How To Start A Gift Basket Business
In big places, including the United States, gift basket happens to be one of the easy-to-start businesses that yield robust profits.
Although the business tends to peak mostly during Christmas and certain other festive periods, you’ll likely make huge success provided you’ve got the entrepreneurial capability to succeed in it.
According to certain industry statistics recorded in the United States, gift basket has maintained its ground among business industries that reel in substantial annual revenues.
Meanwhile, the United States is said to have recorded the whopping sales of $3.3 billion in 2008 only for its gift basket industry.
Contrary to the belief of some people, gift basket business isn’t difficult to start.
And to ensure you don’t start off badly, this article is designed to guide you on all you need to get a gift basket business underway and make it a successful venture.
Starting a Gift Basket Business
1) Research about the Industry
The gift basket industry is perhaps one of the business industries with several niches under them.
While planning to tap into a business of this sort, you may first have to
- conduct a thorough analysis of the industry,
- discover the activities of competitors,
- research the profitability of the business and
- find out the current limitations.
Meanwhile, inquiries into the gift basket industry reveal that over 50% of those engaged in gift basket business own retail outlets.
Within your research,
- you should be able to find out the best location for your proposed gift basket business.
While some people choose to own sizeable stores for the storage of their large inventories, you may establish your gift basket business from home provided it’s spacious enough.
- In reality, your in-depth inquiry into the gift basket industry should give you insights about the lucrative and suitable niche for you.
Aside from food gifts, which the majority of gift basket businesses specialize in, specialty food gift happens to be a profitable sector since numerous customers fancy creative products.
Also, your research should give you a glimpse of various gift basket niches including:
- floral baskets,
- bath product gift baskets,
- customized gift baskets,
- baby shower baskets,
- food baskets,
- toiletry baskets, etc.
Whichever gift basket sector you’d like to engage in, it’s advisable that you understand its ins and outs as these should guarantee business success in the long run.
- If you wish to tailor your gift basket business to the needs of many customers, you’ll have to understand your business demographics.
Basically, this involves knowing your customers as they include corporate clients, government agencies and individual clients.
2) Figure Out Your Start-up Expenses
Getting started with a gift basket business with no money is possibles as the business may not require a huge capital outlay.
However, it’s very likely that you’ll incur certain expenses which may include:
- the costs of business space and
- equipment.
If you, however, decide not to manufacture gift baskets by yourself, probably because you can’t afford the required expenditure, you may have to patronize distributors or suppliers of gift baskets and buy in bulk from them.
In figuring out your start-up expenses, it’s essential that you consider whether to start from scratch or to acquire a franchise.
While starting from scratch will enable you to acquire the basics of food basket business, you may still decide to obtain a franchise provided you wouldn’t like to shoulder the rigors of starting a business by yourself.
Most of the owners of food basket businesses out there started from scratch and whichever way you’ve chosen to take up the business, it’s advisable that you figure out the required expenses.
3) Find a Suitable Legal Entity
Legality is one of the key features that should distinguish your gift basket business as an appropriate commercial establishment.
It’s best to provide your business with a suitable legal entity so that in future, you’ll find it easy to avert business headaches such as financial incapability.
Although a majority of gift basket businesses are sole proprietorships, it could be advantageous that you establish yours as a partnership especially if you foresee the need to pool resources together with someone else.
Usually, establishing a gift basket business as a sole proprietorship is very easy but again, you may have to engage the service of an attorney, public accountant or certain other business experts who should advise you on what legal entity to choose.
4) Obtain Necessary Insurance Covers
Irrespective of the business structure and the location you’ve chosen for your gift basket business, you’ll have to obtain certain insurance covers intended for protecting the business against unforeseeable circumstances.
Insurance covers come in various types and in finding out the suitable ones, some of the things you have to consider are your State of residence, your legal entity and the kind of business you’re running.
Precisely in the United States, some of the insurance covers you may need for your gift basket business are
(i) hazard insurance
(ii) liability insurance
(iii) health insurance, and
(iv) general insurance.
5) Obtain Essential Legal Documents
Some business documents are so important that a business might be considered illegitimate if its owner fails to obtain them.
Like many other businesses, gift basket business requires you to have several legal documents which not only legalize your business activities but also portray your business as an authentic establishment.
In the US, your gift basket business will likely need a couple of legal documents including:
- a sales tax ID,
- an insurance policy,
- a business license,
- a certificate of incorporation and
- a business plan.
6) Purchase the Required Business Equipment
To ply your gift basket business effectively, you need a decent amount of equipment which may include operational and promotional tools.
Operational tools will be needed for the time-to-time production/design of gift baskets and they include:
- kinds of cellophane,
- shrink wraps,
- scissors,
- ribbons,
- baskets,
- crafting materials, etc.
Pretty Ideas for Marketing a Gift Basket Business
- Set up a responsive blog/website through which you can interact with existing customers and advertise to potential customers
- Appear at trade fairs, business seminars and other relevant events where you can exhibit your gift baskets
- Design colorful flyers and distribute them to people at malls, fitness centers and other public places where you’re likely to have potential customers
- Utilize reputable online directories for listing your gift basket business and getting it in front of a wide audience
- Optimize your social media channels (including Facebook and Instagram) for boosting the visibility of your business