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Susan DevineAge: 25

Gift BasketsGift Baskets

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Mission Statement Mission Statement

Taste of Oregon Gift Baskets sells artisanal baskets filled with Oregon’s best regional gourmet food, perfect for people who love food and are environmentally conscious.

Opportunity Distinctive food from the Willamette

Valley and surrounding areas are very popular with tourists and locals.

These gourmet items are not typically carried by local food stores.

There are no other gift basket retailers in Keizer or the surrounding area.

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Business Profile Type of Business

Taste of Oregon Gift Baskets is a retail business selling gift baskets containing gourmet food from Oregon to tourists and the local population.

Legal Structure Taste of Oregon Gift Baskets is a

sole proprietorship. I chose this structure because of the ease of set-up, the low set-up costs, and the ease of maintaining the company.

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Qualifications

I’m qualified to run this business because:

I managed a flower and gift shop for three years. This offered experiences and insights into the gift-giving industry.

I have four years of experience working in an upscale retail environment which had a customer-centric focus.

I have a degree in Communications from the University of Portland.

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Market AnalysisIndustry Name Gift Basket Industry (GiftBasketBusiness.com)

Industry Size $2.3 Billion in sales (U.S. Market)

Total Population Population of Keizer, OR, (37,000) plus tourists (10,000 per year), plus corporate employees (850).

Target Market Keizer residents who are between the ages of 30-45 with an average household income of $54,000 (25,900), plus tourists and corporate employees.

Potential Market Based on survey, 54% of Keizer residents in target market would buy a basket at least once a year (13,986), plus tourists and corporate employees.

47,850

24,836

36,750

Total Population

Target Market

Potential Market

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Demographics Keizer residents

between the ages of 30-45 with an annual household income of over $54,000; tourists older than 21; corporate employees who fit the same profile as Keizer residents.

Geographics Keizer, OR, in the

Willamette Valley, north of Salem, near Portland and near Interstate Highway.

Psychographics Interested in high

quality, regional food and wine. Residents are proud of the Willamette Valley, tourists are interested in the region.

Buying Patterns Keizer residents and

corporate employees will buy gift baskets for special occasions and holidays. Tourists will buy gift baskets on impulse as part of their tourist experience.

Target Market Segment

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Competitive Advantage

Taste ofOregon

Cook’sBasket

GivingThanksFactors

$50 – $125

Quality of Product/Service

Price

Location

Reputation/Brands

Unique Factors/Knowledge

$45 – $165 $55 – $130

Regional gourmet items, locally

woven baskets.

Focus is on cookware.

Minimal food.

Food-related, not regional.

Chinese baskets.

Premium regional food, only one on wine trail, custom

hand-packed baskets

Kitchen products Pre-packaged baskets

Willamette Valley Wine Trail, Keizer,

OR

Salem, OR Salem, OR

New to market Well known, in business 3 years

Well known, in business 10

years

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Marketing Mix Keizer residents, corporate employees, tourists in the Willamette Valley

Advertising in wine trail brochures, local publications and newspapers; in-store promotions, corporate discounts, local events, Website

Store located on the Willamette Valley Wine Trail

Hand-woven gift baskets containing premium regional gourmet and specialty food items

Three sizes $50, $85, $125

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Promotional Mix

Advertising Brochure, cards, postage, Website, ads

$325.00

Publicity Press releases

Personal Selling

Booth at Willamette Valley Fall Festival

—

Sales Promotion Corporate discounts —

Other Sales via Website —

Total Monthly Promotional Expense $325.00

Promotional ExpenseMonthlyAmount

—

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Cost of Materials & Labor

MaterialsMaterial Description Cost/Total Quantity Cost per Unit

Regional gourmet items $20.00 $20.00

Basket 8.00 8.00

Total Material Cost per Unit $28.00

LaborLabor Cost per Hour Time (in Hours) to

Make One UnitLabor Cost per Unit

$12.00 0.25 $3.00

Total Labor Cost per Unit $31.00

COGS (per Unit) $31.00

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Economics of One Unit

Selling Price (per Unit) $72.50

COGS (per Unit) 31.00

Other Variable Expenses (per Unit) 2.50

Total Variable Expenses (per Unit) 33.50

Contribution Margin (per Unit) $39.00

Description of One Unit of Sale: $72.50 (Average Cost of Gift Basket)

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Average Monthly Fixed Expenses

Fixed Expense Average Monthly Expense

Insurance $204.17

Salaries of Employees 500.00

Advertising 325.00

Interest 41.67

Depreciation 54.17

Utilities (Gas, Electric, Telephone) 375.00

Rent 1,500.00

Other Fixed Expenses —

Total Average Monthly Fixed Expenses$3,000.01

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Time-Management Plan

Schedule for a Typical WeekTotal Hours in a Week = 168

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Monthly Sales Projections

First Year

0

50

100

150

200

Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

Un

its

So

ld

Total Units Sold

1,095

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Monthly Break-Even Units

In an average month, the company will begin to make a profit after selling units.77

3,000.0139.00

= 76.92

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Projected Yearly Income Statement

First YearSelling Price per Unit $72.50

Number of Units Sold 1,095

Total Sales $78,387.50

Variable Expenses 36,682.50

Contribution Margin 42,705.00

Fixed Operating Expenses 36,000.12

Pre-Tax Profit 6,704.98

Taxes @ 15% $1,005.73

Net Profit $5,699.15

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Start-Up InvestmentStart-Up Expenditures

Item Where Will I Buy This? Cost

Rent & Security Deposit

Landlord $3,000.00

Initial Inventory Local Vendors 4,500.00

Total Start-Up Expenditures $7,500.00

Cash ReservesEmergency Fund $1,499.98

Reserve for Fixed Expenses 6,000.02

$15,000.00Total Start-Up Investment

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ROS & ROI

$5,699.15$79,387.50

X 100 =7% ROS $0.07

$0.38$5,699.15$15,000.00

X 100 =38% ROI

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Financing Strategy

Source Amount Debt Equity Gift

Personal Savings $5,000.00$5,000.0

0

Relatives/Friends $10,000.00$10,000.0

0— —

Investor — — —

Partner(s) — — —

Totals $15,000.00$10,000.0

0$5,000.0

0—

$15,000.00Total Start-Up Investment

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Business Responsibility& Philanthropy

Business Responsibility Use organic, local products whenever possible. Baskets woven by local artisans using sustainable

materials.

Philanthropy Contribute gift baskets to silent auctions that raise

money for health-related causes and to support regional farmers’ markets.

1% of yearly net profit (after 3 years of business) to nonprofits assisting in the cure and prevention of breast cancer.

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Business & Personal Goals

Establish sales through the store on Willamette Rd.

Develop a Website and begin generating sales through it.

Learn more about sustainable farming procedures.

Business Personal

Receive repeat orders online from tourists who visited the store.

By the third year, increase sales through the Website so they are equal to in-store sales.

In the fourth year, open a second store.

Sh

ort

-Ter

mL

on

g-T

erm

Buy a home that would allow for a large garden.

Consider going into business of producing an organic gourmet product, such as jams, for the regional market (and, if successful, selling it nationally).

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Gift BasketsGift Baskets

Thank you for your consideration.