Gift Basket Business Plan

Avoid the mistakes that other craft business hopefuls have run into

Before you start doing your research and compiling a gift basket business plan for your gift basket company there are some basic things that you should first consider. The following sets out some questions that you should try to answer to give you a clearer idea of the direction that you want to proceed in.

1) Which market should you target? While you can focus on the 'whole market' a better approach is to find 'niche' markets within the gift basket industry. You may choose to go after 'corporate clients' or you may target the consumer market. Each market segment will be different and you will have to consider doing different styles of gift baskets to suit each market.

2) Work from home or rent retail space? While it can be easy to run a small home-based gift basket business and turn a decent profit it can be a different story if you have large overheads to pay such as rent and utilities. However, a prominent retail location can do wonders for your business in terms of exposure and orders from new customers. The usual advice is to start off small at home and only expand into rented premises once you are already making a sizable profit.

3) What legal structure is best for your business? Should you operate as a sole proprietorship, as a partnership or as a corporation? While a sole proprietorship can be easier to set up for new businesses a corporation is usually the best long term option. With a limited liability corporation your personal assets will be protected where as with a sole proprietorship you, as the owner are liable to pay for all losses personally. Seek some legal advice or talk to experienced business people to find out which is the best option for you.

4) How will you sell your gift baskets? This is perhaps that most important question that your gift basket business plan to ask before you make any other decisions. The most common business models are home-based with predominantly online sales or retail space with walk-in sales and online sales. Some home-based and retail gift basket businesses take a more active approach to marketing and go out looking for clients directly (usually corporate clients).

5) What about insurance? You will need to have insurance policies that protect the property of your business from theft or damage and you will need business liability insurance to cover you in the rare case that someone suffers an injury or a loss due to an accident on your premises or as a result of purchasing one of your gift baskets.

6) Tax. Make sure that you get started off right with a solid understanding of your tax obligations and your requirements with the IRS. Your gift basket business plan should have you spending at least a couple of hours with an accountant as they set up a bookkeeping system for you.

7) Should you hire staff or run the business yourself? Starting off as a sole operator is sensible but if you want to expand to a level where you can make a decent living from gift baskets then you really need to set out a plan for taking on and managing employees.

8) Funding. Are you able to finance your new business independently or will you need to seek financing from investors, banks or other sources.

Once you have answered these questions you will have a better idea of how to start doing the research and planning that is necessary to design an effective gift basket business plan if your gift basket start-up is to be successful.

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