If you love the smells of fresh flowers and making flower arrangements, opening a flower shop may be the business for you. It’s not all roses as this is a tough business, but we answer questions from what we have learned by being in the flower shop business.
This site is a collection of resources and answers to common questions entrepreneurs have on how to start a flower shop. If there are questions you would like to have answered, let me know.
Six Things to do Before Opening a Flower Shop
Is Now a Good Time to Start a Flower Shop?
It’s scary when you are researching a small business and considering investing your money to get started. You have probably come across several articles saying that online shops are the future and traditional floral storefronts are going away. I don’t believe that is true and here’s why.
Successful florists are always going to be needed and supermarkets and grocery stores can’t fill all of the demand. Retail florist’s sales largely come from weddings, funerals and people looking for a special gift. Weddings and funerals are largely driven by reputation and referrals. To have a successful shop, be sure you are willing to make these critical connections. Likewise, grocery stores and supermarkets can’t fill all of the demand for a special gift. Are they competitive for low-cost, simple arrangements? Yes. Could you compete against them? Again yes, but the profit margin for these lower priced items just aren’t usually worth it in my opinion.
As we all know, there is a lot of competition in florist industry. The market is highly fragmented and made up of mainly single-location, owner operated shops. This can be a positive as it is difficult to successfully run multiple location flower shops. According to First Research, there are 13,800 flower shops in the U.S. with a total combined revenue of $4.4 billion. First Research has further data that says since 2002, the number of flower shops has declined by about 40% since 2002. The Society of American Florists predicts the number of retail florists in the US is expected to continue to drop, although the pace will slow.
Consumers in 2017 spent over $6.8 billion for fresh flowers in the United States according to Statista. While $6.8 billion is a large number, it is expected to be lower in 2018. Grocery stores and supermarkets have been taking a significant amount of market share from independent flower shops for the last 10 years. It’s hard to tell what the next 10 years will look like, but I don’t believe it will change much as supermarkets are not set up to do elaborate arrangements.
Depending on the population of your local area, there may not be room for one more shop. If you are planning to open a new shop, the key to success, is whether you can lock in the funeral homes and wedding venues. Especially in smaller markets, regardless of what you think about an existing shop’s quality of arrangements, long rooted traditions of using that town’s particular shop are extremely hard to change – no matter how good you are at arranging flowers. I am often a big fan of buying an existing florist because the name recognition.
All of these numbers should be a little concerning for someone looking at opening a flower shop. Knowing this, it’s critical that before jumping in do your research and see if your shop can survive. Do a business plan and run the numbers. Talk with other store owners in markets where you won’t be a competitor to see what it’s really like. Also, make sure you really know who your customers are, be able to profitably market to them and be able to stand out in the market to get business.
What is your Advice on Who I Should Market To?
According to the Society of American Florists, a traditional shop’s primary customer is aged 45 to 64 as they are the group that tends to give gifts of flowers more than any other group. As this market ages and is replaced by consumers in the next age brackets, a few longer-term issues arise since consumers aged 25-44 tend to purchase based on convenience and don’t often have flowers at the top of mind for gift giving. For traditional flower shops to thrive, connecting with this generation is very important.
With customer attitudes increasingly demanding convenience due to their busy schedules, consumers are expected to continue to shopping at grocery stores and supermarkets for basic flower needs. With the increasing importance on time savings, the importance of location should increasingly be necessary for a traditional florist to thrive. Many flower sales are due to impulse purchases and a good location will increase the opportunities to capitalize from these purchases.
Online sales of flowers are also expected to continue to increase with customers doing more of their shopping over the internet. With the larger wire services spending a significant portion of their budget on marketing, these services have the purchasing power to buy a significant amount of advertising in local markets. All is not lost however as the Society of American Florists did research that found over 42% of consumers went online to find a florist’s local contact information and 32% used the internet to find a local florist’s website. While online competition is significant, flower shop owners that develop a good online presence and incorporate paid advertising and search engine optimization will still be able to compete in local markets.
Flowers are largely a discretionary expense as they aren’t a necessity and that consumers tend to be more willing to spend money on flowers when they feel flush with cash. Assuming the economy stays healthy and employment strong, sales should continue to grow slightly. Should the U.S. face another recession, consumers may cut back on flower purchases.
It’s important to make sure you have a location in close proximity of high-traffic areas and also have a strong online presence. There isn’t any hard data yet, but I expect stores with a good online presence and same-day flower delivery to better acquire and keep this audience. While there are a lot of low-cost online platforms to create a website, I would suggest spending a little money to have a designer make an attractive and well thought out site, in addition to a solid shopping cart as this target demographic expects it. Websites in this range tend to run $5,000 – $10,000.
