From family bakery to online success : The story of Goldelucks doughnuts
Hear the incredible story of how young entrepreneur, Phillip Kuoch, grew a family-owned, traditional bakery into an international online doughnut business.
If you are looking to get into business, and you love to bake, could buying a Bakery or starting one from scratch be right for you? How do you know if you would you enjoy it? Would you cope with the crazy hours? What is it really like to own a thriving Bakery?
Phillip Kuoch, the owner of Goldelucks Doughnuts in Melbourne, Australia, had neither baking nor any business experience before he was forced into running his family’s bakery. Despite these challenges, Phillip has gone on to create a thriving business, selling doughnuts by the thousands!
How did he do it?
Introducing Phillip Kuoch, the owner of Goldelucks Doughnuts
In this episode, Phillip shares how he overcame the many problems he encountered in the beginning and how he went about re-imagining Goldelucks in a bid to survive the pandemic induced lockdowns that threatened to cripple it.
Before the pandemic struck, Phillip had already managed to grow his family’s small suburban bakery by opening a further two locations. But, as lockdowns loomed in Australia, Phillip knew he needed to do something differently if the business, and his family’s dream, was to survive.
In the midst of the seemingly endless lockdowns endured in the city in which he is based, Phillip took the gamble and created a range of exciting new products. At the same time, he invested heavily in developing e-commerce sales channels which opened up new markets. And the result of all of this? Goldelucks boomed! This shows there is never a bad time to start a business as opportunities exist everywhere.
The Combination of new products, a focus on creating gift-boxes, and the savvy use of social media marketing has rocketed sales. Rather than only servicing customers from a stores local area, the business now supplies customers nationally and continues to grow at a rapid rate.
Phillip isn’t stopping here! The next growth stage involves moving into a warehouse to supply the growing international demand for doughnut-based gift boxes.
During our chat, Phillip also explains how he used TikTok and Instagram to reach millions of followers.
If using social media to turbo-charge your business is part of your thinking, this episode is a must-listen. Afterall, over 700,000 followers and 19 million likes on TikTok alone, in just a few short years, speaks for itself!
Below is an extract from the interview.
What experience did you have before owning a bakery?
I was studying Journalism and Marketing at University when my family bought a bakery shop. As a teenager, I ran a blog that gave me some experience organising myself and other people.
So, in short, I had zero experience in either baking or business.
I never planned to run the business. The original plan was that I would help my parents part-time as I was a university student.
How did you come to be involved in the bakery?
My family are Cambodian refugees who have dreamt about owning their own small business for years. Owning a small business is the dream of many refugees who come to Australia.
As a kid, I remember my parents looking at businesses for sale, viewing businesses and talking about their dream.
After many years of saving to buy a business, we purchased Goldelucks Bakeshop, a traditional, successful bakery in Croydon, Melbourne. The shop sold pies, cakes, bread and sandwiches. It was well established with loyal customers. The product line was that of your typical bakery.
Unfortunately, my dad’s health deteriorated, and he couldn’t continue to run the business. And, as my mum became his full-time carer, I volunteered to run it. I just couldn’t let their dreams get crushed.
So, with no preparation, I took a year off Uni to run the bakery shop.
What did it feel like to be taking over a bakery shop?
It felt more exciting than scary but probably because I was young and naive. I had a false impression of what it is like being a business owner. In my mind, other people would do the work, and it would be pretty cushy for the owner.
The truth, I quickly learned, is that running a business is hard – actually, really hard.
I had only seen people running a business in the movies. You don’t see the truth about owning a business in the movies or on TV!
What problems did you face in the bakery?
Reality soon set in. I had to do everything as a one-man show as I couldn’t afford to pay anyone.
I couldn’t bake, so our customers noticed a big drop in quality. My days were 16 hours long.
For the first year, I slept in the bakery, and I felt very down. I may have been on the depression spectrum. Also, I felt dead-to-the-bone tired and hated my life.
My Uni friends, we out partying and having fun while I worked 16 hours a day. So I thought, “what am I doing?”
After the first year of owning the bakery, our sales had dropped way off.
The business was not in great shape.
What was the first pivot you tried to change the bakery?
I realized that the previous owners were very successful at what they were good at. So I began to think about what I was good at. Of course, being young, I knew I was good at social media.
A doughnut trend on social media was growing in Melbourne, which gave me an idea.
So, I hired an experienced baker to teach me how to bake doughnuts. I would bake at night as it was the only time I had. After a few hours of sleep, I would then also help in the bakery. My plan was to make donuts that would be attractive on social media and that the posts would be easily sharable.
Sales were slow. It started with selling 6 donuts at $2 each, which made me super excited! Then sales went to 20, and then up to 100.
Soon, customers were travelling across Melbourne to buy the Goldelucks Doughnuts!
