Are you looking to purchase a flower shop?
Whether you are looking forward to getting started in the floral industry or you’re looking to expand, buying a flower shop carries with it a lot of advantages over starting from scratch.
Buying a flower shop saves you the struggle of a new business: building costs, hiring capable staff, acquiring equipment, and building your reputation. All it takes is ensuring that the shop you’re buying is worth your investment. Here are a few things you need to look into when buying a flower shop!
General Floral Business
In the end, a flower shop is a business, so you need to look into the profitability of the shop before delving into the specifics.
There’s a lot of business jargon that might get thrown at you, but basically, you need to look into the assets and liabilities that you get with the quoted price, from the equipment to the accounts receivable.
Sometimes, some shops might be valued higher because of goodwill or intangible assets of the business (eg. reputation and branding). You should absolutely ask to see their work, so you can see if it’s worth the asking price.
Floral Shop Documents
If you are serious about buying that shop, you will also need to go through the managerial, financial and legal documents of the business. Examining these documents can give you a rough idea of how well the business has been doing for the past year or so, and it can help you understand its valuation. Cash flow statements, customer lists, and existing contracts are some of these documents. Asking for help from an attorney or M&A professional can be invaluable.
Flower Shop Equipment
Now, let’s get into the nitty-gritty of the shop and see if it is indeed the flower shop that you’ve been looking to work on.
A flower shop and its flowers thrive on great and reliable equipment, thus you should check up on its facilities. Check if they are still in good working condition and if they will be for the foreseeable future. Coolers, most especially, play a big part in the flower shop business, so you shouldn’t cut corners and make sure the one provided in the shop is a definite asset and not a liability to be replaced.
Some equipment and supplies might not have aged well, so you should take a look at those which might need to be replaced. It might be a frustrating buy if you can’t have the shop up and running right when you purchase it because of these hindrances. You can negotiate with the owner to even get them fixed it up for the purchase.
Floral Business Relationships
Knowing the shop’s current flower providers, and how economic the relationship has been between them is very important. You can also see if you can find better options and deals around. You also need to check if the shop is in a wire service and if they are still paying for the hardware of the service. You can opt-out of the service if you wish, too, once you acquire it.
Flower Shop Employees
Finally, you need to see the workforce of the shop. Management might change, but the employees don’t have to. Some might leave together with the original owner, while the owner themselves might stick around to help you learn the ropes around running a flower shop.
Of course, with new management, you might also change up a few policies around human resources, so taking a look at the current state can help you decide that. Hiring and firing people can also be a part of that process, so long as you can present a reasonable explanation. The important part is to have a team that can survive the shift in ownership and stay efficient and profitable nevertheless.
Flower shops are usually the fruits of someone’s labor and passion for the most beautiful members of nature. It might have been the hardest decision for them to put up a price tag on it for whatever reason they might have. As a flower shop’s future owner, the best that you can do is make sure that their life’s work continues on, now with the renewed vigor of a fresh proprietor.
Florists, what were some items you think are important when purchasing a new or current business that you can share with our readers, please share your comments below!
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