Do you want to start gift shop business?

Executive Summary

Company Summary

Products

Marketing Analysis of Gift Shop Business

Strategy

Personnel plan

Financial Plan
 

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.

Gift Shop Business Plan 1

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 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.

Gift Shop Business Plan 2

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:

Gift Shop Business Plan 3

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 CustomersGrowthYear 1Year 2Year 3Year 4Year 5CAGR
Children & Teens48%22 33432 34443 66552 54466 43210,00%
Senior Citizens32%12 86714 43315 99917 56519 13115,32%
Young & Adults20%11 43313 34416 55318 74520 54513,43%
Total100%46 63460 12176 21788 854106 1089,54%

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 strategy to let your customers know about the products you have brought 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

Gift Shop Business Plan 4

6.4 Sales Yearly

Gift Shop Business Plan 5

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.

Gift Shop Business Plan 6

The detailed information about sales forecast, total unit sales, total sales is given in the following table:

Sales Forecast
Unit SalesYear 1Year 2Year 3
General and Specialty Gifts1 887 0302 680 3202 588 240
Decorative Artworks802 370815 430823 540
Customized Apparel539 3207702301 002 310
Accessories265 450322 390393 320
TOTAL UNIT SALES3 494 1704 588 3704 807 410
Unit PricesYear 1Year 2Year 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 CostsYear 1Year 2Year 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 1Year 2Year 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, 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 1Year 2Year 3
Plan Month123
Current Interest Rate10,00%11,00%12,00%
Long-term Interest Rate10,00%10,00%10,00%
Tax Rate26,42%27,76%28,12%
Other000

8.2 Brake-even Analysis

Gift Shop Business Plan 7

 Brake-Even Analysis
Monthly Units Break-even5530
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 1Year 2Year 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/Sales30,00%39,32%48,64%

8.3.1 Profit Monthly

Gift Shop Business Plan 8

8.3.2 Profit Yearly

Gift Shop Business Plan 9

8.3.3 Gross Margin Monthly

Gift Shop Business Plan 10

8.3.4 Gross Margin Yearly

Gift Shop Business Plan 11

8.4 Projected Cash Flow

Gift Shop Business Plan 12

 Pro Forma Cash Flow
Cash ReceivedYear 1Year 2Year 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
ExpendituresYear 1Year 2Year 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
AssetsYear 1Year 2Year 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 CapitalYear 1Year 2Year 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 1Year 2Year 3INDUSTRY PROFILE
Sales Growth4,35%30,82%63,29%4,00%
Percent of Total Assets
Accounts Receivable5,61%4,71%3,81%9,70%
Inventory1,85%1,82%1,79%9,80%
Other Current Assets1,75%2,02%2,29%27,40%
Total Current Assets138,53%150,99%163,45%54,60%
Long-term Assets-9,47%-21,01%-32,55%58,40%
TOTAL ASSETS100,00%100,00%100,00%100,00%
Current Liabilities4,68%3,04%2,76%27,30%
Long-term Liabilities0,00%0,00%0,00%25,80%
Total Liabilities4,68%3,04%2,76%54,10%
NET WORTH99,32%101,04%102,76%44,90%
Percent of Sales
Sales100,00%100,00%100,00%100,00%
Gross Margin94,18%93,85%93,52%0,00%
Selling, General & Administrative Expenses74,29%71,83%69,37%65,20%
Advertising Expenses2,06%1,11%0,28%1,40%
Profit Before Interest and Taxes26,47%29,30%32,13%2,86%
Main Ratios
Current25,8629,3932,921,63
Quick25,428,8832,360,84
Total Debt to Total Assets2,68%1,04%0,76%67,10%
Pre-tax Return on Net Worth66,83%71,26%75,69%4,40%
Pre-tax Return on Assets64,88%69,75%74,62%9,00%
Additional RatiosYear 1Year 2Year 3
Net Profit Margin19,20%21,16%23,12%N.A.
Return on Equity47,79%50,53%53,27%N.A.
Activity Ratios
Accounts Receivable Turnover4,564,564,56N.A.
Collection Days9299106N.A.
Inventory Turnover19,722,5525,4N.A.
Accounts Payable Turnover14,1714,6715,17N.A.
Payment Days272727N.A.
Total Asset Turnover1,841,551,26N.A.
Debt Ratios
Debt to Net Worth0-0,02-0,04N.A.
Current Liab. to Liab.111N.A.
Liquidity Ratios
Net Working Capital$120 943$140 664$160 385N.A.
Interest Coverage000N.A.
Additional Ratios
Assets to Sales0,450,480,51N.A.
Current Debt/Total Assets4%3%2%N.A.
Acid Test23,6627,0130,36N.A.
Sales/Net Worth1,681,290,9N.A.
Dividend Payout000N.A.