How to Start a Successful Gift Basket Business
The Ultimate Guide
This is an open letter to those of you who have dreamed of starting a gift basket business but never did anything about it. Even those of you who have started one that isn’t going anywhere may find some information here that will be beneficial to you.
This isn’t a short article. So grab your favorite beverage, sit down and start reading.
It has been said that “Dreams are Wings for the Soul.”
Dreams bring out our deepest desires and often we think of them as silly, foolish, and impossible. But until we “own them,” they will never happen. So if you’ve always had the dream of starting a gift basket business, pull out that dream and make it real. BUT before you do, keep reading so that you avoid many of the mistakes that abandoned businesses lying on the roadside have made.
While dreams bring out our deepest desires, they can also bring to the surface our deepest fears. Fears are the enemy of dreams. Fear wants us to live a safe life that is small and isolated. Fear tells us that we will fail. It can also tell us that we might be successful — too successful — so we use that fear of success to keep us from taking action.
I’m telling you to put that fear aside and follow your dreams.
But I’m also telling you to:
Dream Big But Start Small
I know this is the opposite of what many will tell you but this advice will save you lots of time and money and make it much more likely that you will succeed.
Is it going to be easy? Definitely not.
It is going to take work, time, and even a bit of money. You can spend the time and do the work or you can hire someone to do it for you. Building a business takes money — but it can be done on a shoestring if you know how. And I plan to help guide you through that part of it.
There are those in the industry who will tell you that the gift basket industry is booming. They’ll say to just jump in and start designing. Build your business and customers will be there waiting to buy.
I’m going to tell you that when I started my gift basket business over 30 years ago, the industry was very different. Gift baskets were THE gifts for people to buy. They were easy to sell. It was relatively easy to start and succeed with little experience and money. Without the Internet, selling was local and all we had to do was design fairly decent baskets and build relationships with potential customers. They even sold at holiday craft sales.
But like every good thing, that is no longer true.
The industry has evolved. It’s true that gift baskets still sell, and always will, but they are competing with other gift ideas.
And with the Internet, we now can expand beyond our local area and sell nationwide or even around the world. But, as a result, we are competing with the big boys who saw the potential profit and have deeper pockets to pay for marketing than you will ever have.
In today’s world, the gift industry is highly competitive and expert knowledge of the industry is essential for success. Hundreds of gift basket companies are started each year but only a few survive past the start-up state and fewer still are operating and flourishing after the first five years.
I’m not telling you this to discourage you but to make sure that you aren’t looking at starting a gift basket business with rose-colored glasses. The industry is much different now than it was when I started my business and now includes gift boxes.
BUT it is still possible to start and grow a successful business.
It just takes different tactics now.
Building relationships is still, and always will be, important but the Internet has opened new and different methods of marketing. When I started, the Internet was in its infancy. Cell phones, Facebook, Instagram and Pinterest were in the future.
This makes marketing easier now but also increases the competition and makes the need for knowledge more important than ever. There is lots of knowledge to be found out there. Some is good and others are scams. And, as a beginner, you may not have the background and knowledge to determine which is which.
There are books on the web and even courses you can take. Most are written by those who no longer operate an active gift basket business as they are pursuing a whole different business model of teaching, writing, and selling products.
I, too, have taught at national gift basket conventions, wrote for industry trade magazines, and even produced a digital magazine for the gift basket industry for 13 years.
But the difference is that I still operate a very active and successful gift basket business and national gift service today and what I share with you is what I have learned and am still learning from the trenches. You can check it out for yourself at ShopCreativeGifts.com.
As with most things, there is no absolute right way to do anything. I’ll be sharing my knowledge with you as well as lead you to other resources that will be valuable for you as you create your own unique niche in the gift world.
I can help you learn the techniques needed to create a gift basket or a gift box that sells. And, believe me, techniques can make a big difference between a gift that looks “put together” and one that creates a “Wow” experience. This is true even with a budget gift basket.
So let’s get started!
Today, You Are a Business!!
Even though you may be beginning your research for your gift business, as of today, you are a business.
