1. A brief investment memorandum. Opening a flower shop can be not only a profitable business, but also a pleasant hobby. This kind of entrepreneurship is suitable for those who seek financial independence and love floristry.
What can be more wonderful than to give people joy and to be in constant contact with nature? Perhaps, in time, floral business will become for its owner a way of life. It is noticed that people, plunged into the sphere of floristry, leave it only in force majeure situations. To successfully combine art and business, we will try to tell you about the most important aspects of this case.
The purpose of the project : making a profit by selling a sought-after assortment of fresh flowers, related products, as well as providing additional services.
The main factors for the success of the color shop :
- high markup for products;
- high qualification of the personnel;
- a large assortment;
- offering a quality service to its customers;
- availability of effective methods of advertising and promotion of own products.
The amount of initial investment is 430 000 rubles.
Break-even point is reached in the second month of work.
Payback period is 6 months.
The average monthly profit of the 1st year of project implementation is 121,000 rubles.
2. Description of business, product or service
Flower shop is a profitable business that will allow you to make a significant profit with minimal investments, because no holiday or celebration can do without a bouquet.
Assortment of colors:
- carnation, cluster carnation (minimum 3 shades);
- chrysanthemums (3-4 shades);
- roses (from 10 to 15 different shades);
- bush roses (about 5 shades);
- gerbera (3-5 shades);
- tulips;
- peonies.
In addition to the flowers customary for the Russian territory, one should also offer exotic flowers brought from tropical countries:
- orchids;
- strelitzia;
- freesia;
- anemones;
- Ranunculus;
- irises;
- anthuriums.
Rare types of flowers, in contrast to those that buy every day and in large quantities, should be presented in several copies. For buyers, you can print special brochures, in which there will be a story not only about this kind of plants, but also ways of caring for it, the conditions of detention, etc.
Assortment of the offered goods:
- Cut flowers;
- Flower composition made by a florist using packaging materials, which play an important role in the flower business, because they depend on the beautiful design of bouquets;
- Souvenirs.
Characteristics of packaging materials:
- gift wrapping for flowers and floral arrangements;
- handbags from various materials;
- packing paper for every taste;
- boxes for packing floral arrangements;
- baskets for bouquets;
- ribbons, floral bows, rhinestones.
To increase the profit of your business, you can provide the following services:
- services for decoration of premises for celebrations;
- conducting master classes on floristry.
3. Description of the market
Today, the market of flower shops is quite competitive. Here, low barriers to entry and good prospects for development. Thus, in order to take its place in this niche, you need to make the most of your opportunities and find new and original ways of development. At the moment, online flower shops are becoming especially relevant. This is due to the fact that people are increasingly using the Internet to make purchases, flowers and bouquets including. Today, flower shops sell not only flowers, but also baskets with sweets, wines, gifts, decorated with flowers. Especially relevant these gifts are in pre-holiday time. In general, the period from the end of December to the middle of March can be called the most peak because of the large number of holidays in this period of time. Many flower sellers for these 3, 5 months receive more profits than for the rest of the year. Activity is also evident in May and September.
There are specific dates for the peak sale of flowers:
- September 1;
- The 14th of February;
- 7 – 9 March;
- 25 May.
The target audience
Flowers actively buy and give the widest layers of citizens. The core of the target audience is working youth aged 18-35. This group of customers can be considered the main part of the revenue generation shops: they give flowers to each other, their parents, grandparents, pay for the purchase of flowers to children during the holidays.
People buy flowers, having different purposes:
- Desire to congratulate someone on a solemn occasion;
- The desire to give a sign of attention to the opposite sex;
- Acquire a means of decorating the interior of both private homes and public spaces.
4. Sales and marketing
A few weeks before the opening of the flower shop, it is worth starting to advertise.
Ways to attract new customers:
- advertising in social networks;
- advertising in local mass media, transport advertising;
- distribution of promotional leaflets.
In developing an advertising campaign, it is important to consider the following basic nuances:
- Pay attention to branding. It is very important to choose a bright, memorable brand. It is important that the consumer is tied precisely to the name, the situation, and not to the address of the store and the personnel working in it. In addition, it is the brand that helps to inspire the buyer’s confidence, to develop loyalty to the store in it.
- The use of outdoor advertising will dramatically increase the number of spontaneous purchases, so it also needs to pay special attention.
