Financial expert Paul Goodman, MBA, CPA, PFCI, shared the best practices for profitable deliveries during a SAF webinar. The webinar is available to watch on-demand in SAF’s learning hub, Career Connection.
If done correctly, delivering flowers offers customers a convenience and the business a competitive advantage and extra revenue. Is your business doing deliveries profitably?
Paul Goodman, MBA, CPA, PFCI and president of Floral Finance Business Services, shared best practices for profitable deliveries Tuesday during a Society of American Florists’ webinar, “Strategies to Accelerate Deliveries.” He discussed three areas of focus to ensure that deliveries are seamless and add to your business’s bottom line.
Set Delivery Zones and Charges
To set delivery charges, closely track where you deliver and how many deliveries go to each zone. Goodman suggests getting a map of your city and plotting the next 100 deliveries. This will help identify delivery zones around your shop.
Typically, the majority of deliveries are within a five-mile radius, Goodman said. That area should fall under the standard delivery fee. For locations beyond that, charge an extra fee, Goodman said.
To determine how much to charge, consider the two costs of a delivery: vehicle costs and labor costs. In total, they determine the average cost per mile. For example, if the average cost per mile is $1.35, and the delivery is five miles away, your cost for a five-mile delivery is $6.75. Goodman recommended doubling that cost to guarantee a profit, bringing the standard delivery charge to $13.50. Any deliveries beyond the five-mile radius — as well as timed deliveries, rush deliveries and even holiday deliveries — should be charged extra, Goodman said. Done correctly, charges from deliveries can make up to 10 percent of the business’s total revenue, he said.
Track Driver Productivity
Having a right-sized staff is key to ensuring all deliveries are made as efficiently as possible. To determine if you have enough drivers, you must know how many deliveries a driver can make in a day.
To do so, track three numbers daily: the number of deliveries, the number of miles driven and the hours the driver worked.
Those numbers can be tracked using an Excel file in SAF’s Career Connection learning hub. The data will help determine who among your drivers is the most efficient by calculating the cost per delivery for each driver.
Hire Quality Drivers
Goodman recommends looking to the retired workforce when hiring drivers because they have plenty of driving experience, are cautious and probably only want part-time work.
“On all fronts, the retired workforce driver is a real winner for retail florists,” Goodman said.
During the holidays, increase hours for current part-time workers, or consider bringing on temporary drivers. There are a number of other places to find drivers, Goodman said. Reach out to off-duty firefighters, police officers and delivery companies who know the city well. Also look at organizations that are fundraising, such as churches or a high school marching band, he says.
For more detailed information on deliveries, watch the webinar on-demand in Career Connection. The webinar is free for SAF members, $14.99 for non-members.
Nicole Stempak is a contributing writer for the Society of American Florists.
