Your point of sale system can produce many management reports. The product sales report is critical in order to manage for profitability. One great thing about the report? It’s flexible. You can generate a product sales report to cover any date range, a day, a week, a month or a year.
In fact, your product sales report is one of the most important tools you have from your POS to run your flower shop with an end goal of profitability. It provides the data required to accurately forecast your buying and to staff properly. It’s easy to get from your POS system and is something you ought to rely on at least monthly if not weekly. This report gives you the information you need to manage both your cost of goods sold (COGS) and your payroll. Those are the two most important expenses to control if you want to make a decent profit.
Controlling COGS is a function of both your buying habits and how well you stick to your pricing formulas in the design process. A good product sales report won’t help with the problem of stuffing (i.e., putting too many flowers in an arrangement). It will, however, help you on the buying side to make sure you don’t buy too much product. Your product sales report is an invaluable tool to get your buying right.
Most retail florists have two types of modes: holiday and nonholiday. For nonholiday times, which make up 10.5 to 11 months of the year, your weekly sales will be amazingly level, with an occasional spike due to extra funerals, weddings or events.
Create a product sales report for several nonholiday weeks and find your particular pattern. Exclude weddings and events because you plan for them individually. You can quickly determine your fresh flowers sales for your average nonholiday week. Cut flowers and greens should not exceed 25 percent of your fresh sales. If you can stick to buying no more than 25 percent of your expected fresh sales, you should maintain good control of your COGS. Many florists do even better than 25 percent and get down to 20 percent.
Your product sales report will also tell you what your plant and gift sales are each week. You can then plan to purchase enough of those items to be fully stocked.
Your major holidays — Valentine’s Day, Administrative Professionals Week, Mother’s Day and Christmas — will show an increase in sales that vary by the holiday. It is important to know how much to expect for the whole holiday period, not just the day. It is also important to know your sales by day leading up to the holiday. This daily data will help you make sure your product will arrive on time to meet your needs.
Want to know more? Read Goodman’s extended take on the subject in the June issue of Floral Management.
Paul Goodman, MBA, CPA, PFCI, is the founder of Floral Finance Business Services based in Tulsa, Oklahoma, editor of Floral Finance and author of The Profit-Minded Florist.