Looking for guidance on navigating flower shop operations? You're in the right place. In this post, you'll find my four tips to help you manage your cash flow and maximise the profitability of your flower shop operations.
Don't own a flower shop? Don't stress. These four tips will help you with or without a retail space.
Are you brand new to floristry? That's OK too. No doubt, this post will pave the way and show you what matters most when it comes to setting up a flower shop and flower shop operations.
Whether you work from home, have a cute studio set-up or are navigating full-on hectic flower shop operations, having a plan or a basic framework to follow is super helpful.
Real Talk: Flower Shop Operations
The truth is, most florists get stressed AF when we talk about cash flow and managing flower shop operations.
Most humans don't wanna talk about money and most florists don't wanna look at the numbers. It's kinda like, you know you're not making enough money but you don't want to sit down and look at the numbers – it feels painful and it's like rubbing salt into a wound, right?
That's because, if you're anything like me, your brain is offering up stories about how bad it's going to be. As if sitting down and coming face to face with your finances means we'll finally need to admit "It's not working."
The truth is. You already know it's not working. Now it's time to do something about it.
The reason we put it off for so long is that we don't want to feel the shame, guilt and dread. You'll do anything you can to avoid the discomfort of sitting down and feeling nauseous, right?
Or maybe you're like so many of my Flower Boss Bootcamp students who like to stay in the story of "I'm not good at math" or "I'm not good with money."
If that's you, you're in exactly the right place.
The fact of the matter is when you make the decision to start a flower business, sorting out flower shop operations and understanding numbers is part of the game. It is your job to learn these things. That's part of what you signed up for. And the sooner you realise it's your responsibility to learn the numbers, the better off your business will be (I promise!).
I'm here to make sure it doesn't feel nearly as scary or overwhelming as it needs to be.
If you're not a numbers person, you're in the right place. If you're not good at math, you're in the right place. If you're here just to learn how to get good at managing your cash flow, you're in the right place.
Tip #1: Face the Facts
Here's the thing. The numbers don't mean anything.
Whether you're $20,000 in debt or have an extra $20,000 floating around, the numbers are just innocent characters, random numbers floating around in the stratosphere. It's our human brain that makes the numbers mean something.
And we all have these internal narratives that we tie to the numbers. We, the humans, are the ones that make the numbers mean something.
It's our internal narratives that stop us from facing the facts, from taking the time to sit down and taking charge of the situation. Making the decision to sit down and look at the numbers isn't going to change any of the facts – it's not going to make the situation any worse and, in fact, it can only get better, right?
And that's precisely what I want you to do. Embrace the discomfort. Feel the tight chest, woozy stomach, or the numbness in your shoulders and come face to face with the facts. Grab a pen + paper and simply write down the current state of the nation for your cash.
Quite literally. Don't overcomplicate things. Just taking the time to write out the current figures is one of the most empowering things you can do.
Don't put it off.
Do it now.
This blog post will still be here when you get back and you can jump right into Tip #1.
Tip #2: Get your pricing sorted
The most common reason florists aren't able to cover their expenses is because their pricing isn't sorted.
That was totally me.
For 3 years I walked around talking myself out of raising my prices. I knew I was undercharging but I was so scared of the reaction of my customers if I raised my prices.
NEWS FLASH: All the horror stories I had running around in my brain...none of them came true. Literally. None. Of. Them.
So if you're anything like me and know you should raise your prices but keep finding dumb reasons not to do it, stop it. Stop lying to yourself and have a moment of truth. Embrace the discomfort and know that most of your customers aren't paying enough attention to even see there is a price increase (And for the 1% that do, it's OK. There are lots more customers out there who want your new, premium offer.)
(If you need help understanding the right pricing models to follow, check out this YouTube video: https://youtu.be/R5-fN3vCNJM)
Tip #3: Set up a separate bank account for your taxes
It's so easy to forget about our obligations to the tax office. We start to see the money coming in and get super excited.
But I've heard so many horror stories of florists who get slammed with $30,000 tax bills. Don't do that. In fact, do your future self a favour and start planning your cash flow to account for tax obligations. (If you're an Australian florist, throw your Superannuation into this pile too.)
Cause when you run a business, the tax office will always find out about it. Always.
If you're focused on subscriptions or daily flower deliveries, once you have the second account set up, go into your banking details and sort out an auto transfer. Transfer a percentage of your weekly revenue over to that second bank account and set it up so it's done weekly. (The percentage you set is going to vary so talk to your accountant, but a good place to start is 15-20%.)
If you're focused on events and weddings, every time a client pays an invoice, go in and transfer a percentage of that payment to your tax account. Then, when your accountant does your taxes and your tax bill come up for payment, you already have the money set aside (and possibly even more than you need).
And yes, this works if you run a corporation, a partnership or are a sole trader. And yes most banks offer up a fee-free or low free second account for little to no monthly fee.
Tip #4: Track your expenses for 30 days (or more)
There's an old adage that goes something like "What gets measured gets managed."
One of the things I wish I had done sooner was to pay attention to how much money was going out the door. I spent years just mindlessly paying bills, buying stuff I didn't really need and yeah, there were some weeks I just hoped we had enough cash in the bank to cover all the invoices.
I knew I had to get my pricing sorted but the second thing I did was start to really pay attention to where I was overspending at the wholesalers and when I was buying sh*t I didn't need. For example, I used to buy all the fancy vases and containers well before I even had a booking that I might use them for. I also had a bad habit of buying too many expensive things at the wholesalers and buying all the ribbons in all the colours.
In hindsight, I realised the power came from just paying attention. Instead of telling myself, it didn't matter, I told myself to behave like an employee in my own business and I had a responsibility to pay attention.
Once I start to take charge and began to track our expenses, I noticed I paid way more attention to what I was actually buying. I started to see where all the money was going and with a few tweaks here and there I saw a major change in the $$$ that stayed in our bank account.
Let's Go Deeper: What About Setting a Minimum to Help You Manage Your Flower Shop Operations?
Setting a minimum order value can really help increase the profitability of your flower shop operations. And I think it's safe to say, the decision to set a minimum is a pretty personal decision. Every business owner has their own priorities and logistics to navigate and there are lots of details and personal preferences to take on board.
No matter what, whether you set a minimum is 100% up to you. Just because your flower bestie has a set minimum doesn't automatically mean it's right for you too.
And, because you're the CEO, you get to decide what decision-making framework you want to follow and which math formula you want to use to determine what that minimum is.
Over the years, I've learned to look at the practicalities of setting a minimum in a few different ways, giving you the tools to help you set a minimum that works for you and your flower business.
When it comes to setting a minimum and managing your cash flow, I want you to go in with your eyes wide open and feel empowered to make the best decision you can for yourself and your business.
That's why I've recorded a podcast episode diving deep into setting minimum in your flower business and passing along three different frameworks you can follow to help you determine if a minimum (and what minimum) is right for you and your flower business
Inside This Week's Podcast Episode You'll Learn:
✓ What a minimum is and why it can help you manage your cash flow
✓ The strategy behind setting a minimum and a few different pros and cans to consider
✓ Examples of minimums and how different florists use them in their business
✓ 3 different ways to calculate a minimum in your flower business