Do you want to start own greeting card business?
Are you planning to start greeting card business? Well, if you are creative and have a passion for designing greeting cards then this is definitely the right business for you.
Greeting card business has undoubtedly a lot of market potential and a need for continuously emerging new and innovative minds. Its market can be estimated by the fact that over 7.4 billion greeting cards were sold in the United States in 2017.
The biggest benefit of starting this business is that it offers an extremely high rate of return on your investment and has the least amount of risk associated with it as compared to other businesses. The second benefit is that its market never gets down because people buy cards for various occasions, events, and festivals throughout the year.
Considering these aspects, we can say that this venture can be immensely profitable, provided that you produce quality designs and plan your business effectively.
So, before you move on to starting this business, you will have to prepare a comprehensive business plan which will establish the basis of your company’s future operations and decisions. If you are wondering how to write one then here we are providing you the business plan of a greeting card business startup named ‘KJ Cards’.
2.1 The Business
KJ Cards will be a licensed American card manufacturing company located in the main commercial market of the Downtown Manhattan. The company will be owned by Kelly Janes, a passionate Graphic Designer. Janes has been associated with greeting card industry for more than 6 years and has served as the Assistant Director of Design Department in Hallmark Cards for the last 3 years.
For the startup, the company will initially procure office furniture including work desks, cabinets, tables, chairs; computers and related devices including printers and scanners; ten card printers; necessary software and other stationery products.
The success of a startup heavily depends on its staff and management that’s why Janes planned it before starting her greeting card company. The main management of the company will comprise of sales executives, graphic artists, technicians, and customer representatives. The team will be led and managed by Janes herself, who is well experienced with the process of designing and production of greeting cards. The staff will be hired one month before the launch of startup and will be trained by Janes.
Our target market is the residential community living nearby at the 10 minutes’ drive from our office. The community has a monthly income ranging from $40k to $50k while nearly 10% people have incomes even around $100,000. We will offer three types of greeting cards; printed cards, hand-made cards, and customized cards, for various occasions and festivals. The hand-made cards will be completely manufactured by Artisans without any machine while the customized cards will be designed according to the customer requirements.
Although we have a tough competition since there are hundreds of established greeting card companies in the New York City, but with the teamwork of our innovative and creative team members, and the leadership of Janes, we will soon excel our competitors.
2.4 Business Target
We aim to become the best greeting card company of the New York City within next five years of our startup. Our target is to balance the initial cost of the startup with earned profits by the end of the first year and 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.
3.1 Company Owner
KJ Cards will be owned by Kelly Janes, a passionate Graphic Designer. Kelly did her Masters of Art in Graphic Designing from University of Illinois, Chicago. After completing her studies, Janes remained associated with some of America’s renowned greeting card companies and was the Assistant Director of Design Department in Hallmark Cards for the last 3 years. She is known for her exceptional graphics skills and innovative designs.
3.2 Why the Business is being started
Janes has always been extremely passionate about graphic designing, especially the designing of greeting cards. Her designed cards are praised by all and sundry and it was her exceptional abilities and innovative mind which landed her an executive position in one of the biggest greeting card manufacturers of the United States in a very young age.
But this success is nothing more than a part of her career plan, as she has dreamed of much bigger things. From the very beginning of her career, rather her college days, she had thought about starting a greeting card company and her service to this industry was just meant to gather the necessary experience needed for starting her own business.
3.3 How the Business will be started
KJ Cards will be a greeting card company which will produce all sorts of personal and business greeting cards. The business will be located in the main commercial market of the Downtown Manhattan. The company will initially procure following things for the startup.
- Office furniture including five filing cabinets, five work desks, a round table with chairs for meeting area, couch and chairs for customer waiting area
- Four computers with color printers and scanners
- Ten card printers for printing greeting cards
- Graphic designing and other related software including Illustrator, Freehand, Photoshop, Quark, Traffic Office Manager, Font Management Utilities, and Microsoft Project
- Assorted office stationary and brochures
- A strong internet connection and office telecom systems
The financial experts have forecasted following costs for expenses, assets, investment, and loans for the Start-up.
