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Buy a Flower Shop: Serious Considerations
by: Karen Marinelli
You've always liked flowers and you think the idea of turning emotions into floral expressions sounds like tremendous fun. You are between careers and have been investigating business opportunities in your community. Yesterday, while perusing the real estate magazine in your county, you notice that the family owned, downtown flower shop is for sale. The ad says it's a turnkey operation. This is your lucky day. Or is it?

Let's look before we leap, OK? Here are some factors to consider:

  1. What is the current state of health of this business?

    You should be able to see the financial records and consult professional help if needed.

  2. What is the reputation of this business in the community?

    If there are negative feelings about the business in the community, you need to consider a name change and making a big show of the change in management. Factor in the cost of a face-lift on the façade of the physical facility.

  3. What assets are included in the selling price?

    If you are buying the building, equipment, coolers and inventory, you need to carefully assess the age, condition and viability of these items. For example, there may be $10,000 worth of inventory in the store, and the seller may be able to document the value by showing invoices. However, if the inventory is shop worn, out of date or not in keeping with your business plan, the value of that inventory to you may be quite a bit lower than that $10,000.

    Are you also buying the Accounts Receivables as an asset? If so, you should do some serious research into the exact state of these accounts. Many traditional florists have struggled with house accounts. They have extended credit as a matter of tradition, rather than good business sense and have found themselves in extreme cash flow trouble.

  4. What liabilities are you buying?

    You'll need to be very clear about any debt or bills you will be taking over. Be sure that you hire professional help to outline any such debt in your sales agreement. Because of seasonality of the flower business and the existence of house accounts, many retail florists have difficulty with cash flow; you should avoid any situation where you will be paying bills run up by the previous owner.

    Also, you should take time to consult with the Wholesalers that you will be buying from. Discuss your payment terms and lay the groundwork for a healthy business relationship with a reputable Wholesaler or two.

  5. What about the business name? If the name of the business is valuable in your market, you probably won't want to change the name of the business. In any case, consider a clause in the bill of sale limiting the use of the name by the previous owner in the future. This can be very sticky in the case of an owner's own name, for example "Smith Florist".

  6. Will you need to hire all new staff?

    Sometimes a previous owner chooses to stay on and work for the new owner. This can pose tremendous difficulties for all involved, so tread lightly on this territory. It's an extreme analogy, but think about the difficulties in open adoptions between birth and adoptive parents. Everyone has their own style and it can be difficult to accept change or let go of something you have worked very hard to build.

    That being said, many valued staff members at successful florists have weathered the change in ownership of their place of employment. Do make every effort to retain good people. Just be sure to be clear about your expectations so that the separation can be as painless as possible should that become necessary.

  7. What is the correct timing?

    Take the holidays into account when you plan your purchase of a flower shop. Valentine's day is the single largest day, but Christmas is more of a marathon. Mother's Day, weddings, proms, graduations and anniversaries team up to make the spring months a nice busy time. Depending upon your market, the summer can be a difficult time to make ends meet.

    Ideally, you'd take over a shop with enough time to get your feet wet before a holiday, but not with so much down time that your funds dry up before you can get going.

  8. What other opportunities exist, and at what cost?

    Here's the acid test. Take the time to sort out the options. Let's work on the assumption that you WILL own a flower shop in the next year. Take a big sheet of paper and draw a line down the center. At the top of the left column, write "Buy and Existing Flower Shop". In the Right column, write "Open a New Flower Shop". Now draw a line through the middle of the paper, so you have a top and bottom. The top is for pros and the bottom is for cons. Fill in the grid with as many items as you can figure. Ask your trusted business friends and floral professionals for help. You'll be considering such items as the finances and the marketing plan of your business. When you have completed this exercise, you should have two things. One is a good tool to help you make a decision. The second is the beginnings of a business plan.

    Whatever your decision, a business plan is essential. It is your roadmap for success and will be necessary for a business loan. It is worth the extra time at the onset of this journey to compare the options and make the best decision you can.

    About the Author Karen Marinelli is a Floral Industry Professional with nineteen years of experience in the academic, retail and wholesale sectors of the industry. She believes the common goal should be to sell more flowers to more people, more often. For information on How to Open a Flower Shop, visit http://openaflowershop.com/.

    To order flowers online, visit http://send-flowers-online.ws/.

    This article may be reprinted without permission under the following conditions:

    1. Article must be printed in its entirety.
    2. Author information and links must be printed exactly as above.

 



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