Specialty food gift basket

Some people say "thank you" with flowers. But Jill Patton has found a better way--with gift baskets. After acquiring separate specialty shops in 1992 and 1995, Patton combined the two to form a mail order business, Essentially Chocolate and the Basket Gallery.

The company specializes in gourmet gift baskets full of fine imported chocolates, cheeses, smoked Pacific salmon, crackers, coffees, cookies and fresh fruit. Waterman pens and fine crystal such as Waterford and Mikasa are also sold. Clients, including the Marriott Corp., Hilton Hotels, Paychecks Corp., Coopers & Lybrand and Ernst & Young, pay from $35-$40 for the baskets. Last year's revenues were more than $374,000. This year the company, which has three full-time employees, anticipates sales of $500,000.

Gift basket making was a hobby Patton, 31, enjoyed while working as a computer consultant in real estate. But she soon realized she could turn her passion into a profitable full-time venture. "I went out and got industry trade publications, and found out the gift basket market totaled nearly $800 million in sales with food baskets leading the way," she says.

Initially, Patton made the baskets and sold them to family members and friends. In 1992, she noticed a Washington Post ad for the sale of a company called the Basket Gallery in Bethesda, Maryland. The previous owners wanted to bail out because sales did not meet their expectations. At the time, the company was earning about $5,000-$6,000 a month. Patton purchased the business for $12,000. She borrowed $5,000 from credit cards to buy inventory and to advertise.

The majority of the sales were generated over the phone, so in 1994, Patton transformed the shop into a mail order business. "Most of our customers didn't have time to shop and found it more convenient to call and place the order rather than come in and pick up the gift," she says.

In 1995, Patton purchased the second business, Essentially Chocolate, with a $40,000 loan from the Small Business Administration. She merged the two operations and moved to a 3,000-sq.-ft. office and warehouse in Rockville, Maryland, that same year. With the help of an extensive advertising campaign, including a 12-page brochure cataloguing the company's 42 products, Patton anticipates increasing her revenues to $5 million over the next five years.