The detailed start-up requirements, start-up funding, start-up expenses, total assets, total funding required, total liabilities, total planned investment, total capital and liabilities as forecasted by experts, is given below:
|Research and Development||$42,750|
|TOTAL START-UP EXPENSES||$247,500|
|Other Current Assets||$222,500|
|Start-up Expenses to Fund||$121,875|
|Start-up Assets to Fund||$195,000|
|TOTAL FUNDING REQUIRED||$0|
|Non-cash Assets from Start-up||$118,750|
|Cash Requirements from Start-up||$0|
|Additional Cash Raised||$118,750|
|Cash Balance on Starting Date||$121,875|
|Liabilities and Capital||$0|
|Accounts Payable (Outstanding Bills)||$0|
|Other Current Liabilities (interest-free)||$0|
|Additional Investment Requirement||$0|
|TOTAL PLANNED INVESTMENT||$695,000|
|Loss at Start-up (Start-up Expenses)||$313,125|
|TOTAL CAPITAL AND LIABILITIES||$221,875|
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Services for customers
KJ Cards will be a licensed and insured American cards manufacturing company, which will produce a variety of cards for various occasions, festivals, and people. We will produce all types of cards such as holiday, business, birthday greeting cards, and Christmas card for businesses as well as individuals. Our main products include:
1. Printed Cards: Printed cards are our primary products and will form the bulk of our production. They will also contribute the biggest chunk of our revenue. These cards will be printed by the company’s card printers after they have been designed by the graphic designing team. These cards can be further sub-divided into the following three categories.
- Occasional Cards: Occasional cards include cards for Anniversary, Baptism and Christening, Bar/Bat Mitzvah, Birthday, Confirmation, Congratulations, First Communion, Get Well, Graduation, Just Because, New Baby, Promotion, Retirement, Sympathy, Thank You, and Wedding
- Holidays and Festival Cards: Holidays and Festival cards include cards for Christmas, Easter, New Year, Passover, St. Patrick’s Day, Valentine’s Day and other local festivals
- Relational Cards: Relational cards include cards which can be given to relatives like Brother, Daughter, Father, Friend, God-family, Grandma, Grandpa, Husband, Kids, Mother, Partner, Romantic Interest, Sister, Son, Wife
2. Hand-made Cards: Our second category includes hand-made cards. These greeting cards will be completely hand-made and no machines will be used in their manufacturing process. Every such card will be hand cut, hand designed, and hand wrapped before being delivered to the customers. Special artisans will be hired to manufacture this product category. These cards will be costlier than the printed cards due to intensive hard work and expertise needed for their manufacture.
3. Customized Cards: Our final category includes customized cards which will be completely made and designed according to the customer demands. Customers can order for a customized card either online through our official website or by visiting our office in Downtown Manhattan.
Customers can describe their requirements, graphics, and text to be written on the cards to a customer representative and can get a customized card either in a printed or a hand-made form.
Marketing Analysis of greeting card business
The most important component of an effective greeting card business plan is its accurate marketing analysis that’s why Janes acquired the services of marketing experts to help her through this phase. It is only after this stage that a good greeting card business plan template could have been developed. After identifying the trends of greeting card business in the New York City, the marketing experts and analysts also helped her to select the best site to start a greeting card company.
The success or failure of a business totally depends upon its marketing strategy which can only be developed on the basis of accurate marketing analysis. There are four main steps to carry out an accurate marketing analysis which are to identify the current market trends, identify your target audience and potential customers, set out the business targets to achieve, and finally set the prices of your products and services. Marketing analysis is extremely important because the planning of many subsequent components depends on it. Therefore, it must be considered before developing the greeting card company business plan.
Strategic/Operational Business Plan
5.1 Market Trends
According to the Greeting Card Association (GCA), over 7.4 billion greeting cards were manufactured and sold in the United States in 2017. Out of these 7.4 billion cards, approximately 2.5 billion were manufactured and sold by freelances and non-major greeting card distributors while the remaining were manufactured and sold by established companies. Nearly 80% of all greeting cards were bought by women. As of 2017, there were more than 2000 established greeting card companies in the United States which generates more than $7.5 billion every year.
