Introduction

Introduction to the course and “Terms and Conditions”

Claire planning on the field.jpg

Hello, welcome to “Prices, costings and how to make a profit from your flower growing”

This course has been created by me, Claire Brown, and it draws on my 15 years of self employment in horticulture. I run a flower farm in the Surrey Hills, and before that I had a successful garden design and maintenance business. Before that, I was also in horticulture as a retail manager in garden centres, Including the RHS at Wisley. I have also spent many years teaching adults in a variety of settings, from informal workshops to colleges and universities. I enjoy working for myself, but I don't have the luxury of being able to not pay the bills each month, and I love living in one of the most expensive neighbourhoods in one of the most expensive county's in the UK.

The Course

The prices, costings and how to make a profit from your flower growing is an online distance learning course with lessons and information supported by focused tasks, video presentations, and optional one to one sessions. It is a very different way of learning for a lot of people and may take a little bit of getting used to.

The workshop is available for you to work through at your own pace. You can do it all in one (long) session, or break it up into it’s natural module sections. Some pages have questions for you to answer, and your responses can be seen by all those on the course and will be answered by Claire.

Getting the most from your course

As with most learning, the more you put in, the more you’ll get from it. You can just do the basics, read the information and complete the tasks. That should take between 20 minutes and an hour for each lesson. 

Or you can take it a step further, follow up with your own research, print off the lessons, develop your own workbook and build from the lessons to create your own plans for your business. 

The lessons will remain accessible for you so if you’re too busy to complete it immediately, or want to add to your lessons with more information, you can come back to it later. 

On a serious note

I'm very happy for you to use, reuse and annotate the learning materials produced for in this course for your own individual use. However, please respect the time, energy and experience that has gone into creating this course and don’t copy any of the content or materials for other people or for use in your own workshops. The course and all its materials are protected by copyright and remain the intellectual property of Claire Brown. You must not, under any circumstances reproduce any part of this course without our prior written permission.  Thank you!

That's enough of the Paperwork!

We're going to dive straight in, and get you fired up for this online workshop. 

So what do you call yourself? 

A big part of this course is going to be about knowing your own worth and that of your flowers, so i thought we should start at the beginning with finding out what you think about yourself.  Grab your notebook, and write down what you call yourself / say you do, when someone asks "what do you do?"  Then, go on..... Feel brave and let us all know what you say below.

Customers, who are they?

Introduction to Customers

So now we know that we're talking about the selling of our flowers, and that the growing of them (while important) isn't the activity that will make us money and profit, we need to think about the most important part of flowers as a business

' The Customers'. 

Claire showing florist customers her flowers

Claire showing florist customers her flowers

So who are your customers?

If this is the first year of selling you might be tempted to say "anyone who will buy them" but that will make it very difficult to focus on where to find them, and what to sell to them at, so the first Question we need to ask is

Retail or Wholesale?

The dictionary definitions are 

Retail

the sale of goods to the public in relatively small quantities for use or consumption rather than for resale.

Wholesale

the business of selling of goods in large quantities and at low prices, typically to be sold on by retailers at a profit.

The 3 key differences to take into account here, are

1) The Quantity of goods sold - i.e small quantities for retail, and large for wholesale, 

2) The difference in price. Basically goods are sold at a lower price wholesale, so that a retailer can add value, take into account their costs, and still sell at a profit.

3) Whether the buyer is the end user. Are they going to be the one displaying the flowers for themselves, or are they selling them on to someone, or adding value to them (making them into a display) to sell on to someone

I’ve written more about this in the Introduction to Pricing course, so please do go back to this if you didn’t complete the exercises in that section.

Retail customer expectations :

Your retail customers are the end user.

They are often the first type of customers that new flower growers have. - 

They are likely to buy flowers less regularly so will have less knowledge about them, particularly about their price and worth, they will expect you to know your pricing, and be able to tell them what they can afford.

They are going to ask more questions / need more information to make a purchase - particularly when you get past the "friends " stage.

They are often going to need "added value" items - wrapping of flower bunches, labels and cards for presentation, time spent making into a bouquet, vases and props for parties and weddings. These all need to be taken into account as well as the price of the flowers.

