It’s All About the Benjamins, If You Plan to Stay in Business

Tuesday February 19, 2008 •  

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February 19, 2008
Issue 184
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Gift basket designers go into business because they love creating impressive designs and getting admiration from their customers. Pretty quickly your business must earn more money than you spend or you will soon be out of business.I’m a great believer in “do what you love” but for the money to follow you must find someone willing to exchange their hard-earned money for what you offer. When you find these customers, you must insist on getting the profits you deserve.

Short of discovering a gold mine buried in your backyard, how are some ways to increase the cash flow and profits in your gift basket business?

1. Trim the fat

Get rid of excess on and offline. This requires making a careful inspection of where your money is going.

Automatic payments are convenient, but can be dangerous if not monitored. Back when I bought my  credit card terminal, I arranged to have monthly payments automatically debited from my bank account. Several months after my terminal was completely paid, I discovered that the company was still withdrawing the payments. Jump on things like this right away, and get your refund.

I found another place to trim when I took a careful look at my PayPal account. I discovered monthly memberships and services that I no longer used or needed. Cancelling those services spared up $110 a month.

2. Spend cautiously.

When I’m tempted to buy inventory for an order, I determine how I will use the remaining dozen and a half items after I’ve completed the order at hand. If I can’t figure that out, I make another inventory choice.

Another example of the need to think about your spending. I recently bought a wireless modem so I can access the Internet from anywhere. After several introductory discounts the total cost was $49 (this doesn’t include the monthly fees, of course.)

As the young clerk was inputting my information in the computer, he asked as part of his company script, “Would you like to get insurance for $49 so your modem can be replaced in the event it is lost or stolen?”

“Let me think about this for a minute,” I responded.  “Do I want to spend $49 for insurance for an item that only cost $49 in the first place? ”

The young clerk and everyone in hearing distance could see the absurdity. We all burst into laughter.

You don’t need most of those so-called protection plans. More money for you!

3. Don’t extend credit.

You are not a bank, so don’t get into the loan business. Process your customer’s credit cards before you prepare and ship the order. To some of you this may sound harsh, but it’s much harsher to have no money to pay your own bills because your customers haven’t paid their bills.

This goes for corporate clients especially. Medium to large companies are known to hold up paying invoices for long periods, sometimes as long as 90 days or more.
Will your creditors wait for their money that long without taking action against you?

Consumers and companies who want your business must be willing to pay for it. Ignore this tip at your own peril.

4. Create continuity sales.

Set up a program that requires your customers to make monthly payments, such as a Gift Basket of the Month program. For this service the customers receives a different theme of your choosing each month priced at the same price. They can have it shipped to themselves for delivering themselves, or they can designate at the beginning of the service where they want them go each month.  

This may sound like a contradiction of my first tip, but it’s different. You will be on the receiving end of these monthly payments.

5. Raise your prices.

Most gift basket designers price their baskets too low. This is brought on by what I call the “housewife mentality.” Your compassion for your customers causes you to cheat yourself.

Every time the cost of gas, food, shipping and living in general goes up, so should your prices.

To stay and prosper in business you’ve got to keep your eye and hands on the Benjamins.

 Related articles and posts

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Other Websites

www.smartbusinessmatters.com
www.craftideaworld.com
www.homebasedbusinessmatters.com
www.youreducationmatters.com
www.coloryourlifehappy.com 

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How well do you know the gift basket business?
Test your skills with this crossword puzzle, “Gift Basket Wrap Up.”
Click here to get started. ====================================
Ready to design gift baskets? Watch the step by step tutorials and listen to the audio tips on our newest site, www.MakeGiftBasketsNow.com

  • ====================================Looking for easy gift basket ideas?  Discover what to put in popular themes at  www.EasyGiftBasketIdeas.com . Images and ideas for baby, holidays, celebrations, pamper, real estate and more. You’ll even learn to make diaper cakes from a short video.====================================

    ARE YOU FRUSTRATED WITH YOUR INABILITY TO

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    Are you struggling to attract new customers to your gift basket business? Do you have a great gift basket service but aren’t sure how to let prospects know about you? You can attract more new customers, sell more to existing customers, and bring back your customers more often. Learn how in the Marketing Bible.  

     

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    Reprinted from “Gift Basket Business World Newsletter,” a free ezine
    featuring tips, resources and tools that increase profits for gift basket retailers.
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