The greeting card industry employs more than 35,000 people and provides annual payrolls of over $1.2 billion dollars. This industry is the future growth in it is expected to be equal to that of the general US economy. After identifying these market trends, it is clearly evident that the greeting card industry has a lot of potential and can be immensely profitable provided that you plan your business successfully.
5.2 Marketing Segmentation
Our target market is the residential community living nearby at the 10 minutes’ drive from our office. The community consists of all types of people from varying backgrounds. As per the financial position, nearly half of the community has a monthly income ranging from $40k to $50k while nearly 10% people have incomes even around $100,000.
There are currently more than 738,000 households in Manhattan out of which 17.1% have children under the age of 18 living with them, 25.2% are married couples living together and 12.6% have a female householder with no husband present. 59.1% are non-families, out of which 48.0% of all households are made up of individuals and 10.9% have someone living alone who is 65 years of age or older.
It is very important to analyze the market segmentation of the future customers of your services before you start a greeting card business because a successful and efficient marketing strategy can only be developed after we completely know our potential customers. Our experts have identified the following type of target audience which can become our future consumers:
The detailed marketing segmentation of our target audience is as follows:
5.1.1 Married Couples & Adults:
Our first target group will be the married couples and the adults aged between 25-50. These people are most likely to buy greeting cards for various purposes since they have the biggest social circle comprising of friends, family, relatives, neighbors, colleagues, etc. as compared to the other target groups. This group buys greeting cards on various occasions such as birthdays, anniversaries, weddings, festivals and other events of their friends. This group will be the biggest consumer of our products and hence our marketing strategy will be specifically built to attract them.
5.1.2 Children & Teens:
Our second target group comprises of children and teens aged below 25. Children and teens studying in primary, middle, high schools and colleges have a large circle of friends around them and usually buy various cards such as birthday, friendship and festival cards. Teens are the biggest consumer of valentine cards.
5.1.3 Senior Citizens:
Our third group comprises of senior citizens aged above 50. These people will mostly buy anniversary, birthday and festival cards but their contribution to our sales will be less as compared to the other groups, hence they will play no specific role in our marketing strategy.
The detailed market analysis of our potential customers is given in the following table:
|Potential Customers||Growth||YEAR 1||YEAR 2||YEAR 3||YEAR 4||YEAR 5||CAGR|
|Couples & Adults||53%||22,334||32,344||43,665||52,544||66,432||17.00%|
|Children & Teens||39%||11,433||13,344||16,553||18,745||20,545||13.43%|
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5.3 Business Target
We aim to become the best greeting card company of the New York City within next five years of our startup. Our main business targets to be achieved as milestones over the course of next three years are as follows:
- 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 by the end of the first year
5.4 Product Pricing
Product pricing is one of the most important factors in deciding the strategy for a greeting card business. After considering the market demands, we have priced all our products in the similar ranges as of our competitors. The reason behind our pricing policy is to achieve the minimum attractive rate of return which would not be possible in case of offering our services at low prices. Our product pricing is as follows:
- Printed Cards: Prices vary from $4-$15
- Hand-made Cards: Prices vary from $20-$50
- Customized Cards: Prices vary from $20-$50
High Quality Business Plan and Professional Support
It was amazing to work with OGS Capital for our business plan. They promptly responded our enquires and delivered document on time.The document was well organized high quality and content.We succeded with Alex and his team support. We thank you guys again for professional approach and easy communication.
After identifying the market trends, market demand, and the potential customers of the startup, the next step is to define an effective strategy to target the potential customers and attract them towards us. Like marketing analysis, sales strategy is also an important component of a greeting card business. Janes carried out an extensive research about various marketing strategies implemented on large as well as small greeting card companies before she finalized her plan about how to start a greeting card business.
A successful strategy can only be developed after setting specific marketing goals, carrying out a competitive analysis to know what is missing in your competitors and developing a plan for attracting your potential customers.
