Q. I am writing a business plan before opening a gift basket business and would like to know if sale goals are set and how to go about that when starting out.

A. Smart lady! Setting goals and projecting sales is a vital step in moving toward success. Set out your goals; develop plans for how you plan to meet them, and have a timeline for when you want to achieve each goal.

In the beginning your projection may not be very accurate. You may need to align your goals to the results of each marketing project. This will keep you focused on your plan...and will make it easier to grow your busines. There are organizations that can help you, either free or for a very low cost. One is SCORE, and another is the Small Bus Development Center. SCORE is an organization of retired executives who assist small business people in planning and operating your business.

Q. Does anyone know to find UPS rates? I’m trying to get everything ready to start my business and I do not know how to price the shipping.
A. Many gift basket business owners use a standard chart for shipping, based on the selling price of the basket. For example, if the basket sells for $0 - $35, the rate for continental U.S. (non-residence, etc.) would be $8.95 (this is just an example, not a pricing suggestion). This price might be based on the highest zone price for a standard size box and weight. The UPS website has rate & zone charts which you can download if you have Adobe Acrobat Reader.
(www.ups.com). Take the price for this rate, then add on the cost of your shipping supplies, plus a percentage for handling. Now you will have a final price that you can put on your “standard” shipping chart.

During special seasons, gift basket business owners sometimes advertise “free shipping” specials as an incentive for early ordering. When this is in the marketing plan, the catalog price for the basket may be raised to cover a portion, or all of the cost of shipping.

Q. What do you say when you make a cold call? I know you have to find the right person, but how do you do that?

A. Good for you for just thinking about doing some cold calls! My advice is to find your target market first. Is it going to be lawyers or doctors or information tech companies, etc? Try to get leads from networking groups or someone you know in that field of business. Warm up your calls by doing a little research before picking up that phone. Look on the internet for companies in your target market and educate yourself about their logos, company colors, type of service or products they provide. Then you will know a little something when talking to that VIP.

Always approach the cold call like how YOU would like to be approached. If you don't know what you're selling or talking about neither will they. Keep it clean, short and to the point. Be professional. Use open ended questions and directly ask for the appropriate contact person to answer your questions. Sometimes the first "NO" you get really doesn't mean "NO" forever. Learn from each call, how to make it better, what to change, what they want to hear. Most of all practice,practice, practice. You have nothing to lose- everything to gain by taking this vital step in expanding your business!

Q. I recently attended a gift trade show, and since then have asked for, and received, perhaps 50 or so catalogs covering a wide variety of products. Next week I will be ready to place my first orders to get going. My dilemma is that I have seen so many neat things I'd like that I need to reign in my desires to buy too many items. Does anyone have any suggestions or recommendations as to how I should attack my first order so that I don't end up spending too much?

A. Good question -- and one that most of us still struggle with no matter how many years we’ve been in business! Many gift basket designers start the buying process by deciding on a design or two (or three or four, depending on how much money you have to invest in your initial inventory) -- like a coffee basket and a snack basket-- then buy accordingly (just an example). Then, as you sell a few baskets and have the funds, introduce a new design -- maybe a baby basket -- and order that inventory. Also, buy items that are versatile enough to be used in several different basket themes.

Business Plan Help?

Q. What is a business plan and why do I need one?

A. To put it simply, a business plan is a blueprint for getting from Point A to Point B in the growth and development of a company. Developing a business plan -- even a sketchy one -- is essential to building a strong company.

Business plans can be a straightforward as penciled notes on a legal pad, or so detailed, complex and lengthy they are bound into a book. Basically, a business plan is an outline of who you are, what you do, and where you want to go.

Some elements of a business plan include: A description of your products and services; your special niche; customer profile; current competitors; and goals.
Business plans usually include a budget breakout, detailing expected expenses for: advertising,rent,licenses,subscriptions,inventory, utilities, office supplies, labor, credit card fees,bank fees, equipment rental, insurance, etc.

In addition, business plans usually project sales and profits, and give marketing summaries explaining what general steps will be taken to drive sales to forecasts.

