How to Start a Floral Business: Tips on Starting Money, More
When the flower shop where she worked closed, Amy McManus thought she could open her own in Canton’s Baltimore neighborhood, which sits along the city’s outer harbor. It didn’t faze her that she only had three years of retail flower experience.
“It was an opportunity,” McManus told NerdWallet. “I needed something at this time in my life that was exciting.”
McManus had no idea how to run a store. But she made a business plan for Crimson and clover floral pattern with the help of an advisor from SCORE, the SBA-backed nonprofit that offers free mentoring to small businesses. She learned on the job, constantly referring to her business plan during the first few years. She encountered frustrations and obstacles, including zoning issues and issues with a lease. But today McManus has drawn a local audience for his design work at events and weddings. The retail store is also doing well in a larger location in a newer part of town, McManus says.
Starting and running a profitable flower shop isn’t just about smelling the roses. As with many retail businesses, technology has changed the way people buy flowers. Margins can be slim on some orders, and inventory management can be difficult as flowers are perishable.
“It’s a tough business,” says Paul Goodman, president of Floral Finance Business Services in Jenks, Oklahoma. “Few people make a lot of money because it’s not big enough or not well managed.”
Still, the floral business can pay off.
You can earn a salary – including taxes and benefits – worth 10% of annual sales up to $ 500,000, Goodman told NerdWallet. For sales over half a million, add an additional 5%. On top of that, you can also earn 10% profit on the bottom line if you run your business well, he says.
So let’s say you run a store that generates $ 500,000 in annual sales, you can earn $ 50,000 in salary and $ 50,000 in profit.
A retail flower shop generates an average of $ 362,318 in annual revenue, according to the Society of American Florists, a trade group that represents growers, wholesalers and retail florists. But the majority of florists are most likely bringing in $ 200,000 or less in annual sales, Goodman says. This would add up to $ 20,000 in salary and a possible profit of $ 20,000.
A flower business doesn’t require a lot of start-up money
Getting into the floral business doesn’t necessarily require a lot of capital. That’s because you can start the business at home with a large cooler, says Goodman. You buy flowers from wholesalers. Next, you will need props including vases, ribbons, and other items such as pruning equipment. Depending on the city or state, you may also need to obtain a merchant or reseller license.
If you’re opening a storefront, however, you’ll need $ 30,000 to $ 50,000, says Goodman.
To compare financing options, NerdWallet has created a comparison tool for small business loans. We’ve evaluated lender reliability, market scope, and user experience, among other factors, and categorized them that include your income and how long you’ve been in business.
When she started operating in 2003, McManus secured a $ 60,000 Small Business Administration loan from Columbia Bank in Maryland to open her 600 square foot store. At first, she also used her credit cards to restock her flowers. “You have to buy them every week,” she says. “You don’t want to have an empty cooler because you’re a new store. Why would they come back?
Opening a store also means hiring employees. If you don’t have the experience, or just don’t feel like handling the creative aspects of the business, you would hire a designer to create the flower arrangements. Because you can buy a bouquet virtually anywhere, whether it’s at the convenience store or the supermarket, design is becoming more and more important to a business, says Goodman.
While there are no industry certification or licensing requirements, you can become a certified floral designer or an accredited member of the American Institute of Floral Designers, a trade group that oversees both certification processes. . This certification or accreditation can cost up to several thousand dollars.
Advantages and disadvantages of wire service
Most retail florists belong to at least one of the three major floral wire services: FTD, Teleflora, and BloomNet, a subsidiary of 1-800-Flowers.com. You pay a monthly fee and you may also have to pay a one-time membership fee, depending on the wire service.
Wire services facilitate orders between florists nationally and internationally. Say a Manhattan customer wants to send flowers to a friend in California. The florist in New York uses a wire service to connect with a florist in California to complete the order. Each florist receives a share of the order, the recipient florist taking a larger share. The press service also takes a small commission.
Joining a wire service can provide an additional source of income for your flower shop. But in some cases, it may not make financial sense. This is because wire services are also online marketers, taking orders directly from consumers and then filtering them to local florists.
Steven Rosenberg, owner of Superior Florist in New York City, says e-commerce platforms are slashing orders by at least 27%, leaving florists with little to no profit. As a result, his store fills very few wire service orders, he says. “I’m losing my shirt” on these orders. So, he says, many florists won’t fill them out – “I’m one of them.” Rosenberg is a member of Real Local Florists, a business group that educates florists and encourages consumers to buy local.
You have options other than wire services.
McManus, for example, works with BloomNation, a marketplace for local florists. BloomNation also provides technology tools to help florists run their business online.
The Santa Monica-based startup was founded three years ago to help local florists increase sales and stay in business, says David Daneshgar, co-founder of BloomNation.
If you register with the marketplace, which has 3,000 florists in its network, you keep 90% of sales.
Ray Le Du, florist at BloomNation and co-owner of Blue water flowers in New York, says he’s noticed a difference in business. “My slow days aren’t as slow as they used to be. I would attribute this to BloomNation’s web presence and getting orders that I might not have received before.
After operating his store for seven years, McManus moved to another location in 2010, more than doubling his space. It now employs three people.
While opening a store may not make sense to all florists, it was the right decision for McManus. The new location in Baltimore’s Roland Park is generating a lot of business, she said. And it works for them, says McManus, because “we are selling an experience.”
Resources for aspiring entrepreneurs
NerdWallet has information on saving money online legal tools for advice on the legal aspects of starting a business and for obtaining low-cost access to a lawyer.
The Society of American Florists has a business resource page for retailers. As a member, you have access to training workshops, networking events, and sales and marketing support, says Brian Walrath, SAF Membership Director.
Teleflora publishes “The Profit Minded Florist: A Financial Startup & Operating Guide for Retail Florists”. It was first published in 1987 and written by Paul Goodman. The last revision was published in 2011.