Introduction

Introduction to the course and “Terms and Conditions”

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 17 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. I’ve also been in in horticulture as a retail manager in garden centres, including the RHS at Wisley. I have 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 counties in the UK.

The Course

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 its natural module sections. Some pages have questions for you to answer, and there are also regular zoom sessions to answer your questions, - please email me to have your questions included in the next `zoom call.

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 check sheets, 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 notes 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, or what you say you do, when someone asks "what do you do?"  Then, go on..... Feel brave and let us all know what you say in the comments

Zoom Calls and recordings

During the Late Winter / Spring , we’ll be doing a series of Zoom calls to answer your questions and highlight some of the points from the course.

Here’s where to start, - Who should your customers be?

We then talked about the “non sexy” but will effect your profit, subject of of cost of sales, and expenses. - How to make sure they’re all included, and tips for making them as low as possible

recording of our talk about Pricing your products, here we cover small weddings, gift bouquets and market bouquets

The recordings of Pricing your products and Cashflow is king are below

Introduction to me, and my business

Spring bucket of flowers

Video introduction to me

Would you change your job description that you wrote down now? How are you going to "Big Yourself Up"

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.

Claire showing florist customers her flowers

' The Customers' 

So who are your customers for your flowers?

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 your customers, and at what price to sell to them, 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 or 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 are 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

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 = £150-£300

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 excellent 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. 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: your ideal customer may change over time, but it's important you come back to this exercise each time it does.

Who is your ideal customer?

if you don't know the answer, you can't know how many customers you need, what you should sell to 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 has 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, in 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 come up 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?

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) 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.

TASK

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 in to be able to sell your end product

• 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

TASK

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?

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 - anyone who sells retail 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.

• Workshop cost of sales - I separate this one off, so that I have a clear idea of the costs, which include refreshments, staff help, flowers either bought in or grown by us, plus tools and sundries needed specifically for workshops.

Do you know the prices of them all?

TASK

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. All of these things need to be taken into account when pricing your flowers.

Expenses

Expenses are Money Spent or cost incurred in an organisation'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 of 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 essential, Employers liability if it’s more than just you)

• Accountancy fees, either for your accountant or book keeper, or an online accounting programme like Quickbooks or Sage

• Rent, Utility bills (Water, gas, electric) and Security

• Advertising, including website costs, photography, free samples, business cards

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

• Accommodation and Subsistence, (going to a Flower growers’ 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)

• Printing, Postage and 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.

Expenses can get expensive very quickly…. and all of these things need to be paid for by selling your flowers. It’s easy to be seduced by spending more money than you NEED to when you are setting up your business, but keeping a clear view of what needs to be spent each year, - and how much that means you need to bring in turnover is the aim of this course.

If you don’t yet have a system set up to record expenses, then here are the spreadsheet headings that I used for the first 10 years of my self employment.

Expenses are also going to need to be taken into account when pricing up. If your expenses over the year are £6000, then each month you will have to take £500 , or each week £125 or a set price for each item that you sell - depending on the number each year, in addition to your costs of sales- which include labour for your time to ensure you have everything paid for.

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

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£8.21 (minimum wage 2019) x 13 (every 2 weeks from April-October) = £320.19. If I use a contractor with a tractor and  topper, they need to come in twice in the season, it takes them 2 hours @£45 = £180 -  saving £140.19.”

Investing in Yourself

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 our place to retreat to. It also means we have lovely fresh vegetables all year round, and has a wonderful community atmosphere.

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

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 ? ( you 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

Keeping records of expenses

Stereotype for managing money

What's your system for managing your finances?

Up until 4 years ago (i.e for the first 10 years of being self-employed) I used Excel spreadsheets to keep a track of my finances. - The headings i used are on this spreadsheet for you to download and use if you wish

When my son was little, I used to do a babysitting swap with a friend. 1 night a month I got a date night with my husband, and another night a month I got to sit in my friends kitchen listening out for their little ones (they never woke) and doing my finances.  Win-Win.

