Posts tagged "business"

Priming Your Floral Business for Sale

September 25th, 2019 Posted by Josh D Floral Design, Floral Supplies, floral system, floral systems, Florist Ecommerce, Florist Operations, Opening a Flower Shop 0 thoughts on “Priming Your Floral Business for Sale”

As a business owner, there may come a time to embark on a new adventure!

You might have also found that your business is ripe for sale!

The general technical term of selling and buying a business is “mergers and acquisitions,” commonly shortened to M&A, and this process can take a fairly long time to process, anywhere from 6 months to several years. However, in order to actually sell your business, you should prime your business so that potential buyers will surely buy it and you can sell it to its maximum value.

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Keeping Records

One of the most important ways to prepare your business for sale is to keep your books and accounting records clean, transparent, and organized.

When buyers seek to buy your business, financial records are one of the first things they will ask to see. Businesses that follow generally accepted accounting practices are also valued higher than those that don’t. It also gives the image of a well-managed business, so you should try to ask help from your dedicated accountants, or hire an accounting firm to do the job for you. Buyers will look for the past five years of your records, so preparing these is crucial.

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Prepare Your Floral Business

To fully prepare your business for a new owner, it should also have management that’s not heavily dependent on the owner. Your employees should not be reliant on you to function efficiently. You need to put up an effective organizational chart that clearly shows the chain of command.

You also need to establish a clear set of goals and objectives (often in the form of a vision) which guide the processes and operations in the business. By making your manpower self-sufficient, you can assure the buyer that the business will not go down by the time it is sold to them.

Establishing a good image for your business’s brand also helps increase the valuation of your business. A good way to create that image is to boost your online presence, such as in social media and search engines, optimizing it to be more easily found. You should try to make your website and social media ratings to be positive.

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Lastly, think over about when you want to sell your business. Selling a business is often regarded as a smart business move for entrepreneurs, but you also need to be smart about when. You are a veteran in the industry, you know the trends and therefore you know when your business can be most valuable. Take advantage of this time and prep your business for selling.

 

Florists, have you sold or purchased your flower shop recently? What are some good key advice for those who are wanting to sell or purchase a flower shop? Please share your comments below!

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Floranext makes great florist software. Florist websites, floral POS, florist wedding/event proposal software, and florist technology. Let us know if you want a free demo or try our software for free here.

Florist Metrics

September 11th, 2019 Posted by Josh D Floral Design, Floral Supplies, floral system, floral systems, Florist Ecommerce, Florist Marketing, Florist Operations, Florist Profits, Florist Resources 2 thoughts on “Florist Metrics”

A flower shop is a business—you need to make sure that it is profitable and sustainable.

Luckily, there are many metrics to objectively measure your business’s performance. Aside from helping make sure that your business is doing well, these metrics are also going to be measured when you’re trying to get a bank loan, for example.

Having an idea about how your business is doing, supported by hard numbers on the table, can help you plan ahead and make adjustments to your current shop’s workflow. You can also readily adjust your pricing formula, and even see what needs to be improved in your shop, from your equipment to your workforce, just by taking a look at these metrics. That’s how powerful these metrics can be!

Let’s dive deep into these metrics and how you can use them to be fully aware of your business’s current standing.

Floral Shop Operating Expenses

Kicking off with operating expenses or overhead, these are those costs that are not products, like electricity and marketing. Expenses that you incur that are related to your working and shop space, be it rent or utilities, count as this metric.

As a good rule of thumb, operating expenses shouldn’t go past 10% of your total sales revenue.

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Flower Shop Payroll

Payroll and salary expenses are also one important thing to be kept track by florists. Many shops require other floral designers and employees. Because of that, we can spend a great deal on payroll because we rely on manpower to create our main products.

Labor costs can also easily go up high because of custom orders, thus these custom orders should be priced higher than most of your services to compensate for that. Having it take at most 30% of your total sales revenue should be a good margin to maintain.

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Cost Of Goods

Then, there are COGS. The cost of goods sold includes all expenses for the production of your services that are used in the product, e.g. the flowers, vases, etc. Basically the opposite of overhead, many people can underestimate this metric because they forget to include the small or seemingly insignificant costs like the tax on the flowers and the cost of shipping.

To make sure that you are profitable, keep it below 30% of the total sale price.

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Flower Shop Revenues

Of course, you need to know how much you have earned as profit after all your expenditures. This might be the simplest one so far, as long as you got all the numbers down. The formula is simple, just take all your earnings and subtract your expenditures.

There’s also no specific threshold for this metric; you get to pick how high your net profit, as it is called, is. Your goals for the shop will most likely decide that number for you.

That was a lot of math under a lot of explanations, but it is necessary for your shop to flourish and reach its goals. You probably didn’t sign up for all this when you started up your flower shop, but keeping track of these metrics will matter a lot.

 

Florists, do you use these metrics at your business? Have any thoughts, comments, or suggestions, please share below!

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Floranext Logo

Floranext makes great florist software. Florist websites, floral POS, florist wedding/event proposal software, and florist technology. Let us know if you want a free demo or try our software for free here.