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Do you want to start gift basket business?
It is always difficult to find a gift that matches the recipient’s mood, occasion, and of course the price range. If you are looking for a business where you can earn profits while also interacting with different people round the clock, this may be the right choice for you.
A gift basket business provides customizable and standard gift baskets for people of all ages and professions. The business is profitable as people usually exchange gifts with each other on special occasions and meetups.
The first step before starting this business is exploring how to open a gift basket business and making a business plan for gift baskets. For your help, we’re providing a sample of a business plan written for gift business startup, Gifters’ Stop.
Executive Summary
2.1 The Business
Gifters’ Stop will be a registered gift basket business based in New York. The business will aim at offering gift baskets, general gift items, and decoration pieces to its customers.
2.2 Management of Gift Basket Company
Gifters’ Shop will be providing its services both in-store and online. Therefore, to manage it, the business owner will be hiring a large team including co-managers, delivery personnel, store operators, website manager, and customer’s guide.
Though the business doesn’t contain large-scale operations, still there is a need for a proper management plan to run it. This is because the sales in this business hugely depend on how well you treat your customers. And how quickly you convince them to buy a certain thing.
In this gift basket startup plan, we will be listing everything you need to know about how to set up a gift basket business. This blog will also be sufficient in case you’re looking for how to start a gift basket business online.
2.3 Customers of Gift Basket Company
The customers of gift basket company belong to various areas of life. To study their demands and needs we’ve divided them among the following groups:
- Family Members
- Working Class
- Corporate Owners
- College and High School Students
2.4 Business Target
Our target is to achieve a customer satisfaction score above 90% within a year of our launch. Moreover, our financial targets for the first three years of our launch are demonstrated here.
Company Summary
3.1 Company Owner
Angelica Diaz will be the owner of Gifters’ Stop. Angelica is a master’s in Management Sciences. She worked for one year after completing her degree and decided to leave her job to manage her family and children.
3.2 Why the gift basket company is being started
Angelica wanted to run a business along which she could manage her family life and children easily. She was first thinking about starting a gift basket business from home. But due to the explicit advantages, one gets through physical presence, she decided to offer her services in both ways.
3.3 How the gift basket company will be started
Step1: Plan your Business
The first step to start a business is detailed and accurate planning of all of its aspects. To have an idea of what details to include in your business plan for investors you can take here from this gift basket business plan example. In this gift basket business plan sample we’re listing all the details of Gifters’ Stop.
Step2: Define your Brand
The next step is to search for gift basket company name ideas that can help you catch peoples’ attention. Get registered and define your offerings and competitive aspects so that people can recognize you in the market.
Step3: Start the Recruitment
Employees for a gift business must be hired after careful interviewing. It is because the interaction of customers and employees largely depends on the behaviors and communication skills of your workers. Therefore, after establishing your presence, you should start hiring the required employees.
Step4: Promote & Market
To reach out to your target customers, start advertising and promoting your startup way before you actually launch your business.
Step5: Establish a Web & Social Media Presence
Lastly, to manage online sales and to grab the attention of more and more people, you’ll need to establish and maintain a strong website and social media presence.
| Start-up Expenses | |
| Legal | $243,000 |
| Consultants | $0 |
| Insurance | $31,000 |
| Rent | $30,000 |
| Research and Development | $24,000 |
| Expensed Equipment | $55,000 |
| Signs | $4,200 |
| TOTAL START-UP EXPENSES | $387,200 |
| Start-up Assets | $320,000 |
| Cash Required | $340,000 |
| Start-up Inventory | $46,000 |
| Other Current Assets | $201,000 |
| Long-term Assets | $230,000 |
| TOTAL ASSETS | $1,137,000 |
| Total Requirements | $1,524,200 |
| START-UP FUNDING | |
| Start-up Expenses to Fund | $387,200 |
| Start-up Assets to Fund | $1,137,000 |
| TOTAL FUNDING REQUIRED | $1,524,200 |
| Assets | |
| Non-cash Assets from Start-up | $1,503,000 |
| Cash Requirements from Start-up | $346,000 |
| Additional Cash Raised | $51,000 |
| Cash Balance on Starting Date | $31,000 |
| TOTAL ASSETS | $1,931,000 |
| Liabilities and Capital | |
| Liabilities | $29,000 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $43,000 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $72,000 |
| Capital | |
| Planned Investment | $1,524,200 |
| Investor 1 | $0 |
| Investor 2 | $0 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $1,524,200 |
| Loss at Start-up (Start-up Expenses) | $334,800 |
| TOTAL CAPITAL | $1,859,000 |
| TOTAL CAPITAL AND LIABILITIES | $1,931,000 |
| Total Funding | $1,524,200 |
Services
Before you start your own gift basket service you should decide your offerings. You should clearly state your services and products in your gift basket service business plan so that you can make all other arrangements accordingly.