I’d take with me

• details of anyone I had to invoice - in my diary - or any monies i’d got in any other way - sheet 1

• details of all the expenses i’d paid out - any receipts and my credit card bill - sheet 2

• Then i’d check all the ins, and out’s against my bank record - sheet 3

• Anything that didn’t appear on there was entered into my cash record

As my son’s got older, and been in school for longer hours, I've dedicated Mondays to my admin and marketing.

I now use Quickbooks for accounting. It costs me less than £15 a month, but means that I can easily keep doing my own finances, and my tax return even though my business is now larger. 

I did try at one point using some admin help, but i found that i actually needed to know my financial position in order to keep me motivated on my marketing  (that's a nice way of saying, "not enough money coming in, work harder, market more") So I was doing some of the work again, which was a waste of resources.

I've found that the times i've got behind on my finances and tracking my costs and expenses are when i've not got a system set up. I now have a box for receipts, and once a month i file them into a folder that has a sleeve for each month. I keep a weekly check via Quickbooks on my costs and expenses (i now buy everything possible via my business debit card through my account), and every few months, I do a reconciliation - which just means matching the receipts with what's listed in Quickbooks. It's at this point that i add in those other "hidden expenses"  - see next section

As well as Quickbooks there are other online accounting resources - Wave, Sage, and Xero are some.

Hidden Expenses and counting everything

Hidden expenses

I've found over the last 14 years that although I keep a pretty good track of what's going on in terms of costs, there are hidden expenses, often cash items, or things that you already have in your possession that then get used for business that often get missed out on, and so i thought i'd list them here so you can be aware and look out for them

Postage - the odd stamp here or there  (this is my worst one)

Car parking - been to see a client?, - that odd 50p or £1 soon adds up

Tea and coffee and cakes for Tours and talks - yes you are entitled to claim for the flour that you used in that cake. I now have a jar in my office into which I put all those kind of receipts, and if I have time i’ll highlight or tick the items I bought.

The single plant you picked up at the garden centre

The £1 shop item that your friend/ mum / volunteer saw and thought of you!

How much are your costs and expenses per year

We've now worked out all the things that we can call costs and expenses. Some of you will be thinking, - well I won't be making any money this year then, but expenses are good because - they are tax free.

If you are employed, then you get a salary, and it gets taxed, and then if you get perks of the job, like a company car, some childcare, telephone, uniform then they get taxed as well.

If you are a sole trader, There are just 2 figures to put in your tax return if you use the simplified version. The amount of money that comes in (turnover/ income) and the amount of money that goes out (allowable expenses). 

You get taxed, on the amount that is left, and then All the rest of the money is for you to do what you want with. 

• Salary for work you’ve done (drawings)

• Invest in the business( to make it grow) or

• Give yourself a bonus

All of these are technically Profit, (with traditional accounting and Ltd companies it is slightly different, ask your accountant) But I'm working towards the 3rd one. If i've paid myself at a minimum rate for the work that i've done, and i've put in some extra to allow my business to grow, - when can i pay myself a bonus.

What you also need to take into account, and we’ll be talking a lot more about this in Module 4, is that your expenses need to be taken into account in all the items that you sell.

If your Expenses are £12,000 a year, then they are £1000 a month, this means that you’ll need to divide that amount between the sales you make that month as well as taking into account the cost of sales, and your time to process the order.

How to keep your costs low, Reduce, reuse, recycle.

Do you know this Character? He was great on the Reduce, reuse and recycle theme.

Costs and Expenses was a big section, there were lots of things to think about. One of the key things is that a business can be very successful, but if it has too many costs, then it’s cashflow can get into trouble and the business can fail

Today we're going to be more creative, and work on thinking about how we can keep our costs low.

There are so many things we could spend our money on.  Most flower farmers are keen gardeners too, which  means purchases can be difficult to resist, but we're going to look at how expenses can be reduced without compromising our businesses

We're going to talk about

• Reduce, reuse, recycle

• Hire or buy

• Is it really needed?