Wholesale customer expectations :

Wholesale customers are going to be taking your products, adding value to them, and selling them on to their customers. They are not the end users.

They are likely to have a good knowledge of the products as they will be using them regularly.

They are likely to have a good knowledge of the market price of flowers, but will want a good quality product as their reputation is at risk if they sell inferior products.

They will need goods for their clients all the time, and expect to have products available that they need regularly. 

They will expect to be able to buy all that they need for that day's customers in just a few places, so will want larger quantities at a time.

Retail V Wholesale

Whether you sell Wholesale or Retail or a mixture of both will depend on a whole variety of factors.

Here are some

Size of growing area

Undercover growing area?

Growing all year round? - or for how many months?

Do you have previous horticultural / growing experience

Do you have previous floristry / flower arranging experience

Your Location

Transport links

Storage

Your personal circumstances including which days of the week you can or want to work, and how many hours you can work each week.

I've attached a check sheet below with some of the markets you may want to choose. Have a look at what attributes you think might be important for each of them.



Local V National

Your growing conditions also dictate whether you'll be able to find a market locally, or if you need to go further afield or even nationally.

The last survey of UK customer buying habits (Which was a while ago, but it’s the only figures out there to work from), found that the British Public spent an average of £28 per adult per year on cut flowers and £8 on pot plants. Source The Flowers and Plants Assoc

Are your local customers above or below average?

If you live in a rural area, that isn't particularly wealthy, or an inner city area, the amount may be smaller.

If you live in the home counties or in the suburbs of our cities the amount is likely to be above average.

With dedicated marketing to a particular market, you can expect a 1-5% market share (in time, that won't happen overnight)

Do the figures, can you get enough money from your local retail market?

Here’s my figures as an example

  • My local village has 2828 inhabitants

  • If I can reach 1% of them, and get them to spend the average £28, then I can get £792 worth of sales.

  • If I can reach 5% of them that's £3959.2.

(So I can’t live on retail to my local village, with an average spend, but….)

If I include my 2 next nearest villages with 4290 and 268 inhabitants at 5%, that's £10340.4

So far, i've only moved 3 miles from my front door, and sold them half a bouquet.....

that was 370 items sold @£28 (there's a bit of rounding in there)

If you've got a large garden, that's only 

10 small bouquets for 37 weeks of the year or

20 small bouquets for 18 weeks of the year - 

Work out whether you can just sell to your local market or if you have to be looking further afield on the resource below

Can your local retail market support your business?

Spend per head

Retail bouquet at the end of May

Retail bouquet at the end of May

The Spend per head is the amount each customer spends with you on each transaction.

If a retail customer buys a bunch of a single variety = £5-£10

If a retail customer buys a market style bouquet = £15-£25

If a retail customer buys a wrapped gift bouquet = £35-£75

If a wholesale customer (e.g florist) buys several buckets of flowers = £50-£100 

if a retail customer buys several buckets of flowers = £100-£200

If a customer wants flowers for a party or wedding = £200-£2000(or more)

The ideal customer spends a good amount per transaction, and comes back for repeat transactions.

What’s the average that your customers spend with you?


Back in the 1990’s when I worked for Homebase, my first Garden centre management role was at the Portsmouth store. This was a Category C store (the smallest category ) but the Garden centre was a category B. The category rating mattered a huge amount to me, because it was what my bonus was based on, and as i’d just bought my first house at this time, every penny counted. The category was calculated on how much each customer spent - spend per head, and so we tried every trick in the book to make sure that all of our customers spent as much on our garden centre products as possible.

  • We made sure there were "pick up “ lines on every checkout end.

  • We were vigilant on all our special offer displays to make sure they were never empty, and always looked great.

  • We offered great customer service, and I went to great lengths every week to make sure all the staff were informed about all our new lines, so they could suggest extra goods to go with what was already selected. (Known as add on sales) .

  • We made sure we never had “out of stocks” in our dry goods lines (how many chemicals did we sell for the garden back then :( )

  • and our topping up and “pulling forward” of goods to make sure our displays were always full and inviting was an art form.

I use a lot of these tricks now to encourage my customers to spend more.

