Sandy's Donuts: A Successful Dakota Business Lending 504 Borrower

May 21, 2018

Sanfred (Sandy) Ostlund developed a passion for buttermilk donuts after seeing his mother make them in her a cast iron pan over the coal burning stove in their home growing up. As an adult, he made donuts as a hobby, just like his mother. He loved it so much and made so many that he often gave away fresh donuts to neighbors, who loved the mouth-watering pastries. In 1983, while out of work, a neighbor recommended that Sandy and his wife Donna start their own donut shop. 

After a lot of thought and deliberation, Sandy and Donna decided to turn the long-time hobby into a career and Sandy’s Donuts was created.

Shortly after opening the donut and coffee shop on Sheyenne Street in West Fargo, Sandy and Donna’s son, Mark, came home from college and started working for the new family business. The shop was an extreme success and the family found themselves staying up until all hours of the night to make their donuts for their loyal customers. 

Mark says, “Sandy had a dream of having a ma and pa type of donut shop so his dream or vision was exceeded pretty quickly.”

With demand for their donuts rising, and a need for more space, the family moved the restaurant in 2003 to one of its current locations on Main Avenue West. Within the next few years, their son Mark took over the management of the bakery. Sandy passed away in 2008, and all ownership was transferred to Mark as well. To this day, Mark still owns and manages the business with his wife, Karla, using the same family recipes and friendly service that his parents introduced. “I do not know if we are unique but our success comes from making a great product and selling it for a fair price along with great customer service,” Mark says.

‍Sandy's son, Mark, who now manages the bakery

By maintaining the same, authentic products and services over the years, Mark has ensured the business’s continual success. 

“I am not a baker. My dad Sandy was the baker; I love the business side,” Mark said, “I have put my time in baking and I know how important that part is, so I hire quality people to do that.” 

Sandy’s has made a name for itself as the best donuts in the FM area, but this title didn’t come easy. With over 30 years of experience managing Sandy’s, Mark and Karla have helped Sandy’s Donuts grow and expand significantly. In 2012, Mark turned to Dakota Certified Development Corporation (now Dakota Business Lending) for a Small Business Administration (SBA) 504 loan in partnership with Bell State Bank & Trust for the funds to perform necessary improvements to their building on Main Avenue, remodel the existing kitchen and purchase new up-to-date appliances to increase efficiency. 

With a goal to have another bakery location in the area, the couple began plans for another expansion. They reached their goal in 2014 and created a bakery in downtown Fargo on Broadway. The Ostlund’s knew that the energy of downtown Fargo would help their business to thrive and increase their customer base. “The downtown location happened kind of quickly,” says Mark, 

“I wanted a second location and I also wanted to make a statement that the donut shop of Fargo was Sandy's Donuts. I thought a downtown store made that statement.” 

They were right. “We love being downtown and the store is doing awesome.” In addition to expanding, the couple also started a delivery service to transport their donuts to companies and events all over the FM area.

A few years later, the Ostlund’s turned to Dakota CDC (now Dakota Business Lending) once again for a loan to help them expand their West Fargo location to keep up with their growth. In order to produce enough pastries for both of their locations and potentially add another location sometime in the future, they needed a bigger kitchen. “We are very limited on how we do things because of the lack of space. We have only one fryer but need three.” Upon completion, they will be able to produce more donuts with more space and increase efficiency, all in one central location. 

“We make donuts for 18 hours a day now…when the expansion is done we will cut our production time down to 8-10 hours,” Mark says. “It is a huge project for a small donut shop. In 31 years we really have never had the kitchen we needed. We have grown so quickly so we always need more space.”

The SBA 504 loan from Dakota CDC (now Dakota Business Lending) is making this possible for the small business.  

Dakota CDC (now Dakota Business Lending) takes care of funding the expansion while the business continues to focus on producing quality products and services for their customers. 

Mark says, “The Dakota CDC (now Dakota Business Lending) team is great. They do a great job so it is easier for us to focus on our business.”

Sandy’s credits their success to the community. “The Fargo, Moorhead, West Fargo community has always been great to us. They have loved us from day one and we are very thankful for that.” The company has felt immense amount of support from their customers throughout the years. 

“On busy days I will sometimes just sit back and watch,” says Mark, “I do not understand it or feel we deserve it but they keep pouring in. Thankful is really the word.” 

Sandy’s makes sure to give back to their supportive community. Sandy’s is making an impact by hosting events and donating their time, money and, of course their donuts all year around. “We drop off donuts at no charge to most of the shelters in town and we donate to many non-profit events,” Mark said. In the spring of 2012, Sandy’s Donut Run 5K & 10K was started and every year since then, they have picked a new charity to donate all of the proceeds from the event.

Their commitment to their customers and the community is etched into their core values, which include: FUN, INTEGRITY, INNOVATION, COMMUNITY, and EXCELLENCE. To fulfill their goal of innovation, the business is constantly researching and developing new types of donuts. For example, Sandy’s made donuts to match the colors of each of the major colleges in the area, Concordia, NDSU, and MSUM. In addition, you will also find creative flavors such as, maple bacon, dirt and worms, butterfinger crumble, and s’mores, just to name a few at any of the Sandy’s locations. Their exceptional, inventive treats keep bringing customers back in try new donuts.

“We want to always be coming up with new donut ideas that are fun,” says Mark. “We want to do a great job at everything we do and do it with integrity.” 

With passionate employees committed to the community and to the values of Sandy’s, there is no question that the donut shop will continue to grow and bring smiles to the community through their philanthropy and their delectable donuts!

Make sure you “take time to stop in and smell the donuts” at one of the Sandy’s Donuts locations and visit their website at https://www.sandysdonuts.com/.