Premade Gift Baskets
Our primary offerings will be premade gift baskets of all sizes for people of different ages and lifestyles. Our gift baskets that will contain things like chocolates, perfumes, skincare products, automated gadgets, jewelry, and many more things, will be categorized as follows:
- Best for Her
- Best for Him
- Best for Foodies
- Best for Sweet Lovers
- Delight for Mom
- Treat for Dad
- Movie Night Themed
- Success Themed
Customizable Gift Baskets
In this service, our customers will be able to include/ exclude anything in the gift basket.
Gift Cards/ Customized Apparels & Other Items
We will also offer creative gift items including
- Printed Mugs
- T-Shirts with Customizable Graphic Designing
- Fun Printed T-Shirts
- Gift Cards
- Watches
- Chocolate Boxes
- Toys for Kids
- Skincare Products
Decoration Pieces
Lastly, we’ll offer a wide range of decoration pieces and home décor accessories such as
- Elegant Candles
- Garden Vases
- Picture Frames
- Wall Artwork
- Fun Stickers & Wallpapers
- String Lights
- Small to Medium-Sized Decoration Pieces
Marketing Analysis of Gift Basket Company
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Before opening a gift basket business you should carry out a detailed marketing analysis. Your marketing gift baskets analysis should study all the facts about your stakeholders. For example, knowing who your customers are, and how much they would be willing to pay for a medium-sized gift basket, will enable you to set your product quality and prices. Similarly, having an idea of how many customers will you be able to get on a monthly and yearly basis, can enable you to gather sufficient resources and personnel.
In this blog on how to write a gift basket business plan, we’re providing the business plan developed for Gifters’ Stop. From market segmentation to product pricing, we’re listing all the marketing analysis details that might help you.
5.1 Market Trends
Gift basket businesses are in high demand in the United States. As gifts are considered a lovable and respectful gesture, people of all backgrounds and incomes purchase them many times a year. According to IBISWorld, more than 57k gift shops and businesses are successfully running in the United States. The industry that also includes gift card stores holds an annual market size of $17 billion. And is also responsible for employing nearly 163k employees.
5.2 Marketing Segmentation
Before starting your gift basket business, it is necessary to explore the groups of target customers. In the case of a physical store, people living in your vicinity will be your frequent buyers. However, in the case of starting gift basket business home your customer base would be larger. You can serve more customers in case of serving online but you’ll be required to hire more delivery persons to ensure fast shipping.
5.2.1 Family Members
Our biggest customers will be the families living in New York. Family members usually exchange gifts with each other on special occasions like birthdays, anniversaries, mothers’ or fathers’ day. Besides, this group is also expected to purchase our décor equipment.
5.2.2 Working Class
Our second target group will comprise the working class. People who are financially stable and secure usually prefer to give expensive gifts. Moreover, they frequently purchase printed mugs, watches, and gift cards for their colleagues, seniors, and supervisors.
5.2.3 Corporate Owners/ CEOs
Our third category includes business CEOs and owners who strive to create a healthy organizational culture. This group usually purchases gift packs in bulk to appreciate the performance of employees or to celebrate special events and occasions.
5.2.4 College & High School Students
Our last group of target customers will comprise students who exchange gifts with their fellows, teachers, and families. However, this group is expected to make small and occasional purchases.
