In this final module, we're going to pull everything together, and make sure that by the end of the session you have a finance plan for next year that tells you who you're going to be selling to, and how much profit that mean's you'll make.
First though, we're going to look at the steps that will mean you can work towards making that profit.
1) You're going to know what your job description is, and how that benefits the customer, so you're concentrating on SELLING the flowers, not just the growing. (go back to module 1, and contact me if you're not sure about this)
2) You're going to work with the ideal customers for you. They will be the ones you are comfortable and you'll enjoy working with. (See see module 2 for suggestions)
3) You're going to know exactly what terms and conditions you are working under for each customer, so that you know what is expected of you and your customer is totally clear what they will be paying and when.
4) You're going to know exactly what your costs and expenses are, so that you can confidently set a correct price. (having worked through module 4)
5) You're going to keep all your costs to a minimum, by reducing, reusing and recycling wherever possible, and by not forgetting the hidden costs. (Module 2)
Is a loss instead of profit a disaster?
When you are first starting your business, there are lots of outgoing expenses... You are setting up your area, buying plants, and getting selling spaces and growing spaces organised. Unless you already have all the equipment lying about and your customers all lined up, then there is likely to be a lot more money going out than there is coming in.
So when you do your first budget, or tally up the finances for your first few years, you are likely to have made a loss.
Is that a disaster?
Well No... It's normal for any business.
Actually for a lot of large businesses, a loss is a tax benefit.
For us as small businesses, it usually means that we don't get to pay ourselves, and we've already talked about having a salary as a way to value ourselves and our flowers.
The way not to make a loss is to either
Take more as turnover (incomings)
Keep your expenses even lower (outgoings)
Yes, it is that simple - either take more, or spend less, is the way to profit. So if you havn’t made a profit this year, you need to sell more flowers next year. Often this just means more marketing.