Reduce, Reuse, Recycle

When I started my flower farm 7 years ago, I didn't have money to invest. There was no “savings” just the money I was earning as a gardener, that was over and above my monthly family commitments.

I got a loan from the bank of Dad for my polytunnel deposit, and financed the rest over the year. My first year budget showed me running out of money by April, and not making any until September. I thought i'd need to use credit cards and a small loan between those points, but actually as I was setting things up, I used Reduce, Reuse and Recycle as my mantra, and I never actually ran out of money.

So how did I do it?

I asked everyone I knew and quite a few besides for the things I needed.

Items I've sourced for free over the years are:

Pots - my local garden centre recycles them

Pallets - no need for expensive wood for beds or compost bins

Hoses - I've replaced the cheap ones now with professional ones, but in the first year they really helped

Greenhouses - 3 of them, just needing a few new panes of glass

A kitchen or 3 - which means I've now a lovely set up in the barn for workspace and cupboards (Try your local housing association, I found one that were changing to a new design and were just about to tip the remaining carcasses and work tops from the old design. )

Manure - lots of it, either brought to me or I borrowed a trailer to go and collect it

Mesh Metal fencing e.g Heras  - so useful for keeping out deer and growing sweet peas up

Plants - I was a garden designer before being a flower farmer, and many of my clients were very happy for me to divide their plants for them and for me to take the excess.

Foliage - I can't keep up with demand on my field, but the locals love me pruning their gardens.

Gardening equipment - many many different items - seed trays, potting benches, etc - ask the local estate agents for anyone downsizing and find out if they want help clearing out their sheds and greenhouses?

Water collectors - waterbutts, compost bins and large containers are often things people decide they don't have room for and would like to get taken away.

Where to look for these things

• Ask all your friends

• Ask all your current clients

• Ask your neighbours

• Ask your local garden society or U3A, or NAFAS group (you could offer to give them a talk or a tour to get them on your side)

• Freegle / Freecycle groups (websites where people give away unwanted items including plants)

• Local Facebook groups

Write yourself a list of all the things you'd like this year, and then ask the world, and see how many you get. What's the worst that can happen?, People can say no!

Hiring rather than buying.

When you start your business it may seem obvious that you need to buy equipment, but sometimes things are only needed occasionally. 

• You mow a garden regularly, but a field that isn't being used, just needs topping (removal of seed heads) twice a year.

• A hredder may be needed 3 or 4 times

• A rotavator may be needed when you start, but not necessarily every year.

Unless you,  or someone you can borrow from, already have the equipment, you can hire items for a day or week. This is a lot cheaper, and also you will not need additional security and insurance all year round.

Look up the prices of hiring, so that you're aware of what they may cost you.

Collaboration

One of my first collaborations with a florist and photographer

Working on your own can be quite lonely, so one way that I've found to save money, enhance your business, and keep you sane, is to find plenty of business "friends"

These are people that you can either

• Share work with: You work for them, and they do an equivalent amount of time or job for you

• Share experiences with : You both learn from each others mistake (hopefully halving the amount you make and the money you loose from them!)

• Have a moan with : If you take my no cost, low cost marketing masterclass, you’ll find you should only ever be positive about your business in public whatever is happening. But with business friends, you can bitch about the customer from hell you should have never taken on, and they’ll sympathise and remind you to only take on ideal customers next time!

Being British we are often reticent to ask for help....... BUT we have a wonderful product that is thought of as a luxury, and unless you have sold every single one of your stems, you will always have something to buy help with.

People to look out for who may be good collaborators

• Photographers

• Florists

• Cake makers

• Gardeners

• Tree surgeons

• Community garden members

• Caterers

• Local farmers

• Copywriters

• Local craftspeople

As with the ideal customer, find those who aren’t going to stress you out, value you and the product you grow and sell, and have the same values and work ethic as you. Make sure that you value them too, and the relationship will be a long lasting and mutually beneficial one.

