How to Open a Flower Shop
Whether flowers are needed for a wedding, a funeral, or as part of that perfect gift for the one you love, somewhere a florist is behind every arrangement you see. If you have an eye for detail, a creative nature, and a desire to own your own business, then you may want to consider starting a flower shop. While you’ll need some creativity and design skills, you can start up your own flower shop on a scale that feels comfortable to you, making this a type of business accessible to many entrepreneurs.
Business Overview
Flowers, specifically the types of flowers, signify a variety of feelings and emotions. However, flowers can be gifted for almost any occasion, from a prom or formal event to a gift of sympathy. Flower shops provide flowers and arrangements for a variety of uses, special occasions, and events. Florists also fill many smaller orders of bouquets and smaller arrangements that are given as gifts or for special occasions. Flower shop owners must source a variety of flowers, stock different ribbons, vases, and wraps, and have the skill and creativity to arrange flowers so that they are attractive while also managing other business tasks like marketing, customer service, and more.
Industry Summary
Though an IBIS World report, a number of factors have contributed to a decline in the floral industry from 2014 to 2019. During those five years, the florist industry declined by 1.8%, resulting in a predicted total revenue of $7 billion for 2019. The number of businesses declined by 1.9% to 32,402 businesses, and the number of employees also declined by 2.1%.
However, according to IBIS World, florist revenue is projected to swell at a CAGR of 2.8% through the end of 2023 to reach $9.0 billion, despite a 0.0% anticipated expansion in 2023, while profit will edge upward to 5.4% of revenue in 2023.
The U.S. Department of Labor reports the average median pay is $29,880 per year. And while IBIS World reports increases in revenue, the USDoL reports a decline in job outlook in the floral industry from 2021-2023.
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Industry Trends
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Sustainable and environmentally conscious practices: As the consumer market becomes more educated in the environment, they increasingly have sought out florists who practiced sustainable measures in the industry. This includes shopping locally and buying from florists who utilize local growers, reducing plastics and microplastics, reducing the use of floral foam, and the utilization of organic soils.
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The art of preserving flowers: preserving floral arrangements through drying, pressing, or even through a resin has gained popularity in recent years.
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Natural arrangements: Trends have changed the scope of the field through loose, organic arrangements in contrast to the highly designed arrangements in previous years. Florists who incorporate varieties of blooms may see more profit per petal.
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Changing color palettes: In recent years, color palettes have shifted from neutrals to bright bursts of color, which has provided florists with excellent opportunities to showcase their work through social media.
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Education opportunities: Many florists have and continue to offer workshops and classes for their customer base to learn arranging. This creates a relationship with their consumer and an interactive experience that provides connection and appreciation.
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Online and contactless ordering: Much like their large competitors (1-800-Flowers), With the increased emphasis on convenience and safety, florists have expanded their online presence and offered contactless ordering and delivery options. E-commerce solutions have advanced to allow florists to provide ordering experiences that appeal to all market sectors.
Target Market
Florist shops tend to have a large and varied target market. Adult gift-givers make up a large portion of a flower shop’s business, especially around holidays like Valentine’s Day. Other potential markets include funeral parlors and their clients, couples who are getting married, and even high schoolers who need corsages for proms.
Checklist for Starting a Flower Shop
Starting a flower shop can be an incredibly rewarding experience, but it’s important to make sure you’re prepared for the challenges ahead. Use this checklist to help get your business off on the right foot.
Step 1: Write a Business Plan
After coming up with a business idea, the next step in starting any business should be to write a business plan. Not only will a bank require you to have one to get funding, but multiple studies have shown that a business plan helps increase the odds of starting a successful business. A well-thought-out flower shop business plan will serve the entrepreneur as the road map for their business, helping them achieve their business goals.
Related: How to Write a business plan
Step 2: Name the Business
Finding the perfect business name can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.
Step 3: Form a Business Entity
A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
When deciding on which business entity is best for a flower shop, it normally comes down to the sole proprietorship and Limited Liability Company.
A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay. The corporation can be a good choice because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.
That leaves the sole proprietorship and LLC.
The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.
Related: Guide to forming your LLC
Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
Some popular LLC formation services include:
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Step 4: Select your Location
It’s generally beneficial for a flower shop to be located in higher-traffic locations, which typically equates to high rent or purchase prices.