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Family Members | 36% | 42,000 | 44,000 | 45,000 | 47,000 | 48,000 | 10.00% |
| Working Class | 29% | 31,000 | 32,000 | 33,000 | 35,000 | 36,000 | 10.00% |
| Corporate Owners/ CEOs | 24% | 25,000 | 27,000 | 28,000 | 29,000 | 30,000 | 10.00% |
| College & High School Students | 11% | 12,000 | 13,000 | 14,000 | 15,000 | 16,000 | 11.00% |
| Total | 100% | 110,000 | 116,000 | 120,000 | 126,000 | 130,000 | 10% |
5.3 Business Target
The business targets of Gifters’ Stop are listed below:
- To earn a net profit margin of $25k per month by the end of the third year.
- To achieve and maintain a CSAT score above 90% within a year of our launch.
- To increase our sales by 30% by the end of four years of our launch by expanding our product line.
5.4 Product Pricing
Our prices almost within the same range as our competitors. However, the prices for our customizable themed baskets are a little higher than our business rivals.
Marketing Strategy
In your gift basket business plan template you must also include the ways that can help you in attracting and retaining your target customers. To develop an influencing gift basket marketing plan it is essential to explore what interests your customers and which medium of advertisement is more likely to be noticed by your target customers.
6.1 Competitive Analysis
Gifters’ Stop will be having the following competitive advantages over others:
- We have the largest collection of gifts in the entire city. All of our products are high-quality and are made to ensure longevity.
- Only we among all of our competitors are offering customized T-Shirts. Through us, the customers will be able to get anything written and drawn on the gift T-shirt.
- Our staff is highly respectful and collaborative. They will guide the customers unless they are fully satisfied.
6.2 Sales Strategy
To attract our target customers, we will:
- We’ll carry out a strong social media campaign. And advertise our fun customizable apparel.
- We’ll advertise our services through local magazines, social media, and Google Local Ads services.
- We’ll offer a 40% discount on all of our services for the first two months of our launch.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Premade Gift Baskets | 40,000 | 42,400 | 44,944 |
| Customizable Gift Baskets | 57,000 | 60,420 | 64,045 |
| Gift Cards/ Customized Apparels & Others | 12,000 | 12,720 | 13,483 |
| Decoration Pieces | 18,000 | 19,080 | 20,225 |
| TOTAL UNIT SALES | 127,000 | 134,620 | 142,697 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Premade Gift Baskets | $38.00 | $44.08 | $51.13 |
| Customizable Gift Baskets | $49.00 | $56.84 | $65.93 |
| Gift Cards/ Customized Apparels & Others | $41.00 | $47.56 | $55.17 |
| Decoration Pieces | $60.00 | $69.60 | $80.74 |
| Sales | |||
| Premade Gift Baskets | $1,520,000.00 | $1,868,992.00 | $2,298,112.56 |
| Customizable Gift Baskets | $2,793,000.00 | $3,434,272.80 | $4,222,781.83 |
| Gift Cards/ Customized Apparels & Others | $492,000.00 | $604,963.20 | $743,862.75 |
| Decoration Pieces | $1,080,000.00 | $1,327,968.00 | $1,632,869.45 |
| TOTAL SALES | $5,885,000.00 | $7,236,196.00 | $8,897,626.60 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Premade Gift Baskets | $35.00 | $40.00 | $47.00 |
| Customizable Gift Baskets | $46.00 | $52.00 | $60.00 |
| Gift Cards/ Customized Apparels & Others | $39.00 | $44.00 | $51.00 |
| Decoration Pieces | $58.00 | $65.00 | $76.00 |
| Direct Cost of Sales | |||
| Premade Gift Baskets | $1,400,000.00 | $1,696,000.00 | $2,112,368.00 |
| Customizable Gift Baskets | $2,622,000.00 | $3,141,840.00 | $3,842,712.00 |
| Gift Cards/ Customized Apparels & Others | $468,000.00 | $559,680.00 | $687,643.20 |
| Decoration Pieces | $1,044,000.00 | $1,240,200.00 | $1,537,084.80 |
| Subtotal Direct Cost of Sales | $5,534,000.00 | $6,637,720.00 | $8,179,808.00 |
Personnel plan
Business plan for investors
While you write gift basket business plan you should also include a list of required employees along with their qualifications, selection criteria, and average salaries. This will eventually help you in hiring the most suitable employees that meet your requirements as well as budget.
