Do you want to start gift shop business?
Is it difficult for you too, to find the perfect gift for your loved ones, matching the occasion? Well, it is a tedious and difficult part of other’s life as well, and that’s from where the scope of the gift shop business starts. You can provide ease to the people living near you if you know how to open a gift boutique. By opening a gift shop, you’ll be running a profitable business, while continuously interacting with people of all ages.
The business provides a platform to grow, so if you think you are well suited for the type of this business than don’t hesitate a minute and start working on it. To help you with making gift shop business plan, we are providing here one, for a startup named, ‘Gift Galore’.
Executive Summary
2.1 The Business
Gift Galore will be based in Las Vegas, owned by Meryl Walters; based on providing all types of gifts ranging from interesting presents for children to luxurious gifts for adults and old.
2.2 Management
Gift Galore will not only be operating through its store but also be providing home delivery of gifts by taking online orders. So, our management framework will consist of the salespersons, web developers, transport persons for gifts delivery, and a general co-manager. If you want to know more about how to start a gift shop business, go through this gift shop business plan template which we have provided free of cost.
2.3 Customers
We’ll have our customers of all age groups who can be the residents or tourists residing in Las Vegas. Later in this souvenir shop business plan, we’ll be making groups of our customers in more detail.
2.4 Target of the Company
Our target is to be the best and the most popular business of our type in whole Las Vegas and to earn a profit margin of $10k per month by the end of the first year.
Company Summary
3.1 Company Owner
Meryl Walters will be the owner of Gift Galore. Meryl is a graduate in Sociology from the University of Nevada. She has an eight-year experience of working as a management counselor.
3.2 Why the Business is being started
People and society are a subject for Meryl. After working for eight years as a management counselor, she wanted to do something different and interesting. After research on businesses which can link her directly to people, she is starting a gift shop business.
3.3 How the Business will be started
Before taking a startup, you have to create a business plan for a gift shop. After making your business plan gift shop will be easy to run as you will be able to prioritize your business. If you don’t know much about writing a gift shop business plan covering all the aspects, you can take help from here.
A building will be taken on rent and will be converted into a beautiful and well-lit shop to make the entrance appealing. We’ll gather an assortment of various types of gifts, greeting cards, hats and bags, handmade collections and much more. To run the shop Meryl will hire salespersons, web developers and transport persons along with some other staff as will be discussed later.
The detailed start-up requirements, start-up expenses, total capital and liabilities as forecasted by experts, is given below:
| Start-up Expenses | ||
| Legal | $55 300 | |
| Consultants | $0 | |
| Insurance | $32 750 | |
| Rent | $32 500 | |
| Research and Development | $32 750 | |
| Expensed Equipment | $32 750 | |
| Signs | $1 250 | |
| TOTAL START-UP EXPENSES | $187 300 | |
| Start-up Assets | $220 875 | |
| Cash Required | $332 500 | |
| Start-up Inventory | $32 625 | |
| Other Current Assets | $232 500 | |
| Long-term Assets | $235 000 | |
| TOTAL ASSETS | $121 875 | |
| Total Requirements | $245 000 | |
| START-UP FUNDING | ||
| START-UP FUNDING | $273 125 | |
| Start-up Expenses to Fund | $151 875 | |
| Start-up Assets to Fund | $123 000 | |
| TOTAL FUNDING REQUIRED | $0 | |
| Assets | $23 125 | |
| Non-cash Assets from Start-up | $18 750 | |
| Cash Requirements from Start-up | $0 | |
| Additional Cash Raised | $18 750 | |
| Cash Balance on Starting Date | $21 875 | |
| TOTAL ASSETS | $373 125 | |
| Liabilities and Capital | $0 | |
| Liabilities | $0 | |
| Current Borrowing | $0 | |
| Long-term Liabilities | $0 | |
| Accounts Payable (Outstanding Bills) | $0 | |
| Other Current Liabilities (interest-free) | $0 | |
| TOTAL LIABILITIES | $0 | |
| Capital | $620 125 | |
| Planned Investment | $620 125 | |
| Investor 1 | $0 | |
| Investor 2 | $0 | |
| Other | $0 | |
| Additional Investment Requirement | $0 | |
| TOTAL PLANNED INVESTMENT | $620 125 | |
| Loss at Start-up (Start-up Expenses) | $313 125 | |
| TOTAL CAPITAL | $251 875 | |
| TOTAL CAPITAL AND LIABILITIES | $251 875 | |
| Total Funding | $255 000 | |
Products
We’ll be providing our services by hand to hand manually and through our online site. So, even if you are looking for online gift shop business plan, you can take help from here. The products we’ll be providing are:
- General Gift Items: We will have a complete assortment of all types of usual gifts such as stuffed animals, chocolates, toys, greeting cards.
