FailedIt: Donut Shop – I Didn’t Know Any Better

A couple friends and I were watching a show about VooDoo Donuts in Portland and thought “That would be great in Denton!” From that thought, a great failure was born. Failedit – donut shop.

Read the whole FailedIt Series.

Donut Shop

As with my other “failures” this isn’t truly a failure in our minds. We grew a lot, learned and lot and such, but ultimately I can say I wish we hadn’t done it. God uses all things, but I don’t really need to help find so many teaching opportunities for Him.

Originally we wanted to have a food truck donut shop. The thought of a deep fryer on wheels seemed like a bad idea. Then we thought we could co-cook in an existing place and shuttle donuts out in the truck. Eventually we figured we wanted our own place.

The place we found and really wanted was a two-story cafe just off the Square in Denton. We loved the location… and there was probably healthy dose of denial, excitement and self-convincing going on.

The place was great except it didn’t have a grease trap which meant no frying. My wife came up with a great baked-donut option using puff pastry. We liked them even more than fried because they weren’t as heavy and were very unique.

Our product was born and the location was set… then we found out it DID have a grease trap. The self-convincing kicked in as providence that we were meant to bake them.

Since the dough made the donuts square and we were just off the Square, we named it Denton Square Donuts (pics).

Things moved pretty quickly after that. Sorta. We spent weeks avoiding our paying gigs and driving around buying used kitchen equipment, meeting with distributors, setting up a corporation, borrowing on 401k accounts, etc. You know – fun stuff for a donut shop.

We painted, cleaned, furnished, repaired… LOTS of work on the shop. Great, back-breaking work where you spend a ton of money and sweat because it’s July in Texas without electricity in a building.

One time we had a 500 lb double-oven delivered and just dropped on the sidewalk. In our joy of getting a two-story place, we didn’t care that the kitchen was upstairs. Actually we cared a lot but couldn’t come up with a solution. Moving it downstairs meant a ton of $$$ as well as losing our seating area. A dumb waiter was going to cost more than an actual waiter if we wanted one.

It wasn’t all bad – we kept the kitchen separate, the heat out of the main area and since we got our beer/wine license could use the kitchen upstairs as a bar for bands… at a donut shop.

We hired some local movers to get it upstairs and a few of us nearly died. It was amazing. We named the ovens after them, but I’ve blocked out their names. There was three guys there saying it can’t be done. Then they called in the Wolf – not really, but they called a guy who rolled up in an old Oldsmobile. He was about 5 foot nothing and built like a tank.

He basically said “grab it.” I think he carried most of it and everyone else just tried to not die.

The location is a “Painting with a Twist” now but I wonder if they just left the ovens.

Another time we got a giant double freezer. We had to lean it back to get it in and out of the truck because it was too tall. When we were trying to get it out, somehow it started to fall and I was under it. I got a bit of super-human strength… but not enough. I cried out something shameful like “Here it goes!” and the others grabbed it.

I had some adrenaline going but honestly thought I would have died if things didn’t go the way they did. Maybe not died… but seriously hurt.

Unfortunately, it was too big to get upstairs so I walked around from business to business around the area asking if they wanted to buy a freezer. Fortunately someone did! What a waste of time, money and energy… (note – that’s the theme here).

We eventually opened and on that day I think everyone nearly collapsed. Seriously. I think the other guy had actual exhaustion just before we opened and went to lay down at a friends out. His wife might have too – it’s blur. They came later and I baked around 900 donuts that day before I left. My wife went from the shop to an urgent care place due to exhaustion and dehydration.

We made $2500 that day in sales. Me and the other guy were giddy. I remember taking a picture of the money. I told my wife how much it was and she said “It’s not worth it.” She was right. Especially when you consider that half of that goes to cost of goods and then some more to employees and other expenses: rent, utilities, taxes, etc.

If we could make that much each day we could hire someone to do it. Otherwise, bad news.

Sales steadily went down from there. Lots of people didn’t get the concept and didn’t come get wine and dessert or savory donuts at night. We all still had our other jobs and responsibilities which now funded the donut shop.

Some people loved it, but how often do you go get ice cream? It was along those lines. Some people wanted us to branch out and serve other food, but we thought that would dilute the concept and we’d have no identity. Hard to say, but maybe we should have tried??? But ramping up on that side of things might have been a pain too.

My wife baked some stuff like granola and such and we sold that. Same thing – it was a lot of work. If it had taken off, maybe it would have been worth it, but it would have been a LOT of work.

