Remembering to Budget

Budgeting: (verb) one of the scariest parts of being an adult. 

Whether you are working with your own money or buying goods with someone else’s, budgeting is vital to make sure that you are within your means. When working for a hospital gift shop you will not be spending your own money on the cost of goods, making it a bit easier to go a little overboard. Making responsible financial decisions is the first step in managing your gift shop well, and ensuring that you are making the most of what you have!

When getting ready to start spending, it is first important to approximate how much you anticipate selling within each category. For example, some of the things that I budgeted for were flowers, helium, candy, and sundries. These are pretty fixed costs for our gift shop, and will always be purchased during a given month. Having a rough idea of how much you spend on your more fixed costs will allow you to better prepare the other numbers that aren’t quite as easy to identify. 

Once you have taken out an approximation of certain costs, you can then move to parceling out the rest of your categories. For my gift shop we have to think about Valentine’s Day, Easter, 4th of July, Halloween, Christmas, Mother’s Day, Father’s Day, baby, jewelry, clothing, and everyday. These are a general breakdown of the categories that I buy in for the year, and these cannot be budgeted for equally. Halloween, Christmas, and everyday will get the bulk of the budget as we expect to sell more items in these categories. In my personal situation, I am testing the waters to see how the baby items do, so I budgeted slightly more in that category than I might usually do. Breaking down categories is one of the first steps in successful budgeting, whether your personal expenses or those of your store!

Another important part in budgeting is making sure that items are marked up correctly. When you are purchasing goods at wholesale, you are getting them for a discount. It is important during this step that you are constantly asking yourself if the people who will shop in your store will buy that item when it is marked up to its full price. While you might really love a piece of merchandise, it might not do well at MSRP, or the manufacturer’s suggested retail price. For most companies, MSRP is double the wholesale cost, minus a cent. This is where you get the $9.99 for a blanket at Walmart or $18,999.99 for a new car. While some industries mark their merchandise up well over the wholesale price, all items should be at the very minimum doubled from wholesale to make sure that with any seasonal sales you are not risking losing money when that 20% off dips into the wholesale amount you paid to have that product.

My current manager who occasionally helps me in the gift shop was over the TOSH gift shop in Murray for 20 years. She has a bad habit of not marking things up all the way, and then when items are not selling and are discounted, there is a significant loss in money. Selling items for less than you paid for them is going to negatively impact you and will hurt your budget tremendously. Marking items up properly for your store is vital for the well being of your budget!