Getting started
How to Start a Donut Business: 5 Steps and First Costs
The real first costs of a donut business, and how to price a dozen so the fryer pays for itself.
On this page
The order of those steps matters more than the recipe. Most people who ask how to start a donut business are really asking how to not lose money in month one. So this page works backwards from a dozen donuts you can price and defend.
What to remember
- Check your state and local food rules before you spend on equipment.
- Cost a dozen with ingredients, your time, and overhead, not just flour.
- Take paid orders first, then fry, so you are not guessing.
- Keep the menu small enough to finish in one morning.
Pick a donut you can make in one morning
Your menu is a business decision before it is a baking one. Every extra flavor is another set of ingredients to buy, another label, and another thing that can sell out or go stale. Pick one donut you can finish in a single morning and repeat exactly the same way each week.
Then decide the format. A mixed box is harder to cost and harder to pack than one flavor by the dozen. If you want to test a second flavor, run it as a limited batch on one order day and see if it sells before you add it to the list.
Decide how many you will make before you decide how many you will offer. A fixed number per order day keeps your ingredient buying predictable and stops you from frying a tray on hope.
Check the rules before you buy a fryer
Equipment is the easy part to spend on and the hardest to get back. Before you buy anything, find out what your state and county require for a home food business. The FDA says a food business is subject to other federal, state, and local requirements, such as licenses or permits, in addition to FDA requirements.
The Association of Food and Drug Officials keeps a page of links to state and federal guidance for home based, mobile, wholesale, and retail food businesses. Start there to find your state food program, then call your city or county health department, because local rules can be stricter than the state’s.
Ask three questions when you call: can I make and sell donuts from my home kitchen, what permit or license do I need, and is there a fee or an inspection. Write the answers down with the name of the person who gave them.
Penn State Extension runs food entrepreneur resources and training that cover production and processing, regulations, business management, safety, and sanitation. If your state asks for a food handler course, that kind of training is where you look.
Cost one dozen before you name a price
A donut price built on flour and sugar is not a price, it is a guess. Cost the whole dozen: ingredients, the box and the bag, your own time at an hourly rate you would accept from a stranger, and a share of your monthly overhead.
For example, say your ingredients come to $4.20 a dozen and your packaging is $1.10. You pay yourself $12 an hour and the batch takes 20 minutes of your time, so that is $4.00. Your shop costs $20 a month, and at 40 dozen a month that is $0.50 a dozen. Your cost is $9.80.
At $18 a dozen you keep $8.20, which is a margin of about 46 percent. Swap in your own numbers and the shape stays the same. If the margin disappears once you add your time and overhead, the price is wrong or the donut is too big, and you fix that before you sell, not after.
Wholesale is a different price. If a cafe wants a standing order, work out your cost per dozen first, then decide what you need on top. Selling to a shop at your retail cost leaves you paying to do the work.
Set up a way to take orders and get paid
Once you have a price, you need one place where people can order and pay. A group text works for your first five customers and then it starts costing you orders, because people cannot see flavors, prices, or pickup times.
Brevl is $20 a month with no cut of your sales, and the 14 day trial is free. You take card payments through your own Stripe or Square account, plus Venmo, Cash App, Zelle, and cash. Your shop carries your photos, your colors, and your own web address, and it works on your phone and on a computer.
We set it up with you and move your old shop over, including products, photos, reviews, and dates. A real person answers, usually within minutes.
Set a pickup window and hold it. A two hour window on one day is easier to manage than all day Saturday, and it gives you a clear answer when someone asks when they can collect.
Mistakes that cost you money in the first month
Your first week, step by step
Choose one donut and one order day
Pick a single donut you can repeat and one pickup window each week. Write down the batch size and stick to it for the first month.
Check your state and local food rules
Find your state food program through the Association of Food and Drug Officials, then call your city or county health department and ask what a home donut business needs.
Cost a dozen and set your price
Add ingredients, packaging, your hourly rate, and a share of your monthly overhead. Set a price that leaves a margin after all three.
Set up ordering and payment
Open one place to order and pay, list your flavors and pickup window, and connect your own card account so the money lands with you.
Take paid orders, then make the first batch
Collect payment before you fry. Make only what is ordered, hand it over in the pickup window, and note what sold out first.
Your first customers are the people who already ask you to bake. Tell them the order day, the price, and the pickup window, and ask for payment when they order. If you are still deciding what to sell, how to start a baked goods business from home walks through the wider menu. For a second product line, start a cupcake business from home covers the costs before your first sale. And how to start selling baked goods from home online covers taking orders when you are ready to grow.
Try the free bake pricing calculator
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Common questions
Do I need a commercial kitchen to sell donuts from home?
That depends on your state and your local health department. The FDA says a food business must meet federal, state, and local requirements, including licenses or permits. The Association of Food and Drug Officials links to each state's guidance. Call your state food program and your city or county before you cook anything for sale.
How many donuts should I make for my first order?
Start with one size of order and one pickup window. Take paid orders first, then make only what is spoken for. A small menu and a fixed order day keeps waste low and lets you learn the timing before you add a second flavor or a second market.
What should I charge for a dozen donuts?
There is no single right number. Cost the dozen with ingredients, packaging, your time, and your monthly overhead, then add a margin you can defend. If the price will not sell in your area, shrink the box or simplify the donut before you cut your own pay.
Can I sell donuts at a farmers market?
Ask the market manager what they require from food vendors in writing, then check it against your state food program before you pay a booth fee. Market rules and state rules both apply, and the market can turn you away on the morning of the event.
Do I need a website to take donut orders?
You need one place where people can order and pay, and a phone number stops working once you have more than a few customers. A simple shop with your own web address lets you list flavors, set a pickup window, and take card payments. Brevl is $20 a month with no cut of your sales.
Sources
This is general information, not legal, tax, or food safety advice. Rules differ by state and county. Check with your state food program and a tax professional before you sell.