Something to consider with a floral business is that as half of a stores revenues may come from Mother’s Day. In order to thrive, you need some consistent sales that generate cash flow throughout the year to pay the bills. This consistency comes from weddings and funerals. Wedding and funeral customers should be safe from the grocery stores and supermarkets and continue to be a major source of revenue for traditional florists since customers tend to be less concerned about the price as they are about quality and setup. According to the U.S. Census Bureau, funeral and wedding floral sales were 32% of the market last year.
Before opening a retail florist, be sure you can market to these customers. I talked about it earlier, but in many markets it the long-time shop often wins out over the new shop because of their name, even if they have poor customer service and arrangements.
How Do I Market a Floral Shop?
Are there enough customers to support your business? Before you invest time, do some market research for your flower shop before sinking money and energy into opening. In other words, take time to think about who your customers will be, how much of what they will buy and when. Flower shops have two primary markets – consumers wanting to purchase flowers for aesthetics/gifts and for weddings & funerals.
To connect with younger generations to advertise a flower shop there are a few excellent and low cost resources, which will require an investment in an online presence. The two primary resources (which cost nothing except time to use) at this time are Facebook and Pinterest. Facebook is great for generating local awareness through posting of unique arrangements. Also Pinterest is heavily used by women and great for sharing photo worthy arrangements.
Starting out, budget some money to provide free arrangements to community groups, events and maybe even a farmer’s market to start getting your name in the market. Join business groups and the chamber of commerce and be active in those groups, like joining committees or helping at the meetings. Just being a member will not be enough to make the most of these groups. Be sure to visit the funeral homes, wedding venues, wedding planners and more as this can lead to a consistent revenue stream.
What are the Costs to Start a Flower Shop?
Compared to some other retail businesses, the costs to start a flower shop, aren’t as high as other businesses as there is a minimal amount of inventory and furnishings for a retail location and there isn’t much in the way of starting supplies for a flower shop to buy either. The biggest initial start-up costs to start a flower shop are typically the coolers to keep your stock fresh longer, but fortunately they don’t need replaced often. Other typical start-up costs include tables, vases, ribbons, cards, pruning equipment which are all typically minimal in cost.
If you are opening a retail location, I would expect to spend $40,000 – $50,000 to have a fully stocked store that doesn’t require extensive remodeling and a few months of working capital. These prices could be a bit lower too if you are able to buy used coolers, counters and tables. If you are opening a home-based flower shop, you could be looking at $5,000 – $15,000 depending on how diverse your offerings are.
Is It Hard to Open a Flower Shop Business?
All businesses have a certain amount of difficulty to start, but provided you are good at making floral arrangements, starting a flower shop is one of the more straightforward businesses to start. Even if you want schooling to improve your skills, training is affordable.
For starters unless you live in Louisiana, you won’t have to get a professional license. If you do live in Louisiana and in business as a cut flower dealer, wholesale florist or retail florist, visit the Department of Agriculture & Forestry to get a horticulture license
Other common start-up requirements include entity formation, name registration sales tax/trader/reseller licensing, retail occupancy and possibly local business licenses. All pretty straightforward and nominal cost and time to obtain. A great resource for state-by-state specific steps to starting a business is available at StartingYourBusiness.com.
In some areas you may need a commercial driver’s license if your business will be making deliveries. Typically this falls under the Department of Transportation in your local area.
Since there is a limited amount of liability from your product harming a customer, floral shops can be organized as a sole proprietorship, which are simple to form, but I would still recommend doing more research or talking with an attorney to see if a corporation or LLC would be beneficial to protect your personal assets.
With the “legal” stuff out of the way all that’s left is preparing the storefront, ordering equipment, devising the marketing plan and picking suppliers for inventory.
Keep in mind with all of this is that while getting started is not as difficult as in some industries, it’s also easy for new competitors to start as well. Be sure you have some key differentiators like having the best customer service, products customers want, unique advertising, etc. so you stay ahead of existing and new competitors.
My biggest tip is before going into business, be sure to write a business plan for your flower shop. While many people will write a business plan only to get the loan for a flower shop, the plan should be your roadmap so you know what you want your business to become. Once you write it, share with many business minded people to minimize any costly mistakes.
What Kind of Training Do you Need to Be a Florist?
Florists are one of the few creative and design focused jobs that don’t require a formal education. There are certificate programs for floral designers and floristry through the American Institute of Floral Designers (AIFD) and the Society of American Florists (SAF), but many people get their start learning on the job. I would also highly recommend taking a look at the many floral organizations like AIFD, SAF or one of the many state-based organizations and become a member. This is a great opportunity while in the start-up phase to meet other people who are doing what you want to do. There are great people in all of these organizations and they are very giving in their time to help new people. You will make great connections, get advice and feedback and learn from their mistakes while you are making your plans that will be well worth any investment in time and money you make.
