A donut shop sells one of the cheapest things to make in food: a glazed yeast doughnut costs about 32 cents and sells for $1.75. The money is made early, because the shop opens at 6 and the cases are emptiest by noon. The plan turns on wages for bakers who start at 2 a.m., the fryer, proofer and hood, and the doughnuts left at close. Coffee, breakfast sandwiches and kolaches lift the ticket, and dozens for offices fill the morning orders. In the example, a Fort Wayne donut shop starts with $178,100, ends its first year about $11,600 behind before the owner's pay while sales build, and makes about $3,700 a month at full speed. Below is each part of the plan, the first year month by month, the startup budget, and a free template.
The short version
- Describe the shop in a paragraph: the street, the morning traffic, what's missing nearby, the goals.
- Cost each doughnut: dough, glaze or topping, frying oil, the bag and the card fee.
- Plan sales by category per $100: doughnuts, specialty, coffee, breakfast and office dozens.
- Wages are the biggest cost: bakers through the night.
- Count what's left at close; it's the cost with no sale.
- Budget working cash for the slow first months, and check it against the lowest cash point.
- TaroStack makes each doughnut a recipe, so its true cost follows the price of what's in it. More below.
Part 1: the business description
Glaze & Grind Doughnuts, a made-up donut shop in Fort Wayne, Indiana, writes:
Glaze & Grind Doughnuts is a 1,200-square-foot donut shop on a commuter road, frying yeast and cake doughnuts every morning, with specialty doughnuts, coffee, breakfast sandwiches and kolaches, and dozens for offices. In its first year it aims to reach $31,000 of sales a month.
Part 2: what a doughnut costs
| Doughnut | Dough | Glaze or topping | Frying oil | Bag or box | Card fee | Cost | Price | Cost share |
|---|---|---|---|---|---|---|---|---|
| Glazed yeast | $0.14 | $0.05 | $0.04 | $0.04 | $0.05 | $0.32 | $1.75 | 18.3% |
| Maple bacon | $0.14 | $0.55 | $0.04 | $0.05 | $0.11 | $0.89 | $3.50 | 25.4% |
The category costs in Part 4 run higher than single doughnuts because they carry the doughnuts left at close, given to a shelter or sold the next day at half price. Pricing is in how to price donuts.
Part 3: customers and staffing
Two bakers start at 2 a.m.; the doors open at 6. Half the day's sales are gone by 9. Office dozens are ordered the day before and boxed by 6:30. The shop closes at 1, and the afternoon is cleaning and prep.
Part 4: what each category earns
| Category | Sales | Variable cost | Contribution | Margin | Hundreds a month at full speed |
|---|---|---|---|---|---|
| Doughnuts, yeast and cake | $100.00 | $24.00 | $76.00 | 76% | 120 |
| Specialty doughnuts | $100.00 | $28.00 | $72.00 | 72% | 60 |
| Coffee and drinks | $100.00 | $27.00 | $73.00 | 73% | 70 |
| Breakfast sandwiches and kolaches | $100.00 | $36.00 | $64.00 | 64% | 30 |
| Office dozens | $100.00 | $26.00 | $74.00 | 74% | 30 |
At full speed the business sells $31,000 a month and keeps $22,690, 73.2%; doughnuts bring $9,120 of it.
Part 5: the first year, month by month
Fixed costs are $19,000 every month: rent ($3,800), wages ($12,500), utilities and fryer gas ($1,400), insurance ($300), register and software ($200), ads ($300), and other costs ($500). Sales start at half of full speed:
| Month | Sales | Profit | Cash, year to date |
|---|---|---|---|
| 1 | $15,500 | −$7,655 | −$7,655 |
| 2 | $17,400 | −$6,267 | −$13,922 |
| 3 | $19,200 | −$4,951 | −$18,873 |
| 4 | $21,100 | −$3,552 | −$22,425 |
| 5 | $22,900 | −$2,236 | −$24,661 |
| 6 | $24,800 | −$848 | −$25,509 |
| 7 | $26,500 | $392 | −$25,117 |
| 8 | $27,600 | $1,200 | −$23,917 |
| 9 | $28,900 | $2,153 | −$21,764 |
| 10 | $29,800 | $2,809 | −$18,955 |
| 11 | $31,000 | $3,690 | −$15,265 |
| 12 | $31,000 | $3,690 | −$11,575 |
The year's sales are $295,700, and the business ends it $11,575 behind, before the owner's pay. It breaks even at about $25,960 of sales a month, in the seventh month. The lowest cash point, −$25,509 in month 6, is covered by the $40,000 of working cash with about $14,500 to spare. Wages are two-thirds of the fixed costs; frying to what sells, not to a full case at close, is the other lever.
Part 6: the startup budget
| Item | Example |
|---|---|
| Build-out, hood and fire suppression | $60,000 |
| Fryer, proofer and mixer | $38,000 |
| Coffee equipment | $10,000 |
| Display cases | $8,000 |
| Lease deposit and first month | $7,600 |
| Furniture | $5,000 |
| Smallwares | $3,000 |
| Opening inventory | $3,000 |
| Register | $2,000 |
| Licenses and permits | $1,500 |
| Working cash | $40,000 |
| Total to start | $178,100 |
The $138,100 before working cash is earned back in about three years at full speed. Whether doughnuts pay at all is in is a donut business profitable, and boxing dozens in how to package donuts for sale.
Get the template
Download the donut shop business plan workbook. Four sheets: your categories, each per $100 of sales with its variable cost and hundreds a month at full speed; the first year, month by month, with sales ramping up, profit, cash, the first profitable month, the lowest cash point and whether the working cash covers it; your fixed costs; and the startup budget. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The plan uses one share left at close. The shop fries a different count every morning, and how many dozen went to the shelter last Tuesday is a guess by Friday.
How TaroStack does it
TaroStack makes each doughnut a recipe, so its true cost follows the price of flour, oil and glaze.
Doughnuts as recipes. Each doughnut is a recipe by weight, so its cost moves when the supplier's price does.
Counts with no signal. The cooler and dry storage can be counted on a phone with no signal, and the reorder list shows what runs out first in days of cover.
Waste with a reason. What's left at close is recorded as waste with a reason, reported by item.
| The job | Notebook | In TaroStack |
|---|---|---|
| What a doughnut costs this month | Worked out once | True cost from the recipe |
| What to order before the weekend | A guess | The reorder list |
| What was thrown out | Not recorded | Waste by reason and item |
Recipes, counts and the reorder list are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.