- Decorative Artworks: We will have beautiful handmade artworks, baskets, small and large decoration pieces, picture frames, decorative and scented candles, etc.
- Specialty Gifts: We’ll keep a collection of somewhat expensive gifts including jewelry sets, books, technology items, gift bags, etc.
- Customized Apparel: We’ll be having gift sweaters, T-shirts, jackets, pants, and designed shirts for men and women.
- Accessories: We’ll be having a very large collection of handbags, wrist watches, hats and caps, hair accessories, keychains, perfumes, etc. in our store.
Marketing Analysis of Gift Shop Business
After having decided the products you’ll provide in your shop, its time now to develop a marketing plan for gift basket business. Knowing just about how to start a souvenir business, is not enough to run your business successfully. To survive and achieve more than your competitors, you have to develop an accurate gift marketing strategy after analyzing the market trends and target customers.
5.1 Market Trends
Gift shop businesses are running from a long time before and have experienced several growths and falls. According to IBISWorld, more than 61 thousand gift shop businesses are running in the United States at this time generating an annual revenue of $17 billion. The industry is responsible for employing more than 187 thousand people around the U.S. Although latest statistics haven’t reported a positive growth rate overall, but we expect to achieve our goals due to our unmatched competitive advantages.
5.2 Marketing Segmentation
Our customers belong to every age group. To understand the needs of our customers, Gift Galore has divided them into three groups, as given here:
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5.2.1 Children & Teens: The biggest group of our target customers will mostly comprise of the children, college going girls and boys who give small and normal priced gifts to their friends. We’ll be having gifts in affordable prices for them to fulfill the need of giving gifts without disturbing their budget.
5.2.2 Senior Citizens: The second category will comprise of the elder citizens, men, and women who give small gifts to their partners, friends and colleagues. We will be having a wide collection of gift items for this group so that they won’t need to search for the desired item by visiting many shops.
5.2.3 Young & Adults: The third category includes the young and adults, they are expected to purchase mostly the specialty gifts or little expensive gifts. As they can afford giving gifts by their own incomes.
The detailed market analysis of our potential customers is given in the following table:
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Children & Teens | 48% | 22 334 | 32 344 | 43 665 | 52 544 | 66 432 | 10,00% |
| Senior Citizens | 32% | 12 867 | 14 433 | 15 999 | 17 565 | 19 131 | 15,32% |
| Young & Adults | 20% | 11 433 | 13 344 | 16 553 | 18 745 | 20 545 | 13,43% |
| Total | 100% | 46 634 | 60 121 | 76 217 | 88 854 | 106 108 | 9,54% |
5.3 Business Target
Our target to be achieved over the course of three years are:
- To achieve the net profit margin of $10k per month by the end of the first year, $15k per month by the end of the second year, and $25k per month by the end of the third year
- To balance the initial cost of the startup with earned profits within six months of the launch
5.4 Product Pricing
To achieve our business targets while gaining and maintaining potential customers, we have decided to price our items in similar ranges as our competitors.
