Are you the person who takes extra time to make gifts look beautiful? Do you love perfect corners and creative bows? You could turn that skill into a gift wrapping business and help other people give stunningly wrapped gifts. You would be doing what you love and making money at the same time.
A gift wrapping business wraps gifts for customers and sells wrapping paper with creative designs and other gift wrapping accessories. Some professional gift wrappers operate inside department stores, while others may be kiosks in a mall or even a retail shop. Customers pay for the paper and the wrapping service.
According to Statista, the gift wrapping products industry size was $15.11 billion in 2018 and is expected to grow to $24.9 billion by 2025. Little information is available about gift wrapping as a personalized service because businesses in this industry tend to be very small and privately owned.
Disposable income is expected to increase, which is expected to increase the gift wrapping products market. Gift wrapping services are sensitive to economic fluctuations because when people spend less money during economic downturns, they will turn to DIY.
Trends in gift wrap are minimalistic, simple designs.
Your target market will be people giving gifts who don’t want to take the time to wrap gifts themselves.
Skills, Experience, and Education Useful in Running a Gift Wrapping Business
There are several specific skills that you will need to open a gift wrapping business.
- Experience. You just need experience wrapping gifts so that you’re good at it!
- Business knowledge and experience. You will need to have at least some basic knowledge of marketing, finance/accounting, and human resources.
- People skills. You’ll need to be able to build rapport with your customers so that you retain them as customers and keep them coming back.
Costs to Start a Gift Wrapping Business
Here are the typical costs you will face when you open a gift wrapping business.
- Kiosk or shop rent $500 – $3,000 per month
- Gift wrapping supplies (such as ribbons, wrapping paper, scissors, gift tags, gift boxes, tissue, etc.) $1,000
Steps to Starting a Gift Wrapping Business
Step 1: Write your Business Plan
After coming up with the idea, the next step in starting your gift wrapping business should be to write a business plan. The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate exactly what your startup expenses will be and what your ongoing expenses will be.
Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you think through all the aspects of the business and then serves as a guide as you begin.
Step 2: Name the Business
Finding the perfect gift wrapping business name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name. Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.
Step 3: Form a Business Entity
A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include a sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
Related: Comparison of Business Entities
Step 4: Select your Location
A retail location with high foot traffic is essential so that when people are shopping for gifts, your store is visible to them. Some gift wrapping businesses rent kiosk space in a mall or small space in a busy retail store or gift shop.
Given this type of business is really busy between Thanksgiving and Christmas, having a short lease is important in keeping overhead low.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
There are no special licenses directly for a gift wrapping business, however, there are common local, state, and federal registrations that a gift wrapping business may need, which include a sales tax permit and an Employer Identification Number.
Step 6: Find Financing
Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a gift wrapping business is another. In order to get a loan, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.
Step 7: Open a Business Bank Account
Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.
Step 8: Get your Marketing Plan in Place
A gift wrapping business will need to set aside a budget to cover marketing costs on a continuous basis. Common marketing techniques for a gift wrapping business include social media marketing like Facebook, Pinterest, and Instagram, and online advertising, as well as business cards, brochures, and flyers. Developing a website can be a significant expense, but it can also give your gift wrapping business greater visibility online.
Step 9: Get Insurance
A gift wrapping business needs several types of insurance for full coverage:
General liability insurance can help protect you from third-party claims of bodily injury and property damage.
Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.
Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.
Insurance policies will vary. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.
Step 10: Hiring Employees
You may need employees to help you run your gift wrapping business, or you may choose to be a one-person show. Make sure that you select people with appropriate experience.
In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system for your gift wrapping business is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
How Much Can You Potentially Make Owning a Gift Wrapping Business?
A reasonable price for wrapping a gift ranges from $10 – $50. If you charge $25 and wrap an average of 10 gifts per day (more during the holidays), you would make $91,250 in revenue per year.
Things to Consider Before Starting a Gift Wrapping Business
Running a gift wrapping business or any business will have its challenges. You need to be prepared and make sure that you know what you’re getting into.
Marketing and acquiring customers will be your biggest challenge and an ongoing expense.
Your business will be seasonal since you will be much busier during holiday seasons, so you will need to plan accordingly for slow times.
Talk to other business owners for tips on starting a business and do your homework to determine costs. Research other gift wrapping businesses to see what they offer and what prices they charge.