s say 400%. This means I can make $7/dz at $10/dz. The donut machine says 65-80 dozen an hour. Supposing I suck at running it and I only make 30 dozen an hour for six hours that’s still $1260 of value added. If I only sell a third of the donuts I make I should break even.
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Sep 15, 2022 19:02
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I don't have better assumptions but you're definitely going to want to build out a better unit cost model than the handwavery you have right now.
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Sep 15, 2022 19:19
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Democratic Pirate posted:Looks like Krispy Kreme’s latest operating income is around 2%-4%, as a reference point. Some of that would be your salary, but food service is not a high income % sector.
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Sep 15, 2022 19:38
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Hmm...you will make money, in my opinion. Making money is easy. But will you make a profit? That is the question.
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Sep 18, 2022 12:44
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Will your donut business lease the building from your commercial property business?
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Sep 18, 2022 15:40
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evobatman posted:Will your donut business lease the building from your commercial property business? I need an accountant don’t I?
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Sep 19, 2022 00:24
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this sounds harsh but when you say things like 'a bunch of people asked about dining in so i guess we have to a dining room' that suggests to me that, no, you will not make money doing this either sell the building or lease it to someone else
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Sep 19, 2022 22:41
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why not lease the real estate to someone else who can take these risks instead of you
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Sep 20, 2022 03:16
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Owning a building is a pain and it’s so much nicer to just be lazy about it.
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Sep 23, 2022 17:26
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KOTEX GOD OF BLOOD posted:why not lease the real estate to someone else who can take these risks instead of you This. Or take someone on as a business partner who has run a food business before. There is a huge huge learning curve and 75k isn't enough of a runway for you to learn everything yourself.
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Oct 3, 2022 19:03
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KOTEX GOD OF BLOOD posted:why not lease the real estate to someone else who can take these risks instead of you This feels like the winning move to me. You're the loving landlord, OP. Rent that poo poo out to someone else and make them do the work while you get your easy money either way.
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Oct 3, 2022 19:37
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Owing to the sporadic nature of my work we’ve adjusted our lifestyle to fit inside my wife’s income. The 75k budget is a function of how much time we’ve got before our projected opening date. We’ve currently got seven rental units trickling in money and the building as-is won’t lease for more than a paycheck. If my donut business fails I can lease a turn-key shop for much, much more. The guy selling the donut machine says he’ll gladly come on as a consultant for a while. He works for a college so his schedule isn’t too full in the summertime. The electrician estimated 17k out the door. I found drive-thru windows for 2,250 I found a grease hood for 4500 Found a 3-bay with a grease trap for 600 Found some janky dunkin automatic espresso machines for 250 each Donut guy won’t name his price. I’d like to take all his wares in one swell foop but I don’t know where to start. I don’t want to rip him off or insult him. I look at this like a roll of the dice. My job will still be here if my business doesn’t make it. Maybe I piss away ten months of wages and end up just serving nice coffee at the house. Maybe I end up tripling my income and cutting my working day in half. Maybe I really break it big and end up with thirty franchises. Worst-case scenario I’m right back where I am now.
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Oct 6, 2022 13:41
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OP this idea is pretty terrible but I hope it works out anyway, also if nothing else we get "swell foop" out of this thread
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Oct 6, 2022 14:30
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Making risky ventures is cool. Maybe be a bit more wary of the donut guy, he's trying to sell you stuff. I think there's a chance you make money, but I can't imagine you "cut your work day in half", at least not for years. Especially if you're trying to be employee friendly
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Oct 6, 2022 17:20
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The time to make a business plan is before you start buying used drive-through windows
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Oct 6, 2022 20:00
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Real exciting OP. Do you have a name yet? Doobie's Donut House? Any pics of the space yet?
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Oct 9, 2022 07:23
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