The Gift Basket Business — Misconceptions

In some ways, it seems like yesterday.  In others, it seems like an eternity.  For me, the fall of 1992 was the beginning of a new business, a new lifestyle and a whole new perception of operating a homebased business.  I thought I knew everything.  After all, as a SCORE small business counselor, I had been counseling other startups.  I was the expert.  I had started and sold other businesses.  This gift basket business couldn’t possibly be any different.

Was I ever wrong.  Looking back 26 years later, I realize that I knew much while knowing very little.  I had a lot of misconceptions way back then.  Some of them are probably familiar to you:

  • The gift basket business is like any other business.  The gift basket business is very different from any of my previous businesses and requies new and different skills to succeed.  Nothing takes the place of the learning curve that comes from actually operating a specific type of business.
  • Designing and producing gift baskets is easy. They couldn’t be too hard for a creative person to make, could they?  I’m still laughing at that one — and still constantly learning new techniques to create gift baskets that don’t look like they came from Walmart.
  • The 99 Cent Stores have great bargains in gourmet foods that are perfect for gift baskets.  Buying the wrong kinds of foods from the wrong suppliers is a mistake that many, new to the business, make.
  • I needed a lot of different products to make lots of different baskets.  Buying “cute” and “fun” products is another major mistake.  These two words don’t appeal to the corporate market who preferred elegant and gourmet.  And one of the most important techniques to learn is how to use a few products to create a lot of different designs.
  • My major market would be all the people who wanted to buy a personal gift.  It doesn’t take long to learn that corporate is where the money is.
  • People in my area won’t spend more than $40 for a gift basket. I underestimated myself and my customers with this assumption.
  • The extra bedroom is big enough to house this business.  As I look around my 2500 square foot home that is now almost a warehouse, I shake my head in wonder at how naive I could have been.
  • My life wouldn’t be any different.  A neat organized house is now a thing of the past.  Grinding wheat and making bread are memories.  A Christmas tree?  Where would I put it?
  • Since I love shopping, that would be the best part of the business.  That was the reason for a lot of excess inventory that needs to be cleared out now.  “Just looking around” is a thing of the past.  Who has time? Shopping for me now is trade shows and wholesale internet sites.

And I could go on and on and on.  Many of the things that I counseled others to do apply to this business industry as well.  But there were new things to be learned, new techniques to become accomplished in, and a whole new mindset about life and business to be realized.

Would I do it again?  You bet!  The past 26 years have been some of the most exciting in my life.  There will always be challenges.  There will always be new things to learn.  But when it’s all over, I can say, “I dreamed, I risked, I built, and I succeeded!”

Will you say the same?

A Time of Business Renewal

snow-bushThere’s a bush by my front door that always takes the initiative and covers itself with bright yellow blooms as soon as we have a few days of spring here in Flagstaff.  And it always realizes that it celebrated spring too soon when we have another late snow storm, as we did the other day.

But that doesn’t stop this energetic little bush.  The snow melts and provides water to its roots and it just keeps on blooming until the bright yellow flowers are replaced by green leaves.

Why am I relating this story to you?  You probably have a bush similar to it in your yard.

But this is my special bush.

Each year, it reminds me that there will always be challenges to overcome.  On the morning, when I first discover its brilliant yellow flowers bursting forth, there’s a new skip in my step and a smile on my face.  I know that, even though, there may be a few more snowfalls, spring is on its way.

I know that it is time to dig out my business plan and review it to see how challenges of the past year have affected my business.  Since it’s always around tax return time, when this bush proclaims new life, I’ve already been forced to review the accounting figures for the past year.

This is something that all of us need to do at least once a year.  Most people think of January 1st as the time to review and renew.  But, in our industry, after the closing of fourth quarter, with its hectic holiday business season, we’re usually too tired and don’t have enough final figures to do this properly.

Then comes spring with flowers popping up, green leaves opening on the trees, and sunshine.

Most of you probably don’t think of weather in relation to business.  But I do.  For me, winter is a time for taking advantage of all the seeds I’ve planted during the summer and fall.  This is when the work load is heaviest and the profits are greatest.  By spring, I’m tired.  I’m ready for the sunshine.  I’m ready for a chance to review the past year and make whatever changes need to be made.  I’m ready for renewal.