Strategy
After opening a gift shop business, you have to devise an effective business strategy services to let your customers know about the products you have bought for them. Before you start gift shop business find ways to let people know about the best part of you.
6.1 Competitive Analysis
To take a lead upon our competitors, we have come up with several competitive advantages, the biggest one of which is our online delivery system. Only we among our competitors are providing the facility to shop online. Our customers can choose the packages from the web, and get it at their doorstep within 12 hours by paying online. Secondly, we have ideas to make our entrance so creative and attractive that everyone would come to see inside. Lastly, we’ll have excellent customer care service, we’ll guide our customers about the gift that suits the event and will make sure that they are getting more than that they expected from us.
6.2 Sales Strategy
To advertise its services, Gift Galore will follow the following techniques:
- We will carry out a social media campaign to get introduced to a wider audience
- We will offer a 25% discount on home delivery services for the first two weeks
- We will advertise us through effective and creative billboards and posters
6.3 Sales Forecast
6.4 Sales Yearly
6.5 Sales Forecast
Considering the quality of our services and our exceptional customer service, we expect our sales to increase by years. Our experts have forecasted the following sales on a yearly basis which are summarized in the column charts.
The detailed information about sales forecast, total unit sales, total sales is given in the following table:
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| General and Specialty Gifts | 1 887 030 | 2 680 320 | 2 588 240 |
| Decorative Artworks | 802 370 | 815 430 | 823 540 |
| Customized Apparel | 539 320 | 770230 | 1 002 310 |
| Accessories | 265 450 | 322 390 | 393 320 |
| TOTAL UNIT SALES | 3 494 170 | 4 588 370 | 4 807 410 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| General and Specialty Gifts | $140,00 | $150,00 | $160,00 |
| Decorative Artworks | $600,00 | $800,00 | $1 000,00 |
| Customized Apparel | $700,00 | $800,00 | $900,00 |
| Accessories | $650,00 | $750,00 | $850,00 |
| Sales | |||
| General and Specialty Gifts | $2 149 800 | $2 784 000 | $3 383 200 |
| Decorative Artworks | $120 050 | $194 500 | $268 500 |
| Customized Apparel | $50 110 | $71 600 | $93 000 |
| Accessories | $139 350 | $194 600 | $249 850 |
| TOTAL SALES | |||
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| General and Specialty Gifts | $0,70 | $0,80 | $0,90 |
| Decorative Artworks | $0,40 | $0,45 | $0,50 |
| Customized Apparel | $0,30 | $0,35 | $0,40 |
| Accessories | $3,00 | $3,50 | $4,00 |
| Direct Cost of Sales | |||
| General and Specialty Gifts | $989 300 | $1 839 000 | $2 679 700 |
| Decorative Artworks | $66 600 | $119 900 | $173 200 |
| Customized Apparel | $17 900 | $35 000 | $52 100 |
| Accessories | $19 400 | $67 600 | $115 800 |
| Subtotal Direct Cost of Sales | $1 294 100 | $1 699 400 | $2 104 700 |
Personnel plan
You can start a gift shop business with a little or no staff, for if you are starting on a smaller scale. Meryl will be opening her shop on larger scales and, has decided to provide online services as well, so she will need additional staff to run her business smoothly.
7.1 Company Staff
Meryl will act as the General Manager, and will initially hire the following people:
- 1 Co-Manager to help in managing the shop
- 1 Accountant to maintain financial records
- 2 Sales Executives responsible for marketing and discovering new ventures
- 2 Decorators to decorate the shop interior and exterior
- 4 Drivers to bring the equipment and to provide home delivery service
- 1 Customer Care Officer
- 6 Salesman to attend the customers
- 2 IT Experts to manage company’s site, online systems, and payments
- 1 Front Desk Officer to act as a receptionist
- 1 Security Officer
7.2 Average Salary of Employees
The following table shows the forecasted data about employees and their salaries for the next three years.
