managing your cash flow florist flower business

Top 5 Tips for Managing Your Cash Flow

I know, I know. Money is not everyone’s favourite subject. In fact I can see you rolling your eyes now. Your palms are sweaty. Your heart is beating a little bit faster. Squeeeeee……

But believe me, in the early days of setting up your small business, getting a few basics covered off will prove invaluable!

So, here are my top 5 tips for managing your cash flow in the early days of your business:

  1. Set up a bank account that is solely, and only, dedicated to holding the cash you have for your business. I think ING is the best option – there’s no fancy fees and you get the $2 admin charge back when you take money out of any ATM in Australia (*this does assume you deposit more than $1000 per month into the account).
    • for all of our UK, NZ and Canadian followers, there is bound to be a similar bank account / low fee / no fee structure – do a little Google search and see what pops up
  2. When you get paid by your clients, or you weekly shop revenue is deposited into your account, be sure to set aside up to 25% to account for income tax. I know, at the beginning this is a lot of money but if you can get into the habit of doing this now, you will be forever grateful when you’re earning $120,000 a year. Income tax isn’t payable until you are earning a specific amount and it varies depending on your income tax ‘bracket’ but you can check out those details here. The best way to coordinate this is to have a second ‘savings’ bank account that you transfer the money into. It’s best to pretend this money isn’t there until after your annual tax return is done. Just don’t touch it. Ever. When your tax return is complete and there is extra $$$ sitting in there from the previous year’s income, then you can go buy yourself something pretty, go on a little weekend getaway or buy a fancy bottle of wine.
  3. Register for GST. In Australia, business don’t need to pay GST until they are earning $75,000 but in my mind, I’d suggest setting up good cash flow practices from the beginning. Do it now and set yourself up for success before the tax office comes calling asking for previously-owed GST once you pass that $75,000 mark.
  4. Registering for GST means you need to allocate additional money to your ‘tax’ savings. So get in the habit of setting aside another 5-10% to account for the GST you will owe the government (at the end of the year or each quarter). The amount you owe the government will vary from quarter to quarter as it depends on how much business stuff you buy and how much business you bill. In it’s simplest form though the maths is as follows: (a) when you buy a business thing you pay GST on that (b) when you charge a client for a thing, you charge GST on that. The difference between (b) and (a) is what you will need to pay the government. Start doing this now so that when you’re making the big bucks you’re already in the habit of pro-actively planning for it.
  5. When you feel like your bookkeeping has turned into a weekly burden, link your business bank account to your online accounting software. For the first few years of my business I was just using an excel spreadsheet – and that worked just fine for me and my accountant. And then things got busy.  I use Xero but I know others use Quickbooks, MYOB and Freshbooks. The reason I have them linked now is that every time I spend $$ from our business bank account a new line item (technically called a journal entry) is created in Xero. Once a week I then reconcile each entry against my receipts and assign them to various pools of money (cost of goods sold, travel, insurance, motor vehicle expenses etc.). This saves me and my accountant a massive headache at the end of each quarter / end of the year.

If you can get into the habit of doing these five things from the early stages of your business you will be in such a better place when your business income grows year upon year. Set yourself up for success now and you’ll save yourself so much pain in the future.



how to price flowers for profitability

Pricing for Profitability

I know, I know. Math is BORING. At least for most people this is an absolute truth of life. Me on the other hand? I once worked through a math textbook from start to finish in one week. For fun. No joke.

Flower peeps, I’ve got news for you. Math is a reality of floristry and we rely on it almost every day of the week. And when we understand how to do the math, we’re one step closer to running a profitable flower business.

Does your bank account reflect the amount of time and energy you’re spending on your business?

If it is, well done. Give yourself a giant pat on the back and keep on keepin’ on.

If it isn’t, don’t fret. We’re here to help you decipher the numbers and empower you take control of your worth.

But Kathleen, where do I even begin?

We hear you. Finances are intimidating and there is a weird vibe that seems to hang over us when we bring up the topic of profitability and handling money. We get a bit sweaty and our hands start trembling. A hush comes over the room. It’s awkward. 

Many of us feel shame when it comes to the topic of money. There is an assumption we should inherently know how to handle money. But how many of us were either (a) taught by an experienced, professional mentor about the ins and outs of money or (b) trained at school to understand budgets and money management?

Stop feeling ashamed and start paying attention. We’re here to show you what we’ve learned in establishing our own, successful flower brand.

Our top three tips

  1. Understand your expenses, as a business – Write down what it costs you to run your business at this moment in time. It’s important to gain a grasp on your real business expenses. Often there are dozens of incidental costs that add up to real money.
  2. Stop pricing emotionally – We’ve all been there. We are passionate about what we do, we care about our clients but we ‘feel bad’ because they have a limited budget so we take a hit to help them out. Stop it. Just stop it. Please.
  3. Understand your expenses, as a human – How much do you need to make in order to pay your bills? What are your dreams and aspirations, and how much do you need to cover the basic expenses of your own life?

Equations over emotions everyday.

Let’s start at the beginning, Step 1 Understand your Business Expenses.

There are dozens of items that can be considered basic costs of operating a business. Let’s start with the most straightforward ones – the things you pay for regardless of whether you have a wedding scheduled for this weekend or you have the weekend off. These are called fixed costs or fixed business expenses.

Here are a few examples of fixed business expenses:

  1. Light, Power, Heating, Air Conditioning costs
  2. Office Expenses, such as stationery, printers, ink, computer costs
  3. Motor Vehicle Costs – annual maintenance, insurance, repairs

NOTE: If you are just starting up, be sure to account for one-off costs such as legal / formation costs, website design fees, logo / branding design elements etc. Although these costs are not incurred on an annual basis, they can affect your annual budget and need to be accounted for when you are creating your initial annual operating budget.

As a first step towards pricing for profitability and sustainability, download a copy of our Business Expenses Workbook and we’ll walk you through how to calculate your annual fixed business expenses.

There are also business expenses that are specifically tied to this weekend’s wedding. These are referred to as variable costs or variable business expenses. These are often more complicated to calculate. 

Variable business expenses might include:

  1. The cost of the flowers (wholesale)
  2. Sundries or hard goods such as twine, wire, ribbon, floral foam, vases and packaging elements
  3. Transportation costs such as: (i) courier fees for the flower shipment, (ii) petrol to get you to the wholesalers, (iii) parking fees for the venue, or (iv) petrol to get you to and from the drop off points for delivery
  4. Labour, if you are hiring assistance to help execute various aspects of the wedding set-up
  5. Hire fees or rental costs, if you are hiring linen, candles, signage etc. from a separate company (this is only relevant if you are paying for these out of pocket, as opposed to the wedding planner, event management company or the bride & groom themselves coordinating hire)
  6. Bank fees and processing costs (for taking payment from the client)

I’ll talk more about variable costs in our next instalment.


PS – don’t forget to grab my FREE step-by-step pricing guide. I give you my exact approach to pricing for profit.



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