How to Start a Gift Basket Business Free Guide

Author Steve Sutherland Copyright 2012

Legal Notice/Disclaimer/Disclosure
Copyright 2012 Steve Sutherland. All Rights reserved No part of this publication may be sold, copied, reproduced, stored in a retrieval system or transmitted in any form or by any means including electronic, mechanical, photocopying, recording, scanning, or otherwise without prior written permission from the author. All trademarks mentioned in this report are the property of their respective owners. The information contained in this guide represents the opinions of the author. The author has made all reasonable efforts to ensure that the information is correct and up to date. However, it cannot be guaranteed that this is the case and we make no representations or warranties with respect to the completeness or accuracy of the following information. By reading this guide users acknowledge that they cannot hold the author or publisher liable for any losses suffered as a consequence of their actions. This information is intended for educational purposes only and should be used at your own risk.

Table of Contents
1) Introduction Read This First........................................................................................4 2) Reasons to Start a Gift Basket Business ........................................................................5 3) Start up Considerations..................................................................................................8 4) Factors Contributing to Your Success...........................................................................12 5) Preparing a Business Plan............................................................................................15 6) What it Takes to Make a Six Figure Income..................................................................20 7) Ideas for Choosing a Name..........................................................................................24 8) Overview of the Industry in the US..............................................................................28 9) Doing Market Research................................................................................................31 10) Start up Costs and Funding Options...........................................................................33 11) Gift Basket Marketing Plan.........................................................................................36 12) How to Price Gift Baskets...........................................................................................40 13) Selling to Corporate Clients........................................................................................43 14) Gift Basket Drop-Shipping..........................................................................................45 15) Advertising - How to Sell Gift Baskets........................................................................48 16) Business Cards............................................................................................................52 17) Delivery and Shipping.................................................................................................54 18) What to Put in a Gift Basket - Theme Ideas...............................................................57 19) How to Make Gift Baskets..........................................................................................60 20) Other Ideas and Tips..................................................................................................63 21) Information Sources...................................................................................................66 22) Books and Start up Kits..............................................................................................68

1) Introduction Read This First

Welcome! My name is Steve Sutherland. I did some research into the gift basket industry between 2009 and 2011. I still haven't opened a gift basket business as I ended up going into other areas of business. However, I still think that gift baskets represents an excellent opportunity and I may get in at some point in the near future. While I was researching this business I took a lot of notes and chatted with a few vending business owners. The following guide contains the information that I uncovered. Some of the content in this guide is fairly generic business advice and other parts contain information that is specific to gift basket business owners. There is a table of contents so you can go straight to any particular topic that interests you. If you are looking for more information check out www.StartaGiftBasketCompany.com (this site has some awesome information that is quite different from what you will read below). It can be hard to find good quality information on how to get started as business owners in this industry are usually fairly secretive. Business owners will never let on how good they have it or share information as they fear that newcomers will steal ideas from them. If you have a desire to start a gift basket business they I strongly encourage you to pursue your dream. Read on and find out how you can join this elite group of entrepreneurs who have achieved the lifestyles and incomes of their dreams by doing creative work that they thoroughly enjoy.

2) Reasons to Start a Gift Basket Business

There are many reasons why entrepreneurs are drawn to different sectors of business. Let's look at some of the reasons why entrepreneurs decide to start a gift basket business. Growth Prospects Unlike working for an employer, opportunities with your own gift basket company are limited only by your imagination and creativity. You can choose how fast you want to grow and put in the time and effort that you need to achieve the desired results. Freedom and Lifestyle As a business owner you have the freedom to make important decisions about what you do with your time and who you work with. Avoid office politics and work independently or consider working with family, a friend or a relative. Creativity A business in this industry gives you, as the owner a chance to have a bit of fun with your work as you create basket concepts and put them together. So many people have creative skills that are wasted in their jobs and many people find that having a job that allows you to be a little creative makes for less stress and a more enjoyable working day. The opportunities for creativity and product innovation are almost endless compared to other industries. Low Start up Costs
5

Anyone can get started with their own home-based gift basket operation for well under a thousand dollars. This is attractive if you really want to start a business but don't have access to a lot of funding. A Home Based Business Opportunity This is one reason why the industry has largely been dominated by women up until now. Some people want to work at home because they don't like a commute to work or find that they don't often get on well working with others. Some find that they have to stay home to care for children and need some kind of work to keep themselves busy. A gift basket business is one of the best 'work at home' opportunities around and gives you some flexibility to work the hours that you want. Gift baskets as a business model work well as you don't really need a retail front or even a sign as you can do perfectly well just through online and direct marketing. Most entrepreneurs find that the sacrifice in living space is minimal as only a small area needs be set aside for putting together baskets and storing inventory. Minimal Training Requirements You don't need any specific education, qualifications or training to get started with a gift basket business. Putting some baskets together can require skill and experience but you can pick it up easily just by imitating other baskets from websites and stores (order a few yourself and dissect them) and adding your own ideas to make your own original creations. Work Day Variety One great thing about being your own boss is that your working day is never dull. As a gift basket business owner you will likely be involved with sourcing supplies, assembling baskets, taking orders, dealing with clients, managing staff, marketing and other
6

administrative tasks. Variety can make for a more satisfying working day. There are many great reasons to start a gift basket business. For most people it comes down to lifestyle choices and a desire to be happy with their work, their working environment and still have the ability to earn a decent income.

3) Start up 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. Target Market 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 marketing methods for reaching customers in different market sectors will also vary. Home Based or Store Front? 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. and you have steady customers. Legal Structure 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.
8

How to Sell 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 a proactive approach to marketing and go out looking for clients directly. Insurance Requirements 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. Tax Situation 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. Hiring Staff 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. Financing Options Are you able to fund your gift basket business independently or will you need to seek
9

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.

10

11

4) Factors Contributing to Your Success

Creating and selling gift baskets can be an enjoyable and rewarding small business opportunity but this business is not for everyone, and many give up before seeing a decent level of income. Let's take a look at some of the factors that lead to success in this industry. Vision and Motivation Firstly, you will be self-employed and therefore need to be highly motivated. Having a clear vision about what you want to achieve is one thing but actually taking the necessary steps on a day to day basis to reach the goals that you set for yourself is another thing. It takes discipline and persistence to get where you want to go in business. Family Support You will most likely run your business from home, at least for a while. Talk to your spouse about setting aside an area of your home for work. If you have children you should discuss how your work can fit in around their schedules without them distracting you too much. You will need to have the support of your family if you are to start a successful business. Creativity While anyone can learn how to make a gift basket, it takes a flair for design, style, presentation and color to be able to come up with original creations that will really impress your clients. If you are not creative then it is easy to get inspiration from the hundreds of gift basket business websites that you can find easily online. Start up Capital
12

You will need to have funding to start a gift basket business. While this doesn't necessarily have to be a large amount, you do have to take your living costs into consideration as well, at least until you can earn an income from the business. Keeping a part time job while your business is in the early stages of development is a less risky approach that some gift basket entrepreneurs take. Management and Marketing Skills Those that focus only on the practical side of the business are doomed to failure. You need to understand how to run a business operation and how to market gift baskets effectively. While these skills are intuitive for some, others would benefit from taking some related courses at a community college or reading some books on the subject. Communication Skills Success in most businesses comes down to effective communication between people. To succeed in the gift basket business you will need to be able to manage employees, sell to clients and deal with suppliers. Being a good communicator and understanding the perspectives of other people is a good way to push forward the interests of your company without stepping on anyone's toes. Organization and Time Management Skills Starting a gift basket business will require you to take on a variety of roles, the most important of which is providing a quality service to clients with timely delivery and great service. You need to be an organized person in order to get everything done to meet deadlines whilst still maintaining product and service standards. Love What you Do Lastly, you need to have an interest in learning, both about business in general and
13

about the gift industry specifically. You should constantly be doing research into how you can provide better products and run a more efficient operation that delivers maximum value to clients. Reading trade magazines or attending trade shows is one way to keep up with trends and learn new strategies. If you have these skills, resources and personality traits or you are willing to focus on obtaining them, learning them or developing them, then you can proceed to start a gift basket business and to work towards getting your first few clients.