6.1 Competitive Analysis
Our competitive advantage lies in the power and dedication of our team. We have a team of creative and highly proficient graphic designers, a team with excellent qualifications and experience in various niche areas of greeting card industry. This industry is undoubtedly one of the most competitive industries of the United States and with the increasing number of greeting card startups, the competition is getting stiffer by the day. That’s why one has to be highly creative and come up with innovative designs and concepts so as to survive and grow in this industry. Considering the teamwork of our innovative and creative members, and the leadership of Janes, we hope to excel our competitors.
6.2 Sales Strategy
After carrying out a detailed analysis, our experts came up with the following brilliant ideas to advertise and sell ourselves.
- Google search ranking is one of the most important factors in deciding the success of a business, especially a startup, that’s why we will put special emphasis on it. We would do our best to get higher rankings in Google search results and a rank on the first page of Google.
- We will ensure at least a 20% increase in website traffic each month and will ensure at least an 80% conversion rate, i.e. to turn 80% of our website visitors into our customers.
- We will get featured in the local news or on a certain website by a popular blogger to increase our brand awareness in people.
- We will advertise our business in relevant business magazines, newspapers, TV stations, and social media.
- We will offer a 20% discount on our cards for the first three months of our launch.
6.3 Sales Monthly:
Our monthly sales, as forecasted by the company’s financial experts, are as follows:
6.5 Sales Yearly:
Our yearly sales, as forecasted by the company’s financial experts, are as follows:
6.5 Sales Forecast
Considering the quality of our services and our exceptional marketing strategy, our sales pattern is expected to increase with years. By analyzing our market segmentation strategy, 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:
|Unit Sales||Year 1||Year 2||Year 3|
|Printed Occasional Cards||232,000||243,000||265,000|
|Printed Holidays and Festival Cards||112,000||123000||131,000|
|Printed Relational Cards||145,000||149,000||152,000|
|TOTAL UNIT SALES||609,000||650,000||706,000|
|Unit Prices||Year 1||Year 2||Year 3|
|Printed Occasional Cards||$140.00||$150.00||$160.00|
|Printed Holidays and Festival Cards||$600.00||$800.00||$1,000.00|
|Printed Relational Cards||$700.00||$800.00||$900.00|
|Printed Occasional Cards||$214,800||$274,000||$333,200|
|Printed Holidays and Festival Cards||$120,050||$194,500||$268,500|
|Printed Relational Cards||$50,110||$71,600||$93,000|
|Direct Unit Costs||Year 1||Year 2||Year 3|
|Printed Occasional Cards||$0.70||$0.80||$0.90|
|Printed Holidays and Festival Cards||$0.40||$0.45||$0.50|
|Printed Relational Cards||$0.30||$0.35||$0.40|
|Direct Cost of Sales|
|Printed Occasional Cards||$98,300||$183,000||$267,700|
|Printed Holidays and Festival Cards||$66,600||$119,900||$173,200|
|Printed Relational Cards||$17,900||$35,000||$52,100|
|Subtotal Direct Cost of Sales||$294,100||$699,400||$1,104,700|
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Personnel plan, like all other plans, is an important component of an effective business plan so it must be planned before you even think about how to start your own greeting card business. Janes has developed the following personnel plan for her company.
7.1 Company Staff
Janes will act as the General Manager of the company and will initially hire following people:
- 1 Accountant to maintain financial and other records
- 2 Sales Executives responsible for marketing and discovering new ventures
- 6 Graphic Artists for designing printed cards
- 4 Artisans for creating hand-made cards
- 3 Technicians to operate the card printing machines
- 2 Managing Assistants for managing the company’s official website and social media pages
- 4 Customer Representatives to interact with customers and record their orders
- 4 Drivers to transport cards to retail outlets
- 1 Front Desk Officer to act as a receptionist
- 1 Security Officer
To ensure the best quality service, all employees will be selected through vigorous testing and will be trained for a month before starting their jobs.
7.2 Average Salary of Employees
The following table shows the data about employees and their salaries for next three years.
|Year 1||Year 2||Year 3|
|Front Desk Officer||$20,000||$23,300||$30,000|
There are hundreds of greeting card businesses in the New York City and in order to survive in this competitive environment, a startup must develop an impeccable financial plan. The financial plan should craft a detailed map about the cost of inventory, payroll, equipment, rent and utilities needed for the startup and how these costs will be covered by the earned profits.