Which of these retail “tricks “ might work for you

Your ideal customer

Ideal Customers for you

If you completed the Retail V Wholesale spreadsheet , you may already know about who you may be wanting to sell to this year.  But this next section is going to be about your ideal customer, so we can know about the prices and costs of selling to them. Please note, who your customer is may change over time, but it's important you come back to this exercise each time it does.

Summer bouquet.jpg

Who is you ideal customer?

if you don't know the answer, you can't know how many customers you need, what you should sell them, or at what price points, and you don't know where to find them.

A generalisation here isn't any good, you need a build a picture in your head of who it is, (if you've already got customers) or who might be your ideal customers.

i'll give you 3 examples

My ideal retail customer is Mrs Simons, (made up name, but i am thinking of a particular customer) She is a lady who had always loved having flowers, but didn’t know much about them or how to arrange them. Her personal circumstances now mean she has more time to spend on crafts, and the wherewithal to come to workshops and flower clubs as well as buying flowers regularly to arrange herself. She’s in her 50’s with Children left home, and drives a mid sized vehicle, which she can fit buckets of flowers in the back seat.

My ideal wholesale client is Dawn, She's got a lovely boutique florists shop in a village about 25 minutes away. She is a skilled florist and loves flowers and plants herself. She lives near her florist shop, and drives a mini, which she can cram an awful lot of flowers into each week.

My ideal wedding customer is Emily, her mum lives in my local village, and she’s having a big party in the back garden, and getting married at a registry office with just close family. She’s got an aunt who is helping to do the party table arrangements, who’s savvy about flower arranging, but happy to work with whatever she’s given. Emily and her Fiancé are both keen on organic and sustainability, and just want to make sure that the bridal flowers don’t clash with the bridesmaids dress colour, but they have no particular colour theme.

  • An ideal customer won't make you stressed

  • You'll enjoy working with them, and look forward to the next opportunity.

  • You won't be worried if you see their name on your phone.

  • You'll know them well enough that you'll be able to look at what you're growing and think "Dawn will like that"

  • They'll pay on time

Your exercise is to think about your ideal clients, - if you are going to sell to more than one type of customer, then do this exercise with each. There is a downloadable resource to print off below


What will your ideal customer want to buy?

picking lemon balm.jpg

If you've got in mind an ideal customer, then it makes it a lot easier to market to them. You know where they will be, who their friends are (recommendations are a wonderful currency in 2019) and what they will want to buy. 

You will also know their budgets and price points. This is a really important trick that a lot of small businesses miss. 

They work out what they want to sell, rather than what their customer wants to buy.

Examples are (yes, these are stereotypes, please excuse that for illustration purposes!)

The busy housewife just wants a bunch of flowers for a vase for when friends visit - She often buys from supermarkets where she spends £5-£10, - if you present her with a bunch that is £15 that is beyond her budget.


The retired lady is having her NAFAS friends for lunch, She wants a selection of flowers she can make up herself for a table centre. If you offer her a ready made bouquet, or bunch of a single variety, that won’t fulfil her brief.
The Gentleman who wants to spoil his wife on a special birthday, the bouquet he bought last year was £40, so he wants to spend more, and make it really special this year.

If you don't offer them a product for their wishes, then they won't buy from you. But that means that they aren't your ideal customer.

Go back to your ideal customer and work out what they will want to buy. If you sell other products (or want to) work out who the ideal customers for those will be

Would you want a customer that didn't fit into the definition of being 'ideal'

Costs of sales V Expenses

Today we're going to start to think about Costs and Expenses, and it's a biggy.


In my experience, very few business take into account All their expenses when thinking about pricing. But when you're small and new, and just setting up,  if you don't know exactly what counts, you can make big mistakes that very quickly mean that any hope of making a profit vanishes.

So what's the different between a Cost and an Expense.?

Cost is short for Cost of Sale.  This is something that has to be bought in to allow your product (flowers) be sold
An Expense, is an item that is needed to run the business.  


For UK Business accounting purposes and tax, they are both taken together as Allowable business expenses

HMRC (Her Majesty's Revenue and Customs) have very clear notes about what is to be taken into account whether you are a sole trader or a limited company on their website here  their information and advice is presented in plain english, and is easy to read, so do have a quick read through (and it will help you with the next 2 sections)

The majority of people following this course will be Self employed Sole Traders, which is how my business is currently set up (I have been a limited company in the past) So please do double check if you are a limited company because some expenses are slightly different. 