14

5) Preparing a Business Plan

If you ask struggling or failed entrepreneurs if they would do anything differently if they were to start over again, many state that they would have invested more time into putting together a proper business plan. A gift basket business plan is crucial if you are serious about starting out and thriving in the potentially lucrative gift industry. In the following report we look at why it is so important to have a solid business plan in place when you start a gift basket business. We then offer a business plan outline that you can follow as you proceed to put your own plan together. The planning stage is extremely important in the life of a business as it is crucial to set yourself on the right course for success. Bad decisions during the start up phase can easily allow you to be thrown off course or to make mistakes that are not easy to correct later on. Your gift basket business plan will be useful to you well beyond the start up phase though. It can be your blueprint for success that you follow over the years, making changes to it when necessary. It can also help you to grow in a structured manner so that you remain efficient and organized. Before you start a gift basket business you will have numerous questions in your mind. Your plan should be the 'central document' where you compile the answers to these questions as you answer them one by one via your research. It may be necessary to have a plan written in a formal, professional style if your aim is to use it to convince bankers or investors to support your idea. However, even if you dont have anything to prove to anyone your plan will help to confirm the viability of your ideas in your own mind. There are quite a few free gift basket business plan samples available online that you
15

can use for ideas on how to write your own. You can also purchase templates or software for this purpose. Below we have set out a business plan outline or template that you can follow. Keep in mind that every business consultant has their preferred format so there are many ways to go about laying out the various sections of a plan. Table of Contents Start out by offering readers a contents page at the beginning of the report so that they can quickly refer to the section that they are interested in if necessary. Executive Summary Start out with a one page summary of what your report is about and offer a basic profile of the new venture that you are proposing. Let readers know about the opportunities that you have seen in the gift basket industry and how you have come to the conclusion that the proposed business is viable. Let readers know about the current status of the project if it has been on the drawing board for a while. Background Give the reader some background information on yourself, your past experiences and your qualifications. Include basic resumes for yourself and any other partners or key players and identify the strengths that you each bring to the table. Let readers know how you came to decide that you want to start a gift basket business. Offer some background data and statistics on the gift basket industry at both the local and national level. Business Description
16

Introduce readers to your idea of what your gift basket business will be like once set up. Offer them a basic description of the market that you will target and the kind of gift basket products that you will offer. Discuss the location of the proposed business and provide other useful information. Mission Statement Set out your vision for the new company, its values and the impact that you want to have on your customers and on the community. What will your brand promise clients in the way of product and service standards? Put financial matters aside for a minute and think about how you want your business to affect people in a positive way. It may be that you have strong feelings about caring for employees, the environment, healthy lifestyles or customer happiness. Goals and Objectives Set out what you hope to achieve and set out a time frame for reaching growth targets. Goals can be measured in many ways and you may set targets for total revenue, total number of baskets sold, profit margins or customer satisfaction rates among other metrics. Start up Requirements and Legal Concerns What is needed to get started? Set out start up costs and details and outline where the funding for the new venture will come from. Take into account compliance costs and any licenses or permits that have to be acquired. Report on the zoning status of your proposed location and confirm that a gift basket business would be permitted to operate there by local authorities. Management and Operations
17

Point out who the owners of the proposed gift basket business are and their responsibilities relating to business development and day-to-day management. Include details of how the business will operate on a daily basis. Make a note of all the systems that you will have in place to ensure that things run smoothly, productivity is maximized and errors are avoided. You will need systems for ordering, storing client data, handling payments, ordering supplies, assembling baskets, arranging for deliveries and more. Estimate the costs involved with taking on employees and set out a time-line for taking on extra staff as the business grows. Market Analysis Examine your target market, set out some profiles of typical customers and report on how your products and services will be suited to their needs and desires. Here you can include local demographic data as well as the results of any surveys that you have carried out as part of your market research. Provide a thorough analysis of direct competitors in your area. You should also mention indirect competition as well and consider other gift related businesses that you may be in competition with. Look for strengths and weaknesses in the business models of your competitors. Highlight ways that you plan on taking market share from them by offering products and services that are in some way different, better or unique. Marketing Plan Expand on your understanding of the market by suggesting a line of products to meet their demands, a branding strategy and a pricing strategy. Set out detailed plans for getting inquiries, converting them into new customers and maintaining them for the long term. This should include details of advertising campaigns or direct marketing as
18

well as details of an online strategy or other sales approaches. Financial Assessment Estimate monthly income and expenditure for the first three years of your businesses life and try to estimate profit levels and a 'break even' point. Bear in mind that things often change or turn out to be not what you expected so go about this conservatively. Set out your estimates in spreadsheet format so that you can easily view a range of scenarios by entering different revenue and expenditure forecasts.

19

6) What it Takes to Make a Six Figure Income

When entrepreneurs look at starting up a business in a specific industry one of the first questions to come up is usually related to the earnings potential. 'Six figures' is said by many to be the level that you need to get to in order to have achieved success with your business. Prospective gift basket business owners are no different and are naturally curious about the profit potential and the length of time required before a decent level of income can be made. Everyone's situation is different though so it is only possible to estimate how much you can expect to make. There are no guarantees and success will come down to the work that you put in as well as other factors. The typical small home-based gift basket business can expect to turn over around $10,000 to $20,000 in their first year with a bit of effort, allowing owners to make a profit of $4000 to $8000 for their efforts. After this initial start up period many homebased operations grow to offer their owners an annual salary of around $20,000 to $30,000 part-time or $30,000 to $70,000 full-time. As with any industry, there are also the players that master the business and for these operators the profits can run into hundreds of thousands of dollars a year. There are many factors that will influence the level of success that you achieve in the gift basket business. Let's look closely at some of the factors that typically separate the six figure operators from the rest. Attitude One big difference between successful business owners and unsuccessful business owners is attitude. You have to treat your gift basket operation like a real business and not a hobby. Going into this business as an extension of a crafts hobby is a recipe for failure if you don't pay attention to business fundamentals. Get your business model right before you start working on your product line.
20

A full time commitment to a business is a great way to start off. Part time gift basket business operators can still enjoy success if they are disciplined. However, if you are squeezing a gift basket business in with an already busy schedule then you will be facing an uphill battle and failure will come all too easily. Commercial Space Many operators that earn a six figure income from their businesses operate out of commercial premises that give them the space and facilities that they need to store stock and supervise staff as they put the baskets together and manage orders. Commercial premises can also help by giving the business more exposure, a store front and a more professional image and they can therefore usually do more sales volume. Some home-based operators are also able to achieve six figure profits too once they are well established. Online Domination The gift basket business is more reliant on online marketing in comparison to other industries. The top companies in this field have developed highly effective websites that market their products as well as allowing their customers to use an easy ordering process. They also know how to get targeted visitors to their websites in large numbers. Understanding the Internet yourself or hiring good people to run and promote your website for you is another key to success. Marketing and Sales The best gift basket businesses have well thought out marketing plans, test a variety of advertising methods and become very good at understanding the market and what their customers want. It is all about identifying and researching profitable markets and going after them with the right products and the right style of marketing.

21

Customer Service To get repeat orders from your clients and referrals you must ensure that you offer the highest standard of products and services at all times so that you can benefit from positive 'word of mouth' advertising. There is little room for error when your clients will be ordering gifts for important events like birthdays and Valentines Day. Product Line Naturally, the top companies in this field have become very good at what they do. They know what kinds of baskets sell well and they stick with a core product line that works while still testing more innovative product offerings as well. Find out what your market wants and give it to them while offering some variation if they feel inclined. Keep up with industry trends by attending trade shows and reading industry magazines. Branding The top companies in the gift basket industry understand the value of building up a brand over the long term. They get their brand out in the marketplace on their baskets and through their advertising and actions. Make a promise to your market regarding your products and services and never fail to live up to your promise. That is the best way to establish brand reputation. Once you have a good reputation you will find that sales come much easier and that you can be more confident with your pricing. Systems The top earners have systems in place to streamline the ordering process from the time they receive an order to the time it ships out. Being organized is they key to being efficient, productive and avoiding mistakes which can be very costly to your reputation. Hiring Staff

22

To reach a level where the owner can draw an annual profit of over $100,000 it is usually necessary to scale up to a level of operation beyond the capabilities of one owner operator. Realize that you will have to hire employees to become successful and set out a plan for taking them on as soon as you can justify the cost. Before starting out in this industry you should consider these ideas and try to incorporate them into your gift basket business plan. Earning a great deal of money in this business and taking home a 'six figure' salary is not impossible if you focus on the factors that separate the successful gift basket operators from the hobbyists.