7.1 Company Staff
Angelica will hire the following people for her running her business:
- 1 Co-Manager to help manage the business
- 2 Sales Managers to manage online and in-store sales
- 3 Salesmen to attend customers and maintain store’s display
- 1 Website & App Developer to maintain online presence
- 1 Accountant to maintain financial records
- 1 Sales Executive to promote the company
- 1 Customer Care Officer to resolver customers’ concerns/ complaints
- 3 Drivers to deliver orders
- 2 General Assistants
- 1 Receptionist/ Call Operator
7.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Co-Manager | $13,000 | $14,300 | $15,730 |
| Sales Managers | $23,000 | $25,300 | $27,830 |
| Salesmen | $27,000 | $29,700 | $32,670 |
| Accountant | $9,000 | $9,900 | $10,890 |
| Sales Executive | $7,000 | $7,700 | $8,470 |
| Web Developer & App Developer | $6,900 | $7,590 | $8,349 |
| Customer Care Officer | $7,800 | $8,580 | $9,438 |
| Drivers | $27,000 | $29,700 | $32,670 |
| General Assistants | $14,000 | $15,400 | $16,940 |
| Receptionist/ Call Operator | $6,500 | $7,150 | $7,865 |
| Total Salaries | $141,200 | $155,320 | $170,852 |
Financial Plan
To achieve your financial goals, just increasing sales isn’t enough. In fact, your business can run into loss even with increased sales, if you fail at managing your resources and investments. Understanding the importance of financial planning, Angelica decided to consult a financial expert before developing a strategy. While carefully analyzing taxation, expenses, and income from sales, she developed a financial plan.
The cash flow tables, profit and loss projections, gross margins charts, and balance sheets developed by her are given here. If you need any help to create a gift basket business plan for your business, you can have it from here free of cost.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 8.19% | 8.21% | 8.24% |
| Long-term Interest Rate | 8.34% | 8.36% | 8.39% |
| Tax Rate | 22.92% | 23.09% | 23.33% |
| Other | 0 | 0 | 0 |
8.2 Break-even Analysis
| Break-Even Analysis | |
| Monthly Units Break-even | 5334 |
| Monthly Revenue Break-even | $132,900 |
| Assumptions: | |
| Average Per-Unit Revenue | $234.00 |
| Average Per-Unit Variable Cost | $0.67 |
| Estimated Monthly Fixed Cost | $164,955 |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $5,885,000 | $7,236,196 | $8,897,627 |
| Direct Cost of Sales | $5,534,000 | $6,637,720 | $8,179,808 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $5,534,000 | $6,637,720 | $8,179,808 |
| Gross Margin | $351,000 | $598,476 | $717,819 |
| Gross Margin % | 5.96% | 8.27% | 8.07% |
| Expenses | |||
| Payroll | $141,200 | $155,320 | $170,852 |
| Sales and Marketing and Other Expenses | $129,000 | $126,000 | $128,000 |
| Depreciation | $2,289 | $2,310 | $2,398 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $2,700 | $2,800 | $2,950 |
| Insurance | $1,900 | $2,000 | $2,100 |
| Rent | $3,100 | $3,180 | $3,280 |
| Payroll Taxes | $27,000 | $28,000 | $29,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $307,189 | $319,610 | $338,580 |
| Profit Before Interest and Taxes | $43,811 | $278,866 | $379,239 |
| EBITDA | $43,811 | $278,866 | $379,239 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $8,762 | $55,773 | $75,848 |
| Net Profit | $35,049 | $223,093 | $303,391 |
| Net Profit/Sales | 0.60% | 3.08% | 3.41% |
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 | $52,000 | $56,160 | $60,653 |
| Cash from Receivables | $15,400 | $16,632 | $17,963 |
| SUBTOTAL CASH FROM OPERATIONS | $67,000 | $73,030 | $78,872 |