 (please note, if you are not in the UK,  please check your local authority)

Your Cost of sales are all the things that you have to buy to be able to sell.

If you want to grow a plant, you have to buy a seed, 

If you want to pick flowers, you will have to pay for labour to get them picked (yes, even if you pick them, you will need to account for your time and labour)

If you want a plant to have grown well you will need compost / fertiliser / water

Before you move onto the next section, spend 5 minutes listing all the things that you you think you need to buy to be able to sell

How many cost of sales items can you see in this picture?

How many cost of sales items can you see in this picture?

So what did you get on your list?

Here's what i divide my cost of sales list into

  • Bulbs, Spring bulbs, Narcissus, Tulips, Alliums, Anemones and Ranunculus, plus summer Dahlias and Gladioli. These can often be large numbers and high costs, and need to be ordered in January and July

  • Seeds - The 2nd year I grew flowers I used 18 different seed companies, which all involved postage costs, now thankfully there are a couple of wholesale companies that do larger numbers of varieties suitable for cut flower growing

  • Plants - Shrubs, herbs and perennials that i’m not growing from seeds

  • Flowers - For anyone who sells retail you may need to buy in from other suppliers at pinch points in the year, these are a cost of sales.

  • Floristry sundries - Buckets, scissors, vases, paper or tissue floral wrap, wires and tapes, gift cards

  • Small tools - secateurs, trugs, hoes, forks, wheelbarrows, seed trays, pots

  • Material purchases - Compost, netting, environmesh, vermiculite

  • Salary and contractors - help with floristry or farming or deliveries or admin and accounts in whatever form


Do you know the prices of them all? - Take the Quiz and test yourself. Print off the sheet, and guesstimate the prices, then go online or to your receipts and properly look them all up. How correct were you? or far out? More than 10% difference could mean all your profit disappears. 


Prices may change for some things around the country and later in the course we'll also look at other ways to save money.

Expenses

Expenses are Money spent or cost incurred in an organization's efforts to generate revenue,

Capital expenses are usually larger items that are needed to set up a business, or expand it when it's going.  Examples for those of us growing and selling flowers are

  • Polytunnels or glasshouses

  • Land

  • Sales buildings (even if it’s just a garden shed)

  • Storage

  • Delivery vehicles

  • Mowers and power equipment

If you are using a lot  items that are in this category, then it may be best for you to set up your business as a limited company. This is the limit of advice that i'm able to give on this subject, please do check with an accountant.

Other expenses, which may be one offs or ongoing expenses are

  • Insurance (Public liability is a must, Employers liability if it’s more than just you)

  • Rent, Utility bills and Security

  • Advertising, including website costs, photography, free samples

  • Computer and software, (Don’t forget your web hosting, dropbox, etc)

  • Accomadation and Subsistence, (going to a FFTF conference - look up what you can claim as expenses)

  • Bank, credit card and PayPal fees

  • Rates and water

  • Telephone (don’t forget to work out your percentage for personal use)

  • Travel costs or Vehicle running costs (Either the bills for your vehicle or a flat rate mileage)

  • Stationary - Diary, paper, pens

  • Working from home expenses HMRC guidelines here

  • Legal professional fees (any lawyers/ coaches/ designers come here)

  • Training costs - Be careful what counts here, CPD for a current business is valid, training to do something in a new isn’t.

  • Safety equipment and branded work wear. Clothing branded with your company name that you can't wear outside the workplace for you and your staff, is an allowable expense.




Doing it yourself or hiring in help

One of the biggest costs for any company in almost any line of business is Staff / Labour / Wages. When you are first working for yourself, you have little if any money coming in to the business, so you often can't hire in additional help. 

Team working together to get the Dahlias planted

Team working together to get the Dahlias planted


However sometimes doing it all yourself is a false economy

things to think about 

  • Could you earn more per hour (doing something that pays you) than the person you are paying?

  • Would it take you far longer to do that task than a contractor?