- Internet advertising. Provided that the store will have its own page, promotion on the Internet will be just necessary. In this case, the website of the store will need to be promoted in the search engines and social networks.
- Pay attention to the issue of discount and bonus cards, gift certificates, holding of shares.
5. Production plan
The main goal of the project is to open a flower shop and maximize its profit.
Real estate market review for the selection of the optimal premises.
Requirements for placing the store:
– A separate stationary pavilion with an area of 20-40 m2 or a room of the same size on the first floor of an office building or apartment building;
– The windows and the entrance must open on the first line or be in sight from it;
– It is desirable that the building is located near the roadway and next to the stop of public transport;
– Ability to place a sign;
– The presence of a water pipe and a bathroom.
Registration of a legal entity.
Opening its own flower shop, special attention should be paid to organizational and legal issues. It is very important to have all the necessary information and work according to the law to avoid various penalties.
- Organizational and legal form – IP or LLC.
- It is more profitable for an entrepreneur to choose USN «Incomes minus expenses» 15%.
- A «Sanitary and Production Control Program» is mandatory. It is held once – after approval in Rospotrebnadzor.
- It is necessary to have contracts for deratization, disinfestation and disinfection.
- Ventilation and air conditioning systems should also be serviced, disinfection is mandatory.
- A contract for the export and disposal of solid waste is mandatory.
- There are also requirements for the internal documentation of the store. So, in the organization should be:
- magazine on accounting for overdue products;
- a register of disinfectants;
- assortment list of products sold.
- All products will need hygienic permits from SES or relevant quality certificates.
- It is worth familiarizing with the Customs Code and Rosselkhoznadzor regulations, which apply to plants.
- Please note that you do not need to receive a license to sell flowers, but you will have to get permission to trade in flowers.
- If you accept payment from customers on bank cards, then you need to open a settlement account.
- Staff recruitment;
- Supplier search;
- Advertising campaign;
- Room repair;
- Purchase of necessary furniture;
- Installation of machinery;
- Grand opening;
- Advertising campaign for the plan of annual shares;
- The current work of the flower shop.
6. Organizational structure
Staff Schedule:
- director – 1,
- seller / florist – 2,
- the courier – 1.
The total number of staff is 4 people.
Requirements for all candidates:
- active life position;
- high communicative skills;
- benevolence;
- honesty;
- discipline;
- a responsibility.
Requirements for the florist:
- good taste;
- the ability to interest the buyer;
- experience in similar positions;
| Salary fund | |||
| Staff | Salary per 1 employee (rub.) | The number of employees | Salary Total (rub.) |
| Director | 30 000 | 1 | 30 000 |
| Seller / florist | 25 000 | 2 | 50,000 |
| Courier | 15,000 | 1 | 15,000 |
| General Fund of ZP | 4 | 95,000 | |
7. Financial plan
The investment costs for the opening of this business are 430 000 rubles.
| COSTS TO BUSINESS ORGANIZATION, rub. | |
| Manufacturing of signboards and decoration of the facade | 50,000 |
| Repair (cosmetic repair) | 80,000 |
| Interior decoration | 70 000 |
| Refrigeration equipment | 100,000 |
| Thermal screen | 50,000 |
| Air conditioning | 30 000 |
| Advertising campaign | 50,000 |
| Total: | 430 000 |
The sales plan for the project is forecast taking into account the seasonality of this business. It is forecasted a gradual increase in sales in the first 3 months of the project. Despite the seasonality of this business, the sales structure is diversified in such a way that the store constantly receives profit.
Thus, this basic scenario is realistic, and the project has a reserve to increase sales in case of successful entry into the market.
Sales plan for the 1st year of the project implementation, rubles.
