you have determined your market and are confident about your gift basket business, you need to find space to produce your product. This book is not intended for the businessperson interested in opening a retail gift basket operation. The two options covered in this section are finding and working from office/studio space and setting up a home-based operation.
a. Location Considerations
The two most important areas for consideration in choosing a location for your new business are:
(a) choosing a particular community, and
(b) deciding on a site within that community.
Opening a new business in a community with a declining, static, or small population would not be a wise choice. Choose an area with increasing and expanding population, permanent industry, upward mobility, and a minimum of season-related problems in the workplace.
When choosing a location for your new business, ask yourself the following questions:
(a) Is the population large enough to support your venture? Studies have shown that a population of at least 50,000 is necessary to support a gift basket business.
(b) Is the economic base stable and able to support a new business?
(c) What percentage of people are employed full time?
(d) What is the average family income?
(e) Are new chain or department stores opening in the area?
(f) Are branch or head offices of large corporations or industries opening in the area?
If you are planning on running your business from your home, obviously you can’t choose your space in the same way as you would if you are looking for space to rent or lease. But you should still go through the exercise of asking yourself the above questions, because if your answers don’t support your business, you may want to rethink your decision of using your home as your base.
As well, even if you do decide to run the business from your home, you will still need to make sure that you do not violate zoning ordinances or rental agreements if you do not own your home. If you have space to run a home-based gift company, you should still spend some time researching the cost of office/studio space, which will give you an indication of what rental costs would be incurred if you ran your business in another location. Paying yourself the equivalent rent each month will give you a better indication of your profitability and the feasibility of future expansion.
b. Demographics of the Area
Determine the demographic profile of the potential customers in the community you are considering. Professionals and business executives will differ greatly in their purchasing interests from a working-class clientele, and urban city dwellers will vary in their interests and needs from potential clients in a suburban setting. Income, education, culture, religion, occupation, and upbringing influence the tastes and buying habits of your potential customers.
Consider the following factors when choosing a community to locate your business:
(a) Purchasing power or degree of disposable income
(b) Building activity and the range of housing
(c) Diversity of business establishments and industry
(d) Number of colleges or universities
(e) Cultural and leisure activities
(f) The age range of the population
A gift basket business is versatile and appealing to a wide range of clients. A gift basket service usually attracts customers who work long hours, have a steady income, and do not have the time to shop or create their own gifts. Generally, your potential clients will be well-educated, make average to high salaries, and be inclined to buy gifts that are creative as well as useful.
When you are satisfied that the community you have chosen can support your new business, it is time to choose a site for your new venture.
c. Leasing Office or Studio Space
If your dwelling is not appropriate for a home-based business, and you have enough capital to rent, you can consider leasing office or studio space. I have always leased space for my own company since my condominium is inappropriate for a home-based business. The advantage to leasing outside space is that you can set up a showroom and invite potential customers to visit and view your products.
Another option is to find another business to share space with, where you have a designated area to store inventory, assemble your baskets, and display your products.
Following are a few types of businesses that have good potential for space sharing:
(a) Gourmet food wholesaler
(b) Florist
(c) Artists and craftspeople
(d) Photographers
When leasing office or studio space, you must consider the issues of —
(a) proximity to customers,
(b) parking facilities,
(c) accessibility to loading dock or freight elevator, and
(d) storage and work space.
1. Proximity to your potential customers
My own office and showroom is located in the downtown business district of a major metropolitan area. I live within walking distance of the majority of my local corporate clients, and advertise that our showroom is open during the week for walk-in business. We also actively promote our business to the other companies in our building and have made many loyal customers who do not even have to leave their office building to receive our services.
Consider how close any potential office space is to your clientele. If you are hidden away in a back street, you won’t attract walk-by traffic, and it will be more difficult to show off your product. You might find the monthly rental or lease rate lower in a less populated area, but those savings won’t go very far if you can’t attract customers because no one knows where you are. Make it easy for your customers to find you.
2. Customer parking facilities
Make sure you locate your office where there is plenty of free or inexpensive parking for the convenience of your clients.
3. Accessibility to a loading dock or freight elevator
When those big orders start to come in, you will be grateful for easy access to a loading bay or freight elevator.
4. Storage and work space
Make sure your office has sufficient space for storing supplies and inventory and plenty of space to produce your products. You can lease your own space in an office building, small business