Example 1) when i first started my garden consultation business, i had 15 hours per week when my son was in childcare that i was paying for. I needed to work for 7 of those hours to cover his Nursery, 1 to cover my weekly expenses, and if I worked 12 or more i made a nice amount of money and could contribute a small amount to the home. I wanted time with my son when i was at home, so i was trying hard to clean up the house each morning after taking William to nursery before i went to clients, - but that was taking 1/2 an hour a day. So I paid a cleaner (from my after tax monies in this instance) so that i could work 2 extra hours a week. Her hourly rate was £10, mine was £25, so I gained £30



Example 2) My contract says that i keep my field cared for, even the areas I don’t use. I have a low power mower, so if we don’t mow every 2 weeks the grass gets too thick for it to cope with. It takes 3 hours minimum to mow. 3x £7.50 (minimum wage2018) x 13 (every 2 weeks from April-October) = £292.50. If I use a contractor with a tractor and  topper, they need to come in twice in the season, it takes them 2 hours @£40 = £160 -  saving £132.50.

The rest of the time, you are going to have to rely on you. So it's a great investment in your company to keep both your mental and physical health in top shape. 

What things help you to keep in the best possible physical and mental shape?

  • Eating well

  • Going on holiday every year

  • Taking regular exercise

  • Not over - doing it physically, or mentally

    What’s your method for keeping in good shape? I have an allotment which my husband and I grow in a different way to the farm, and it’s out place to retreat to. It also means we have lovely fresh vegetables all year round, and has a wonderful community atmosphere.

Allotment.JPG

Let us know what your method for keeping yourself (and so therefore your ability to run your business) in the best possible shape






Paying yourself

Claire with bucket of sweet peas.jpg

You may be flower farming for many reasons, and not all of them will mean that you need to be taking out a salary from your business. However in this lesson I want you to work out what you should be paying yourself.

There’s a saying that "A self-employed person is someone who will work 80 hours for themselves to prevent them working 40 hours for someone else" but as we've already discussed, if you are your business, you need to keep yourself in good health, and valuing yourself is one way of making sure that you keep wanting to do what you do.

How much are you worth?

Minimum wage in 2019 in the UK for all those over 24 is £8.21 per hour (this changes each April)

If you’ve been in paid employment before, what did you earn per hour in your last paid job?

(You may have been salaried, so do work it out)

This year, while flower farming, how many hours did you do on average each week ? ( Do need to take into account doing your admin and marketing) If you are starting this year, how many hours have you planned to do each week?

What should you be paying yourself as a minimum per month?

= £8.21 x number of average hours per week multiplied by 52, divided by 12.

If you're working on your flowers a couple of days a week, that figure should be just over £500

If you're working on your flowers a normal office week 35hours that should be £1,137.50

If you are working all daylight hours on the field and......... well you work it out.

if you've worked in a paid job at more than minimum wage, work out that rate as well.

NO I AM NOT SAYING IF YOU DONT PAY YOURSELF THAT AMOUNT YOU HAVE FAILED!!!

Apart from thinking that no-one would employ me any more!, I am self employed because

  • I can choose the hours i work

  • I can choose the customers i want to work with and tell them the hours i want to work

  • It means i don't have to have paid childcare (and havn't had apart from holiday clubs that my son Wanted to go to since he started school)

  • I can work longer hours in the summer, and less in the winter

  • Which means i can take time off at Christmas and half terms and when my sales are naturally low (the weeks round bank holidays are naturally lower sales periods i've discovered - Hurrah)

But I want to know that I am not doing this for nothing, It isn't a hobby, it's a hard work job, and so my way of valuing myself is to ensure that even from the beginning I have paid myself a monthly "Salary"

It automatically comes from my business account to my personal account every month on the 1st.

Sometimes (rarely actually as it's very precious to me that i pay myself, but it does happen) the business "needs" that money urgently, so i pay it back into the business as a loan, and make sure i earn some more to be able to pay it back. But i make sure that there is a standing order that transfers the money each month, and that is wonderful at clearing the mind and making sure there is enough money coming in to pay my staff, my bills, and me (in that order) at the end of each month.

How much are you going to pay yourself? - even if it's a couple of hundred pounds each month, I recommend setting up that standing order to ensure you get the money not the business