| Sales structure | 1 month | 2 month | 3 month | 4 month | 5 month | 6 month | |
| Cut flowers | number of sales | 50 | 80 | 160 | 100 | 100 | 100 |
| average check, rub | 700 | 700 | 700 | 700 | 700 | 700 | |
| total, rub. | 35,000 | 56,000 | 112,000 | 70 000 | 70 000 | 70 000 | |
| Flower compositions | number of sales | 80 | 120 | 200 | 150 | 160 | 150 |
| average check, rub. | 1 500 | 1 500 | 1 500 | 1 500 | 1 500 | 1 500 | |
| total, rub. | 120,000 | 180,000 | 300 000 | 225,000 | 240,000 | 225,000 | |
| Souvenirs | number of sales | 10 | 15 | 40 | 20 | 20 | 20 |
| average check, rub. | 500 | 500 | 500 | 500 | 500 | 500 | |
| total, rub. | 5,000 | 7,500 | 20,000 | 10,000 | 10,000 | 10,000 | |
| Services for decoration of premises for celebrations | number of sales | 4 | 5 | 6th | 6th | 8 | 10 |
| average check, rub | 25 000 | 25 000 | 25 000 | 25 000 | 25 000 | 25 000 | |
| total, rub. | 100,000 | 125,000 | 150,000 | 150,000 | 200 000 | 250,000 | |
| Master classes in floristry | number of sales | 0 | 0 | 0 | 1 | 0 | 0 |
| average check, rub | 40,000 | 40,000 | 40,000 | 40,000 | 40,000 | 40,000 | |
| total, rub. | 0 | 0 | 0 | 40,000 | 0 | 0 | |
| Total revenue, rub. | 260 000 | 368,500 | 582 000 | 495 000 | 520,000 | 555 000 | |
| Sales structure | 7 month | 8 month | 9 month | 10 month | 11 month | 12 month | |
| Cut flowers | number of sales | 100 | 100 | 200 | 100 | 100 | 120 |
| average check, rub | 700 | 700 | 700 | 700 | 700 | 700 | |
| total, rub. | 70 000 | 70 000 | 140 000 | 70 000 | 70 000 | 84 000 | |
| Flower compositions | number of sales | 150 | 150 | 250 | 150 | 150 | 150 |
| average check, rub. | 1 500 | 1 500 | 1 500 | 1 500 | 1 500 | 1 500 | |
| total, rub. | 225,000 | 225,000 | 375 000 | 225,000 | 225,000 | 225,000 | |
| Souvenirs | number of sales | 20 | 20 | 25 | 20 | 20 | 20 |
| average check, rub. | 500 | 500 | 500 | 500 | 500 | 500 | |
| total, rub. | 10,000 | 10,000 | 12 500 | 10,000 | 10,000 | 10,000 | |
| Services for decoration of premises for celebrations | number of sales | 10 | 12 | 10 | 8 | 6th | 6th |
| average check, rub | 25 000 | 25 000 | 25 000 | 25 000 | 25 000 | 25 000 | |
| total, rub. | 250,000 | 300 000 | 250,000 | 200 000 | 150,000 | 150,000 | |
| Master classes in floristry | number of sales | 1 | 0 | 0 | 1 | 0 | 0 |
| average check, rub | 40,000 | 40,000 | 40,000 | 40,000 | 40,000 | 40,000 | |
| total, rub. | 40,000 | 0 | 0 | 40,000 | 0 | 0 | |
| Total revenue, rub. | 595 000 | 605 000 | 777 500 | 545 000 | 455 000 | 469 000 | |
Monthly costs include both fixed and variable costs (direct costs), depending on sales volumes.
The table shows the average monthly costs.
| Permanent monthly costs, rub. | |
| Retail space for rent | 30 000 |
| Utilities | 3,000 |
| Director’s salary | 30 000 |
| Salary of the seller / florist (2 persons) | 50,000 |
| Courier salary | 15,000 |
| Advertising | 5,000 |
| Accounting (remote) | 3,000 |
| Insurance premiums (30% SOT) | 28,500 |
| Total | 164 500 |
In addition to the data given in the table above, the main cost item in monthly costs is the purchase of goods, raw materials and materials. The structure of procurement of the first year of the project is presented in the table.
Procurement structure for the 1st year of project implementation, rubles.