Taxes, the taxman and do you need an accountant

Accountants

If you are a limited company, you will need to employ an accountant.

If  you are a sole trader / self employed but the thought of having to deal with anything financial brings you out in hives, then you need to collaborate with someone who has those skills, or employ an accountant.

Bookkeeping

If you are scared of doing your own bookkeeping,  because you've never done it before, but really feel you want to have these skills , then hire an accountant to talk you through what information you need, and how to collate it. HMRC also offers good free introductory courses on bookkeeping for the self employed, or again collaborate with someone who has those skills. You can then do your own bookkeeping throughout the year and get an account to submit your tax return or....

DIY Tax return

If you are interested in your finances, and can work your way round a spreadsheet, then HMRC have made it much easier in the last few years to file your tax return on line without an accountant. Use an online programme like Quickbooks , Sage or Xero or a free programme like Wave, to get your incomings and outgoings calculated, and then do your tax return yourself online.

What are you selling this year? and who too?

Today we're going to concentrate on customers groups.

We'll look at 

common expenses and costs involved with selling to each group of clients, 

giving you more confidence with the "why" you're charging what you are, so that you can explain why your prices are at that level to those that want to buy.

For each section, please spend time answering the questions on the downloadable resources, this will enable you to see if your pricing is correct, and will also form a reference document of FAQs, useful if you will have other staff to selling to these customers as well

If you are never ever going to sell to that type of  customer, you have my permission to leave out that section.

Local area gift bouquets

Gift bouquets are often where people start, putting together  a lovely mixture of flowers from the garden.

The dictionary definition of a bouquet is:

"An attractively arranged bunch of flowers, especially one presented as a gift"

So before you can work out your costings, here's the series of questions you need to ask yourself.

1. Are you selling by the number of stems, or by the price of the flowers?

2. Will you only be using flowers you've grown or will you be buying in?

3. How long will you spend picking the flowers, conditioning them, and making them up?

4. How will you be presenting the bouquet?

5. Will you be delivering the bouquet?

6. How will customers place their order with you and pay for it?

7. How much of my expenses will be assigned to each bouquet.

8. What profit do i want to make?

Let's take you through each of those questions in more detail

1. If you are making a 30 stems bouquet, will it contain any flower that's on the field, or only those of a certain value? For example, will you include higher value roses if you have them? What proportion of the bouquet will be flowers and what fillers / foliage? . If you are selling by the price of the flowers, which  price are you using? your retail price, your wholesale price, or your wholesalers price? if it's a mixture of these you may be losing out.

2. Although the flowers you grow should be being sold at at least the price of the wholesalers, but if you have to buy in flowers there will be delivery / postage / or mileage/time/pickup costs. So if you only use your prices, the moment you have to buy in you may be losing out. You also have to bear in mind that if you pick from your field, if something isn't of saleable quality, you won't pick it, but with bought in flowers you may need to overbuy, so that you have more flowers than you need in case of any breakages.

3. How much do you need to pay yourself, or your member of staff if they are making it. If it takes 15 minutes to pick the flowers, and 15 minutes to make and wrap it (even when you're experienced) you need to include 30 minutes of someone's time. What if it takes longer than that? What hourly rate are you going to use - Minimum wage?, Higher living wage? A contractors wage? Similar to an Accountant?

4. How will you be presenting the bouquet. There's a big difference in price between a rubber band and a sheet of newspaper, and a cellophane wrapped hand tied in a tissue bed in a gift bag, with a business card and a gift tag. probably £2-£3 difference on each bouquet. However you plan to wrap it, ensure that you've taken everything into account, and add it into the price.

