Flower Shop Operations

Flower Shop Operations – 4 Tips for Managing Your Cash Flow

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.

Literally.

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

Listen to the full episode here

Full Episode Transcript

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Flower Shop Operations

Flower Shop Operations – 3 Tips for Increasing Profitability This Week

Let's talk flower shop operations and profitability!!! It's one of my favourite topics!

Here's the thing. Running a flower business is hard work. And, like every other business on the planet, it's really easy to not make money.

It took me a few years to really settle in and find my grove for all things flower shop operations and now it's one of my most favourite areas of floristry to teach about. It's unsexy AF, but it really does make the difference between riding the struggle bus and setting yourself up to run a thriving business.

There are three big things we did in our flower shop operations that really changed the game for us, and instead of you feeling like you need to create all your own systems + processes from scratch, staring at the blank page and just feeling so overwhelmed by the idea of having to create more processes, I wanted to distil it down into three easy actions and simple ideas to get you real results faster.

In economics, there is a guiding principle that states: 80% of the output is driven by 20% of the actions. This is called Pareto's Principle.

It definitely applies to flower shop operations and it's one of the lessons I come back to time and time again, believing that 80% of your business can be run if you get 20% of your systems sorted.

It's just a matter of making sure you know which systems are more important than others (cause y'all don't have time to do it all, right?).

Very specifically, when it comes to flower shop operations and how to use systems to increase your profitability, here are the three places I'd focus on first:

  1. Staffing
  2. Wholesale Orders
  3. Maximising Product Usage

(If you're struggling with the basics, and want to get your pricing sorted, be sure to check out these two resources (1) Flower Pricing Worksheets and (2) How to Price Flower Bouquets – YouTube Video)

Flower Shop Operations Tip 1: Smart Staffing Solutions

One of the biggest challenges (and opportunities) of living in a small town is that you don't have access to the same talent pool as in the big city. In hindsight, I now see this as such an incredible blessing because it forced us to look at our staffing totally differently.

We had to get creative with who we hired and how we staffed our flower business. We didn't have access to dozens of highly trained, experienced florists and that required that we look at our structure differently.

As we were sorting through our staffing challenges, I realised that not all tasks in a flower shop are created equal. For example, writing out card messages, processing new flowers from the market and sweeping the floor don't require special training or qualifications.

Yes, you need to train staff on your expectations and how things need to be done but with the right attitude and hiring for cultural fit, many of our day to day flower shop operation tasks can be passed along to a capable, inexperienced lovely human.

I vividly remember pausing one day, taking a little time to look at what each one of our team members was doing and seeing how disjointed it was. We had our most talented designers doing things that others could do and we had team members who were awesome at customer service stuck behind the workbench all day, not engaging with customers at all.

It all came to a head one Mother's Day (this is like when all the holes are put under the microscope). I remember sitting down and thinking, "I have to plan this differently." So we decided to shift our perspective and divide the tasks into 'front of house' and 'back of house'.

Rather than have a designer handle an order from the phone call, to ingredients selection, design and on to packaging and delivery, we broke the whole process down into smaller steps. This gave us the opportunity to get the best people on the job doing customer service and taking orders and have your best designers, designing. Then, you can set up a system for wrapping, packaging, writing cards and organising deliveries.

It's kinda like in a restaurant. The process of making a meal is broken down into stages and you have a mix of staff members, support resources, and chefs navigating a specific series of steps to make it easy for the whole team to follow. The person who takes the order from the customer isn't the same person who makes the meal and probably not the same person who cleans the kitchen.

In short, we flipped the traditional model to flower shop staffing on its side and came at it from a totally different perspective. This allowed us to hire a range of staff, fill the gaps where they needed to be filled, level up our training processes and maximise our profit.

It meant we were no longer doubling up on expensive staff at all hours of the day and we could hire more junior employees, train them up and deliver a great experience to our customers.

Tip 2: Better Wholesale Ordering Processes

When you run a flower shop it's easy to spend a lot of money on product that just ends up in the bin. It's like a long, roundabout way of taking cash out of the ATM throwing it in the trash.

Yes, we all get sucked in by the new, beautiful flowers showing up at the market each week and get tempted to buy a little bit too much of that or too much of this.

It's like the impact is x100 when you run a flower shop because you're bringing in new flowers every day and/or every other day (or at least once per week). $100 overspending with each wholesale order adds up really quickly when you're buying at this frequency.

When it comes to sorting out better wholesale ordering, I started out by creating a system for tracking product wastage (i.e. a piece of paper where we wrote down what was going in the bin).

At the end of each week, I could tally it up and see just how much wastage we were creative (and how much money was going in the trash). That one exercise compelled me to come up with a better process for ordering flowers.

What I ended up doing was, rather than staring at a blank page and coming up with a brand new wholesale order each week, I looked at what we ordered the previous week, cut down on the order depending on how much wastage we had and plan more strategically.

(I even took it so far as to write out my order and then go back and shave off 20% of the flowers, just to see how little flowers we needed to navigate the week. It's a remarkably eye-opening exercise that has a dramatic impact on your bank account.)

The results were amazing and as I did this, over the course of just a few weeks, I started to see that there really was a 'standard order' I could place with our wholesalers and then add in a few delights here and there.

This one system had a knock-on effect for so many areas of our business because it also made pricing was so much easier (no need to keep supplying new price lists to staff with all the new flowers we were getting in every week) and the designs that were going out of our shop were so much more consistent. It was a total win-win!

Tip 3: Maximising Product Usage

One of the super simple systems we put in place to help increase profitability for our flower shop operations was to create an 'orphan bucket'. As we were unpacking the cool room and cleaning up each night we'd gather the stray stems, the random one snapdragon here, the two last roses here and pull them together into a bucket.

We'd place that bucket on the workbench and whoever was starting orders first would work through that orphan bucket, using up loose stems as they worked through the pile of flower orders.

This one process really helped us maximise product usage but it also turned it into a game for all our designers. Yes, there was something to celebrate when we finished up the orphan bucket but what was even more fun was the challenge of being able to still create something lovely with 1 snapdragon and two miss-matched gerberas.

It pushes your design skills but also helps increase your profitability.

Another Awesome Shortcut: Create Floral Design Formulas

One of the best shortcuts we created in our business was to come up with "a formula" for our floral design.

Yes. You read that right.

I spent so much time spinning my wheels, second-guessing all the things and staring at the blank page (or empty workbench) thinking I had to create brand new designs from scratch every time out. I wasted so much time but it also meant we didn't have a consistent 'look' to our designs.

That experience is double stressful when you have customers standing there waiting for their order, the pressure seems like x100. Time just slows down to a molasses pace and you feel like every pair of eyes is just staring at you, right?

And then even as you're designing, trying to stick to your costings, we're all tempted to over-stuff, add in more ingredients and just keep adding in more stems because we want it to meet our expectations.

The idea of creating a flower formula is one of the easiest ways to cut through the overwhelm and make it easier to a create a consistent look. It's like being able to bridge the gap between your vision + design aesthetic and the final recipe or wholesale order you place.

I go through the process of creating flower formulas on this week's podcast episode, giving you my step by step, a how-to guide for you to take this concept and implement it in your business.

I'd love for you to take this concept, put it to work and make it your own peoples!

What you'll learn from this episode:

What a floral design formula is and the exact process to creating one for your designs

My #1 tip for scaling your design work and making it easier to train new staff

How to stop over-stuffing and set up a system to make it easier to manage profitability (with every order!)

Real-world floral design formulas and frameworks you can use in your business

Listen to the full episode here

Full Episode Transcript


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