Question:
My daughter and I are in the process of starting our Basket Service and are
very excited.
Could you please give me an idea of the cost involved in starting this type
of business?
Also, what is the best way to set up the structure of our company in regards
to taxes, etc.
Most of the money will come from me and we didn't know if a partnership or
incorporate or what. Any advise will be appreciated.
Response: The cost to start a gift basket business has always been
difficult to estimate because expenses run the gamut in terms of each
person's budget and vision.
A breakdown of the most common costs include but are not limited to:
Inventory - baskets, shred and enhancements, prepackaged foods, gift items.
Office expenses - telephone and fax (plus installation charges for both),
computer and printer, scanner, credit card terminal, calculator,
electricity, postage, Internet charges, copier, business checks.
Marketing materials - stationery, brochures, basket photography and
developing, promotional items and other advertising, postage.
Travel expenses - car mileage, tolls, cellular phone.
Basket shipping charges - boxes, labels, packing tape, bubble wrap.
Other - education, memberships, business insurance, subscriptions,
networking functions.
You can see that costs will definitely run you over $500 (business insurance
alone will run $250+) and probably over $1,000, but how much more depends on
what you already own. If you have a computer, that cost is deleted, but if
you must upgrade, it's back on your list. The same goes for other big ticket
items such as a fax and printer.
Inventory also runs the gamut, and as you refine your purchasing habits, you
will become a more savvy buyer. Perhaps buying from distributors will help
you control costs in the beginning stages.
Most gift basket professionals form their businesses as sole
proprietorships, but a small business accountant is the best person to
consult in terms of business structure. I bet you can find good leads for an
accountant through an after-hours business gathering.
Is your dream worth the cost? You bet it is. Start slow, plan, weed out what
doesn't work and build your business.
One more word of advice: carry a pad and pen wherever you go or keep both by
your bedside. You'll get your best ideas when you're grocery shopping, in
line at the bank or as you awake in the morning.