Lease costs vary according to the store size and location. While it is possible to start up a flower shop out of a home, having a storefront in a busy location can help build awareness of the shop and make it easier for customers to stop picking up purchases.
Related: Choosing a business location
Step 5: Register for Business
The types of business licenses, permits, and registrations that will be required to start a business vary on the activities of the business in addition to where it is located.
License and permit requirements for flower shops vary depending on location. Louisiana is the only state to regulate retail florists through the Department of Agriculture & Forestry. Individual towns and cities may have additional regulations.
In addition, there will likely be some general business registrations such as a local business license, sales tax permit, resale certificate, Employer Identification Number, Occupancy Permit, and others.
After you have chosen your business entity and filed for an assumed name certificate or received your Articles of Incorporation (corporation) / Articles of Organization (LLC), you can then apply for your employer identification number or EIN. The EIN number is necessary for most businesses, even if you do not plan to hire employees for your bike shop. The EIN works like a social security number for your business and many vendors will require an EIN number to place orders. To file your EIN, visit the IRS website.
Related: Common business licenses, permits, and registrations by state
Step 6: Find Financing
Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a flower shop is another. Fortunately, the cost to start a Floral business can be relatively low, with most of the costs going towards remodeling, coolers, display cases, signage, and inventory. Funding for a new start-up can be difficult as banks typically want the borrower to have good credit and personally invest 15-25% towards the total startup costs.
Step 7: Open a Business Bank Account
Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
Many banks offer no-cost business checking accounts, so be sure to find a cost-effective option for your business. Establishing your accounts with a bank or other financial institution can help you with future business loans, as well.
You will want to do some research on your point-of-sale system or POS. Once you have opened your accounts, finding a POS that is both easy to use and easy to work with will be an important next step. Check with your financial institution to see if there are systems they have experience working with and if they will be able to assist you.
Step 8: Get your Marketing Ready
Marketing is essential to start and grow a flower shop. Many marketing efforts can be made on a small budget, such as by getting active on social media platforms like Facebook, Pinterest, and Instagram, since flowers are so visually appealing.
Other effective advertising includes creating an email marketing program to send customers reminders and discounts, especially around anniversaries and birthdays. Print and radio advertising, targeted internet ads, mailing flyers, and coupons are also effective. Marketing costs vary depending on the particular methods and the size of the marketing effort.
Related: Low-cost ideas to market a new business
Every business is going to need a logo. Make a professional logo in no time with the free logo makers from BrandCrowd and Canva.
Step 9: Obtain Business Insurance
There are several types of insurance to consider when starting a flower shop. A few of these include:
– General liability insurance is necessary to pay for medical bills and potential lawsuit expenses if a customer is injured in the store.
– Worker’s comp insurance is a must if a flower store has employees and helps to cover lost wages or medical bills if employees are injured.
– Car insurance covers a delivery vehicle in the case of an accident (for flower shops that offer deliveries). Personal auto policies often won’t cover the costs should the accident happen while being used for business purposes.
Insurance costs vary according to the value of a store’s equipment and inventory, the number of employees, and even a store’s location. Other factors, like desired coverage limits and deductibles, can also affect insurance premiums. It is best to request quotes from multiple insurance companies and carefully compare them to determine the plan that offers the best coverage at the best rates.
Step 10: Hire Employees
Depending on the size and productivity of a flower shop, employees may be needed. According to the Bureau of Labor Statistics, a floral designer makes an average of $27,200 per year. Additional expenses, such as paid time off, health insurance contributions, and worker’s compensation insurance, may be necessary if a store employs staff.
You may start as the only person working in your flower shop; however, it’s important at some point to bring on employees as retail hours are typically long, and you will need a break or time off if you are sick, or if you plan to offer flower delivery services.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
StartingYourBusiness.comHow much does it cost to start a flower shop?
Flower stores require relatively little funding to start when compared to other types of retail businesses. The cost to start a flower shop typically ranges between $10,000 to $50,000, plus the cost of real estate if it is being purchased rather than leased.
