Posts tagged "profits"

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 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.

Writing a Flower Shop Business Plan

August 14th, 2019 Posted by Josh D Become A Floral Designer, Floral Supplies, floral systems, Florist Marketing, Florist Operations, Florist Profits, Florist Resources, florist technology 0 thoughts on “Writing a Flower Shop Business Plan”

Florists’ goal is to make money doing the thing they love most!

Writing technical papers like business plans sounds like a lot of work, and you may think it’s irrelevant for someone who’s starting out. However, business plans are even more important for a business early on.

What Makes a Floral Business Plan Important

A business plan guides your helps you track your long-term objectives and the strategies you use to achieve them. Planning is crucial in business because we are not simply dealing with money; time and effort are on the line—your time, and everyone helping you. Also, formalizing your vision helps you assess your current position and your capabilities of reaching it.

Aside from that, business plans let you plan ahead for possible problems you might get into. This requires you to analyze the market trend of flowers around your area, and look into your possible competitors. By getting this knowledge, you can appropriately predict possible highs and lows of the industry.

Business plans are also a requirement to get a loan from most banks. Banks need to determine if you can, at minimum, pay the loan back. This is very important especially for newcomers and people who plan upgrades to their shop.

Parts of a Business Plan

Title Page

The title page contains all the basic information about your flower shop, which includes your shop’s name, address, your name as the owner (and of others who co-own the shop), and other relevant information like the registration number of your business (if you have any, this may vary by area). It should also contain your business logo.

Executive Summary

The summary of your business plan, It has its own parts in it: (a) the business summary, (b) the future summary, (c) the market summary, and (d) the finance summary.

The business summary basically contains all the basic information related to your shop (think title page but more comprehensive).

The future summary outlines your vision for your shop, as well as your goals and objectives.

The market summary contains the information you’ve gathered about your customers and the marketing strategies you’ll use.

Lastly, the finance summary contains your expected sales, the money you need to start up, where you’ll get these funds and other monetary information. It should tell the reader your current financial position.

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Management Plan

The management plan or the operations section contains all the nitty-gritty details of your business, from your flower suppliers, equipment, and production processes to your inventory, payment modes, operating hours, and communication channels. You can list out the products and services you plan to deliver. This can easily become the longest and important part of the business plan, so take your time writing this part.

Marketing Plan

As the name suggests, the marketing plan contains your analysis about your potential customers and competitors. It also includes your key marketing strategies that you plan to implement for your shop, such as running special discounts on holidays and other special occasions.

Future Plan

Again, the name suggests that the future plan contains your prospective plans for your shop. Here you can state your vision for your shop (something like the “premier flower business in the locale”) and your business goals. It is important to not just think of quick goals to attain but rather long-term goals that you hope to achieve.

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Financial Plan

The financial plan contains everything about your shop’s finances. Here, you go into detail about the cash flow of your business. You are expected to list out your current creditors and debtors, your source of funding, and your projected cash flow; these are often tabulated with the figures and dates. If you have been working on your business plan with your shop already up and running, you can also add a profit and loss statement.

Supporting Documentation

At this part of the business plan, you can include some documents that are relevant to your business: permits, maps, financial tables, and other attachments that readers of your plan might use to refer.

 

Florists, do you have a business plan in place, What are some things you put in place that could help other florists, please share your comments down 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.

 

It’s Not Personal…It’s the Flower Business!

August 15th, 2018 Posted by Idalina Bertone Become A Floral Designer, Florist Operations, Florist Profits 6 thoughts on “It’s Not Personal…It’s the Flower Business!”

The floral business is fast evolving, leave behind your preconceptions about the way it’s run.

Floristry is competitive, and it’s important to have a firm business plan and policies for your customers, employees, and shop alike. How do you establish policies that will stick if you are new to the floral business? The solution is simple: get comfortable with the phrase “It’s not personal, its business.”

We promise you that making some simple changes in your flower business will not in any way hurt your profits—to the contrary, you can expect to profit more. To be constantly evolving your business means to treat it as such, and not cross wires with your personal life. Here’s how.

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Friendships and the Floral Business

It’s no wonder many florists really like their customers and vice versa, it’s common sense that the customers who gravitate to your business will be the ones that are friendliest to you.

So what is all the fuss about friendship in business? Well, the fact that florists are so giving by nature, some shops may misconstrue their relationships with customers and start giving them freebies. It can be helpful to give a customer a reason to do business with you in the future, but be careful of overdoing it.

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Employee Policies

The most relaxed job I ever had was my job in a flower shop. The environment was so laid-back and there were few rules for conduct as long as I showed up and did my work. We needed structure, and your floral business will benefit from having firm employee policies and guidelines.

That starts with putting policy in writing. First, explicate a policy to keep waste under control. Supplies cost money—that tiny wire on the floor, bits of ribbon, scraps of tissue paper—all employees should have respect for your supplies.

It’s worth noting that some communities have many flower shops, and some florists hire part-time floral designers that may also work for a competitor a few miles away or the next town over. If this is not a concern to you, then no problem—but if it does, take this into account as you write your waste policy.

Next, every employee should be taught how to upsell and offer add-ons to a customer with their order. This is an easy way to win some extra sales.

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Event Contract Terms

If you design for many weddings or events, then you absolutely must have terms signed by the customer. Remember even though this may be a customer you think of as a friend, it’s a business relationship and no one can blame you for keeping yourself covered.

All terms must be clear—all delivery stops on contract, deposit requirements, cancellation requirements and substitution policy. This will protect you and save you money in the long run. There is nothing worse than having a customer contradict you when you have nothing to back up what you know to be true. Put it all down in black and white.

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Customer Assumptions

We all know what works in our flower shop and for our customers, so why try something new and different? Maybe a new floral design style isn’t your style, but it’s trending. Maybe it won’t work for you, but maybe it will!

You must keep evolving and trying new things in the floral industry. If certain flower stems in your area are too costly to keep all the time, maybe offer them once a month and charge more so that you make a profit.

Never assume your customers won’t like or buy something. You may be right, but if you’re wrong you will be losing out on gaining new prospective customers and profits.

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High Maintenance, Low Profit

We often hear how some customers and services can deplete profits. Now is the time to make a change and reevaluate.

First, let’s consider customers who are low profit and super high maintenance. Sometimes it’s okay to gently say “no” to the customer. Working on quality service is always best if you feel quality will be subpar or customer is just impossible to please by all means just say no (in a nicer way of course). This is your reputation on the line and remember everyone today is a critic with easy access to review you online which can really be determined to your business.

Think of every customer as a critic and do your very best to achieve a great review for every order—regardless if they review you or not. Also, keep in mind that customers who are unhappy with your service are the first ones to offer their review. If you feel you can’t accommodate an event during a busy week, then simply say no. If you feel the customer is just too hard, just say no.

Last, if you are with a wire service, double check that you are making a genuine profit. Not a few hundred dollars a year, that won’t cut it when you account for mortgage/rent, utilities, etc. Wire service companies are not your partners, they are in it for their own profits. It may sound cynical, but as a business owner, you should be too!


Florists, what are some important rules you feel should be included above? Please share your feedback any related questions in the comment section below!

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Floranext offers great florist software, florist POS, florist websites and florist wedding proposal software. Our florist technology products are built by florists, for florists. Let us know if you want a free demo or try our software for free here.