23

7) Ideas for Choosing a Name

One important task that you will face when starting a gift basket business will be deciding on an appropriate name for your new venture. A good gift basket business name will give your company an identity and will help to influence peoples perceptions about what you are, what you do and how well you do it. A name can help you to make a good first impression. Developing a brand over the years will help your business to grow by giving it a platform upon which trust, recognition and reputation can be built up with the public and with your customers. A great name is a key part of any branding strategy. Understand that having to change a business name further down the road can be a nightmare. You will have costs associated with re-branding signs, paperwork and marketing materials. You will also lose some of your name recognition in the market and may risk confusing your customers. Know that you must get the naming decision right the first time around. Here are a number of ideas to consider when it comes to thinking up creative gift basket business names for your new company. Define your Product or Service It is great to have a name that defines what you do so including the words 'gift baskets' is sensible. However think twice before using your name, your city name or other words that may limit the names future potential. If you wish to grow in a different direction, spread into new areas or sell your business at some point in the future then it is better to have a name that is flexible. Due to your inability to predict the future direction of your business it is generally better to go with a more abstract name rather than something that is too specific. In other words, if you start out targeting corporate clients then using a phrase like
24

'Corporate Gift Baskets' as part of your name could be a bad idea as you may wish to move into the consumer market as well at a later date. Market Appeal When coming up with a name it is good idea to think of something that is a good match with your target market. A corporate gift basket provider may go with something more serious and professional sounding that hints at a high class product or reliable service. A gift basket service catering to the consumer market on the other hand may consider a name that is cute, catchy or romantic. Putting forward the right image is the key to having customers identify your business as one that can fulfill their needs. Memorable Names A good name should be memorable and easy to pronounce. You need something that will be remembered by clients and prospects, even if they have only heard it once. Once you have put together a list of possibilities, run them by family and friends and test them several days later to see which ones they were able to recall and pronounce correctly. Practice answering the phone using a variety of names and see how they sound. Playing with Words Another great idea when brainstorming for names is to put together a big list of words that appeal to you. You can then consider combining these words with other words to make a short list of candidates. Think of words that describe your service, your baskets or the products inside your baskets. Think of emotional words that people might associate with gift giving. Sometimes the most memorable names can be totally unrelated to the theme of your business all together and they can still work well. Think of words that are powerful but
25

avoid words that have been over used in business like 'best' or 'global'. Practical and Functional Gift basket business names, like those of any business should be practical. A name must be able to be fit on, and look good on business cards and other branded material that you may print in the future. Go for shorter names over longer names. Unique and Original The name that you decide on for your gift basket business should distinguish you from local competitors as well as from any other businesses and organizations. Coming up with something unique can be tough but originality is usually rewarded in the business world. A great name will help you to stand out in a crowded market. Get inspired by the names of other local businesses but be careful not to imitate them too closely. The other reason why originality is important is that you must be sure that your name is not infringing on the trademarks of other companies. Do your due diligence here and check out your selection carefully before going ahead with it. Check online as well as with your county clerks office as they have databases that can confirm availability. Website Considerations You will almost certainly want to get a website up soon after you start a gift basket business so you should also do some preliminary research into suitable domain names to make sure that there are some options available that match your business name. Ideally, you will also want to rank highly on search engines when somebody searches for you by name. Check out the search results on Google and other top search engines and make sure that they are not too cluttered with other companies using similar words in their business names.

26

Personal Satisfaction Lastly, you should make sure that you are happy with the name that you have selected. It should inspire you, make you feel proud of what you have created and make you want to channel all of your energy into your new gift basket business to make it successful. Too many entrepreneurs leave the naming of their business to the last minute and end up going with something that they end up regretting further down the line. Treat the naming of your business as an important part of building a solid foundation for the future of your gift basket company. Give the naming decision the attention that it deserves.

27

8) Overview of the Industry in the US

Gift baskets represent an excellent opportunity for entrepreneurs wanting to start a profitable home-based business in an interesting and creative field. Firstly we take a look at some gift basket business statistics and then we offer an analysis of this industry in the US. Statistics The industry has had an incredible amount of growth over the last decade and is currently worth approximately 3.5 billion dollars a year in the US. Gift baskets form a part of the wider 'gift industry' which is valued at over 200 billion dollars a year. They are the fourth most popular gift item in the industry (the most popular category is vouchers). It is interesting to note that the business has long been dominated by woman. Even though men are slowly getting more involved, women make up the majority of business owners in this industry. Women are also more likely than men to be customers. Corporate clients make up 40% of the market with the balance of 60% coming from the consumer market. The busiest times of year for the industry are naturally the big holidays, with the top three being Christmas, Valentines day and Mother's day. Overview of the Industry in the US People these days have so much stuff in their lives and don't really want for anything. For this reason it can be nearly impossible to think of something suitable to give to certain people in certain situations. A gift basket solves that problem and can be given
28

to people for a variety of reasons and events, from celebratory events such as birthdays and weddings through to romantic occasions and even funerals. The corporate world has also jumped on the bandwagon and baskets have become a common way for a company to show thanks or appreciation to employees and clients. Gift baskets are becoming more and more popular, with many people seeing them as an alternative to flowers (they last more than a few days if not eaten straight away). Various companies are putting almost anything into their creations these days. After all, packing gifts in a basket is really just another form of gift wrapping. Gift baskets typically include a range of products that compliment each other and follow a certain theme. While businesses operating out of retail space will get walk-in orders, home-based gift basket businesses will likely be reliant on the Internet for orders. Having a website and promoting it effectively is the key to success here. Payments can be handled online by PayPal but a successful operation should be set up to take credit card payments directly. While most business models involve heavy Internet marketing, some, particularly those catering to corporate clients are more active at going out and finding clients directly. The gift basket industry has low barriers to entry and a business can be started from home for well under a thousand dollars. No special skills or training are required. People who are creative, with a good eye for color and presentation as well as possessing good business sense will naturally do well. Depending on whether you structure your business as a limited liability company or as a sole proprietor you may be required to apply for a business license depending on the state that you are setting up in. If you intend to run your business from out of your home then you will also have to check the zoning regulations in your city to see if you are permitted to do so. Those who are able to start a gift basket business and achieve a full time income from it are usually the ones who are able to balance the creative or practical side of the business with the business administration and marketing side. This business is reasonably competitive and having a good product is only part of the formula. To
29

succeed you really need to focus heavily on sales and marketing and on become highly effective at finding customers, catering to their needs and delivering a product of the highest standard with the highest level of service. The gift basket business looks set to expand well into the future and offers great opportunities to those wanting to start up a small business easily and with minimal complications. More US gift basket business statistics can be found in a variety of gift industry publications but it is important that you don't rely on national data too much but instead try to collect local information through solid market research.