5. How will you be delivering the bouquet? and more importantly when? - if it's on your way home from the field, there's a huge difference in price cost to "by eleven a.m to the town 20 miles from you" If you are including delivery in your price, you need to state the time, or charge an additional amount for a specified delivery time

6. How will customers tell you they want to buy a bouquet? Is your website set up to take credit card payments and tell you the minute an order comes in - if so take into account PayPal / stripe / credit card charges. If they need to phone you or email you, have you taken into account the time you need to spend taking the order or getting back to them to confirm it? Will you have to send them an invoice? or wait for a  cheque to clear? Will you need cash on delivery? What if they're not in.?

7. Providing you account for all the above things, then you will break even. Now you need to take into account your additional expenses. What proportion of them will you assign to each bouquet? Will your expenses be evenly spread across the year? will you assign more to some products than others?

8. How much profit do you want to make on top? 20% ? 50%? 100%? - you may just want to even things up to the next price point, when you're starting out.

It’s difficult to think about all of these things on their own, so here’s an example of me making one of my gift bouquets, and then i’ll take you through the pricing below

For most of my gift bouquets, i’m working on 35-39 stems of flowers and foliage and I work out my wholesale cost for them.

here’s how I make up the mix

6 Focal flowers @ 80p average (here Dahlias)

19 Secondary flowers @ 50p average (here Sweet Williams, Cosmos, Acidanthera, Statice)

5 Spires / Air @ 60p average (here Antirrhinum)

5-9 Pieces of Foliage @ 40p average (here Aster, Physocarpus, Eucalyptus)

Which gives me a usual cost of £20-£21 per bouquet.

It takes me 15 minutes to pick the bouquet flowers, and 15 minutes to make and wrap the bouquet, and I like to cost my time at £20 per hour, - so £10

The floristry costs are £2.79 for the vase, 10p for paper and tissue wrap and the raffia, the bag is 69p, and the business card and tag that I add are 10p, so cost for floristry is £3.68

The vast majority of the customers buying bouquets will pay online via my website, so I also have to take into account Paypal / Stripe payments. Stripe is cheaper at 89p for this payment, but some customers pay by PayPal, so I have to allow for £1.97 in my calculations.

So i’ve now got to £21 + £10 + £3.68 + £1.97 = £36.65

It would be tempting to sell this lovely bouquet at this price, because after all you’ve taken into account all your costs. BUT

that’s just the cost price, which should have taken into account all your “Cost of sales” but what about all your expenses for the year? What about your profit?

I sell this bouquet at £49, and I choose the flowers that will go in it. If my customers could tell me what to use, or what colours (apart from an occasional can it have some “x” in it) then i’d have to charge at least £10 more.

Now it’s your turn, - use the worksheet below to work out your prices.

Market or Market style flowers

These market flowers are a lower priced bouquet, and the trick to making sure you can sell these at a profit is to have lots of inexpensive filler flowers, and not as many focals.

These are going to be made up to sell at Farm shops, or at market stalls, or as a lower priced item to sell from the farm gate. The key to making these profitable is to make them to a formula, quickly and simply, you are unlikely to be able to make a profit if you make these using florist quality bought in flowers in wraps

Questions you need to be asking yourself

1. What is the minimum number of these that you will be making at a time - and the maximum

2. How long will you spend picking the flowers, conditioning them, and making them up?

3. How will you be presenting the bouquet?

4. Will you be delivering the bouquet? Individually or in one Job lot to a shop?

5. How will customers place their order with you and pay for it?

6. What profit do i want to make?

Here’s how we make them up and then i’ll take you through the pricing.

So the key point about these lower priced bouquets is that they have less focal flowers, and more of the less expensive filler/ secondary flowers and foliage.

I work out my pricing as follows

Focal Flowers x 1 @80p

Spire x 3 @ 50p

Secondary flowers x 6 @ 40p

Foliage x 9 @ 30p

total = £7.40

plus 10p for paper wrap and tie = £7.50

I usually make a minimum of 6 at a time. Maximum 20

6 bouquets = 120(ish) stems will take 45 mins to pick

20 bouquets = 380 (ish) stems will take 2 hours to pick

6 bouquets can be made up by one person in 40 mins

20 bouquets can be made up by 2 people together in 40mins

Weddings

Weddings

There are 3 types of weddings that flower growers get involved with 

• Fully Bespoke floristry

• Buckets and bouquets

• DIY flowers

People can assume that as soon as weddings are mentioned, the price goes up. but is that fair?