| Procurement structure | 1 month | 2 month | 3 month | 4 month | 5 month | 6 month |
| Flowers (realized) | 85,000 | 120 333 | 187,333 | 148,333 | 170,000 | 181 667 |
| Flowers (unrealized) | 15,000 | 21 235 | 33,059 | 26 176 | 30 000 | 32,059 |
| Flowers, total: | 100,000 | 141,569 | 220,392 | 174 510 | 200 000 | 213 725 |
| Packing | 6,000 | 9,000 | 15,000 | 11 250 | 12,000 | 11 250 |
| Souvenirs | 2 500 | 3 750 | 10,000 | 5,000 | 5,000 | 5,000 |
| Purchases, total: | 108,500 | 154 319 | 245,392 | 190 760 | 217 000 | 229,975 |
| Procurement structure | 7 month | 8 month | 9 month | 10 month | 11 month | 12 month |
| Flowers (realized) | 181 667 | 198,333 | 255 000 | 165 000 | 148,333 | 153 000 |
| Flowers (unrealized) | 32,059 | 35,000 | 45,000 | 29 118 | 26 176 | 27,000 |
| Flowers, total: | 213 725 | 233 333 | 300 000 | 194 118 | 174 510 | 180,000 |
| Packing | 11 250 | 11 250 | 18,750 | 11 250 | 11 250 | 11 250 |
| Souvenirs | 5,000 | 5,000 | 6 250 | 5,000 | 5,000 | 5,000 |
| Purchases, total: | 229,975 | 249,583 | 325,000 | 210,368 | 190 760 | 196 250 |
Thus, 15% of the purchased flowers remain unrealized and are written off for losses. The margin for flowers is 200%, the margin for souvenirs is 100%. The cost of packing is 5% of the bouquet.
Taking into account the purchase of goods, raw materials and materials, the average monthly cost is 384,500 rubles.
The financial result for the first year of activity is presented in the table. The average net profit for the first year of operation is 121,000 rubles.
| 1 month | 2 month | 3 month | 4 month | 5 month | 6 month | |
| Revenues | 260 000 | 368,500 | 582 000 | 495 000 | 520,000 | 555 000 |
| (-) Monthly costs | 273 000 | 318,819 | 409,892 | 355 260 | 381 500 | 394 475 |
| (=) Gross income | -13,000 | 49,681 | 172 108 | 139 740 | 138,500 | 160,525 |
| (-) USN taxes (income-expenses, 15%) | -1 950 | 7,452 | 25,816 | 20,961 | 20 775 | 24,079 |
| (=) Net profit | -11 050 | 42,229 | 146 292 | 118,779 | 117 725 | 136 446 |
| (=) Net income accrual basis | -11 050 | 31,179 | 177 471 | 296 250 | 413 975 | 550 421 |
| 7 month | 8 month | 9 month | 10 month | 11 month | 12 month | |
| Revenues | 595 000 | 605 000 | 777 500 | 545 000 | 455 000 | 469 000 |
| (-) Monthly costs | 394 475 | 414 083 | 489 500 | 374 868 | 355 260 | 360 750 |
| (=) Gross income | 200,525 | 190 917 | 288,000 | 170 132 | 99,740 | 108 250 |
| (-) USN taxes (income-expenses, 15%) | 30,079 | 28 638 | 43 200 | 25,520 | 14 961 | 16 238 |
| (=) Net profit | 170 446 | 162 279 | 244 800 | 144,613 | 84,779 | 92 013 |
| (=) Net income accrual basis | 720 867 | 883 146 | 1 127 946 | 1 272 558 | 1 357 338 | 1 449 350 |
With the planning horizon of 2 years, the following economic indicators can be distinguished:
Payback period is 6 months;
Discounted payback period – 6 months;
Net discounted income – 2 108 253 rubles;
The profitability index is 5.9;
The internal rate of return is 273%.
8. Risk factors
Before opening a flower shop, it is worth considering the possible risks, as well as the ways to prevent them.
The risks include:
- The fact that flowers are perishable goods. To avoid possible losses, you need to constantly monitor the market, predict demand. All this requires great knowledge and time.
- The possibility of obtaining a defective and defective product. And not always it is possible to return it. It is important to correctly draw up a contract with suppliers and choose bona fide partners who will also be interested in the timely delivery of a quality product.
- Cyclicality of the flower market and occasional demand. It is almost impossible to fight these risks directly. But you can mitigate the consequences, opening up additional opportunities for the segment. So, today in flower stalls you can find soft toys, cards, souvenirs and much more. It is possible to be engaged in registration of celebrations that at least partially will help to estimate the planned volume of profit.
Ways to prevent risks:
- Be careful, minimize risks;
- Cooperate with trusted suppliers (it is better to consult with knowledgeable people beforehand);
- Establish contacts with several suppliers at once, so that the flowers and their assortment are continuously updated;
- The assortment should be formed proceeding from monitoring of a market situation.
Suppliers, their resumes can be easily found on the Internet, but the sites do not tell the truth about their owners, so you need to be safe and check everything carefully.