30

9) Doing Market Research

Before you decide to go ahead with the planning phase of a gift basket business start up it is prudent to do some market research. To put together a business plan and a marketing strategy you need to understand more about what kind of market opportunities exist and what kind of products and services you should be creating to cater to market needs. You also need to learn more about the profile of a typical gift basket customer so that you know how to market and advertise your products effectively to them. Here are some thoughts on market research and the gift basket business. Professional or Independent? It is possible to outsource market research these days and there are many companies that you can contract to do so. However, the best way to go is to do your own independent research as you will save money, make some new connections and ultimately have a better understanding of your market. Demographic Analysis Firstly you should look into the demographics of the area that you are wanting to target. Gift basket consumers are more likely to be women than men and they are also more likely to be from the middle class or wealthy socio-economic groups. Survey Prospective Customers Once you understand the demographics better it is time to sit down with some typical gift basket customers and find out more about them. Set up some interviews with some friends or associates who admit to being frequent gift basket buyers. To survey a wider crowd you can even approach people directly in your community, at church or outside the supermarket for example. Try to find out everything that you can about their experience with buying gift baskets. Ask them why they were attracted to a specific
31

company and what they liked about their products and services. Try to find out their likes and dislikes regarding the company in question and ask them if they think there is a way that their products and services could have been improved. Some of the people that you meet while doing your market research may later become your customers if you manage to get their contact details and let them know when you have opened your business. Investigate the Competition Do some investigation into how your competitors are running their businesses. Study their product ranges and take note of how their baskets are put together. Read their websites, call them on the phone or visit them posing as a customer in order to find out as much as you can about their gift basket pricing and their ordering and sales processes. Look for aspects that you like and don't like about these other companies and decide which things you would like to implement or adapt for your new venture. While you are studying the competition you should also think about how you will differentiate your products and service from them so that you have some originality and can stand out in a crowded market. Before you risk your start up capital on a new gift basket venture make sure that you have completed thorough market research to reduce your risk and help you to plan more effectively. And even once your business is up and running it doesn't hurt to continue to research the market through your customer feedback and other methods.

32

10) Start up Costs and Funding Options

It is easy for people to say that a particular business model, such as a gift basket business can be started for a few hundred dollars. However when it comes to the point of actually setting up then you may find that it is just not possible to do things properly on such a small budget. Let's take a look at some of the start up costs associated with a gift basket business and some methods that you might consider for funding your new venture. Start up Costs A home-based gift basket business can be set up for under a thousand dollars and many people have grown huge business from such humble beginnings. However, if you want to start out seriously then you should plan on spending more than that amount. A start up budget for a home-based gift basket business could run over $10,000 if you get everything that you need right away. Costs will include market research, business registration or incorporation, workplace and storage area set up, tools and equipment for production and packaging (such as a shrink wrapper), office equipment and supplies, stationary, branding costs, website design, pre-launch advertising and signage. Don't forget to add on a small amount for unforeseen or miscellaneous expenses. Some businesses also include the first few months of operating costs when they work out the total start up requirements. If you are going into commercial premises then you will also have costs associated with getting your store decorated and fitted out with shelves for displaying your products as well as the initial costs of taking on a lease. Costs can be lowered by buying second hand equipment wherever possible or by leasing some of the more expensive items.
33

Funding When it comes to funding the start up costs for a gift basket business there are a variety of sources available. As start up costs are generally low it is a good idea for the business owner to fund them independently and to avoid going into debt. If this is not possible and external funding is required then a small loan from family is often the best option if you can convince them. Another option is to try and find an investor to take an equity stake in your business in return for a portion of ownership in the business. Investors will often want to have some input into the management of the business so you really have to make sure that your plans are along the same lines as theirs to avoid confrontation. If you have a good account history with a bank then there are a variety of small business loans available with varying repayment schedules and interest rates. You will need to show the bank your business plan, show a willingness to fund at least some of the start up costs and offer them some form of guarantee that the money will be paid back. Seeking a small business loan or grant from the government is a possibility but with so many applicants for these limited opportunities you really have to submit an outstanding application to even be considered. If you can prove that your business will give something back to the community or can commit to hiring workers who have been unemployed for some time then you will increase your chances. Lastly, if all else fails, you can always take out some cash advances on a variety of credit cards. Many small entrepreneurs fund business start ups this way but it can be risky due to the high interest rates that are involved. If you are confident that you will be in a position to start making repayments within two or three months then you will avoid being hit too hard with interest.
34

No matter how you go about financing your gift basket business just make sure that you prepare a budget and ensure that all funds are put to the best possible use.

35

11) Gift Basket Marketing Plan

One of the most important aspects of any business is marketing and the gift basket business is no exception. No matter how great your product is you will not be in business for long if you don't have a strategy, methods and systems for getting those products in front of the consumers who are looking for them. Many businesses fail because they focus too intensely on product development instead of how to market gift baskets effectively. Here are some ideas to help you put together a gift basket marketing plan. Go after the Right Niches When you start a gift basket business it may not be practical to offer a full product range in your first year of business. Focus on a few niches and make sure that your products are the best in those areas, whether they are baby shower baskets or organic food baskets. Also offer a few general purpose gift baskets that will suit all occasions When doing your market research you should try to identify niches that are underserved in your area or niches that you have a competitive advantage in. An advantage could come from having specialist skills or good relationships with certain suppliers. Product Packaging The next step in creating a marketing plan for a gift basket business is to take the results of your research and put together a portfolio featuring your product line so that you have something to offer for sale. If you have walk-in clients you can have gift basket models or mockups on display so that clients have an idea of what to expect. Depending on the kind of baskets that you offer then photographs may be a better option as product models with plastic fruit can look pretty dull. If you are doing business online then professional looking photos are essential and you should have a range taken to feature on your website.
36

Consider compiling photos and other product information into a brochure or album so that you have something presentable to show clients when you meet with them. Think of some marketable names for each of your gift basket creations that suit the contents or theme. You can also offer descriptions of the basket contents, packaging and overall style. Marketing a Brand Establish a brand for your gift basket business that you can build over time into something that customers immediately recognize and associate with quality and reliability. This will gradually make your marketing burden much lighter. If you get your brand out there on your gift baskets, advertising and signage, and you then back up your brands promise with quality products and services you will be building a very valuable asset. Recognition of your brand by customers will make it easier to sell baskets and easier to charge a premium price for them. Try to create a brand that is refreshing and unique in the market in order to stand out. Advertising Gift Baskets Running effective advertising campaigns is a major part of a companies marketing effort. Try as many advertising methods as your marketing budget will allow for and test results to see which ones are cost effective and which are not. Word of Mouth Marketing and Referrals In the gift basket business you will be relying on repeat customers. To keep them coming back you have to ensure that you have great products and offer great service. If you do you will not only retain your existing customers but they will spread the word and refer their friends and associates to your business as well.

37

Remember that there is no room for error in this business as people are buying your products for important events. Customers expect that you will get their order right, it will look great and that it will be delivered on time. Anything less than perfect products and services will strongly encourage customers to try another business next time they need a gift. There is much more to 'word of mouth' marketing than just having good products and high service standards. Think of other ways to make your customer's experience with your business and your gift baskets so interesting, unique and memorable that they won't be able to resist telling friends about you. You can also put a referral program in place that encourages your customers to refer friends. Offer them bonuses or discounts for successful referrals. Networking Try to network with other businesses owners. They may be able to sell your products on a commission basis or you may agree to cross-promote each others products. Try to get close to other businesses in the 'gift' industry such as florists and gift shops. Bear in mind that woman are twice as likely as men to order a gift basket so also target businesses popular with women such as hair salons and beauty spas. Depending on the gift basket niches that you are catering to, having relationships with other businesses such as pet stores, wedding shops and baby supply stores may be beneficial. A great way to meet other local businesses is to join your local Chamber of Commerce. Online Marketing - Social Media Take advantage of the social media services that have become popular on the Internet over the past few years. While it can be difficult to meet new customers through the likes of Twitter and Facebook, these tools can be great for maintaining relationships and contact with your existing gift basket clients. Marketing to your Existing Clients

38

It is much easier to sell to customers that have already used your services than to go out and find new customers. You can easily market to your existing customer base by encouraging everyone that buys one of your products to join a mailing list in order to receive discounts and promotions. A newsletter or email sent out just before a holiday such as Valentine's Day can work wonders for your sales. Marketing is undoubtedly the most important aspect of starting and running any successful business. If you don't know how to market your gift baskets successfully then you won't be in business for long. Set out a solid gift basket marketing plan that can give you the sales volume and market reputation that you need to grow your business over the long term.