| 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 | $67,000 | $74,000 | $79,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $33,900 | $34,600 | $36,000 |
| Bill Payments | $17,000 | $17,600 | $18,000 |
| SUBTOTAL SPENT ON OPERATIONS | $50,000 | $51,000 | $54,000 |
| 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 | $50,000 | $54,000 | $58,320 |
| Net Cash Flow | $16,000 | $17,000 | $18,000 |
| Cash Balance | $25,000 | $26,000 | $27,000 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $266,000 | $297,920 | $327,712 |
| Accounts Receivable | $24,000 | $26,880 | $30,213 |
| Inventory | $4,100 | $4,592 | $4,900 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $270,000 | $302,400 | $339,898 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $16,000 | $17,920 | $20,160 |
| TOTAL LONG-TERM ASSETS | $19,000 | $21,280 | $23,940 |
| TOTAL ASSETS | $282,000 | $315,840 | $355,320 |
| Liabilities and Capital | Year 4 | Year 5 | Year 6 |
| Current Liabilities | |||
| Accounts Payable | $16,300 | $18,256 | $20,520 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $14,900 | $16,688 | $18,757 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $13,900 | $15,568 | $17,498 |
| Paid-in Capital | $30,000 | $30,000 | $31,000 |
| Retained Earnings | $50,000 | $54,500 | $59,950 |
| Earnings | $188,400 | $205,356 | $225,892 |
| TOTAL CAPITAL | $282,000 | $307,380 | $338,118 |
| TOTAL LIABILITIES AND CAPITAL | $295,900 | $315,840 | $355,320 |
| Net Worth | $296,000 | $322,640 | $354,904 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 7.13% | 7.90% | 8.75% | 3.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 9.21% | 10.20% | 11.31% | 9.80% |
| Inventory | 5.39% | 5.97% | 6.62% | 9.90% |
| Other Current Assets | 2.11% | 2.34% | 2.59% | 2.40% |
| Total Current Assets | 149.50% | 149.00% | 150.20% | 158.00% |
| Long-term Assets | 11.40% | 11.32% | 11.39% | 12.00% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.93% | 4.97% | 5.02% | 4.34% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
| Total Liabilities | 7.47% | 7.53% | 7.60% | 7.38% |
| NET WORTH | 101.02% | 101.83% | 102.76% | 110.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 95.99% | 98.58% | 101.34% | 99.00% |
| Selling, General & Administrative Expenses | 93.57% | 96.10% | 98.79% | 97.80% |
| Advertising Expenses | 1.50% | 1.54% | 1.58% | 1.40% |
| Profit Before Interest and Taxes | 40.92% | 42.02% | 43.20% | 33.90% |
| Main Ratios | ||||
| Current | 33 | 34 | 36 | 32 |
| Quick | 34 | 34.4 | 35.26 | 33 |
| Total Debt to Total Assets | 0.18% | 0.17% | 0.17% | 0.40% |
| Pre-tax Return on Net Worth | 73.92% | 74.02% | 74.70% | 75.00% |
| Pre-tax Return on Assets | 96.09% | 100.89% | 105.94% | 111.30% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 33.40% | 34.44% | 35.50% | N.A. |
| Return on Equity | 55.06% | 56.77% | 58.53% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7.6 | 7.7 | 7.8 | N.A. |
| Collection Days | 100 | 100 | 100 | N.A. |
| Inventory Turnover | 32.6 | 34.23 | 34.8 | N.A. |
| Accounts Payable Turnover | 15.9 | 16.01 | 16.2 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 2.4 | 2.5 | 2.6 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | -0.04 | -0.03 | -0.02 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $238,000 | $251,328 | $265,402 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.85 | 0.86 | 0.87 | N.A. |
| Current Debt/Total Assets | 1% | 1% | 0% | N.A. |
| Acid Test | 29.2 | 29.3 | 29.45 | N.A. |
| Sales/Net Worth | 2.1 | 2.2 | 2.3 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
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