Monday, January 10, 2011

Raking in the Dough with Doughnuts!

After the dust had settled, we're all still here!

Smeagol and Maestro decided to try their hands at making home made doughnuts and muffins to sell to the neighbors. Rotten home schooling Mom that I am, we turned it into a week-long project! There were many steps involved, but I'll try to condense things a bit.

First Smeagol had to learn to look the recipe up using the index in the cookbook. That took a little more time than you might imagine, but he did manage it in the end. He has done this once before, and simply made a batch then took them door-to-door to sell them. This time, we discussed ways to increase his sales numbers.
Mastro was involved in a program called J.A. Biztown last year and learned all the various steps of building and running a business. He was Smeagol's advisor at this point, helping give advice on various marketing, sales and management ideas. Smeagol didn't understand all of it, but it was helpful nonetheless for finding a new way to expand business.

In the end, he decided to go door-tp-door beforehand and take orders, to be delivered on Saturday between 8:30 and 9:30 in the morning - fresh from the oven and fryer! The boys put together an order form and I helped write in a description of each item, the cost and how tasty they would be with morning coffee.

Smeagol decided to charge $.50 for each doughnut and $.75 for each muffin - it seemed at first like these numbers were totally arbitrary, and with Smeagol, such numbers really are plucked from thin air. But when it comes to it, he is a big-picture kind of guy and his estimates actually turn out to be pretty accurate! In this case, the "real" cost for one muffin is $.23 each and the cost for a doughnut is about $.10 each so his retail cost is not unreasonable for the buyer or for his overhead!

To make sure he was charging enough, we spent two days in heavy math work - all the paperwork a small business owner loves to hate! Working from an old grocery list, we figured out our supply costs. We determined:
* How much money was needed for each ingredient in total (1 doz. eggs runs $1.32 in our store)
* How many batches of each item we could make for the ingredients purchased (i.e.: one bag of flour = 17 c. of flour, a batch of doughnuts need 3.5 c. of flour, while a batch of muffins requires 2 c.)
* How much each ingredient cost individually if he didn't need the whole package (1 egg costs $.11)

We made out a basic grocery list and I became his supplier, picking up the ingredients at the store. He was put "on account" and afforded the opportunity to repay me after his goods had sold. Smeagol spent all of Friday morning making doughnut dough by hand - he read the directions and measured everything out, etc. largely on his own. (I helped with a bit of mixing.) I have been working with the boys on good time management skills so we also mixed up the dry ingredients for the muffins ahead of time and decided to put in the rest on Saturday morning. To make two dozen of muffins and one batch of 16 doughnuts would need $13.00 in supplies.

A moment of craziness amid the more serious business of making dough

It wasn't all drudge work but Saturday was a very early morning for our industrious crew! I woke them at 6 to begin baking (and pointed out that professional bakers get up closer to 4 - yikes!) We had two early delivery requests because of people who had other obligations so the first doughnuts had to be ready by 7:30. We made it with five minutes to spare!

In the end, they earned $32 gross. Bruiser was given $1 for helping with supply purchases (paid by the "supplier"); Maestro earned $6 as a consultant and assistant (primarily for deliveries and early-morning Saturday baking); the supplier (Mom) was paid in a combination of baked good ($5.50) and cash ($6.) In the end, Smeagol earned a net profit of $14 and was very pleased by his success! He's talking now about doing this every weekend. I'm not sure I can handle that much overtime work as a mom, but I've given the go-ahead for every-other-weekend until they're at the point of doing it all on their own!

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