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Written by: Carolyn Young
Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
Edited by: David Lepeska
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on May 5, 2021
Investment range
$9,550 - $18,100
Revenue potential
$100,000 - $200,000 p.a.
Time to build
1 - 3 months
Profit potential
$30,000 - $40,000 p.a.
Industry trend
Recovering
Commitment
Full-time
Here are the most crucial considerations when you are starting your florist business:
There’s more to owning a florist shop than just arranging flowers. So, as an up-and-coming business owner, you’ll want to do an industry analysis to develop a strong sense of what’s going on in the market.
Understanding the pros and cons of selling fresh flowers can help you prepare for the highs and lows that come with it.
The US floral gifting market is expected to grow 5% annually through 2025, according to analyst ReportLinker.com.((https://www.globenewswire.com/news-release/2020/06/03/2042934/0/en/The-floral-gifting-market-in-US-is-expected-to-grow-at-a-CAGR-of-over-5-during-the-period-2020-2025.html))
The latest trends in the flower industry include:
Florists face some challenges such as:
The startup cost for a flower shop business ranges between $10,000 and $50,000. Most of this money goes towards buying the following:
| Start-up Costs | Ballpark Range | Average |
|---|---|---|
| Setting up a business name and corporation | $150 - $200 | $175 |
| Business licenses and permits | $100 - $300 | $200 |
| Insurance | $100 - $300 | $200 |
| Business cards and brochures | $200 - $300 | $250 |
| Coolers | $6,000 - $10,000 | $8,000 |
| Initial inventory and supplies | $1,000 - $2,000 | $1,500 |
| Rent | $1,000 - $2,000 | 1500 |
| Website | $1,000 - $3,000 | 2000 |
| Total | $9,550 - $18,100 | $13,825 |
The largest recurring expense for a flower shop is re-stocking the flowers, which is usually about 40-50% of sales. Other ongoing expenses worth noting include wages and delivery costs.
Most florists do about $200,000 in annual sales, and have a profit margin around 20%.
In your first year or two, you could set up an online shop and work from home, with a higher profit margin of 30%. If you bring in $100,000 in annual revenue, you’d get $30,000 in profit, assuming that 30% margin. As your brand gains recognition, sales could double to $200,000 a year. At this stage, you’d rent a commercial space and hire staff, reducing your profit margin to around 20%. With annual revenue of $200,000, you’d make a tidy profit of $40,000.
Some of the challenges you’re likely to encounter when trying to venture into the floral industry include:
You now have an overview of the industry. The next phase is to narrow your focus on fundamental principles to fine-tune your business idea further.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Your direct competitors are other floral shops in your area as well as online retailers like 1-800-flowers.com. Depending on your location, you may also compete against local department and grocery stores selling flowers.
It’s a good idea to see what your competitors are selling and at what prices. That way, you can offer unique arrangements at discount rates to gain a competitive advantage.
You should consider creating a niche for yourself by specializing in a certain aspect of your industry. This could jumpstart your word-of-mouth marketing within your niche market.
For example, you can introduce unique flower designs in unique packaging or containers. You might also want to focus on celebrations such as bridal showers, weddings, birthday parties, and other joyous occasions. Another option is to focus on funeral flower arrangements.
There isn’t a standard pricing structure for florists. As a floral designer, you should determine your markup by type of flowers, supplies needed for flower arrangement, labor, and whether or not the flowers are in season.
Most people in the floral business charge a markup of 3.5x on flowers and 2x for containers and supplies. The standard labor charge is 20% of the retail price. However, you can charge more for complex floral arrangements. Use our markup calculator to calculate your sale price and how much revenue and profit you will earn with different markup percentages.
When determining your pricing structure, be sure to keep in mind what other flower shops in your area charge. Generally, you want to set your pricing in line with the industry standards.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
You’ll need to know who to sell your flowers to before opening your shop. The target customers for a floral business are varied. Your prospects may include:
Your location may determine who your customers are. So, be sure to do some research in the neighborhood and its demographic to help you decide which flowers you should sell.
In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out a storefront. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
The best place to open a floral design business is in an area with high foot traffic, such as near a subway station or busy parking lot. If you choose a storefront, make sure it’s easy for customers to see your business. On top of that, ensure the shop’s location allows suppliers to easily deliver.
When choosing a commercial space, you may want to follow these rules of thumb:
It is also a good idea to have an online shop for customers who can’t make it to your brick-and-mortar store.
Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.
Here are some ideas for brainstorming your business name:
Discover over 520 unique florist business name ideas here. If you want your business name to include specific keywords, you can also use our florist business name generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool below. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Here are the key components of a business plan:
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to floristry.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your flower business will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
Choose Your State
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
The IRS website also offers a tax-payers checklist, and taxes can be filed online.
It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.
Securing financing is your next step and there are plenty of ways to raise capital:
Bank and SBA loans are probably the best options, other than friends and family, for funding a flower business. You might also try crowdfunding if you have an innovative concept.
Starting a flower business requires obtaining a number of licenses and permits from local, state, and federal governments.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Before you start making money you’ll need a place to keep it, and that requires opening a bank account.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your flower business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
Floral business software like IRIS Floral, FAS Pearl, and Details Flowers can help with accounting, purchasing, event organization, and project management.
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
Here are some powerful marketing strategies for your future business:
Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your flower shop meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Some signature USPs for your flower business could be:
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a flower shop, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in floristry for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in flowers. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a flower business would include:
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
You’re now ready to start making money with your flower business. You can bet there’s always a demand for flowers, whether for birthdays, weddings, anniversaries, or funerals. Among the keys to success in this industry is providing excellent customer service on top of good quality flowers. Having satisfied customers will inspire their loyalty and potentially lead to successful referrals.
With adequate preparation and a reliable supply of flowers, you should be able to get your florist business up and running in no time. You could even expand your business soon and enjoy a profitable career for years!
Yes. You can. However, you’ll need to embark on a vigorous marketing campaign to attract customers. Remember, most floral shops are located in areas with high human traffic to serve as many customers as possible. Plus, you need to offer delivery services if you operate your business from home.
In addition to flowers, consider selling greeting cards, chocolates, fragrances, home décor, and gift items. This makes your flower shop a convenient one-stop-shop for customers seeking flowers and related gifts.
Profitable flowers include roses, daisies, lilies, irises, peonies, and daffodils, among others. When selecting flowers for your shop, consider your target market and choose those in high demand.
Yes, a florist business can be a rewarding side hustle. It offers flexibility and a chance to express your creativity with floral design. However, you should consider the time needed to manage orders, source flowers, and respond to customer inquiries.
To differentiate your florist business from competitors, focus on creating a unique and memorable experience for your customers. Offer distinctive floral arrangements and designs that showcase your artistic style and creativity.
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