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  • The Advantages of being an Entrepreneur in the Floral Industry

    Feb 6, 2015

    The National Retail Federation estimates 38% of Americans will buy flowers in 2015 for Valentine’s Day spending over $2 billion dollars. This consumer demand makes Valentine’s Day the #1 retail day in the floral industry. It also results in a significant management challenge for owners of florist shops as successful performance on the day requires proper purchasing, staffing, and planning for the logistics of deliveries.

    The Advantages of being an Entrepreneur in the Floral Industry

    The National Retail Federation estimates 38% of Americans will buy flowers in 2015 for Valentine’s Day spending over $2 billion dollars. This consumer demand makes Valentine’s Day the #1 retail day in the floral industry. It also results in a significant management challenge for owners of florist shops as successful performance on the day requires proper purchasing, staffing, and planning for the logistics of deliveries.
    Florist shop ownership is one of the most challenging entrepreneurial venues in the retail sector. It is also a business model with unique components that facilitate artistic expression, revenue growth, and profitability opportunities not found in traditional retail businesses. The most significant challenge involved with owning & managing a floral business is the spectrum of business activities that need to be performed on a daily basis to be successful as a florist. An entrepreneur owning a floral business needs to manage an artistic manufacturing process, retail sales, perishable product inventory, a national distribution network, and delivery logistics successfully on a daily basis. This hybrid combination of management responsibilities is not found in any other business model in the retail sector and requires executive management that can multi-task and prioritize projects based on urgency, profitability, and customer needs.

    This challenging opportunity for entrepreneurship also provides some of the most fertile ground in the retail sector for creativity and unrestrained revenue growth based on vision & hard work. The following are some of the unique characteristics existing in the floral industry for entrepreneurs:

    1. A florist shop is one of the few business models that combine artistic expression with consistent financial remuneration. Artistically, florists can express themselves in large venues like weddings & events or within a limited budget. Materials employed artistically can range from fresh flowers to fruits & vegetables and from ribbons & accent pieces to glassware, baskets, and unique containers. Unlike most artistic business models, artistic work can be sold as a floral business owner on a daily basis.

    2. A florist shop is one of the few retail business models that can proactively build customers through an active sales effort. Most retail businesses are passive sale business models hoping a customer will walk through the door or visit a website desiring to purchase merchandise. A florist shop has the ability to actively pursue customers across a spectrum of demographic groups by employing a comprehensive sales effort that can include direct sales, telemarketing, social media, organic search, and networking. Successful florists have business to business clienteles found in the professional community (doctor & dentist offices), hospitality industry (restaurants & hotels), and corporate businesses that recognize achievement & life events with flowers & gift baskets. They also serve consumers in need of flowers for weddings, holidays, birthdays, anniversaries, special events, and bereavement. Customer retention is a function of providing quality product, excellent customer service, fair pricing, and asking for the order when appropriate. Excellent CRM software exists for the floral industry to help manage the process.

    3. A florist shop is one of the few retail business models with limited inventory risk. Traditional retail businesses have significant value tied up in inventory. A florist shop has the ability to purchase inventory based on demand and turn the inventory on a regular basis with limited risk exposure that products become dated or out of style. A florist shop also has the ability to maintain a gross profit of 60 – 70% based on their product mix as compared to the 50% commonly found in traditional retail.

    4. A florist shop has the ability to compliment their retail offering with a product mix appropriate for the demographic community they serve. There is almost no retail product that cannot be offered alongside flowers. I have observed successful florists that incorporate in-house cafes, art galleries, Hallmark shops, tuxedo rental businesses, gift shops, and photography studios into their business model.

    I am honored to be considered a national expert on the purchase and sale of floral & horticulture related businesses. I have written articles on subjects relevant to the acquisition and sale of a florist shop for Florist Magazine, Florists’ Review Magazine, Floral Management Magazine, and The Floragram, in addition to appearing as a featured speaker at a spectrum of floral industry conventions and events. I have successfully facilitated transactions in the floral industry from Cape Cod to Seattle involving growers, nurseries, wholesalers, florists, and service companies supporting the trade. I encourage entrepreneurs with an artistic orientation and good management ability to consider the floral industry as the economic opportunity is robust and business environment challenging.

    IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, and mergers & acquisitions community on subjects relevant to the purchase & sale of privately held companies and family owned businesses. IBA is recognized as one of the best business brokerage firms in the nation in terms of successfully negotiating transactions that are “win-win” in an environment of full disclosure between the parties.

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