We started cutting hours to mostly the morning since that’s when we did most of our sales. We had some events, but again, the cost of goods, pay, etc. didn’t make it good enough. If it had been constant, sure. But it wasn’t.

Eventually, the other guy had to take a full-time (non-freelance) job, our kids were growing up, I needed to work, etc. I still went in but didn’t really work the shop. Our employees were pretty great so they could mostly run the shop without us. I went in to work on my development stuff and so I could be there, but we just couldn’t invest the time, money and energy into it anymore.

There were a couple of times we were about to call the employees and just say “we’re done, don’t bother coming in.” But we wanted to try. We hoped Spring would turn things around or a holiday or something. Nope.

Finally we decided it was done. The numbers were telling us that we had a few more weeks left and then we’d need to put in more money. If we could have worked it, it would have made money – not enough for us to live on it so we had to do our other work which meant we couldn’t work the shop.

The situation was something like – we can close to save money, but we’ll still have to pay rent. So we might as well keep it open to generate some money… but we know where this is going.

So I posted on the Facebook page “Anyone want to buy a donut shop?” and in about an hour we had someone interested. A family bought it and were able to run it. The kids worked there since they were homeschooled.

I think the eventual path lead them to the same place and they sold it to a local lawyer who had some cupcake shops. I was sure with his experience and employees managing things they’d get it going. But after about 9 months they suddenly closed. I think they were just holding out until it was leased out so they wouldn’t be responsible for the rent.

I really hoped my kids would someday work there. It would be a great memory for us all and we’d really be able to contribute to the landscape of downtown Denton. Unfortunately I did all the things I didn’t want to do when I went solo in my development work.

I didn’t want a physical location, physical product (especially not a perishable one), employees, set hours and to be a boss. Failedit.

I’ve always said if you love flowers, don’t open a flower shop. You’ll never touch them again. You’ll be dealing with accountants, distributors, refrigeration repairs, employees, schedules, etc. – and not flowers.

We had a lot going for us including our intelligence, determination and excitement. We also had some great help from great friends. One friend even MADE our amazing branding and our 3D sign! We had great product – the bacon maple was AMAZING! I even developed and app for us where you could order ahead! We were on the news, the newspaper, etc. We had a lot going for us.

The smell of bacon has a hint of pain now.

But the business didn’t follow. Maybe we needed to cater to a more common denominator. Maybe we needed more marketing or something. However, I will say that during that time I got to know some other business owners and I get the sense that every day is a fight to get people in that door and to part with some money.

A rainy day could be really painful. Anything unexpected could really hurt. I came to the conclusion that there’s only 3 reasons to have a restaurant: you don’t know how to do anything else, you love it for some crazy reason or you’re somehow easily successful at it (great location like an airport, some insane product or gimmick, you’re a celebrity, etc.).

When people ask why I/we did it, I say “I didn’t know any better.”

It was a rough, rough year that cost a lot in every way. I think we all have PTDS (post tramatic donut shop) after it and my wife and I had to tag-team everything we did so each of us missed half our kids’ milestones that year.

Meanwhile we’re STILL (4 years later) paying off the 401k loan (with another year to go). We sunk $30k-$35k+ into that shop plus time/energy/etc. and the cost of working on things for the shop as opposed to paying efforts. I’m sure the other couple did the same. When we sold it, which was for very little, most of the money went to paying off the ovens and related debt. We basically made them pay to get a debt-free donut shop.

God got us through it. One time I met with a friend during that year and was very concerned, stressed and emotional. I was worried about finances and said “What if we lose the house?” He responded with “You have to be ok with that.” Meaning, you have God and it’s better to have Him than the world without Him. What does a man profit if he gains the world but loses his soul.

That’s not what I wanted to hear, but it was what I needed to hear.

We’ve mostly recovered though we have a significant cautionary tale. It hurts to think about at times and there’s a dark cloud over that part of the street in Denton for us. The next building tore up a lot of the things we paid to have installed: floors and such. It hurts.

I salvaged a good part of the 3D outdoor sign from the trash pile.

So one thing we can take away, we never have to wonder what it would be like to open a restaurant. And this was barely a cafe!

No situation is perfect but I can’t say we missed out on success because of one or two specific things. We just didn’t have enough business. It wasn’t the right time in the right place, etc. And I have lot more respect and sympathy for people in that business.

So we now know what it’s like – we don’t have to wonder. Also, now we know better. Also, we know God was faithful even in our failures. More than that, He allowed us to get out without more costs which were going to happen if we weren’t able to sell.

“Donut shop” to us is now a powerful statement for biting off more than you can chew and getting in over your head. It’s kept us from some bad decisions since then.