These things need to be taken into account

• Time spent on consultations / quotes / explanations / site visits

• The need for perfect flowers, second best won't do for a wedding day

• The time and date are immovable

Considering just the bride's bouquet, so often, the number of stems may be the same as for a gift bouquet but the price is different because:

• A higher rate of wastage needs to be accounted for to achieve perfection

• There will be a higher proportion of luxury flowers, the Roses, Peonies, Dahlias and Hydrangeas etc.

• Your Time is focused on just one customer, the bouquet is bespoke

• You will have already spent time in preparations e.g sourcing specialty ribbons that you don't have in stock

• You will need to have a back up plan to be able to provide the brides flowers if anything goes wrong

Before you can work out your costings for a wedding quote, here's the series of questions you need to ask yourself.

1. Are you working to precise flowers types, a general colour scheme or whatever's flowering?

2. Will you only be using flowers you've grown or will you be buying in?

3. How long will you have spent picking the flowers, conditioning them, and making them up?

4. Have you had to get in additional help?

5. How will you be presenting the bouquet? To the same place as the rest of the wedding flowers?

6. Will you be delivering the flowers to the venue and picking them up afterwards?

7. Will you have to do any floristry on site?

8. What vases / props / accessories will i need and will i need to hire or buy them? Whose are they after the wedding, yours of the bride's?

9. What tools and equipment will i need, and is that different from your every day items?

10. What proportion of your expenses will you need to cover with this wedding?

11. What profit do i want to make?

When I make a normal gift bouquet, i'll have it in my diary that i'll need to make it at some point in the day, but it will normally be fitted in around the other jobs that i'm doing, and will be delivered on the way home. For a  wedding bouquet, I have an immovable deadline as to when it will be collected or delivered. This means I block out a complete section of time from my day for that particular bouquet, and arrange the rest of the jobs around it. 

So here’s how i’d plan my costings for

1) A set of DIY wedding buckets

This video is of me putting together a set of 2 wedding boxes (it’s been put in 3 buckets not to squash some of the flowers)

I’ll need to add into my prices

Initial email contact

Consultation (for just DIY buckets, I wouldn’t normally do any in person consultation, they are invited to the farm on an open day)

Picking flowers

Conditioning and collationg them

I put 80 stems of flowers in a bucket, and the buckets cost £75. I make sure that I put in a mixture of focal flowers, secondary flowers, spires and filler. I need to make sure that I get the mix right, as using too many focal flowers will ensure that I don’t make a good profit.

So in 80 stems, there would be

8 Focal flowers @ average 80p cost (Note this will not allow for Roses to be used!) = £6.40

12 Spires @ average 60p £7.20

24 secondary flowers @ average 50p £12

36 fillers @ average 40p £14.4

total =£40

It will take me 30 minutes to pick and condition, and another 15 minutes to collate the bucket. = £15

I’ll take into account that one in 4 buckets don’t make it back to me (most people recycle them, but not all of them come back) = £1

i’ll have spent 30 minutes contacting them via my bridal email system / sending invoices / seeing them in a group at an open day = £10

So total costs = £40+£15+£1+£10 = £66

Profit on one bucket = £9 and that’s not taking into account any of my expenses.

BUT I will make a lot more if I add in additional buckets (picking / conditioning /collating costs are lower) and get orders for added value floristry, like Bridal bouquets and buttonholes.

2) A DIY bouquets and buckets wedding

Lets take the example of a 4 bucket DIY wedding with a Bridal bouquet, a Bridesmaid bouquet and 5 buttonholes.