39

12) How to Price Gift Baskets

Pricing is important in the gift basket business just as it is in any field of commerce. You must know how to price gift baskets if you want your business to be profitable and your products to be marketable. You price has to be fair and competitive while still allowing you to make the profit level that you need. Pricing a gift basket does not have to be complicated. In this article we set out some pricing considerations for a gift basket business and offer a strategy and formula for coming up with the right price. Pricing Too Low Don't make the mistake of pricing too low to try and win customers over and establish your business as you will be limiting your profits and will end up attracting the worst kind of customers. If you do raise your prices in the future to more profitable levels then the bargain hunter clients that you have served will simply move on to the next gift basket business offering budget prices. By pricing low you are leaving money on the table, lowering the value of your products and damaging the overall industry in your area. Pricing High Like any industry, the gift basket business is competitive. If you price your product line too highly then you risk losing prospective clients to competitors. However, there are situations where you can get away with prices that are above average market rates. Look for ways that you can make your baskets and your service better or different from the competition. If you can demonstrate these differences to clients and they see that they are still getting value from what you offer then they will go to your price level. Don't be afraid to ask for premium prices if you really feel that your products and services are better than what the competition has to offer.
40

Other factors that may permit you to get away with above average pricing in the market include your brand reputation and your sales process. What are your Competitors Charging? One of the best approaches to pricing is to survey the market and find out what your competitors are charging for their baskets. You can then consider pricing your own at similar rates with some adjustments where necessary. Getting pricing data is easy these days as you can analyze a large number of competitors in your area by viewing their websites or giving them a quick phone call. A Pricing Formula One easy formula for pricing is to add up the cost of all the items in the basket and the packaging costs, add a suitable amount for labor and finally add on a fair profit. To keep things even more simple many business operators simply work out the total cost of supplies per unit and double it in order to make a 100% profit margin per gift basket. Larger businesses and those working out of rented premises will have to be a bit more careful with their methods as they will have to figure in fixed costs such as rent and utilities and add a small amount on to the price for each basket to compensate for these expenses. You may also have to allow for other expenses such as marketing and transportation costs. If you are getting your goods at wholesale prices then often your final basket prices will come out at an amount that is not significantly higher than what consumers would pay for the same products at the supermarket. And the price premium is worth it to them for the convenience and presentation value that is added as a result of your work. Retail prices can be a good yardstick to measure your basket prices against. It is OK to charge more than a supermarket for a basket of goodies but try not to go too far beyond retail price levels.

41

Discounts and Freebies You may consider offering cheaper prices to customers that pick up their orders instead of having them delivered. When you do have loyal customers that buy from you over and over again you should also offer them small discounts to show them your appreciation. Don't be afraid to give away sample packages if you are targeting corporate clients as the value of winning some of these lucrative accounts definitely makes the cost of a freebie worthwhile. Learning how to price gift baskets at a level that suits your market can take time and requires some intuition as well as a method. It is better to price a little high (rather than low) at first to test out prices and then slowly go down from there to find a level that customers are prepared to pay.

42

13) Selling to Corporate Clients

The corporate sector is the most lucrative market sector in the gift basket industry, making up an estimated 40% of total sales. Let's take a look at why this is such a great area of the market to target and how you can go about selling gift baskets to corporate clients. Why Corporate Clients are Worth Targeting What makes corporate customers so great is that they will buy from you repeatedly, consistently, all year round as opposed to the general consumer market whose participants are only occasional buyers and 'holiday buyers'. A gift basket is well suited to corporate clients. In business, relationships are often not so close in the personal sense and there are many situations that arise when a gift would be a nice gesture yet so little is known about what type of present the recipient would appreciate. A gift basket business solves the problem of not knowing what to buy and offers an easy solution for selection, payment and delivery. There are many occasions in the business world when gift giving becomes an obligation or a necessity. Gifts are usually given to employees who leave the company, celebrate anniversaries with the company or achieve outstanding results for the company. They are also needed to help build stronger relationships with valued customers or to smooth over mistakes, issues or problems that arise between a firm and their clients. How to Sell Gift Baskets to Corporate Clients Work on developing a finely tuned sales and marketing process for going out and getting new leads and turning these leads into accounts. Try to perfect a sales presentation that you can give to these valuable prospects and try to come across professionally as a business person as opposed to a 'work from home' hobbyist.

43

When meeting with clients don't forget to listen to their needs and requirements before you start ranting on about what you can offer. Try to see how the client in question is unique from your other clients and try to create a unique solution accordingly. When the time is right though you do need to know how to close the deal and finalize the details of the new account. Most companies have a casual relationship with a gift basket business rather than entering into contracts with them. Realize the importance of having clear lines of communication with prospective clients and existing ones. Impose some strict service standards upon yourself and your employees and make sure that phone calls and emails are answered or responded to within short time periods. Most companies choose one business to deal with for all their basket requirements. Scoring a corporate client can be an amazing accomplishment for your business as it is likely that you will have their 'high volume' business for many years if you treat them right. For many gift basket businesses, the corporate sector can make up over half of their annual revenue. Once you have attained some great corporate accounts you have to work on keeping them and that means that you have to be a perfectionist, getting every order right and delivered on time. Don't accept errors, and if they do happen go out of your way to explain and apologize to the client. Make sure that you keep a detailed file on each client so that you can note down any changes or any specific preferences that they have. Targeting and dominating the corporate market has been the secret behind many successful gift basket businesses. Deciding to go after corporate market with your gift baskets could prove to be very rewarding for you if you go about it wisely and professionally.

44

14) Gift Basket Drop-Shipping

Drop shipping is a unique business arrangement whereby a retailer or online store acts as an intermediary for a supplier or manufacturer by taking on the job of selling their products. The party responsible for marketing takes orders from end customers and forwards orders on to the supplier who then ships out the product in question to the end consumer. The intermediary takes payment and then forwards a predetermined amount on to the supplier after deducting their profit margin. Drop shipping is popular in the gift basket business as it is a business that has predominantly gone online. The drop shipping concept works well online as customers are happy to view pictures before making a purchase rather than needing to inspect sample gift baskets physically. Vendors can display a full product range for sale on their websites without having to worry about storing or assembling any of these products. Lets examine the drop shipping concept more carefully and look at some of the ways that businesses are putting it to good use in the gift basket industry. Becoming a Drop Shipping Supplier The great thing about drop shipping is that it enables gift basket companies to focus only on certain aspects of the business if they want to. If your strengths are in sourcing supplies and assembling baskets then you could look at becoming a drop shipper and assembling a network of sellers to make sales for you. Under this scenario you would never have to worry about marketing to the end consumer. Although you will still face competition and have to market yourself to sellers before they will agree to work with you. Competition among gift basket drop shippers is fierce. Your best approach is to start looking for sellers locally by searching online and identifying the websites that are getting the traffic. To make your service attractive to drop shipping vendors you need to be reliable and
45

trustworthy as well as offer a first class product line. Good communication between drop shipping suppliers and vendors is essential. If a supplier is out of stock or discontinues a product then they owe it to their vendors to let them know. Otherwise they will go ahead and sell these items and subsequently face an embarrassing situation where they have to tell their customer that they are out of stock. Respect the fact that customers gained via drop shipping don't really belong to you as the supplier. Even though the drop shipping vendors that you work with will be sending you a name and address to deliver a gift basket to fulfill an order that doesn't necessarily mean that you can start contacting those customers directly. A drop shipper will usually agree to put the logo of the seller on the gift basket or packaging to give the customer the impression that the product has come from them. Vendors will also be interested in your prices as they will want to add on a healthy margin and still be able to sell the gift basket at a competitive price. Expect sellers to want to make profit margins of up to 40% or more per sale. Good drop shipping companies will offer their vendors as many tools as they can to help them with their marketing. Sellers will need professional looking photos and accurate product descriptions to display on their sites. Some drop shippers even go as far as offering vendors a ready made website or online store that they can promote. Becoming a Drop Shipping Vendor If you find that your strengths lie in marketing then you may decide to become a gift basket drop shipper This allows you to simply focus on setting up a website, driving targeted traffic to it and making sales. All the headaches associated with sourcing supplies, storing them and gift basket creation can effectively be outsourced. You simply have to take orders, collect payments and then forward orders to the supplier. Drop shipping vendors also benefit from this business model as they are paid cash up front. They essentially pay for the gift basket after receiving funds instead of having to pay for supplies before receiving an order.
46

