Budgeting
Budgeting often means guesstimating what you are going to sell. However i'm hoping that what you're going to spend is now a lot more clear.
When I started out, I had very little money to spend, I was still working doing garden design, and I had £3000 in savings. I thought you might like to see my first budget from my first year. I was wildly optimistic about how many bouquets of flowers I would sell, (I actually made my most money that first year from Contracts, and Markets and party flowers). But right from the beginning I was tight with my money, so i actually didn't spend as much as this budget predicts (I did practically all the work myself, or drafted in my family for free, and I took pride in getting recycled/ swaps / freebies where i'd planned to spend money.
I ended my first year having made a turnover of £4000 from my flowers, and although I was still working my gardening and garden design jobs, my savings were intact.
See my first Budget here
Seasonality and cash flow
One of the disadvantages of our business is that it is seasonal.
The main selling season is April until the first frosts in October/ early November.
What are you going to do out of the main selling season?
Questions to ask yourself
Will you buy in from other sources? Will they be only British Flowers or from elsewhere?
Will you make wreaths to sell to the Christmas markets?
Grow dried flowers?
Propagate plants to sell?
Do a different job in the winter?
Will you sell enough flowers in the peak season to mean you can work less / not at all, in the winter?
The main problem with seasonality is that although the sales are less in the winter, there are still costs to be paid. This is where cashflow is an issue, and many a good and successful business has gone bust because of lack of cashflow. Here are some of my ideas to keep costs in the winter months as low as possible, and to ensure you get as much cash in as possible
Get staff and help seasonally, rather than all year round.
Ensure Insurances and Vehicle costs are timed to be paid in peak season.
Budget for bulbs and plants that need to be paid for in winter and save the money for them.
Ensure you keep up to date with your finances all year so that you have any taxes due available by October, so there is no financial panic on January 31st
Make sure you chase any monies owed to you, however small.
Cashflow is really important, and there will be times when there is more money going out than coming in. So it is really important to make sure that any money comes in to you as soon as it is due.
There are 3 reasons that customers don't pay on time
They can't pay (they don't have the money available)
They won't pay (they are disputing the amount, or the result)
They don't know they have to pay (have they got an invoice, when is it due?)
This is where you need good terms and conditions. Have you got them written?
Here's a link to mine for florists
If your terms and conditions are clear about what your customers should expect, you are less likely to get a "won't pay", if it is obvious about when the payment due date is, then you can chase any late payments immediately. If you take a deposit, then your customer will have proved that they do have money available.
The downloadable resource below has the questions you need to answer to write your own terms and conditions