Gift Baskets Sample Business Plan

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Gift Baskets Business Plan

Executive Summary

Introduction
Basket of Goodies (BOG) is a premier gift basket retailer. BOG is concentrating on making gourmet gift baskets out of a wide range of high-quality ingredients. In addition to having several flagship baskets, BOG will also offer the option of a custom basket allowing the customer to choose the ingredients themselves. BOG will be selling to individuals as well as corporations. Initially the bulk of BOG’s business will be generated by individuals from word-of-mouth referrals, but as time passes, corporations will become a growing percentage of sales.

Once up and running with some momentum, BOG will be steadily producing profits. It is projected that BOG will be making a profit by December. By the end of year three, it is projected that BOG will be generating a net profit of approximately $21,000.

The Company
The Basket of Goodies’ mission is to create the finest gift baskets available. BOG, soon to be located in Salem, OR, will be hand assembling our products out of premier ingredients, local when possible. The business will be based out of Susan Presento’s home. Although this will be a home-based business, toward the end of year one Susan will have an employee.

Susan Presento, founder and owner, managed a flower shop in Salem for three years and this has given her insight to the gift giving practices of Oregonians. The primary gift baskets that will be offered are: smoked fish basket, fruit basket, pasta dinner basket, and picnic basket that has caviar, crackers, fruit, and smoked fish. BOG also offers a custom basket which allows customers to pick items from a list and BOG will assemble the basket with its custom ingredients.

The Market
The purchasing of gift baskets is very “seasonal.” More than half of the gift basket purchasing occurs during a wide variety of holidays.

BOG’s competitive advantage will be based on two factors, low overhead which allows reasonable prices, and an unrelenting desire for the highest quality product and service.

1. Low overhead
2. Highest quality product and service

BOG’s sales strategy will be targeted at obtaining both the individual and corporate clients through word-of-mouth referrals. Customers will be able to place an order at the office, over the phone or via the website.

1.1 Mission

The Basket of Goodies’ mission is to create the finest gift baskets available. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall into place. Our products and services will exceed the expectations of our customers.

1.2 Objectives

The objectives for the first three years of operation include:

• To create a home-based company whose primary goal is to exceed customer’s expectations.
• To increase the number of clients served by at least 20% per year through superior performance and word-of-mouth referrals.
• To develop a sustainable home business, surviving off its own cash flow.

Company Summary

BOG, soon to be located in Salem, OR will offer a wide range of gourmet gift baskets, production as well as custom units. BOG will be hand assembling the baskets out of premier ingredients, local when possible. The business will be based out of Susan Presento’s home. Although this will be a home-based business, toward the end of year one Susan will have an employee. If the business goes per the forecasted plan, the business will achieve profits by the end of year one.

2.1 Company Ownership

The Basket of Goodies will be a sole proprietorship, owned by Susan Presento.

2.2 Start-up Summary

BOG’s start-up costs will include all the equipment needed for the home-based office, legal fees, website creation, and start-up advertising. The home office equipment will be the largest chunk of the start-up expenses. This equipment includes a computer system, fax machine, office supplies, cellular phone, and pager. The computer should have a 500 megahertz Celeron/Pentium processor, 64 megabytes of RAM (preferably 128), 6 gigabyte hard drive, and a rewritable CD-ROM for backing up the system. Additionally, there will be the expense installation of a broadband connection. While a broadband connection is not totally necessary, it only costs between $40-50 per month for service and will make working on the Internet significantly faster and easier.

The home office will also require a few pieces of furniture such as a desk, chair, and bookshelf to transform a standard room into an office.  Lastly, an additional land phone line will be required. The legal fees are used for the formation of the business as well as for reviewing/generating standard client contracts. The Web creation fees at start-up costs are for design and creation of the website. The start-up advertising will be the production of brochures.

Products

BOG sells gourmet, hand-assembled gift baskets. Their premier baskets are: smoked fish basket, fruit basket, pasta dinner basket, and picnic basket that has caviar, crackers, fruit, and smoked fish. BOG also offers a custom basket which allow customers to pick items from a list and BOG will assemble the basket with their custom ingredients.

For the customer baskets, BOG will provide a list of options grouped into four different categories. The customer then chooses two items from each of the four categories and the gift basket is made for them. BOG highlights four previously mentioned premier baskets. In addition to these, BOG will typically have one or two specials, often seasonally based.

Market Analysis Summary

BOG will be going after two distinct market segments, individuals and corporations. Both groups buy gift baskets as a goodwill gesture, typically for different reasons. Individuals typically buy the baskets as a present with over half of sales occur during holidays. Corporations buy the baskets as presents as well, but usually for events unrelated to the holidays. By going after both of these groups, sales will be less seasonal (relative to if only the individuals were targeted).

There are many different “gift basket” retailers in Salem. BOG will differentiate themselves through the use of premium ingredients in their baskets. The gourmet baskets, coupled with a custom option and reasonable prices (attributed to low overhead) will spell success for BOG.

4.1 Market Segmentation

BOG’s has two distinct groups of customers, individuals and corporate customers:

1. Individuals- The individuals are people who are looking to give a friend, relative, colleague, etc., a gift basket as a gesture of goodwill.  These customers typically do not have a specific type of gift basket in mind when they look at BOG’s product offerings, they just want to give a gift.
2. Corporate- The corporate customer is typically buying the basket for a colleague at work, either as a sign of appreciation, for a special event, or as a thank you for a customer. The corporate market can be further broken down to banks, health care, employment gifts, real estate, apartments, special events/promotions, corporate headquarters, hotels/vacation resorts, and automobile dealerships.

4.2 Target Market Segment Strategy

BOG is focusing on individuals and corporate customers because they are the largest segments of purchasers for gift baskets. Individuals are the target purchaser of gift baskets. They purchase baskets typically as a thank you in response for something the recipient did or just to be nice. The gift basket is unmistakingly a gift so upon receipt there is no ambiguity why it was sent or at least what it is trying to accomplish. Within the individual category, women are 69% more likely to be the purchaser of a gift basket compared to men. This is not to say that women more often purchase gifts, it just indicates women are more likely to buy gift baskets.

BOG is focusing on the corporate customers as they currently represent approximately a third of the purchasers of gift baskets. The corporate customer could be buying the basket for someone within their company, or they could be buying it for a customer, vendor, etc. The trend for the corporation to purchase gifts is not a new phenomenon and therefore would appear to be a solid market segment to pursue.

4.3 Industry Analysis

There are many different forms of competition in the gift basket business:

• Similar gift basket type retail stores: There are several of these stores located in Salem. These competitors offer a wide range of gift baskets, however none of them are concentrating on the higher end, gourmet product line.
• Nut/fruit companies: There are several stores that concentrate on nuts and or fruit baskets.
• Bath product gift basket companies: There is currently one gift basket company that concentrates on bath products. Bath products have a slightly smaller population of people who appreciate these products (as women predominately appreciate bath products more then men do).
• Regional gift basket: There is one retailer that sells gift baskets composed of local products. These type of baskets tend to appeal to people that are buying gifts for people that are not from this area.
• Candy gift baskets: There are several candy stores that offer, as one on their products, a candy gift basket. Similar to the bath products basket, candy typically appeals to women a bit more so then men.
• Florists: Flowers are a similar product that competes with gift baskets. Once again flowers tend to appeal to women more so then men.

The purchasing of gift baskets is very “seasonal.” More than half of the gift basket purchasing occurs during a wide variety of holidays.

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