I can hear you now saying: “But I don’t know anything about starting a business yet? I’m not ready for customers? How could I be in business?
You aren’t ready to open your doors yet. That’s true. But if you’re really serious about this, you’re on your way already. We never learn everything we need to know. I’m still learning and you will be too, even after you’ve been in business as long as I have.
Today, I want you to realize that the sad truth is that all the other gift companies are the only ones who care about how long you’ve been in business. A customer could care less.
Let me tell you how I know this to be true.
I’ve taught small business classes in my county and at national conventions and meetings. In one of my local small business classes, we had people who were in all stages of starting and growing their business. Some had been selling their products and services for years but the businesses just weren’t working. There was one student, however, who had a unique idea — making and selling ukuleles. Now I live in the mountains of northern Arizona — not too far from the Grand Canyon. Definitely not a place you think of for ukuleles.
But this guy’s mother had married a Hawaiian who make the instruments, played them, and taught lessons. He wanted to pass the skills that he had learned down to his step-son who could continue the tradition. My student immersed himself in everything he could learn about ukuleles as well as about starting and operating a business.
He considered himself to be in the ukulele business from the very beginning.
He didn’t wait until he knew everything about the instrument or even everything about business. He didn’t just sit and wait to find customers in this unlikely area of the country. He became pro-active. He found groups in town who were interested in the Hawaiian culture or just liked music. He talked about what he was doing with everyone he knew and even those he didn’t know who would listen. He showed them how easy it would be to learn to play and was wildly enthusiastic about the ukuleles he could make for them.
He entered a competition for a grant for new start-up businesses and won.
Within six months, he had a new business that was on its way and many of the other business owners in town, who focused on how long they had been in business in their marketing, were lining up to buy a ukulele and learn how to play it.
He was in business before he ever opened his doors. Before he quit his day job.
He looked in the mirror and saw himself not as a man planning a business but the man in the mirror was in business.
He discovered that it is not how long you are in business.
It is what your business can do for others.
So, as of today, look in the mirror and see yourself as a person who is a business.
Now, let’s look at some of the ins and outs of running a business. These are the things that will determine whether you want to go further and develop that business or forget about it for now.
Running a Business
Many years ago, I took a writing class from author Ted Schwarz. One of the things he said was, “Today you are a professional writer. Think of yourself as one. Act like you are one. When you send out a query letter, say that you are one. And you will be one.”
And, that is what I am going to say to you today. Think of yourself as a business owner. Act like you are one. Believe that you are one. And you will be one.
Now that you are a business owner, there are a few things that you should realize before you proceed in developing that business that is still in your head.
Think about them and decide if growing a business is something that you really want to proceed with or if you want to put that dream back on the shelf and take off your business owner hat.
- A lot of gift basket businesses fail
Unfortunately the stats don’t lie. Most gift businesses don’t last past the first year and even fewer make it to the five-year mark. Making it to twenty years is even rarer.
- You may be slow seeing Profits
This is not a business where “if you build it, they will come.” Profits come with hard work and lots of marketing. I saw a profit the first year that I was in business, but remember I had created and sold other successful businesses in the past.
- There’s no safety net
Unless you have savings or a spouse that earns a good income or you continue working while growing your business, there aren’t a lot of safety nets should your business fail. This is why so many start their business part-time and from home rather than dive deep into it from the beginning. Consider what the results would be for your own personal life should you not be able to make this business work.
- It costs money
There has been a lot written about starting a gift business with no money. It’s true that if you operate it as a home based business, already have the knowledge to know how to start and run a successful business, and don’t make any spending mistakes, you can start a gift business with less money than many many other businesses. But let’s face it. It does cost money to make money. I started my own business with a loan to myself for $5,000 but I already had a computer and printer, and had started and sold other successful businesses. You can start a business with even less than what I did, and I will be giving you some tips about running your business on a shoestring. But you will have to be more creative, more resourceful, and much more careful with every dollar that you invest in your business.
