A week ago I bumped into a floral friend. As always, we were talking shop. We were both at the end of our busy season so to say that we looked a little “beaten down” was an understatement. Both of us had dark circles under our eyes, hair a little out of place, and shoulders sagging from feeling weary about the season ahead. Both lacked sleep. Tired. Yulp.
After spending some time chatting, she mentioned that after 20+ years in the wedding floral business, she was struggling with paying the bills. And that she didn’t have much to show for it. After seeing so many ups and downs, she said that this year was the worst.
If someone with her experience is still having trouble making ends meet after investing 20 years in this business, then what can we learn from this?
During these times, it’s hard to feel bullish (confident and upbeat). Given that my background is finance, I often seem to have a “bear” mentality when it comes to business and consumer confidence, though on a personal level, I think I’m more glass-half-full than the glass-half-empty type.
In business and when it comes to consumer confidence, I confess that I’m conservative and bearish all the way (a bear investor or analyst is one that is “accompanied by widespread fear and pessimism” as defined by Wikipedia. ). And because I am bearish, this is what I have to say to those who are thinking of starting a career as a floral designer or a florist (or more simply put - anyone just going into business for yourself).
Save Save Save
When it comes to your business, you better know how to save. Save for a rainy day. Save your profits on a yearly basis for future expanse or for the growing opportunities. Save now for next year’s unexpected expenses or downward sales. Save for the unknown.
Many businesses, especially floral and event designers, forget how to stay on budget. Stick with a shopping list, and buy only what is needed. I totally understand when you are in your element of design that it is always so so so easy to buy more more more. Or when there’s a great sale from your suppliers we get carried away. I say, “stop and evaluate”. Do you really need it?
What I am saying is that you have to be good at saving. Learn to buy wisely. Learn what deals are worthwhile. Learn to save for upcoming projects. Does not mean you go cheap. No No No.
In well managed companies (small or big), cash flow is crucial. Especially during tough times, those companies who have strong cash flow can weather the downs.
For Richer, For Poorer
This piece of advice is for those who haven’t started their business and are still on the fence. No matter what I say, I know many of you will jump right in but I’m going to say it anyway. If you are one of those that don’t care about making good money, working long hours, waking up early, and being enslaved to your work, then you don’t need to read this section. However, what if you do care?
For those of you who would like to have a home one day and might need money to pay for the mortgage (or your credit card bills or your college loans or even a shoe collection), who want to have a life outside of their work, and who might care if they have to give up weekends, then read on.
I am sure that many people will bash me for saying this so hold on tight… unless you are at the top top top of your game in your community, most floral designers do not make that much money in comparison to averages. Period. (Did I just burst your bubble? sorry!) (****The top of the market or top volume businesses are excluded from this conversation)
The profit margin is horrific. Horrific.
That’s why after so many years, my dear floral friend was crying on my shoulder. She’s having a hard time meeting her financial needs and feels that she doesn’t have much to show for 20 years of work in this field. I feel that way too.
Why do so many floral designers gripe that they don’t make much. It has to do with low profit margin and consumers’ expectation of what is an acceptable margin. Planners don’t get it. Editors don’t get it. Venues don’t get it. Consumers don’t get it. As a floral designer, we’ve heard people moan, “wow - flowers are so expensive!”. Sure, but that’s because they are perishable, usually imported, and are rare things. Most flowers are not common commodities like oranges, beef, water, and pork bellies that can be traded on the NYSE.
Let me continue.
Did you hear that Apple’s last quarter profit margin was over 35%? Wall Street applauded this. A 35% gross margin on a $100 item from Apple, would equal a pre-tax profit of $35.00. Wall Street and most investors of Apple did applaud the company for managing their bottom line and thus the stock jumped on trading news.
However, when it comes to wedding flowers, most average consumers would probably question if a floral designer made $35.00 per every $100 of flowers ordered. I’ll give you an example. If a boutonnière is priced out at $20.00, a floral designer should make $7.00 - right? However, most consumers probably would feel that it is too much. Not all consumers, but many. I’ve actually had many brides ask me why a single stem of flower that should be worn on the lapel should be over $5.00. (That’s another decision which I am not supposed to talk about.)
