Why My Gift Basket Business Failed

While other teenage couples were chilling out at the mall food court, spending countless hours at the movies, and going to the occasional college party, my future husband and I were starting a gift basket business.

Why gift baskets?  Honestly, I don’t know.  That’s probably the first reason why the business failed!  I think we had seen the price of gift baskets on Amazon and thought we could do better.  Guess we were wrong…

No Business Plan

For starters, we knew nothing about running a business or making/selling gift baskets, so how we expected to run a successful gift basket business is beyond me!

The extent of our business planning was:  (The following is a dramatization of real events)

Humble Timothy:  “What type of business would you be interested in starting?”

Humble Laura:  “Uh, I don’t know…  Definitely not a Red Bull vending machine!”  (Probably would’ve had better luck with that.)

Humble Timothy:  “I know, you said that already… What about gift baskets?”

Humble Laura:  “What made you think of gift baskets?”

Humble Timothy:  “I don’t know, just thought it would be girly enough for you to go with it.”

Again, I have no idea how we thought this was a business plan or that we could be successful with it.  So starting a business without a firm business plan would be mistake #1.

No Target Market

For some reason, we assumed that the most difficult decision we’d have to make was what type of product/service we’d sell, but we were wrong, once again.

After taking several marketing classes since the failure of our business, I’ve realized that one of the biggest mistakes we made was that we didn’t set a target market!

Basically a target market is a specific group of customers you’re aiming your product or service towards.  Of course, I’m thinking, “Well everyone would want one of our gift baskets!”  How wrong you were young Humble Laura!

Thinking about it now, we should have done our research and focused our marketing to real estate agents, bed and breakfasts and other small businesses.

Serious Lack of Capital

As you can imagine, two teenagers in college don’t have a lot of discretionary money to begin with, let alone enough to start a business.

We got a business tax I.D. number so we could buy supplies for wholesale, thinking this would help us save money.  There was one problem we hadn’t considered: Most wholesale suppliers require you to buy in large quantities or have minimum cost per order, both of which priced us out of the market.

Basically this left us with only one other option:  Shop for supplies individually at local retailers.  We’d spend hours browsing around Walmart, TJMaxx, Publix, and sometimes even the dollar store to find stuff to put in a basket.

You can imagine how slow and laborious our production process was, not to mention the fact that replicating a basket would be nearly impossible, since many of the stores we shopped at were unable to restock exact items.

No Plans for Growth

The final nail in our gift basket business’ coffin was the fact that we didn’t think about the future of our business.  What happened if we got loaded down with orders?  How could we produce baskets quick enough?  Where would we make our baskets?

Like I said earlier, we couldn’t afford to order from wholesalers and so we couldn’t reproduce our gift baskets.  We were putting our custom gift baskets together in my bedroom at my parents’ house.  (I lived with the parents until Humble Timothy and I got married so we really didn’t have any other options.)  We had little storage and even less money to encourage growth.

We only planned for the short-term, rather than both the short-term and long-term.  Without a doubt, this was the biggest mistake of all.


After a year in business, maybe $1,000 invested in supplies, and only 12 baskets sold, we decided to call it quits, a decision I don’t regret at all.  It was a learning experience.  Had we been living life like others our age, we would’ve most likely spent more money and would’ve had little to show for it, but a few old movie stubs and forgotten nights.

Have you ever started your own business?  What type of business what it? Was it successful or did it end up like my gift basket business?