- Running a business can be stressful
Being your own boss has advantages but it also can be stressful. You will have to make decisions that can affect your bottom line and there will be months when it will be hard to show a profit. If you are someone who is simply not made for that kind of pressure, a regular job may be a better bet for you.
It’s not all negative. There are many positive things about owning your own gift business. Your hours spent being creative and all your hard work will be going directly into an asset that you own. And the profits will be going into your bank account instead of someone else’s pocket. There are other benefits as well:
- You can set your own hours
You will no longer have to punch a time clock. As long as you meet the needs of your customers and your business, you can work at whatever time works best for you. Some parents of small children like this because they can work around their children’s schedule. You can work late at night if that suits you better than early mornings.
- You’re much more flexible
Just like setting your own hours, you’ll have more freedom to pick up the kids from school, go to the gym or run some errands. You need to still work the hours, but it often doesn’t matter when you work as long as you are meeting the needs of customers. Cell phones make it easier for you to respond to customers no matter where you are. When I started my business, it was before the age of even car phones and pagers. If I wasn’t in, my customers could only reach an answering machine.
- You don’t have to deal with office politics
There is lots of stress dealing with the drama of a job working for someone else. This is your office and the only politics are those that you wish to create for yourself.
- There is a potential for earning a lot of money
The potential is there but it is not a guarantee. There are those who have grown their business into a high-earning one while there are others who prefer to grow it slowly without dealing with employees and the stress of operating a large business. And then, of course, there are those who never make it.
As with anything in life, there are pros and cons. The important thing is to look at both and decide if this is for you instead of going into it blindly.
Are you ready to take that step and say, “I am a gift business.” If so, keep reading but also start doing.
Facebook groups are a good place to begin asking your questions and getting answers. But even then, be aware that your business and your area may be different than someone else’s. We have a Facebook group that I invite you to join at GiftBasketNetwork Group.
You’ll find people just like you who are starting their business or even thinking about it as well as many of us who have been successful gift business owners for many years. Giving and sharing information with each other is the very best way to make friends in this industry that you are becoming a part of.
Once you get your business started, another helpful group is the Gift Basket Resell Shop where company owners post merchandise that they no longer need for sale. You can sometimes find good bargains there.
The Pros and Cons of a Gift Basket Business
I realize now that many of the ideas and reasons for starting my new business were unrealistic. There was much that I didn’t know or even think to expect. As I said earlier, I don’t intend to whitewash this business. It can be a lot of fun and there are lots of pros for it. Likewise, there are negative aspects which should be considered.
The Pros and Cons
I’m going to address this as if you are planning to be a homebased business which is realistically the best way to go. We’ll discuss the pros and cons of homebased versus storefront later. But, as a homebased business, you’ll save a lot of overhead that a storefront will have.
One of the advantages of this business is that you can set your own schedule and plan your time around other things that you would normally be doing. I can dry the clothes or cook dinner while making gift baskets.
The gift basket business allows me to juggle my time so that I can spend time with my family and make the baskets at night or on the weekend. This can also be a disadvantage as children, spouses, and housework can be equally demanding.
Unless you have a large basement or other area that can contain a growing business, be prepared for the growing business to take over your house.
You may begin in an extra bedroom or in a corner of your house, but if you are successful, it will expand like a balloon and you’ll find that you have baskets, inventory, ribbons and paperwork everywhere. Your bathtub will become the place to store finished baskets. Your dining room table will no longer be useable or even visible.
One very successful gift basket company owner began in her laundry room, graduated to the garage, expanded to an add-on workshop, and is now operating out of a shared retail space.
My husband and I live in a large house with about 2400 square feet. Fortunately, the children are grown and no longer living here. I began my business in one of four bedrooms. My business now occupies two bedrooms (a third one is sometimes used to store finished baskets), our 15 x 22 foot living room, the garage, and two outside storage areas. I also used to rent a small retail space – first in an antique mall, then in a florist, later in a gift store and now no longer rent retail space.
Your business will take over your life. As a true entrepreneur, your business will consume almost every waking moment as well as your dreams. You’ll no longer shop for clothes or gifts for others. You’ll find yourself looking at things in a store very differently.