Remodeling for a Home Based Business
Q. HELP!! I'm going full-time with my basket business,(yeah!!!) and I'm moving it from a bedroom to the garage. I would like to keep the original garage door for loading and unloading order/shipments, but I’m concerned about losing A/C around the garage door through cracks etc.

A. There is a kit available at home centers to insulate garage doors. Works great & knocks down noise also. Basically, it's just strips of foam that fit into the frame of the door sections.

Business Registration and Insurance

Q. I am just starting my business. Do I have to register my business with the state? Do I have to get liability insurance? A. Contact the Small Business Administration office in your area for a complete ‘how-to’ guide for starting a business. You will need to get a license and tax number, plus learn about collecting sales taxes and much more. You might also contact SCORE, a group of retired volunteer business people who give FREE advice about small business start-ups etc. Good luck!

Business Name Change?
Q. Should I change my business name? Currently, it is called Creative Special Events. This was a good name when my services were event planning, balloons & florals. But now I am designing and selling gift baskets, and this service is producing more revenue. Event planning accounts for only a small portion of my sales, but balloons and florals are still strong.


A. Changing a business name is a big step and one that deserves careful consideration. Since you are making gift basket sales with your current business name, why change? Seems like you’re doing fine. Maybe you might print the different types of services you offer on the back of your business cards or under the heading of any flyers you are using...I've seen that done many times and I think it's a pretty good idea.

Q. Can you explain the most common method used in pricing a gift basket?
A. The most common way is not the most accurate way to determine a profitable margin, nor does it insure one, but it is helpful to newcomers to the trade. Here is the common formula:
Add up the wholesale cost of merchandise, container, and supplies (ribbon, shred, etc.). Double that base wholesale sum. Next, add a labor fee, usually between 15% - 30%. Finally, add the tax and delivery.
Example:
Wholesale cost $20
X 2 = $40
Plus Labor (20%) +$8 = $48
Plus tax and delivery = Final Retail Price

Q. When baskets come in a set of 3 (or more), and are priced as a group, how do you determine how much each individual basket would cost? Obviously, the largest basket costs more than the smallest.

A. The following set pricing information comes from the Willow Specialties catalog: Sets of three: 25% small
33% medium
42% large
Sets of four: 17% small
22% next up
28% next up
33% largest
Sets of five: 10% small
15%
20%
25%
30% largest

Set of 3 Example:
$10 for a set of 3 nested baskets
$2.50 for the smallest
$3.30 for the medium sized basket
$4.20 for the largest basket)

Q. What Is the difference in a Sole Proprietor and a Limited Liability Company (LLC)?

A. As a sole proprietor, your personal and family assets are exposed to legal action;as a limited liability company, only the COMPANY'S assets are exposed. That is, of course, an oversimplification of the structure. Talk to a business attorney before you decide on a structure, because it is costly to change later. Seek more in depth information about business types from the SBA (Small Business Administration). Look for a lawyer that specializes in small business matters.

Moving a Home based Business into a Retail Location

Q. I'm at a crossroads in my business. After operating from my basement studio for 4 years, I have not yet turned a decent profit because I keep investing in more things like Yellow Pages advertising, coupon advertising, a van lease, and now a web site. Now, I’ve found the perfect location for a retail store. The landlord is willing to work with me to move my business into this location, believing, as I do, that this is a prime location for a gift basket business. But, should I be turning a positive profit on my home based business before I consider moving into a retail location.

A. This is a hard question. With my first gift delivery business, like you, I often found myself looking at empty storefronts in the neighborhood. Eventually I rented a tiny space next to a busy, trendy restaurant. Business boomed. Six months after moving into the tiny space, I moved around the corner to a much larger shop. A year after that I sold the business and made a good profit. Taking that step into retail worked for me and it might work for you. But, I would wait until your business is earning enough to comfortably stash some cash before you move. Then, you’ll have money to invest in more inventory, spruce up the shop, advertise your new location, and feel more comfortable making the big plunge.