A gift shop business plan is mostly a plan for the calendar. In a tourist town the shop makes its year in four summer months, then pays rent through a winter with almost no one on the street, so the plan has to show the cash the summer builds and the winter spends. It works in categories, apparel, local art, candles, local foods, souvenirs, cards, each planned per $100 of sales, with the summer staff's hours counted as a cost of each sale. In the example below, a Maine gift shop opens in May with $104,500, makes $56,210 in its first year before the owner's pay on $321,500 of sales, and loses about $3,900 in each of the deepest winter months. Below is each part of the plan, the year month by month, the startup budget, and a free template.
The short version
- Describe the shop in a paragraph: the town, the visitors, what they take home, the goals.
- Plan sales by category, per $100: what the goods cost, card fees, shrink and staff hours.
- Plan the year by season, not by a steady climb: the summer pays for the winter.
- Open in spring, so the first months are the busy ones.
- Souvenirs and apparel with the town's name keep the most of each dollar.
- Local art and foods bring people in and carry the shop's character.
- TaroStack keeps the food shelf's dates, records losses with reasons, and lists reorders in days of cover. More below.
Part 1: the business description
Frenchman Bay Gifts, a made-up gift shop in Bar Harbor, Maine, I use in these examples, writes:
Frenchman Bay Gifts is a 1,200-square-foot gift shop on Main Street selling sweatshirts and tees with the town's name, prints and cards by Maine artists, candles, Maine jams, maple syrup and chocolate, and souvenirs. Open daily from May to October and on weekends through the winter, it aims to make its year in the summer and keep its stock low by January.
Part 2: what each category earns
Each category is planned per $100 of sales. Its variable cost is what the goods cost, 2.5% card fees, 1.5% shrink, and 12% for the seasonal staff's hours:
| Category | Sales | Variable cost | Contribution | Margin | Hundreds in a summer month |
|---|---|---|---|---|---|
| Apparel: sweatshirts, tees, hats | $100.00 | $61.00 | $39.00 | 39.0% | 180 |
| Local art and prints | $100.00 | $71.00 | $29.00 | 29.0% | 60 |
| Candles and home | $100.00 | $66.00 | $34.00 | 34.0% | 90 |
| Maine foods: jams, maple, chocolate | $100.00 | $71.00 | $29.00 | 29.0% | 120 |
| Souvenirs, magnets, ornaments | $100.00 | $51.00 | $49.00 | 49.0% | 90 |
| Cards and books | $100.00 | $66.00 | $34.00 | 34.0% | 60 |
In a summer month the shop sells $60,000 and keeps $21,750 after variable costs, 36.3%. Apparel brings $7,020 of it and souvenirs $4,410 on 15% of the sales, the best return on each dollar. Local art and foods keep less, and they're why the shop isn't the same as the one next door. Art taken on consignment is paid for only when it sells; an agreement is in consignment agreement template. How a maker prices for shops like this one is in how to price handmade items for wholesale.
Part 3: the first year, month by month
Fixed costs are $5,030 every month, all year: rent ($3,500), utilities ($400), insurance ($250), the register and software ($120), the website ($60), ads ($400), and other costs ($300). The staff's hours rise and fall with sales, so they're in the variable cost. The shop opens in May:
| Month | Sales | Profit | Cash, year to date |
|---|---|---|---|
| May | $30,000 | $5,845 | $5,845 |
| June | $48,000 | $12,370 | $18,215 |
| July | $60,000 | $16,720 | $34,935 |
| August | $60,000 | $16,720 | $51,655 |
| September | $42,000 | $10,195 | $61,850 |
| October | $30,000 | $5,845 | $67,695 |
| November | $9,100 | −$1,726 | $65,969 |
| December | $15,100 | $449 | $66,418 |
| January | $3,100 | −$3,901 | $62,517 |
| February | $3,100 | −$3,901 | $58,616 |
| March | $6,000 | −$2,855 | $55,761 |
| April | $15,100 | $449 | $56,210 |
The year's sales are $321,500 and the profit $56,210, before the owner's pay. The shop breaks even at about $13,900 of sales a month, so cash peaks at $67,695 at the end of October and the winter spends $11,485 of it. A shop that opened in October would face that winter first, with nothing saved; that's why the plan opens in May. The holiday season gives December a small profit, and April's visitors get the shop ready for the next summer.
Part 4: the startup budget
| Item | Example |
|---|---|
| Opening inventory | $45,000 |
| Fixtures and build-out | $20,000 |
| Lease deposit and first month | $7,000 |
| Signs | $3,000 |
| Register and scanner | $2,500 |
| Website and photos | $1,500 |
| Licenses | $500 |
| Working cash | $25,000 |
| Total to start | $104,500 |
The opening inventory is the biggest line, and it's bought in winter and early spring for a May opening. The $79,500 spent before working cash is mostly earned back in the first summer.
Part 5: buying for the season
The shop orders most of its summer stock between January and March, from trade shows and wholesale catalogs, then reorders the best sellers in June and July. By the end of the season, the goal is little stock left: a sweatshirt still on the shelf in January has tied up its cost for six months. The budget for each month's orders is set with the open to buy formula, and the stock for a season in seasonal inventory. Licenses for a gift shop are a business license from the town and a sales tax permit from the state, plus a retail food license where the state requires one for prepackaged foods. This is general information, not legal advice.
Get the template
Download the gift shop business plan workbook. Four sheets: your categories, each per $100 of sales with its variable cost and hundreds in a summer month; the first year, month by month (month 1 is May), with sales, profit and cash; your fixed costs; and your startup budget with working cash. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
A plan in categories hides the items: two thousand of them, sweatshirts in five sizes and eight colors, jams and chocolate with best-before dates, reorders placed in the rush of July, and a winter in which what's left on the shelves is the money the summer didn't make. A spreadsheet can't say which sizes sold out in July or which jams expire before next summer.
How TaroStack does it
TaroStack keeps the food shelf's dates, records losses with reasons, and lists reorders in days of cover.
Reorders in the rush. A reorder list in days of cover, with reorder points suggested from how each item actually sells, says which sweatshirt sizes and colors to reorder in July, and purchase orders show what's already on its way.
Dates on the food shelf. Jams, maple and chocolate keep their best-before dates, the oldest goes first, and an alert comes before a date runs out, so a case of chocolate isn't found expired in May.
Losses with a reason. Every adjustment carries its reason, damaged, expired or lost, and counting on a phone by barcode shows what a variance is worth, so a broken candle and a stolen magnet are recorded, not guessed.
| The job | Spreadsheet | In TaroStack |
|---|---|---|
| Which sizes to reorder in July | Walk the racks | Reorder list in days of cover |
| Chocolate past its date | Found in spring | An alert before the date |
| What's on order | Typed in | Open purchase orders |
| Breakage and theft | Guessed | Recorded with a reason |
Reorder lists, purchase orders, expiry and losses by reason are on every plan, from $49 a month, with no limit on items; TaroStack connects to Square. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.