Common startup costs for a flower shop include:
– Refrigerators to extend the life of floral inventory
– Renovations to the retail space as a bright and clean space is important to customers
– Store signage
– Delivery vehicle if your shop will deliver flowers
– Initial inventory of cut flowers and balloons
– Supplies like floral tape, wire, and foam, knives, scissors, baskets, etc.
How much does a flower shop owner make?
In 2019, the floral industry was predicted to bring in total revenue of $7 billion. According to PayScale, floral managers make an average salary of $40,739 per year. BizFluent reports that, as of 2017, the typical medium-sized flower shop that was just starting produced an average income of $40,000 for its owner.
Keep in mind that many factors influence a flower shop’s profits, and as a store is in business for a longer period of time, it’s likely to bring in increased profits. Other factors affecting profits include how many staff a store employs, its geographic and physical location, whether the store offers delivery services, and the number and location of competing stores, including grocery stores and big box retailers. Wire services will affect profits too.
While they can bring in many customers, your profit margin will be much lower than selling yourself. For many, the wire services are not worth the trouble. Creating your own e-commerce website to sell your arrangements will likely be more profitable.
Establishing relationships with local wedding venues, bridal stores, wedding planners, and funeral homes can lead to significant business, increasing profits, too.
Are there grants to start a flower shop?
It’s extremely rare to find a grant to start a flower shop. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.
Legitimate federal grants can be found at Grants.gov and you can check on your state’s economic development office to see if they have any grants available.
What skills are needed to run a flower shop?
Running a flower shop doesn’t require a business degree, but the following skills and experiences help start and manage the business.
Floral design experience. Experience working in a floral shop or department can be an advantage in starting up a shop of your own. Familiarity with different types of flowers, their care, and the techniques used in arranging them can eliminate some of the learning curves when starting up a floral shop.
An eye for design. Understanding how to pair colors, why certain types of flowers work well together, and how to design an arrangement so that it looks its best are all skills that allow florists to create professional products that draw customers into a store. Design skills are also important in marketing a flower shop, especially when it comes to photographing arrangements so that they look their best.
Creativity. Whether it’s selecting a variety of flower types to stock in the shop or coming up with a new type of flower arrangement, creativity is a valuable skill to have when owning and running a flower shop.
Customer service skills. Experience and talent in working with customers – and keeping them happy – are also important in this industry. Attention to detail and the willingness to always make sure that a customer is happy can lead to positive reviews and valuable repeat customers.
Business skills. You don’t necessarily need a business degree to start a flower shop, but some business skills are definitely necessary. Flower store owners need to maintain inventory, calculate prices, market their businesses, and more. If you don’t yet have the business skills needed, taking some business classes can help prepare you for what to expect in running your business.
What is the NAICS code for a flower shop?
The NAICS code for a flower shop is 311811.
The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.
Related: What is a NAICS code?
Things to Consider Before Starting a Flower Shop
If you have a passion for floral arrangements and design, opening a flower shop may sound like an ideal business venture. But just like other types of businesses, flower shops have some risks and challenges.
One challenge of owning a flower business is that fresh flower inventory eventually spoils and dies. In retail stores, inventory sitting on the shelves takes up space and eats into the business’ working capital, but in a flower shop, too much inventory means lost money and lost products. Some types of flowers live longer than others, and properly caring for the flowers in the shop can help prolong their lives. This can be a steep learning curve, so try to find an experienced florist who can advise you or gain some experience working in a flower shop before venturing out on your own.
Certain times of the year, especially those surrounding major holidays such as Valentine’s Day and Mother’s Day, are hectic for flower shops. Other times of the year can be very slow. Finding a way to branch out into other services, such as establishing the shop as the go-to shop for local memorial services and funerals, can increase income year-round, helping a store get through those slow times. Creative marketing and specializing in particular types of flowers, such as arrangements for weddings, can also help position a flower shop well in the local community, driving sales.
Speaking of peak times during the year, florists are challenged by having trained staff to complete orders. Some will have a network of family and friends that will pitch in; however, this can be a risky strategy to rely on. It’s essential to get your product out on time and to look its best.
Since customers are often purchasing flowers for a special occasions, consider adding other gift items to generate additional upsells.
Though there are absolutely some challenges in starting a flower shop, it can also be a very rewarding and exciting venture.
Resources
American Institute of Floral Designers
Society of American Florists