Some gift basket businesses become drop shippers in order to diversify their product line. As a small company you may specialize in only a handful of different basket themes and styles. However if you really want to give customers the impression that you are a well established business offering a full variety of baskets or other gifts then you can easily tap into the product catalog of a large gift basket drop shipper You simply enter into a drop shipping arrangement with them and feature their products on your website. The drop shipping industry is rife with scams so you must do your due diligence before deciding on a supplier to work with. You need to make sure that the supplier that you work with is reliable and has good quality products. After all, if the product is faulty or doesn't turn up then the customer will be looking to you for compensation. It is typical for the vendors address to be attached to the basket rather than the suppliers. If your supplier suddenly disappears then you can be left facing a lot of problems. Many drop shippers charge a membership fee before they allow you to promote their products. Do some research online and you will also find that there are some drop shipping programs that are free to join. It is also likely that a drop shipper will require their vendors to sign an agreement setting out the terms of their relationship. Always look into such an agreement carefully before you sign to ensure that you are not being ripped off or taken advantage of in any way.

47

15) Advertising - How to Sell Gift Baskets

With all the talk about viral marketing and networking these days it is easy to forget that it is good old fashioned advertising that helps a business grow a solid customer base and ensure that a steady stream of new inquiries are coming in over time. To be successful you need to know how to sell gift baskets and advertising is still one of the best ways to do so. To make sure that you get the most out of your advertising budget make sure that your advertising is as targeted as possible. Test out a variety of advertising methods and see which ones produce the best return on investment. If you ask each customer how they found you or use other methods to track inquiries from the advertising that generated them then you will soon learn what is cost effective and what is not. A great way to start out is to look at some of the methods that other well established gift basket companies are using. Copy their methods but don't imitate their campaigns too closely as you are better off with original advertising design and copy that will stand out. Let's examine some of the gift basket advertising and promotion methods that you can use to promote your products and services when you start your gift basket business. The Business Owner One of the best advertisements for your gift basket business will be you, as the owner. You should view everyone that you talk to as a potential customer but you don't have to be too heavy in the way that you push your products on to them. When meeting new people, wait until the inevitable "what do you do?" comes up in the conversation and then let them know about your gift basket service. If they are interested then give them your card and let them know that you do a 10% discount for friends. They will undoubtedly need to buy a gift basket at some stage and may remember you.

48

Signage If you are operating out of commercial premises then you can benefit by displaying signage in a prominent place on your buildings exterior. Check this out before signing a lease. If you run a home business it may also be possible to use signage to advertise your business. You must confirm that this is allowed though as some residential areas have ordinances that forbid advertising signage. Community Events Fairs and other community events can offer you a great chance to showcase your products. People may not need a gift basket right away but you can aim to make them aware of your company so that you can secure their business in the future. If you sell baskets made up of non-perishable items then people will often buy one in advance as they know that they will be stuck for a gift for someone sometime in the near future (usually within the next few weeks or months). To really get some good publicity at an event you can always offer one of your larger, more impressive gift baskets to be auctioned off for charity or used as a prize in a charity raffle. Word of Mouth Advertising When customers talk to their friends and associates and recommend your business to them they are helping you by sending clients your way. The cost of acquiring these clients is absolutely free. Work on encouraging 'word of mouth' advertising by making your customers experience with you so unique, interesting and positive that they can't help but talk to people about you. If you can't get them talking about you voluntarily then you can always offer a reward program for customers that refer a lot of new business to you. Advertising Online This area is very broad and includes a variety of methods for driving traffic to your gift basket business website.
49

Getting listed in the right directories is helpful as consumers will sometimes search for a directory of gift basket suppliers in order to quickly look over some of their options Pay-per-click advertising with search engines like Google offers you the chance to have your business advertisement come up alongside the search results for any keywords that you like. So if somebody living in Sacramento for example typed in 'Sacramento gift baskets' your advertisement would come up if you had chosen those specific keywords. It is possible to get free traffic by optimizing your website for the search engines although you will probably need extensive knowledge or expert help to rank well. Also try to exchange links or banner advertising with similar businesses in your area that are not in direct competition with you. Business Directories Directories like The Yellow Pages are still often the first place that people look when searching for a business. This is particularly true with people in the older demographics who aren't used to using the Internet for search. Effective 'Yellow Pages' advertising can make or break a business so you must do all that you can to make sure that your advertisement stands out and is the first one that people call. Community Notice Boards Posting a flyer on a notice board is usually free and is an approach that can work well, particularly in smaller communities. Always ask for permission first. Vehicle Advertising As a gift basket business owner you will undoubtedly be spending a lot of time driving around the market area that you serve. Getting an advertising wrap fitted to your vehicle with your branding and contact details on it only has a small up front cost and
50

can give you years of free advertising. Local Publications Newspaper advertising can still work well if you can purchase advertising space for a reasonable price. A local newspaper may also do an article on your business if you request it and have something newsworthy to offer. Remember that advertising is usually more effective when done in campaigns as it usually takes a number of views before your message will sink in to the viewers mind. For this reason you should always run advertisements for each method continually for a certain time period instead of giving each method a 'one off shot'. Advertising is a key part of a gift basket business's marketing strategy and a considerable budget should be allocated for this important purpose.

51

16) Business Cards

Business cards are an essential tool in a gift basket business marketing toolkit. They can help you make a great first impression and they can help you to be remembered by customers. Let's take a closer look at why gift basket business cards are so important, some of the things that you should consider about their design and finally some ways that you can use them to promote your brand. Why so Important? Firstly, business cards establish an impression of professionalism in the customers mind. People are used to receiving them so they will expect a reputable business to have them. Secondly, they offer a great excuse to get your message across to people that you meet in a way that is polite and subtle. Not only do they convey an important message to the recipient at the time but they are often stored away for future reference and they may even be passed onto other people. Don't just view cards as a way of passing on your contact details, try to see them more as mini advertisements for your gift baskets. Elements of Good Business Card Design Make sure that you include all of the necessary details. The essentials will include business name, your name or those of your employees, job titles and full contact details including website and email address. Make sure that you have your company's branding on the card. Include your logo and a slogan or description of the kind of gift baskets that you offer. You can also list some of your selling points such as your guarantee policy or other promises that you make regarding your products and services. A picture also adds a nice personal touch and will help a prospect or customer remember not only the business but also the people behind it.
52

A good designer will make sure that your business cards are not too cluttered. If you want to go into detail about your product range then it would be necessary to print on both sides of the card. Remember that you are in a creative industry so your gift basket business cards should reflect that. Play around with the shape if your printer will let you or format your card vertically instead of horizontally. Go for bold colors that demand attention while staying away from conservative colors that won't make much of an impact. Consider including something useful, interesting or humorous on one side of your card. You could include a testimonial from one of your better known clients, a discount coupon, some interesting statistics, a recipe or even a joke. Using Cards to Promote your Business Take every opportunity that comes along to distribute your business cards. Hand one out to everyone that you meet and build a relationship with via your business as well as people that you meet socially. If you send out any kind of mail to your clients then you may as well slip a card into each envelope. Don't hesitate to hand out more than one card to people if you fee that your relationship is strong or that they are in a position to refer a lot of business to you. Let people know that you would really appreciate it if they were to mention your gift baskets to their friends and associates. Most importantly, slip a business card into each of your gift baskets as you are put them together. It would be a shame if one of the recipients of your baskets enjoyed it but didn't know how to reach you to place an order.