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Co-Manager | $85 000 | $95 000 | $105 000 |
| Accouontant | $50 000 | $55 000 | $60 000 |
| Sales Executives | $187 000 | $194 000 | $201 000 |
| Decorators | $55 000 | $60 000 | $65 000 |
| Drivers | $85 000 | $95 000 | $105 000 |
| Customer Care Officer | $50 000 | $55 000 | $60 000 |
| Salesman | $245 000 | $252 000 | $259 000 |
| IT Experts | $85 000 | $95 000 | $105 000 |
| Front Desk Officer | $50 000 | $55 000 | $60 000 |
| Security Officer | $85 000 | $95 000 | $105 000 |
| Total Salaries | $435 000 | $462 000 | $489 000 |
Financial Plan
After you have decided to start a gift shop business, a general question arises that how much does it cost to open a gift shop. Well, this business doesn’t require a very large investment. The only expenditures you will have to do will be buying the inventory for your store business plan, expenses of advertisement and the salaries of your employees. These expenses can easily be balanced by the earned profits provided that you plan and market your business successfully. All the financial details of Gift Galore are provided in this sample gift shop business plan pdf. Anyone who is looking for how to open a gift shop business and run it successfully while achieving all goals can take help from here.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 10,00% | 11,00% | 12,00% |
| Long-term Interest Rate | 10,00% | 10,00% | 10,00% |
| Tax Rate | 26,42% | 27,76% | 28,12% |
| Other | 0 | 0 | 0 |
8.2 Brake-even Analysis
| Brake-Even Analysis | ||
| Monthly Units Break-even | 5530 | |
| Monthly Revenue Break-even | $159 740 | |
| Assumptions: | ||
| Average Per-Unit Revenue | $260,87 | |
| Average Per-Unit Variable Cost | $0,89 | |
| Estimated Monthly Fixed Cost | $196 410 | |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $309 069 | $385 934 | $462 799 |
| Direct Cost of Sales | $15 100 | $19 153 | $23 206 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $15 100 | $19 153 | $23 206 |
| Gross Margin | $293 969 | $366 781 | $439 593 |
| Gross Margin % | 94,98% | 94,72% | 94,46% |
| Expenses | |||
| Payroll | $138 036 | $162 898 | $187 760 |
| Sales and Marketing and Other Expenses | $1 850 | $2 000 | $2 150 |
| Depreciation | $2 070 | $2 070 | $2 070 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $4 000 | $4 250 | $4 500 |
| Insurance | $1 800 | $1 800 | $1 800 |
| Rent | $6 500 | $7 000 | $7 500 |
| Payroll Taxes | $34 510 | $40 726 | $46 942 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $188 766 | $220 744 | $252 722 |
| Profit Before Interest and Taxes | $105 205 | $146 040 | $186 875 |
| EBITDA | $107 275 | $148 110 | $188 945 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $26 838 | $37 315 | $47 792 |
| Net Profit | $78 367 | $108 725 | $139 083 |
| Net Profit/Sales | 30,00% | 39,32% | 48,64% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $40 124 | $45 046 | $50 068 |
| Cash from Receivables | $7 023 | $8 610 | $9 297 |
| SUBTOTAL CASH FROM OPERATIONS | $47 143 | $53 651 | $59 359 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $47 143 | $53 651 | $55 359 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $21 647 | $24 204 | $26 951 |
| Bill Payments | $13 539 | $15 385 | $170 631 |
| SUBTOTAL SPENT ON OPERATIONS | $35 296 | $39 549 | $43 582 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $35 296 | $35 489 | $43 882 |