This would need 1/2 hour of planning to work out which flowers i’d need to use, in addition to the time spent on the emails / invoices etc- (the single bucket would be done while I was walking round the field!) = £10 + £10

I’d use 4 times the single bucket figures for the flowers, i.e Wholesale price = 4 x £40 so £160

I’d pick all the flowers together, so instead of taking 1/2 hour to pick 80 stems it would take me 1 1/2 hours to pick 400 stems = £30 plus collation time of half an hour = £10 so £40 in total.

I will make up the Bridal bouquet with more focal flowers including Roses or Peonies or Dahlias, but to the same theme as the buckets,

9 Focal flowers @ £1.80 cost (will allow for Roses to be used!) = £16.20

5 Spires @ average 60p £3.00

9 secondary flowers @ average 50p £4.50

11 fillers @ average 40p £4.40

Wholesale cost of flowers = £28.10

Also cost of ribbon / floristry materials = £10

And the bridesmaid bouquet along the same lines, but less focal flowers = £20.40

I’ve got 5 buttonholes to make, so i’ll use 2 focal flowers for each of those, but i’ll probably use side stems, / seed heads / foliage that are waste from collating the buckets

Cost = 5 x £3.60 = £18

I will allow one hour to make the Bridal bouquet, and 1 hour to do the 5 buttonholes and the bridesmaid bouquet. i’ll also allow 1/2 hour to get them packaged and presented = £50

So

Time allocation @ £20 p/h =

1 hour for planning, 2 hours for picking and collating, 2 1/2 hours for making = £110

Wholesale cost of the flowers and sundries = buckets + bouquets + buttonholes = £236.50

total costs = £346.50

Wedding prices 4 x £75, = £300, plus £105 for bridal bouquet, £85 for Bridesmaid and £10 per buttonholes = £500

Which means I can cover £100 of my expenses, and make £53.50 profit

Florists

Florists order going off in an estate car.

Florists

There are 2 types of Florists that are likely to want your lovely British Flowers,

• Retail florists who have a bricks and mortar shop. These will be buying “on spec” in the hope that a great range on display will increase their range and sales

• Event florists who have a customer already lined up and need specific flowers for a set date.

Each have separate considerations on the selling front but are likely to pose the same questions on the pricing up front. Before you speak to a florist think about the next series of questions.

1. What's your minimum wholesale order ? is it the number of stems or the total value of the order?

2. Will you help florists select, or will they have to pick from a list?

3. Will you let florists see round your field, or will they choose from what's already picked in buckets?

4. Do you deliver? If so how far, and what's your delivery charge? When can they pick up?

5.  Out of hours service?

Let's look at each of those in more detail

1) Florists normally have to buy in a "wrap" of 10, 20 or 50 flowers. Do you want to sell in similar multiples so you can shift higher numbers in one transaction? Or do you want to be able to sell individual stems? For delivery the larger wholesalers need a minimum order of over £250, do you want to specify a minimum order or are you happy for florists to come and buy a few stems at a time?

2) Do you want florists to be able to pick from a list, or are you willing to help them choose flowers to a theme or colour scheme or budget? Which will take more time - a list needs constant updating, but choosing also takes hands on time and judgement.

3) On the same theme will you spend time with florists to look round the field and pick with them - bearing in mind that these flowers won't then be conditioned, or do you want them to buy from what is already cut and go?  (I never let florists do this as i've found it takes too much time, - my Ideal customers trust me to have already found the goodies for them and have picked and conditioned them ready to go)

4) How far away will you deliver? Does it depend on the order size? When will you deliver?  On the way home/ first thing/ precisely when they want? What's your deliver charge, - a milage fee plus minimum wage charge Or free within a specified radius/ postcode? - and if so where are you going to build that into your costs?

5) What about if they want flowers early in the morning or late at night? Will that mean additional work? 

My florists price lists are worked out to give excellent quality flowers at Wholesale prices.

To do that I need to know a lot about

• The Price that it has cost to produce that flowers

• The Price that the market will bear (What other examples of similar flowers will be selling at