53

17) Delivery and Shipping

One important consideration before you start a gift basket business should be how you plan on getting your baskets delivered. There are a lot of solutions out there and it is important that you do some research to find the best options for your business. In the gift basket industry it is traditional for the customer to pay for delivery expenses and a charge is usually added to the bill to allow for this. Sometimes though, delivery expenses can be built into the overall gift basket price so that a package can be promoted as having 'free delivery'. There are four main gift basket business delivery options including customer pick up, making your own deliveries, courier companies and shipping services. Each method is discussed in detail below. Customer Pickup Very few gift basket businesses have clients that will pick up the baskets that they have purchased. If you do have a store front in a reasonably busy area you may find that some buyers will want to pick up baskets. Unless you really don't want the headaches associated with having customers come to your business premises then you may consider offering them the option to save on the delivery cost if they are prepared to pick up their purchases themselves. Doing your own Deliveries When you start a gift basket business you may decide to start off doing your own deliveries. This can be a great way to go as you will have a chance to see how customers react upon seeing your creations, you will be able to get some feedback and customers can put a face to your business which will possibly increase your chances of getting future orders.

54

As your gift basket business grows though it is unrealistic to expect that you can continue doing your own deliveries for long as you will be too busy working on other aspects of the business. You may be able to have one of your staff take over this job at some stage but the logistics involved will probably mean that this role is best to be performed by couriers and delivery companies who can be much more cost effective (due to the volume of deliveries that they will be distributing in an area). Think about a delivery that may be twenty minutes drive away and the costs associated with labor, gas and other vehicle related expenses and you will soon see that it is usually best to outsource your deliveries. Courier Services Couriers are another popular option for getting your gift baskets to the purchaser or gift recipient. Shop around and see what the various local operators have to offer in the way of rates and services. Find out if their delivery vehicles will be suitable for transporting your baskets, giving thought to the basket contents. If your creations include products that need to be kept cool such as chocolate or cheeses then you will need a solution that can cater to these needs. If your baskets are fragile and need to be kept upright and handled with care you need to let the courier service know that this is important to you and that them having your frequent business relies upon them consistently delivering your products in mint condition. Look for companies that are reliable and have a reputation for being professional. Try to get an idea of what courier services are popular with other gift basket companies and florists who have been in the business for a while. Make sure that you fully understand the rates that they charge for all areas and circumstances so that you are able to pass these expenses onto customers correctly. No matter which delivery method you use you should make sure that clear instructions are relayed from the client to the individual or company doing the delivery. The delivery person should know exactly how to get to the address and any other specific instructions that the client has stated. Make it clear who is responsible for additional
55

charges in cases where deliveries are not able to be made first time round causing the delivery company to have to return to an address for a second or third try. Shipping Options While couriers are great for local deliveries you will have to look into a shipping service such as UPS or Federal Express for deliveries that are further afield. Compare a variety of option by the services that they offer, which will vary by delivery time, destination, package size and weight (price may also be cheaper if you drop packages off to your shipper instead of having them pick them up). It may not always be best to go with the same service for every basket as prices will vary depending on each unique situation. If your gift baskets are to be shipped then you must make sure that they are protected in transit so that they arrive in good condition. Source a variety of boxes that will easily fit your gift baskets inside them. Wrap each finished product in bubble wrap and then place it inside an appropriately sized box. Add some form of padding to protect the basket such as screwed up newspaper or foam peanuts. Lastly you can seal the box with tape and place a 'This Way Up' sticker on the box to let shippers know how the package should be handled. You will undoubtedly be receiving a lot of your supplies in packaged boxes and you may be able to reuse some of this packaging to cut down the expense of having to buy so much new packaging. There are several delivery options that you can use to get your gift basket creations into the hands of your customers and you should fully research the options before preparing your gift basket business plan. Look for solutions that minimize headaches for you, get your baskets to the door undamaged, offer customers great service as well as offering great value. Product delivery is an important part of running a gift basket business so you should put the time into developing a system that works well.

56

18) What to Put in a Gift Basket - Theme Ideas

When it comes to putting together gift baskets there is an almost endless variety of products that you may consider including. Below we have outlined some common themes that are popular in the industry. You may find that there is also a market for your own, unique gift basket themes. Are you struggling to figure out what to put in a gift basket? Here are eight theme ideas. Gourmet Food Possibly the largest sector of the market, gourmet food baskets may include chocolates, wine, cheeses and crackers, expensive tinned goods such as caviar and jars of upmarket preserved foods such as olives or sun-dried tomatoes. Organic food is always increasing in popularity. While you can include perishable items such as breads, cakes, meats and fruits you should also have options that are made up entirely of nonperishable goods (or goods that don't expire for a month or so at least). Bathroom and Beauty Products Popular with women, gift baskets along these lines include items such as scented soaps, skin care products, aromatherapy products, perfumes and candles to name a few. Baby Gift Baskets The perfect gift for a baby shower, these baskets include diapers, baby clothes, wet wipes, baby food, toys and other items that parents of a newborn baby would find useful or funny. With a pink option for girls, a blue option for boys, and a white option for the 'not sure yet' crowd these baskets have become very popular in recent years. Holiday Themes

57

Gift Basket businesses do an incredible amount of business over holiday periods and customers will often want a basket that suits the holiday or season. Put together special baskets for holidays such as Valentines Day or Christmas that are made up of gift items and packaging that is relevant. Pet Baskets Some people treat their dogs and cats very well these days. To brighten up their day (and the pet's) or for a doggie birthday, pet related gift baskets are all the rage. The product mix will of course include pet foods and treats, toys and other pet accessories. Beverages and Alcohol If you know someone that has a preference for coffee, tea or alcoholic beverages you can put together a basket that encompasses these things and more. Just be sure that you are complying with local regulations if you are selling gift baskets containing alcohol. Customized Baskets Some customers like to have a lot of input into their order so you many consider allowing them to customize their own basket. Let them choose from a variety of basket sizes, shapes and colors and let them view the full range of products that you stock so they can choose the combination that appeals to them. Finally you can give the client options in the way that the basket is wrapped and presented. Personal Themes You can offer to personalize a basket for anyone by finding out a little more about their interests and combining items related to their job, lifestyle or hobbies into a themed basket.

58

To run a successful gift basket business you should offer the time-tested favorites that are in demand and put your own unique style on them. Offer the customer a selection of the baskets that you know they are looking for and then throw in a few more original designs into the mix to surprise them.

59

19) How to Make Gift Baskets

Many people get excited about the idea of starting a gift basket business at home. However, when it comes time to actually put a gift basket together results are often disappointing. Here are some tips on how to make gift baskets that look attractive and sell like hot cakes. Anything Goes While gift baskets have traditionally used old style cane baskets, these days people are using other forms of container as well. While baskets may still make up 80% of your product range, think outside the box and come up with some other great ways to package an assortment of gifts. You can pretty much use any kind of box, container, pot or bag to suit a specific theme and if packaged well for the right occasion it can work really well. If you want to assemble a gift basket for children then a plastic bucket or dump truck should do the trick. Protection and Elevation Shredded paper can be put at the bottom of a basket to protect breakable products or to elevate products so that they sit higher in the basket and can be seen more clearly. If you use colorful shredded paper it can also enhance the overall effect of your presentation. Perspective and Positioning Make sure that your basket looks great from all angles but try to give it an obvious front side that looks exceptional as customers will often want to photograph it. Layer your products, starting with taller items in the center and working towards the outside where you place smaller items.

