This is a difficult question to answer, since there are many different types of shops and people go into the sector for different reasons. For some it is seen as a commercial venture, for others it can be a lifestyle choice.
Nevertheless, there's clearly money to be made in gift retailing if you are successful. One owner suggested a market town gift shop, for example, should be turning over £200,000-£250,000, from which you would get a gross profit margin of around £100,000, with rent, rates, staff costs and other overheads still to pay.
Therefore, an owner-manager with a reasonably sized gift shop in a market town should be able to take £50-60,000 per year out of the business, assuming it's doing well.
There are a number of bows and ribbons that will add value to your business once you have established the core retail operation:
- Credit cards: The use of credit cards is a key area. If you don't accept them, customers will go to your competitors who do. Research has also shown that people buying on credit cards tend to buy more.
- Tax free shopping: If you have a lot of customers who are from outside the EU, you can offer them tax-free shopping. For example, the GA runs a VAT exemption scheme in association with Global Refund.
- Corporate gifts: Companies may be interested in buying a certain item in bulk with their company name engraved on it.
- Wholesale: If you find a particularly good product that no one is supplying, you might be able to set up a wholesale operation.
- Expansion: Once you have perfected a look and feel for your shop, it shouldn't be difficult to copy it at another location.
- Diversification: This may be critical for survival if you are in a tourist area, since it will support out-of-season sales. Add-ons include accommodation, coffee bars, delis and newsagents.
- Website: Websites are becoming increasingly important as the credit crunch sets in and consumers become more web-savvy. They are also a great way to retain customers - tourists, for example, can keep coming back, even if they are in another country.