For argument’s sake, let’s look at this backwards from the cost perspective.
Let’s price something out with an APPLE 35% profit margin. Once you buy all the ingredients, you take that and multiple by 3x. For this example, let’s use this bouquet below.
Recipe and Costs
1 bunch of orange tulips at $9.00 a bunch
1 5 stem bunch of orange orchids at $10.00 a bunch
1 bunch of orange mini calla at $20.00 a bunch
1 stem of green cymbidium orchids at $22.00 a stem
1 bunch of orange Asiatic lilies at $9.50 a bunch
1 bunch of 50 cm deep orange roses at at $18.00 a bunch
1 stem of orange cymbidium orchids at $22.00
1 bolt of ribbon at $7.00 a roll for 10 yards
1 box of pins at $2.25 a box
1 1inch floral tape at $2.00 a roll
Are you ready for the costs? Total approx costs - $122. The retail should be (@ 35% margin) - $366.00. What is the market expectation for this bridal bouquet probably - $250 to $300.00.
It is because some (not all) wedding markets cannot bear to afford a $366 bouquet before delivery and tax that so many floral designers have to lower their margin. Thus most arrangements are probably being produced by floral designers with a 2x or 2.5 times mark up. If so, you might guess that after labor, overhead, rent, utilities, sales tax, trucking, liability insurance (and on and on), that a 15 to 20% overall profit margin might be obtained. (As for my own business, we average 25%, which isn’t good and isn’t bad. There’s always room for improvement and I’m working on that.)
What does this mean for a floral designer or new florist?
Well, if your profit margin is say 20%, you do 40 weddings at $3000 per wedding, then total sales equals - $120,000. Your end of year gross before taxes would be ———-
Let’s say you live in the Bay Area; this would be far below the average salary. According to Indeed.com, as of October 20, 2009, the average salary in the Bay Area is $85,000. It’s no wonder since the average one bedroom rent is around $1839/month according to rentaldata.com. So if you make $24,000 per year, you could barely make rent.
Do you see where I am going? When an average bride spends $1000 on wedding flowers, if your profit margin is 20%, you make $200. If you spend 30 hours on that project including setup, phone calls, emails, etc, you make
I once calculated how many hours I spend and it turns out that I work an average of 6 days a week, 46 weeks a year, totaling over 2700 hours per year. We do over 40 weddings per year plus I meet with 80+ clients. The average wedding client gets 60 hours of my time (doesn’t include my staff). So if a typically client spends around $4500 before tax and delivery and if my margin is 25%, then I make roughly
I’m sure you know what I’m getting at. This business is not for the faint of heart. 2700 hours a year. 60 hours per client. That’s what it takes if you want to do above average, full customized weddings in which you service the client and write customized proposals.
If your community does not have the floral business that some areas like San Francisco has, you need to do more weddings at a lower average ticket and you have to be able to get a higher margin if you want to stay in it for the long run.
Of course, money doesn’t have to matter. But I’m not talking about making millions. I am talking about making a standard of living so that you can have a good quality of life. Before you jump in, ask yourself
Your Worth Know your worth. If you’ve spent many years in this business, you know it’s tough. If you are lucky like I am, you work with great vendors. You have a wonderful selection of fresh products. You have a great talent pool of resources and designers to choose from. You have wonderful clients who understand. Not many of us floral designers are remotely this lucky and fortunate.
Yet after it’s all said and done, I kept thinking about my floral friend and I wonder, was it all worth it? 20 years and still being unable to pay the bills. Was it worth it?
And for me the answer is very simple. No matter what, there is much more to life. And as much as I love to do what I do, I know what’s important to me. And I know that it isn’t about the money. It’s not even about the respect and admiration of your peers.
It is good knowing that I just love creating beautiful weddings and working for myself. Yet, I know what my limits are. And I know that it takes sacrifice to be a success, but no matter what no sacrifice is worth it if I don’t have the things that are dear to me… my health, my hobbies (outside of flowers), my friendships, my family life, my time with Chin Chin( my baby dog),my only time, and my hopes.
Bottom line: Know what you are worth. Stand for what you need to make. Weather the storms by being a good saver. Spend wisely. Cash is king.