I went back to Uni. I put what I learnt about marketing and journalism into practice which was a great help. As soon as I studied something, I applied it in the business. As a result, my marketing efforts started to work.
Was there a breakthrough moment for Goldelucks Doughnuts?
It is a family business, and my mum avoids risks. For example, my sister and I wanted to test our new products in a pop-up store, but it was expensive. Mum was against risking the rent and wouldn’t agree.
When she was away, my sister and I ran a pop-up shop. It had high rent at $500 per day, but we took the risk that mum wouldn’t agree to.
We sold out 1,500 doughnuts in under 2 hours!
We knew then we were on the right path.
When Mum came back, we told her what we had done, and she smiled.
Did you have a business plan to guide you?
Honestly, until last year I didn’t. After that, there never seemed to be time to write one. But, I know Brendan, you and Geoff always recommend them.
If I was advising someone new to business now, I would suggest having one!
Initially, my goal was to open as many shops as I could. To me, this was what success meant at that time. However, now I realize that the number of shops is not the measure of success. A business plan would have shown me that. Instead, I learned the hard way.
More shops meant more costs and time managing them. Running a lot of shops requires a big team and a lot of work for the owner. More hard work and long hours!
We had grown to 3 shops when the first Melbourne lockdown happened.
That was a scary time, and that’s when I was referred to you, Brendan, for business advice.
What was the second pivot for Goldelucks bakery?
The year before the lockdown, I set up an online store, but not much happened. A few boxes would sell now and then. We did not push the online store, as there wasn’t much customer interest.
Customers didn’t buy doughnuts online – it just wasn’t a thing then.
I was confused and scared when I spoke to you, Brendan, and the first lockdown was such an uncertain and unsettling time.
Talking with you, I realized that our online business was so important. We were providing a way for loved ones to stay in touch during the pandemic.
My major change was seeing doughnuts as a gift to loved ones, not a simple bakery item.
We were about much more than baking!
So I immediately started to focus on gift boxes sold through our e-commerce platform.
So, thank you as I felt much calmer about what to do after talking with you.
I put starting the online business down to luck, but it wasn’t just luck, as you told me, but good business management!
What has the Goldelucks Doughnuts achieved since the first lockdown?
We have achieved amazing growth since the pivot to e-commerce.
So much so, we have outgrown our bakery stores, and we will move into a warehouse later this year.
Goldelucks now ships all over Australia, and the national part of our business is growing strongly.
The next phase I am working on is an international e-commerce gift site for Goldelucks to ship worldwide!
We have recruited our own marketing team to help us grow.
What issues and hurdles do you see?
As the bakery business is growing so much, I am concentrating on the systems and procedures.
I realize these are key to keeping a high-quality, consistent product. However, hiring people is a massive task, especially as it involves emotions as well as HR.
I am transitioning well with delegating to my staff.
It is a business owners responsibility to recruit and develop their people.
A challenging aspect of this is letting go and trusting your employees.
Something unexpected happened that led to our international business growth.
In January, I started posting our story on TikTok and Instagram. As a result, millions of people follow our days running Goldelucks Doughnuts.
We have about half a million Instagram and TikTok followers. Our videos have been watched 100 million times!
We had so many overseas doughnut requests that we started a whole new export gift business.
What is in a typical day for you owning a doughnut bakery?
Today, we were short-staffed, so I helped pack orders this morning.
Then I did some booking and accounting work. After that, I edited a TikTok. Once we have recorded this podcast, I have some more bookwork to do. I will also be checking how my newly recruited marketing team are doing and recording another TikTok.
In short, no two days are the same.
As a small business owner, you have to solve problems because there are always new problems.
What advice would you give to a new bakery owner?
Get a good accountant from the start. I had a few accountants that didn’t set me up correctly, which caused some tax problems. So get this right from the start to save yourself some pain.
The last eighteen months have been insane. I feel bad for the businesses that have suffered during the lockdowns. However, I believe there are always opportunities, and you just have to find them.
7 Key points from the interview with Phillip Kuoch
- A business plan does not have to be huge, but it can predict problems and benefits. So it can save you a lot of time and money.
- There are often opportunities if we are open to seeing them.
- Phillip saw that Goldelucks was offering more to customers than doughnuts. Understanding what customers value is critical.
- Success is often the result of long hours and persistence.
- Getting good advice about your business structure is vital.
- A business mentor can help you work through difficult decisions.
- Lessons from lockdowns to increase your business resilience.
Additional resources related to owning and operating a business.
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Listen to other great Small Business Stories.
Check our Entrepreneur Personality Quiz for guidance on preparing yourself for owning a business.
Disclaimer: The information in this podcast is general in nature and does not consider your personal situation. The content does not constitute legal or financial advice and should not be used as such. You should consider whether the information is appropriate to your needs. Where applicable, seek professional advice from a financial adviser or lawyer in your own jurisdiction. To find out more, please go to ShouldIOwnABusiness.com
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