Let’s talk about makin’ money!! In fact, let’s talk about how to make more money in your flower business. Here are 8 ideas to help you maximise profit in your flower business.
WHAT IS PROFIT?
First things, first, let’s all agree on a definition of “profit”, can we?
There are a few different ways to define profit, but for simplicity, I’m going to define it as follow:
Profit = the money left over after you’ve paid all the bills.
In most cases, profit is defined over a timeframe – you could define it over a week, a quarter, a year, or you can evaluate it on a per-project basis.
Let’s get into a real-world example, with the last design project you did, you’ve got bills from growers, invoices from suppliers, labour costs as well as operational costs (petrol, insurance, rent, heat, electricity, etc.).
Once you pay all those invoices, there should still be money left in your bank account (this includes after you pay yourself).
Most florists are gobsmacked to realise they’re barely breaking even. If that’s you, you’re in exactly the right place!
Getting a handle on your numbers and learning to evaluate your profitability regularly is so helpful!
I know it’s super scary and intimidating at first, but it gets easier!
Know this: getting comfortable reviewing your profitability is incredibly powerful. That's why I've put together these tips to help you maximise profit in your flower business.
This isn’t about using your numbers as an opportunity for your inner critic to come in and judge, ridicule and beat you up (more than usual).
Treat this as a science experiment. A pure fact-finding mission.
Look back at your last project. Maybe you way overspent on ingredients for the event. Or maybe you miscalculated how many freelancer hours you needed.
Don’t stress. Don’t beat yourself. Don’t dwell on what went wrong.
“When you know better, you do better.”
I have lived by this mantra for years and it has served me so well in my flower business. Beating yourself isn’t going to help you move forward. Let that sh*t go, friend. Instead, make notes of what you would do differently next time… and then do it differently.
The best way to improve your numbers is to know your numbers. Once you know your numbers, you can take action to change them, to always improve.
Now, with all that said, here are 8 ideas to maximise profit in your flower business:
IDEA #1 – REVIEW YOUR PRICING
And do it today. I spent far too long putting this one off when the reality is, there is no reason to hold off. Just go in there and update it straight away. And no, you don’t need to gradually increase your prices. Embrace the discomfort, peoples! Don’t dilly dally. (Need help? Check out this recent blog post How to Price a Bouquet.)
IDEA #2 – KNOW YOUR COSTS
When I first started, I had no idea what was involved in running a flower business. Just becoming aware of money in, money out is helpful because that increased awareness will help you measure your progress. You will feel more in control and have a more complete picture of what’s happening (rather than just hoping you have money in your account to pay for the next bill that comes in your inbox).
Your homework: how much money does it take for you to just have your business “open”? Grab a worksheet and add up your rent, insurance, website hosting, accounting software, electricity, water, internet, phone, etc. Whatever you spend money on just to keep the lights on.
IDEA #3 – SHAVE 10% OFF YOUR NEXT WHOLESALE FLOWER ORDER
I used to overbuy at the Sydney Flower Market all the time. $100 there. $200 here. It adds up so quickly and is one of the simplest ways to eat up your profitability.
Shopping for flowers is like being a kid in a candy shop. Building the discipline to stick to a budget and work through the urges to buy the things, not on your shopping list takes practice but it’s doable. It made a dramatic difference to our bottom line. So, put your list together and then cut it back by 10%. Keep shaving a little bit off here and there, push your design skills and watch your profitability increase. It’s so good!
IDEA #4 – PUSH YOUR CREATIVITY + DESIGN SKILLS FURTHER
In the shop, we used to have little design wars. We’d grab the bucket of orphan stems (the leftover from full bunches) and we’d challenge each other to make something look good with an imperfect set of ingredients.
I used to be so impressed by what we could create using three mismatched gerberas and one snapdragon. Learning to create beautiful designs with an imperfect number of stems is a valuable skill to learn and helps you push your creativity to the next level.
It makes you a better designer and teaches you how to make more money.
IDEA #5 – REVIEW YOUR DELIVERY CHARGES
Free delivery isn’t a tactic you have to adopt. If the relay services and networks can charge $12.95 for delivery, you can too.
In 2017, we sat down and did the math, adding up the total cost of just doing deliveries. Once it was all said and done, we saw that it cost us $25,000 to do deliveries PLUS, adding on the labour charges to then make the deliveries happen.
When you look at those costs on an annual basis, the numbers become very real. It is a sort of tedious job to do, but it’s so worth it.
And if you need any evidence to see that you can charge for delivery, check out one of the national wire services or relay networks.
IDEA #6 – STOP OVER-STUFFING
We have high expectations of our work. We want everything that leaves the bench to look good. It’s super tempting to add in one extra stem of this or an extra stem of that. Don’t!
Multiply that one stem x orders per year and watch the money just walk out the door.
So, it’s time to solve this problem a different way: set your prices so your designs reflect your expectations. Then you won’t ever need to worry about overstuffing designs.
IDEA #7 – CHARGING OUT YOUR STAFF
When it comes to quoting for set-up and pack down, double-check your staffing mark-ups. (Yes, like we mark up our flowers, we also mark up our staff).
I take the hourly rate we pay our staff/freelancers and multiply it by 3. That becomes your per hour charge for each staff member.
In Australia, we also have rules around staff rates for after hours and weekends. So be sure you’re keeping up with proper staffing requirements when you’re quoting per hour for the projects.
IDEA #8 – BEFORE YOU BUY THOSE CONTAINERS…
I spent so much money on stuff I never used. Honestly, I had an entire shed of containers and stuff that I might have used once.
Today, my rule is that I don’t buy the thing until I get the project. I’ve also told myself I need to give myself 7 days before I hit “buy”. This ensures I don’t waste my money on things I don’t need or won’t use.
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Want to go deeper? Want more than these 8 tips to help you maximise profit in your flower business? Learn the secrets of successful florists – sign up for my Ultimate Guide to Building a Thriving Flower Business. CLICK HERE