"Rome wasn't built in a day," says the popular quote, but the other half of the quote that stands missing is, "Rome wasn't built with a penny."
Though every successful business has been born out of an interesting idea, the fact is, if an idea is a seed, money is the water that enables it to grow. So, here are some do's and don'ts that you must follow from the finance point of view if you wish to start a gifting business.Do's
Do have your start-up investment plan on paper.
In other words, when we started The Good Road, we knew what all we need but didn't know what would be the tentative money approach. Therefore, when we actually started setting up the business, we were like that over-budget film that knew that a great movie is in the making but also was worried about where to raise that extra money from to achieve the expected standards.
Do research about the market rates of everything that your business would need.
For example, when we wanted to set up our e-Commerce website we had zero clue about the tentative charges and time it would ideally need to develop one.
Do spend wisely.
When I say spend wise, it doesn't mean to be stingy but, it means to prioritise and then spend money on the most important elements. For example, when we started, we thought we better take bigger office space, but then we chose to take a reasonably sized space and instead use that money for other pressing needs like packaging material.
Do spend right.
When I say right, I mean to say, spend on the right things. For example, when we were setting up The Good Road, we were clear on hiring good people as that would mean effective work. When you are starting, it is common to feel that you would cut down on a few people and do that work by yourself. But trust me, that doesn't work. Have the right number of people and have the right person at the right job atleast 6 months after commencing your business.
Do spend money on putting processes in place.
In other words, do spend money on finding the right vendors for your products and packaging, even if they are tad bit expensive than the ones you cannot trust. This is that thing when done right, can save a lot of money in the long run without compromising on the quality of the output.
Don't fall prey to bulk discounts from brand collaborations.
As a gifting company, it is quite common to fall prey when your vendors offer bulk discounts. You tend to buy more under the premise that you would use them in some other hamper. But trust me, that's a trap. Buying more than what you need, not only locks your money as dead money but also leaves you with goods you don't know how to sell. Wondering why? Once you have used a product in a gift box, using them again is not possible because buyers want every gift box to be unique. So, stacking up leads to locked money, loss of space and stress of how to dispose or sell them. Especially stacking of food and cosmetics is a waste as they have a shelf life.
- Another thing that we learned the tough way at The Good Road is, avoid adding beauty products to your hampers unless and until a client asks for them specifically.
Every skin type is different and beauty is subjective. Hence, with choosing beauty products you run a risk of customer complaints or dissatisfaction. Most of the good cosmetics are expensive and something that most women can buy for themselves anyway.
In a nutshell, the mantra while setting up a gifting company is not to be "penny wise pound foolish."
Be sure of every penny and pound spent.