Small Business Credit Profiles

Making dough with delectable doughnuts

Doughnuts were this food expert's calling


Food industry expert Craig Blum hopped on the food truck craze as it was taking off and opened Johnny Doughnuts. Here’s how he utilized credit cards to finance this delicious venture.

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Craig Blum

Craig Blum

Craig Blum is a longtime food industry expert, including being part of the opening team for the first U.S. Hard Rock Cafe, and an entrepreneur with an eye toward the next best thing. So, when food trucks were taking off, doughnuts on wheels just made sense.

But not just any pastry that can be bought from the typical corner shop would do. Oh no, Blum was intent on developing hand-crafted, creative treats, made from only the very best ingredients on the market.

It didn’t take long before doughnuts became Blum’s calling. He researched recipes, tried them out and slept little until his dream of creating and selling the most delectable items became a reality.

Johnny Doughnuts was a hit: Today, he has three brick-and-mortar locations in the San Francisco Bay Area, as well as three custom-built doughnut trucks and two support trucks.

Although the current business environment is especially difficult due to COVID-19 restrictions, Blum is optimistic about the future. “At Johnny Doughnuts, we have plans for aggressive and controlled growth,” he says. “In addition, we are exploring new shops and geographic locations.”

Here is Blum’s journey so far, and how he’s been using a wallet full of credit cards to finance his most delicious venture.

See related: A new way to work out: Flexing credit card benefits

Let’s go back to the beginning: What was it like for you to start this business?

As a small business, we endured many hardships in starting this business from the ground up. First off, even though I had over 30 years in the food service world and in many different capacities, I had never built a food truck before. So, I sought out mentorship to guide me through the process.

Being prepared for the unexpected expenses, there were not a lot of areas that we were blind-sided other than time. When we figured one month, it would take three. When we believed our truck would be completed in just a few months, it took a year.

Can you describe the peaks and valleys you’ve experienced in running Johnny Doughnuts?

Johnny Doughnuts

The highs have seriously outweighed the lows. Some of the highs were starting my company with a massive explosion – community support was amazing. Locally, we were nominated in our first year of business for “Small business of the year.”

And in 2015, we were recognized as “Small business of the year” by the California State SBA. We’ve had many amazing opportunities, including being in an Oscar-nominated motion picture, “Roman J. Israel, Esq.,” starring Denzel Washington.

Currently, the immediate environment can be considered some of the lowest of lows. While we are grateful to be able to operate and provide love and service to our community, how our communities are suffering and not being able to share a smile or a big hug for all that we love is painful.

Our food trucks have all but been parked for most of this pandemic. But we are finding ways, with the help of our customers, to bring doughnuts, coffee and love to the essential front-line workers in need of a momentary pause.

In what ways have you been using credit cards for your venture?

I found it very challenging to access capital as a new and unproven business – and that’s where credit cards held a prolific role. Through a business acquaintance, I was able to obtain multiple credit cards with promotional 0% interest rates to build and develop our company and have adequate capital to operate.

Given the fact that a lot of our non-food purchases come from an online source, credit cards are an invaluable source of payment and we would be lost without access to that source. As a business, we leverage our capital for the expansion of locations.

See related: Best 0% APR Credit Cards

Which cards do you have, and why did you choose them?

We have quite a few: Blue from American Express, the American Express® Gold Card, the Blue Cash Everyday® Card from American Express, Visa Business Platinum Card via Elan, and the Citi® / AAdvantage® Platinum Select® World Elite Mastercard.

We chose these cards as a line of credit to begin our company because of the APRs and rewards points they offer. But we also have the U.S. Bank Visa Platinum Card, which we used because of the balance transfer benefits it offered.

Is building and keeping good credit important to you as a business owner?

This question makes me laugh, and not because it’s funny but what it means to me. My father was a banker and a real estate investor, so to him, good credit was imperative.

He would say often, “Craig, you could be broke, but if you have good credit, you can always borrow and always have money.”

Is there anything that you like to do over if you could?

As in any regrets? Well yes, of course! I wish I invested in Apple in 1998 instead of Ralph Lauren. But that kind of thinking can drive you crazy. As a small business owner, how can you not wish you had the opportunity for do-overs? But we hope to learn from our mistakes and not do it twice while striving to be actively growing as an owner and CEO.

Finally, as a business owner, what have you learned about using credit cards/borrowing money along the way?

What I have learned is that using credit cards can be expensive. If I have a balance on a card, then I am always reviewing my rates and looking to transfer to better rate cards.

My personal advice is this: If you believe in your dream and you have an executable plan to achieve it, go for it! And if you don’t have the capital but you or a loved one has great credit, use credit cards. They could be the most affordable way of beginning your business.

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