Ever wonder how your shop’s financials compare to top-performing businesses? In the May/June issue of Floral Management, floral finance expert Paul Goodman, AAF, PFCI, shares essential benchmarks to help florists measure success and steps to take control of their bottom line.
Profitability boils down to the right metrics in three key areas: cost of goods sold (COGS), payroll, and facilities expenses, Goodman says.
“I’ve studied hundreds of retail flower shops and determined that if a retail florist controls these three items, they will be profitable,” he says.
When it comes to COGS for floral arrangements (the cost of the flowers, foliage, container and supplies) expenses shouldn’t exceed 33% of the retail price. Payroll costs (including taxes and benefits) should be no more than 30% of sales if the owner is on the payroll, Goodman says. Facility expenses should not exceed 10% of sales.
But it’s not just about controlling costs — it’s about understanding where your money goes. “If payroll is too high, look to the design room,” Goodman advises. “It’s likely you’re paying too many hours of design wages for the volume the shop is selling.”
Curious how your shop measures up — and what you can do if you’re off-target? Read “How Do You Measure Up?” in the May/June issue of Floral Management for the full breakdown and practical strategies to improve your bottom line.
Amanda Jedlinsky is the senior director of content and communications for the Society of American Florists.