8.1 Important Assumptions
The company’s financial projections are forecasted on the basis of following assumptions.
|Year 1||Year 2||Year 3|
|Current Interest Rate||10.00%||11.00%||12.00%|
|Long-term Interest Rate||10.00%||10.00%||10.00%|
8.2 Brake-even Analysis
The following graph shows the company’s Brake-even Analysis.
The following table shows the company’s Brake-even Analysis.
|Monthly Units Break-even||5530|
|Monthly Revenue Break-even||$159,740|
|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
The following charts show the company’s expected Profit and Loss situation on the monthly and yearly basis.
|Pro Forma Cash Flow|
|Cash Received||Year 1||Year 2||Year 3|
|Cash from Operations|
|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|
|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|
|SUBTOTAL CASH SPENT||$35,296||$35,489||$43,882|
|Net Cash Flow||$11,551||$13,167||$15,683|
8.3.1 Profit Monthly
The following graph shows the monthly profit, as forecasted by the company’s financial experts.
8.3.2 Profit Yearly
The following graph shows the yearly profit, as forecasted by the company’s financial experts.
8.3.3 Gross Margin Monthly
The following graph shows the monthly gross margin, as forecasted by the company’s financial experts.
8.3.4 Gross Margin Yearly
The following graph shows the yearly gross margin, as forecasted by the company’s financial experts.
The following table shows detailed information about profit and loss, and total cost of sales.
|Pro Forma Profit And Loss|
|Year 1||Year 2||Year 3|
|Direct Cost of Sales||$15,100||$19,153||$23,206|
|TOTAL COST OF SALES||$15,100||$19,153||$23,206|
|Gross Margin %||94.98%||94.72%||94.46%|
|Sales and Marketing and Other Expenses||$1,850||$2,000||$2,150|
|Total Operating Expenses||$188,766||$220,744||$252,722|
|Profit Before Interest and Taxes||$105,205||$146,040||$186,875|
8.4 Projected Cash Flow
The following column diagram shows the projected cash flow.
8.5 Projected Balance Sheet
The following table shows detailed data about pro forma cash flow, subtotal cash from operations, subtotal cash received, sub-total spent on operations, subtotal cash spent.
The following projected balance sheet shows data about total current assets, total long-term assets, total assets, subtotal current liabilities, total liabilities, total capital, total liabilities and capital.
|Pro Forma Balance Sheet|
|Assets||Year 1||Year 2||Year 3|
|Other Current Assets||$1,000||$1,000||$1,000|
|TOTAL CURRENT ASSETS||$201,259||$237,468||$273,677|
|TOTAL LONG-TERM ASSETS||$980||$610||$240|
|Liabilities and Capital||Year 1||Year 2||Year 3|
|Other Current Liabilities||$0||$0||$0|
|SUBTOTAL CURRENT LIABILITIES||$9,482||$10,792||$12,102|
|TOTAL LIABILITIES AND CAPITAL||$198,839||$232,978||$267,117|
8.6 Business Ratios
The following table shows data about business ratios, ratio analysis, total assets, net worth.
|Year 1||Year 2||Year 3||INDUSTRY PROFILE|
|Percent of Total Assets|
|Other Current Assets||1.75%||2.02%||2.29%||27.40%|
|Total Current Assets||138.53%||150.99%||163.45%||54.60%|
|Percent of Sales|
|Selling, General & Administrative Expenses||74.29%||71.83%||69.37%||65.20%|
|Profit Before Interest and Taxes||26.47%||29.30%||32.13%||2.86%|
|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.|
|Accounts Receivable Turnover||4.56||4.56||4.56||N.A.|
|Accounts Payable Turnover||14.17||14.67||15.17||N.A.|
|Total Asset Turnover||1.84||1.55||1.26||N.A.|
|Debt to Net Worth||0||-0.02||-0.04||N.A.|
|Current Liab. to Liab.||1||1||1||N.A.|
|Net Working Capital||$120,943||$140,664||$160,385||N.A.|
|Assets to Sales||0.45||0.48||0.51||N.A.|
|Current Debt/Total Assets||4%||3%||2%||N.A.|
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