Gift Basket Startup Considerations

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

1) Which market should you target?

While you can focus on the entire market, a better approach is to identify niche markets within the industry. You may choose to sell gift baskets to corporate clients, target consumers or go after both markets. Each market sector is different and you will have to offer different styles of gift baskets depending on the market that you choose. The best methods for reaching customers in different market sectors will also vary.

2) Should you work from home or from a commercial space?

While it can be easy to run a profitable gift basket business from home it can be a different story if you have rent and other overheads to pay. However, a prominent retail location can do wonders for your business in terms of exposure to customers. The usual advice is to start off small at home and only expand into rented premises once your business is profitable.

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 whereas with a sole proprietorship you, as the owner will be 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 the most important question to ask yourself before you make any other decisions. The most common business models are either home-based with predominantly online sales or retail based with a combination of walk-in sales and online sales. Most gift basket businesses also take an active active approach to marketing and go out looking for clients directly.

5) Is insurance necessary?

You will need to have insurance policies that protect the property of your business from theft or damage. Liability insurance is also essential in case someone suffers an injury or a loss due to an accident on your premises or as a result of the actions of one of your employees.

6) What is the situation with taxes?

Make sure that you get started off right by having a good understanding of your tax obligations and your requirements with the IRS. Plan on 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. If you want to expand to a level where you can make a decent living from gift baskets though then you must take on employees at some point.

8) What are your financing options?

Are you able to fund your gift basket business independently or will you need to seek funding 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 start a gift basket business successfully.