| Net Cash Flow | $11 551 | $13 167 | $15 683 |
| Cash Balance | $21 823 | $22 381 | $28 239 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $184 666 | $218 525 | $252 384 |
| Accounts Receivable | $12 613 | $14 493 | $16 373 |
| Inventory | $2 980 | $3 450 | $3 920 |
| Other Current Assets | $1 000 | $1 000 | $1 000 |
| TOTAL CURRENT ASSETS | $201 259 | $237 468 | $273 677 |
| Long-term Assets | |||
| Long-term Assets | $10 000 | $10 000 | $10 000 |
| Accumulated Depreciation | $12 420 | $14 490 | $16 560 |
| TOTAL LONG-TERM ASSETS | $980 | $610 | $240 |
| TOTAL ASSETS | $198 839 | $232 978 | $267 117 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $9 482 | $10 792 | $12 102 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $9 482 | $10 792 | $12 102 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $9 482 | $10 792 | $12 102 |
| Paid-in Capital | $30 000 | $30 000 | $30 000 |
| Retained Earnings | $48 651 | $72 636 | $96 621 |
| Earnings | $100 709 | $119 555 | $138 401 |
| TOTAL CAPITAL | $189 360 | $222 190 | $255 020 |
| TOTAL LIABILITIES AND CAPITAL | $198 839 | $232 978 | $267 117 |
| Net Worth | $182 060 | $226 240 | $270 420 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 4,35% | 30,82% | 63,29% | 4,00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 5,61% | 4,71% | 3,81% | 9,70% |
| Inventory | 1,85% | 1,82% | 1,79% | 9,80% |
| Other Current Assets | 1,75% | 2,02% | 2,29% | 27,40% |
| Total Current Assets | 138,53% | 150,99% | 163,45% | 54,60% |
| Long-term Assets | -9,47% | -21,01% | -32,55% | 58,40% |
| TOTAL ASSETS | 100,00% | 100,00% | 100,00% | 100,00% |
| Current Liabilities | 4,68% | 3,04% | 2,76% | 27,30% |
| Long-term Liabilities | 0,00% | 0,00% | 0,00% | 25,80% |
| Total Liabilities | 4,68% | 3,04% | 2,76% | 54,10% |
| NET WORTH | 99,32% | 101,04% | 102,76% | 44,90% |
| Percent of Sales | ||||
| Sales | 100,00% | 100,00% | 100,00% | 100,00% |
| Gross Margin | 94,18% | 93,85% | 93,52% | 0,00% |
| Selling, General & Administrative Expenses | 74,29% | 71,83% | 69,37% | 65,20% |
| Advertising Expenses | 2,06% | 1,11% | 0,28% | 1,40% |
| Profit Before Interest and Taxes | 26,47% | 29,30% | 32,13% | 2,86% |
| Main Ratios | ||||
| Current | 25,86 | 29,39 | 32,92 | 1,63 |
| Quick | 25,4 | 28,88 | 32,36 | 0,84 |
| Total Debt to Total Assets | 2,68% | 1,04% | 0,76% | 67,10% |
| Pre-tax Return on Net Worth | 66,83% | 71,26% | 75,69% | 4,40% |
| Pre-tax Return on Assets | 64,88% | 69,75% | 74,62% | 9,00% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 19,20% | 21,16% | 23,12% | N.A. |
| Return on Equity | 47,79% | 50,53% | 53,27% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 4,56 | 4,56 | 4,56 | N.A. |
| Collection Days | 92 | 99 | 106 | N.A. |
| Inventory Turnover | 19,7 | 22,55 | 25,4 | N.A. |
| Accounts Payable Turnover | 14,17 | 14,67 | 15,17 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 1,84 | 1,55 | 1,26 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | 0 | -0,02 | -0,04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $120 943 | $140 664 | $160 385 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0,45 | 0,48 | 0,51 | N.A. |
| Current Debt/Total Assets | 4% | 3% | 2% | N.A. |
| Acid Test | 23,66 | 27,01 | 30,36 | N.A. |
| Sales/Net Worth | 1,68 | 1,29 | 0,9 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
Download Gift Shop Business Plan Sample in pdf
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