How about you?

Chasing Dreams or Creating A Lasting Business?

butterflynet1An article, written by Marilyn Gardner of The Christian Science Monitor, was reprinted in my local newspaper.  It talked about people, who are laid off from their jobs and are unable to find new ones, deciding to start their own business.

Some of the comments and suggestions in the article apply to anyone who is attempting to start a new business, whether gift related or not.  Even for those of us already in business, there are “one minute wisdoms” that should make all of us think.  Some of these are:

  • Few people understand the dynamics and challenges of operating their own business.  There is much to learn and mistakes can be expensive or even put you out of business.
  • People start a business because they want the freedom of coming and going as they please.  Wrong.  You’ll put in more time than ever.
  • If you’ve been used to a steady paycheck, you must change from having an employee mentality to an entrepreneurial mindset.  You are the one who is going to be telling you what to do, when to do it, and how to do it.  Your decisions will determine how much profit you end up with to pay yourself.
  • Becoming profitable is usually a slow process.  Of course, there are businesses that are profitable right out the door. But these are usually experienced people who understand the dynamics of building a business and are willing to put in the many hours required to make it happen.
  • Deciding to go into business as a last resort is a bad reason.  A good reason for starting a business is “this is something I’ve wanted to do for a long time.”
  • 80% of businesses fail before Year Five and 96% fail before Year 10. Will yours be one of these statistics?
  • One of the basic first steps is to define what business you are really in, who your customers are, how you’ll reach those customers, and how large your target market is.  It’s not a case of “build a business and they will come.”
  • Analyze your competitors–and really understand who they are.  Determine what their strengths and weaknesses are.  And then determine what yours are and how you can use their weaknesses and your strengths to become the best in your market.
  • During an economic downturn, such as the one we are currently in, will people buy your products?  Is your product something they need or a product that they can do without.  Be aware, however, that people will often spend money on things that will make themselves “feel good” even in a down economy and when they may not be able to afford it.  That’s human nature.
  • Sacrifices in your lifestyle, personal budgets, and time will most likely be necessary.  If you’re totally dependent on the income from your business, it’s more important than ever to make sure that income will be there.  If not, are you willing to live a simpler lifestyle and do without some of the things you are used to.

    A lot of young mothers start a business so that they can be with their children more and then discover that their business is eating into all the time they had to spend with the kids before plus even more time.

All too often, people fall in love with an idea or even with the idea of owning their own business and don’t really understand what is required for success.  They fail to project their cash flow and expenses and are frequently under capitalized.  They have a poor financial understanding of the potential business.  You have to understand the financial needs in order to put together a business feasibility plan that works.  If you are supporting yourself with your business, you have to make sure that the income will be adequate to cover your personal needs as well.

You must be passionate about your business idea but you must also be realistic.  Doing the necessary research, writing a good business plan and then reviewing it and making changes as the business changes, and having adquate financial resources can make all the difference between chasing a dream and creating a lasting business success.

 

Crazy enough to think they can change the world. . .

Occasionally, we find a quote from someone that we think is Right On Target!  Here is one from Steve Jobs:

“Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… the ones who see things differently — they’re not fond of rules… You can quote them, disagree with them, glorify or vilify them, but the only thing you can’t do is ignore them because they change things… they push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do.”

How about you?  Are you one of the those who see things differently.  Do you think you can change the world, even if it’s one tiny step at a time?  Think about it!

Surprises in life and business

Yesterday, I woke up to the sun glistening on snow here in Flagstaff.  It was a beautiful but unusual mid-May event.  This morning, the snow had completely disappeared leaving the sunshine to welcome me when I opened the blinds.  The squirrels were once again scampering on the ground under the bird feeder, waiting for the birds to drop their breakfast to them.

It’s often said by folks here in Flagstaff that if you don’t like the weather, just wait a few hours and it will change.  That’s true of business, and even life, as well.  Surprises happen.  Sometimes they are good ones.  Other times disappointing.  But, they do happen.

The snow was a pleasant surprise in the middle of a beautiful spring.  Today it is only a memory.  We’ve all had surprises in our business.  If they are pleasant ones, we enjoy the moment and savor the memories.  If not so pleasant, we make the most of them and wait until tomorrow when things will be different.

What surprises have you had in your business and life?