60

The Right Balance Fill the basket to an appropriate level. Baskets that have empty space can make your business look cheap whereas those that are too cluttered can make your products look untidy and ugly. Try to get the right balance when filling a basket. Also think about the balance between different kinds of products. Some products compliment each other while others don't go so well together. Secure for Delivery Try to make sure that items are secure in the way that you place them. People are paying for the 'look' or presentation when they buy a gift basket and if everything falls out of place by the time they get to the party it is disastrous for them and you. Use tape in a subtle way that allows you to secure the products in place without revealing any tape until the basket is unpacked. Packaging Clear cellophane is king when it comes to packaging. Most gift basket operations wrap their final product in cellophane and then decorate them with ribbons, bows and other decorations. Having ribbons with a printed message on them adds a nice touch. If you won't be having somebody doing your gift basket business deliveries personally then you may have to look at additional packaging if the basket is to be delivered by courier. Ideally you can wrap them with bubble wrap, pack them into tight fitting cardboard boxes, stuff the box with Styrofoam peanuts or another product that offers padding and then you are good to go. Don't forget to label the box with 'fragile' and 'this way up' stickers. Attach a Card

61

Ask customers if they want a message or greeting printed on a small card or tag and offer to attach this for them. If not, attach a blank card for the client to complete themselves. Branding Think of ways that you can send every basket out with your company branding on it to encourage people to order from you again. If you put your business card at the bottom of the basket then the person who received the gift will see it when they unpack their basket. However, if you manage to get your company branding on the outside of the product you will be seen by possibly a lot more people. Inspiration If you do get stuck for new product ideas or find that your plans just aren't coming out right don't get discouraged. Remember that all creative people encounter these problems from time to time. Take some time to do some more research, seek inspiration from other areas of art or crafts or have a nosy online at what some of the other designers around the world are doing. When you are feeling refreshed and inspired then get back to creating beautiful gift baskets for your business. Practice Makes Perfect While anyone can make a gift basket, it takes a little time and patience to get the process down and come up with professional looking results. You will find numerous articles online that will teach you how to assemble a gift basket and package it. Read up on different techniques and ideas and then have a few practice runs before you prepare the basket for your first order. If you want to be successful in this business then you have to know how to make a gift basket quickly, easily and cheaply. Once you know how to assemble a basket yourself you can then teach employees how to do it.
62

20) Other Ideas and Tips

A gift basket business offers you an excellent, home based business opportunity that can be very profitable if taken seriously. Here are some gift basket business ideas and tips for those who are starting out in this unique business and are wanting to increase sales and profit margins. Sell Via Retailers While selling directly to the end consumer will allow you to make the highest profit margins it also comes with a high customer acquisition cost. Consider selling your baskets through retailers such as 'gift shops' or high-end food stores such as delicatessens. Even though your profit margins won't be anywhere near as high you may find that it is easy to make up for this due to increased sales volume. Sell your baskets through hospital gift shops. People traditionally bring fruit or flowers when they come to visit someone in hospital but gift baskets are becoming more popular for this purpose. Look for any kind of retailer in the lobby or close to the hospital entrance and ask them if they would like to stock your products. Strategic Partners Consider going into business with a florist. You can split the rent on a small store and offer gift baskets as well as flowers. The two products compliment each other nicely. You can share tools and equipment with them and you can even start to incorporate flowers into your gift baskets or incorporate gifts into floral bouquets. Personal Gifts Never buy a gift again. When you have your own gift basket company you can simply take one of your own creations along to every function or party where you would
63

otherwise buy something. This is a great way to get your products noticed and remembered by friends and associates. Product Range Start out with a product range of no more than five or six baskets. Focus on quality in the beginning rather than trying to offer a huge range of products. Having to learn how to put a large range of baskets together and manage a huge amount of stock to supply them will be a nightmare when you are starting out. Your aim should be to a have a few great baskets that you know so well that you could make them blindfolded. You can then spend the early days of your businesses life focusing on marketing, taking orders, delivery and customer service. Get things running smoothly before you really start to diversify your product range. Save Money with Creative Ideas Save money on basket decoration and increase your profit margins. You can be really thrifty in the ways that you decorate and present your baskets and still have them looking great if you put your mind to it. Look into buying in bulk and think beyond the usually suppliers like gift shops that are likely to be more expensive. Look into buying at garage sales, auctions (online and offline), thrift stores or even consider asking suitable companies for their excess supplies or off-cuts that may be otherwise thrown away. Your customers won't know where you get your supplies from and with a bit of creativity you can have your baskets looking top-class on a shoestring budget. Getting Innovative with Suppliers One great way to source products for your gift basket business is to become a sales representative for a company selling health or beauty products such as Avon. While these products can be hard to sell under normal circumstances, if you package them up in a basket they suddenly become much more marketable. And you know that you are getting the products for a reasonable wholesale price.

64

Drop Shipping If you want to increase the variety of baskets in your product range then one good idea is to consider drop shipping. Drop shipping is where you have another company supply the gift baskets and you simply have to sell them on your website. When you get an order you let the supplier know and they arrange for the basket to be assembled and delivered with your company branding on it. You then share the proceeds of the sale with the supplier. Be careful which suppliers you use though as you are putting your companies reputation in their hands and any bad product or service that they offer will reflect badly on your business.

65

21) Information Sources

There are many sources of information available to those wanting to know how to start a gift basket business. Let's take a look at some of the online and offline resources that you may use for your research. Online Resources While an Internet search doesn't reveal much in the way of useful information for prospective gift basket business owners there is some good information there if you dig deeper. One of the best ways to connect with people already in the industry and to meet others who are just getting started is to join an online forum. One of the largest gift basket business forums requires a paid membership but there are a few other reasonably active message boards that you can read to pick up some tips and to find suppliers. Through forum participation you will also be able to find out about industry conferences that are held from time to time that offer workshops and networking opportunities. There are also a number of gift basket business guides and start up kits sold online that have been written by successful market players. These industry insiders share there experiences and offer insights and advice on all aspects of the industry. These guides can be downloaded instantly and often include other useful resources that you can adapt for use with your own business. Offline Resources There is a fairly good range of titles relating to the business available online through Amazon.com and other online book sellers.

66

There are also number of gift basket business associations that offer paid memberships but it is hard to be sure how credible they are. Some of them have tried to implement certification and quality standards but none have managed to make any impact on the industry. Members just end up paying to be associated with an association that nobody recognizes anyway and they get little else in return for their fees. It is uncertain as to whether these associations are able to offer useful advice to those starting out. There was a 'gift basket magazine' available several years ago called 'Gift Basket Review' but it is no longer in print. Although the industry is reasonably large in North America it seems unable to offer enough regular readers for any kind of regular magazine. There are some general gift industry publications available though and these often cover gift baskets within their content. One of the best ways to learn about the business is to get some practical experience if possible. Look for a course on making gift baskets in your city or consider working for a gift basket business for six months to learn the ropes. Another source of information can be competitors and suppliers, if you can get friendly with them and get them talking. Do your best to find out as much information as you possibly can about the gift basket business before you start. By being fully informed you will stand the best chance of starting out in the right direction and avoiding common mistakes.

67

22) Books and Start up Kits

When it comes to getting the information that you need to start a gift basket business there are many options available to you. A great source of information and tips are some of the gift basket business books and guides that have been written especially to help newcomers get started. Let's look at some of the products that are available and how they can help you to get your business off to a great start. There are several books, e-books and start up guides available for purchase on the Internet that have been written by real gift basket business professionals. These writers sell information products that offer entrepreneurs guidance on how they can set up a gift basket business and manage it successfully. Most importantly, they share their wisdom and experience and give you access to trade secrets that you may otherwise not figure out for many years. This kind of advice will allow you to get set up faster, avoid common pitfalls and maximize profitability. Buying a start up guide or kit is a great way to get inside the mind of someone who has already been successful doing what you are striving to do yourself. Some of these authors have had amazing success in the gift basket industry and are now involved with other lines of business. Other authors are running smaller operations and are just looking to make some extra money by compiling their tips, research and resources into a product so that they can share their knowledge in a way that helps others. If you don't mind waiting around for books to be physically delivered to your home then there are a small range of titles that relate specifically to the gift basket business. You should also consider looking on line for information too. E-books and start up guides often offer the most up to date information on a given subject and they can be downloaded right after you buy them. Before purchasing any start up guide or e-book on the gift basket business be sure to check the writers background so that you get an understanding of the perspective that
68

their material is written from. The main reasoning for doing this is that there are many start up guides which have been written by authors that don't necessarily have first hand experience inside the industry that they write about. It is better to buy a guide that has been put together by a real gift basket business owner rather than a writer who writes on the gift basket business one month and then something else the next month. Whether you are buying real books or digital information online always check the sellers refund policy before you make a purchase. Many sellers offer a money back guarantee to people who have found that their products failed to live up to expectations. Do yourself a big favor and make sure that you do your homework before you go and put your time and money into your gift basket venture. The right books or start up guides can set you on a course for success and give you the edge that you will need to compete with your more established competitors.

69