So, you're thinking about buying a flower business. But you're not really sure how to buy a flower business or what the benefits of buying a flower business are? I've gotcha covered.
I want to share three things I wish I knew before we bought our flower shop.
What are you actually buying, when you buy a flower business?
Like for reals, what do you actually "get'? Well, most apparent, you get the supplies and materials from that business – things like the sink, a cool room, buckets, and all the flowering things (technically referred to as the assets of the business). Maybe there's a delivery van, some uniforms, a social media following, a phone number and a website.
The specifics vary from flower business to flower business but the shop fit-out and physical assets are just the beginning of what you're buying. So much of what you're actually buying isn't visible to the human eye.
The real value of a flower business sits in its systems, processes, and relationships. This is referred to as Goodwill. And it often has a juicy value associated with it, possibly something like $40,000, $80,000 or $200,000.
In essence, the whole point of Goodwill is that you should, no matter your level of expertise or experience, be able to open the door (literally or figuratively) and be able to turn over the same volume the previous owner turned over – all without the previous owner being there.
Goodwill moves with the business and isn't something that stays with the previous owner. So, if you buy a flower shop and the handover date is on a Friday. You, the new owner, should be able to generate the same revenue and profit as the previous owner in a similar trading window.
Yes, this whole Goodwill thing is pretty nebulous and it's super easy for people who are selling a business to pay lip service and say "Yeah, yeah yeah. It's all there."
This is where I want to step in and share three things I wish I had known before I jumped into buying a flower business.
I Wish I Had Known Better: How to Buy a Flower Business
When we bought the flower shop, I wish I had known way more about what to ask the previous owner.
In the end, we took on the shop with a handful of text messages and one email. Thank goodness for the handful of staff we inherited, who knew enough to keep us on track for the first while, while we figured out how the shiz this whole flowering + business situation was supposed to go.
When it comes to thinking about how to buy a flower business, here's three things I wish I had known before I jumped into the deep end.
#1 Documented Operations + Systems
The more systems and processes that have been documented, the better. And no, you don't want an old dot-matrix printer document. You want the most recent, up to date systems (including COVID operations plan).
The goal is for you to have access to a complete 'How To Guide' to running the business exactly as the previous owner ran things. Yes, you're going to make changes and improvements but this is your place to start and a safety net when things get hectic.
#2 Marketing + Sales Processes
At the end of the day, one of the most important things you're buying is the systems that come with consistent orders and enquiries. If these are based on a best guess or relationships with the seller, that's a giant red flag.
The biggest benefit to buying an existing flower business is that you don't have to reinvent the wheel when it comes to marketing + sales. This includes social media plans, website guides, advertising programs and sales scripts.
If this isn't clearly mapped out, proceed with caution. (If you're looking for quick tips and more marketing ideas, be sure to follow me on Instagram @littlebirdbloom. I'm showing up every week, passing along super helpful tips and teaching florists how to build better businesses.)
#3 Wholesale + Customer Relationships.
One of the most unexpected wins from buying the flower business was the established relationships with wholesalers. This saved my bacon on more than one occasion and makes your job 8000 times easier.
At the end of the day, your flower business success is directly linked to your wholesaler relationships and having these squared away is invaluable. Better yet, have the previous owner do a formal introduction and handover to set you up for a seamless transition.
The same goes for high-value clients and regular customers. Prepare a script for you and the previous owner, align your stories and celebrate the transition so you can continue to build great relationships with these customers.
Enlist Help to Navigate the Process
I am so grateful I threw myself in the deep end and bought the shop...but I also know there are heaps of questions that come up through the process.
Do lots of research. You won't regret it. (Still, to this day, I jump online and look to see what shops are for sale. It's so fun to see what's listed and explore the possibilities.)
When it comes to all the ins and outs, the who, what where, why and how to buy a flower business, definitely enlist the help of a financial planner or accountant. You'll probably also need a lawyer to help you review the contracts and logistics.
And, be sure to know your financial risks and the ins and outs of your obligations.
Go in with eyes wide open and do your best to not get sucked into the pretty shop layouts, cool decor and fancy design stuff. At the end of the day, it's all the unsexy things that are going to help you build a profitable, thriving flower business.
Know too, particularly in today's world, you don't need a physical retail space to be successful.
More and more designers are building successful, hugely profitable flower businesses without a physical retail shop space. (PS – if you need help getting shiz sorted out online, check out this blog post: 4 Google Adwords Tips for Florists)
If owning a physical retail shop is your dream, go for it. If not, that's awesome too. You do you, boo.