All I Need to Know about Small Biz I Learned in a Donut Shop
True Story. A friend stopped by his neighborhood donut shop the other day and found a new featured offering temptingly in the glass display case. He bought two; one for himself and one for his wife.
His wife loved this new creation so much, the next day she dropped in and bought a dozen for co-workers.
This taste treat isn’t totally new, but this donut shop was the first to make it in their hometown. Maybe you’ve had one. It’s the cronut. Dough is layered croissant style in the shape of a donut. It’s then deep fried and frosted any number of ways.
In all honesty, there are few products as long-established as the donut, yet—according to Wikipedia—a bakery in New York City invented the “cronut” a year or so ago…although there are others who lay claim to the basic idea of fried croissant dough treats.
Lesson #1: No matter how long your product line has been around, there are innovations waiting to be made.
This neighborhood donut shop is not part of a chain. It’s been in business for years and when the strip mall where it’s located recently did an extreme facade makeover, local residents rose up and demanded that it’s old neon sign—with its animated “O” in “donuts”—be allowed to stay.
There’s a major Krispy Kreme in the city, but it hasn’t put a damper on the business of this donut shop. It’s been going strong for 30 years and will probably survive for another 30…as long as they can keep finding family members willing to get up early enough in the morning to have fresh donuts ready for the commuting crowd.
Lesson #2: When a large corporate competitor comes into your turf, it’s not instant doom.
When my friend dropped in and bought his first cronut, there was another transaction going on in the donut shop—someone was buying a party cake. This shop has figured out a way to up-size the magic of the traditional donut into cake-sized offerings.
This “innovation” is different than the cronut, because it opens a new market for the donut shop. Few would order two dozen donuts for a graduation party, for example, but people would order a unique donut-like cake.
Lesson #3: There’s always a way to diversify and broaden your customer base.
This donut shop is located within a block of a high school. With apologies to First Lady Michelle Obama and her quest to improve how our kids eat in school, this proximity to several hundred teenagers all throughout the school year guarantees this donut shop great traffic.
Lesson #4: There is no substitute for bringing enthused visitors to your brick and mortar location or to your website.
You may have noticed some upscale donut shops over the last 10 years or so. Many of them came and went. (I think some morphed into cup cake boutiques.) However, I bet your city has an old-style donut shop that’s been around for decades.
While the donut shop described here has made some innovations and diversified, it hasn’t strayed far from what it does best. Don’t mess with a winning formula…right New Coke?
Lesson #5: As they say in Texas, “Dance with the one that brung ya!”
We offer these lessons from the halls of the American donut shop in honor of Donut Day, June 6. I’m out of room for today, but there’s one more “lesson of the donut shop”:
Lesson #6: Incentivize larger orders.
I’ll take a dozen!
