My first million: Gary Frank, The Fabulous Bakin’ Boys

If Gary Frank hadn't gone into business, he could have made a decent living as a raconteur. After five years in New York working as a futures trader, he lost everything in the market crash of 1987 and ended up back in the UK, living on the outskirts of Oxford on dole money of £39 a week. While that's a riches-to-rags story in itself, the tale of how he turned himself around is even more compelling if a little far-fetched. After the crash, Frank found that he "couldn't even get a job stocking shelves in a super­market. So I was unemployed for pretty much the best part of a year. Then one night I had a dream," he says. According to Frank, "an old boy in a long white gown and a long white beard and flowing hair" came to him and said "Gary; you're going to make doughnuts".

Six months later, Delicious Doughnuts was born. Frank started small, making samples of the US-style doughnuts he'd enjoyed in New York, and approached local shops. "Enough people said they were interested to give it a bit of momentum." He put together a business plan and raised £15,000 from friends and family, which the bank matched: "obviously, the bank manager liked the doughnuts". He opened a small baking unit in Witney. But driving around Oxfordshire and London in his white van, Frank soon discovered a "fundamental flaw" with his plan. "Nobody liked these flipping doughnuts." In the first year, he made a £15,000 loss on a turnover of £45,000. But in the meantime, to use up the extra space in his van, Frank had been buying flapjacks and cakes from other Oxford producers, and selling them to the same shops that were stocking his doughnuts. "And they started taking off." Back then, you could buy a sandwich and crisps at your local petrol station, he says, "but muffins and flapjacks they just didn't have any of that. Suddenly, there was a big sales opportunity." In year two he made a small profit on the back of £250,000 turnover and began supplying contract caterers. By the mid-1990s, five or six years later, the business was turning over "a couple of million".

The next move was to "break into the supermarkets". He saw the chance to bring something fresh to the cake market. There was "no Ben & Jerry's or Innocent, no brand being different". But by this time, Delicious Doughnuts had stopped making doughnuts. So Frank spent 1996 and 1997 rebranding the group as The Fabulous Bakin' Boys, and sorting out a new factory to handle the capacity they'd need to supply supermarkets.

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The plan was to start a trial at the end of 1998 with one of the retailers. "That went out of the window in March 1998", when Sainsbury's bakery manager called. "I thought it was a wind up." ­But three days later he was in her office; after four weeks, his products were on the shelves. "It was a bit of a roller-coaster ride because we didn't know anything about supplying supermarkets... But we learnt quickly and the business has grown ever since." It now turns over £12.5m, with £15m expected this year, and the group is launching a new fair-trade range. But the dream sage to whom he says he owes his success got it wrong on one count. As Frank says, "doughnuts are well and truly behind us".