As you wander through a store, you’ll suddenly see a colander as a container for a pasta basket, a bait bucket for a fishing basket, and a flower pot for a candy bouquet.
Silk flowers are no longer for the dining room table but are purchased for enhancements for that springtime gift basket or the sunflower summer one. The child’s wagon becomes a “Welcome Wagon” for a housewarming gift or a container for a new baby gift.
You’ll wake up in the middle of the night with an idea (better write it down before you forget it!)
You’ve probably heard or even read that you can make lots of money in this business. That’s one of those sugar-coated truths. You can make a lot of money in this business BUT it doesn’t happen overnight and it doesn’t come easily. It takes a lot of work, a great deal of knowledge, strong business and time management skills, and even luck.
Many spend the first few years without ever taking a penny out of the business. All of the profits are plowed back into the marketing, inventory, advertising and more. If you are looking at the gift basket business as a “get rich quick” business, forget it. Keep your fulltime job and learn how to invest wisely. You’ll end up a lot richer.
Most of us in the gift business are here because we love it. We wouldn’t be happy doing anything else and we are willing to work hard to make it work. Many gift basket company owners work at another job in order to support this business until it takes off – and this can take years. It’s the kind of commitment that is hard to understand. It’s the magic of he entrepreneur.
One misconception that many creative beginners in this business have is that all they need to succeed is to be able to make a beautiful gift basket. Some even think that all they have to do is buy a bunch of similar products, put them in a basket or box and call it done.
Creativity is important, of course. You probably wouldn’t even be considering the gift basket business if you weren’t somewhat creative. But it takes much more than that to succeed in this business. Making the gift basket is only a minor part of what is essential if your business is going to blossom and grow.
I had never even made a gift basket before starting this business. This is a skill that can be learned. Other skills can be learned as well but you should be aware that they will be needed if you hope to grow this business. Marketing, managing time wisely, networking, advertising, accounting, computer, graphics and internet knowledge are all valuable assets to have.
Don’t be discouraged, however, if you don’t have all these skills. They can be farmed out to others or even acquired. As an employee or mother or housewife or whatever station of life you happen to be in, you probably have many of these skills without even being aware of them.
Attitude and patience are very important in this business as well. Everything will not always be sunny. You have to be able to take disappointment in stride and bounce back. There will be grumpy customers and perhaps your family and friends will not always be supportive. You have to believe in yourself and your ability to succeed.
I mentioned earlier that you can make a lot of money in this business. Oftentimes there are tradeoffs, however. That big mega order for 200 baskets that have to be shipped out in one week may require long back-breaking hours to get it out.
Many of us have put in all-night stints to make sure our customers were not disappointed. I haven’t had a Christmas tree (or even been able to see my living room) since the first year I began my business. That’s not all bad though.
I don’t have to cook Christmas dinner as we celebrate at my daughter’s homes. Christmas cards are completed either before December or by my husband. Any cookies or holiday pastries fill the freezer before Thanksgiving or they don’t get made. Since I don’t have a young family, this is not much of a drawback for me, but it could be a problem for some of you.
Pros and cons. . . there are many on both sides of the slate. But this is true of any kind of business.
Take a long deep look at yourself and if you still want to own your own business while having fun (most of the time), then read on. This may be just the business for you. It was for me 30 years ago and still is!
If you still have that dream, let’s continue!
Every business needs a good foundation. Built on an unstable one, it will surely fail. And like building a house, building a business requires a plan. This is the perfect time to build that plan and to avoid the alligators in the gift business swamp.
My suggestions to you are this:
Regardless of where you look, there are gifts galore. In the stores. At craft sales. Online. Look at everything that is available. Look at what is selling. Look at gifts and the gift baskets that you find with new eyes. Look at what is missing. Look at what you can do different. Look at how you can be unique. Make notes and use them as you create your plan.
Remember that I said earlier: Dream Big but Start Small.
This is what I meant by that. Don’t start your business by planning to be everything for everybody. That is one of the quickest and most expensive ways to fail.