How Much Do Flower Shop Owners Make?
A lot of people want to know if owning a flower shop is profitable. While there are a lot of variables, there are some averages we can talk about.
According to the Society of American Florists, the average retail florist business brings in just over $360,000 in sales. The amount of sales for your shop is going to vary depending on the local population, competition and ability to get people in the door.
Flower Shop Mark Up
On average, a retail flower business will mark-up cut flowers by 300%, so if the flowers used to make a bouquet of flowers costs the retailer $10, they will typically sell it for around $30. On items like vases, cards, etc they usually double those items.
Costs to Run a Flower Shop
Operationally, inventory will run between 40%-50% of sales. Above I said that shops mark up their cut flowers by 300% but gross profit margins are only 40%-50%. The reason these numbers don’t match is since flowers are perishable the have a limited shelf life and some inventory is going to go to waste. Inventory management can be the difference between a profitable business and unprofitable one. Especially with big holidays like Mother’s Day and Valentine’s Day it can be hard to estimate demand and not to over buy inventory.
The next highest expense is labor, which is usually around 20%-25% of sales. Don’t underestimate the importance of quality employees to the success of your business because ones that emphasize good customer service will keep customers coming back. Be sure to pay and treat good people well so you don’t lose them.
Flower Shop Profitability
Published numbers show after all of the other expenses, the total profit margin down to just over 4% of sales. While that sounds like a low number, this doesn’t take into account the other owner benefits that would increase the real profitability of a florist shop up more.
Where do Flower Shops Get Their Flowers?
This can be a complicated answer since not all flowers can be obtained from just one vendor. A few options include:
- Growing the flowers themselves
- Local vendors that sell in an open market
- Purchase directly from farms – this option will typically involve a contract to ensure consistent availability
- Traveling vendors that visit flower shops a couple of times per week (like the Schwan’s truck that delivers food)
- Online wholesale florists
Who are the Biggest Flower Shop Business Competitors?
When starting a flower shop or any business in general, you will typically want to focus on the direct competitors as they are typically the biggest threat, however for local florists the biggest threat is from indirect competitors – online sales and supermarkets/grocery stores.
If you are looking to open a florist shop in a market with a competitor already in place, even if you are the best at floral design, do not underestimate reputation in the community as the existing shops competitive advantage and this alone may be too much for a new shop to overcome. If you plan to offer the lowest prices as your competitive advantage, remember that an existing shop has the ability to easily lower their prices and still stay profitable and may eventually run you out of business. Also existing competitors may have better access to quality flowers as they have a track history with suppliers.
As indirect competition has greatly increased from supermarkets, grocery stores and online, the result has been a reduction in profits and volume of sales for traditional florists due to low prices and one-stop shopping. According to the US Bureau of Economic Analysis, sales from traditional flower shops have declined from about 33% to under 25% in the last decade.
Market share from online florists continue to grow due as more shopping shifts online. Currently online flower sales are estimated to be 12% of the market according to the Society of American Florists. It’s hard to tell what the future holds, but my opinion is that online sales won’t be able to take a large amount of sales from traditional storefronts because outside of customers who are driven by price, many customers purchasing flowers want a personalized gift and online competitors can’t do that as well as a retail florist. I do see the online flower shops taking more business away from supermarkets and grocery stores however.
While the traditional floral shop can benefit as the typical model has the local florist fulfilling the order, the traditional florist’s margins are greatly reduced since the wire services take a big cut of the profits. The newest trend that traditional shops need to be aware of is that online florists such as Amazon Curated Flowers Collection and others eliminate the local florist altogether and instead purchase flowers in bulk directly from the farmers (further reducing their costs of inventory) and fulfilling orders in their own facilities, thereby bypassing local shops. The impact of this model is yet to be seen, but with large corporations such as Amazon getting into the market, traditional shops need to be aware.
I believe that for traditional flower shops to thrive in the future, they need to focus more on individualized custom products and featuring unique & hard to obtain flowers. Supermarkets and online stores will focus on volume and can only offer a limited selection. It’s unlikely that many retail storefronts to be able to compete on price and convenience, so quality is likely the key for success. Also, excellent customer service will set you apart from them as well. Being different with unique products will be necessary for flower shops in the future and with the ease of online shopping for flowers, one bad customer experience will likely have them to never return to your shop.
As the competition has greatly increased from online stores and supermarkets, the storefront flower shop can still be competitive by offering the best customer service, creative floral arrangements and depth of inventory.
Take a look around the site for the other articles on starting a flower shop. If you have any questions, please contact me.