Start with One Specific Niche
Of course, food gift baskets are always popular and will most likely be a part of most niches that you choose. But think deeper than that.
Choose a niche (or market) that you know something about or that you see a need for in your local community. This way, you will save money on inventory and marketing.
As an example, when I started my business, I was a Realtor. My customers loved the closing gift baskets that I made for them. Looking back at them now, they were pretty pathetic compared with what I can create now.
But I decided that making gift baskets was much more fun than the grind of showing homes and closing sales. And, best of all, I had a husband who made a good income so I wasn’t dependent on the money I made even though I was a multi-million-dollar producer. So, I started a side gig — selling closing gift baskets to the other Realtors that I knew. The business evolved from that to what it is today.
I have no idea why you are considering starting a gift basket business. Perhaps you are a mom who wants to do something to make some money while staying home with the kids. Or you may just love designing and being creative. Perhaps you’ve made a few baskets and others have told you that you should start a business and sell them. Maybe you’re tired of the 9 to 5, and want a side gig that will possibly grow enough to allow you to quit your day job and have a full-time business.
Whatever your reason, I suggest that you look deeply inside yourself. Take the time to sit down and brainstorm. Write your thoughts down or you are sure to forget them.
- Think about what you know, what you are good at, and what you see a need for.
- Look at different niches and decide which one appeals to you the most.
- Think about things such as whether you are really interested in that area of the industry and whether it is evergreen — when means that the gifts will sell throughout the year and not just at one time of year.
- Think about who your potential customers will be and how you will reach them.
- Who will be your competition? Of course, florists is the first we think of. But any company that sells any kinds of gifts — and not just gift baskets — will be competing with you for that customer’s dollars.
So what do I mean by niches.
There are many of them out there. If you are a mom with young kids, gifts for babies or kids is a niche to consider. Look at the gift basket websites and scroll through the “categories” of gifts and you will find many, many ideas. There are gifts for men, for women, college students and even for grandparents and/or senior citizens. You could focus on special occasion gifts or be even more specific by choosing birthday gifts, get well gifts, sympathy gifts, etc.
You may want to specialize in corporate and business gifts. This is where the money is in this industry. I began with Realtors which is still a good market.
But there are others as well. How about Financial (planners, mortgage brokers, banks, etc)? Or medical or property managers? Here is another article that you may find helpful about choosing your gift basket niches.
Look around your local area and see where there may be a need. If you know people in the industry area that you are considering, talk to them. Take one of them to lunch or coffee and find out what they need, what price ranges, and the types of gifts that would help them market their own business.
I’m not going to suggest that you spend any money right now and when I do, it will be what I have found to be the most economical ways to build your business.
To help push you over the edge and get moving on laying that foundation, I have a free e-book for you. The first one is called What I Wish I Had Known When Starting my Gift Business. You can download it here.
By this time, you probably have more questions than answers and your excitement is being replaced by overwhelm. But, even though at this very moment, you may feel like giving up on the idea, you know that you really want to make this dream come true.
Many people start a business while neglecting some the foundational steps that will make sure the business succeeds. Planning where you want to go and how you will get there will make the difference between success and failure.
Read this article about Planning Your Gift Basket Business before you go any further. This article will lead you to a very basic way to plan your business at this point in time. You really don’t need a long detailed business plan now or even later unless you are going to take it to a bank for a loan.
Then come back here and let’s continue.
As you go through the process, if you feel you need some feedback, feel free to ask questions in the comments below and I will answer them. Or if you don’t want to share what you are thinking about, you can always email me at email@example.com.
I will be taking you through the various steps and things that you need to consider and do as you start your business in future articles that I will link to on this page. So bookmark the page and come back often.
Sign up for my newsletter,which is free as well. This way you will be kept up to date as I add more detailed information about what you need to know to start and run a successful business.
My advice to you is to Read, Read, Read. When you join the Facebook group, scan down and read through the old posts that have been made. You’ll find that others have asked many of the same questions that you have and have shared information and comments that you have never thought of.
Remember that It Is Never Too Late to Be What You Want to Be! So get started today.
Your friend and mentor,
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