Are you looking to purchase a flower shop?
Whether you are looking forward to getting started in the floral industry or you’re looking to expand, buying a flower shop carries with it a lot of advantages over starting from scratch.
Buying a flower shop saves you the struggle of a new business: building costs, hiring capable staff, acquiring equipment, and building your reputation. All it takes is ensuring that the shop you’re buying is worth your investment. Here are a few things you need to look into when buying a flower shop!
You have a creative passion and love for flowers, you dream of owning and operating a flower shop.
Your dream can be a reality! What other career choices can be as rewarding than being a flower shop owner and opening a flower shop? How many times have we heard people say, “I wish I owned a flower shop.”
There are tons of nostalgic when it comes to being a flower shop owner. Using your creativity to sell everlasting emotions with flowers and surrounded by natures beauty on daily basis is priceless. Have you pondered taking the leap into the floral industry as a business owner? Go For It!
If you have come across a neighborhood flower shop that is for sale, even better! There are important key factors to look for when buying a flower shop. Let’s review the benefits and 8 tips to consider when buying a flower shop.
Benefits Of Buying A Flower Shop
- Less Up Front Costs
- Easy Turn Around Time
- Established Reputation
- Continuous Cash Flow
- Great SEO
- Guidance from current owner
- Trained Staff
Why buy a flower shop versus a start-up?.
If you are a fairly new floral designer or do not have any experience in this area, buying would be very beneficial. When I bought Stacy B’s (that’s the name of the first flower shop we acquired) the existing staff taught me everything at first and stayed on with me 6 months to help. She owned the shop for a few years before me, so it was a nice established shop. We do flowers for all occasions with funerals being one of the most profitable events. If you decide to buy a flower shop and your shop is known for doing funerals then be prepared to do funeral flowers. Buying something already established makes it easier in the sense that many choices have been made for you because what the shop has always offered can continue.
Floral Business Relationships
Knowing the shop’s current flower providers, and how economic the relationship has been between them is very important. You can also see if you can find better options and deals around. You also need to check if the shop is in a wire service and if they are still paying for the hardware of the service. You can opt-out of the service if you wish, too, once you acquire it.
You need to decide if that works for you, though. If you can’t stand doing funeral work or whatever it might be, then you might want to look into the option of starting up a shop so that it’s custom to you and what you want to offer. This is where having a well thought out business model comes into play! Take the time to think about your shop’s business model and stick to that. It will help you not be a stressed out mess! When you are dealing with the public, it’s a whole new ball game where saying ‘yes’ to everything will exhaust you and make you want to run away. I do not want that for you because it can be so rewarding owning a flower shop!
Whats Included In Purchase Price?
To run a flower shop, equipment, inventory and supplies are needed. Find out what is actually included in the purchase price. Look over the condition of equipment to see if it will need to be replaced sooner than later.
- Customer Data Base
- Delivery Vehicle
- Current POS & Website Software
Note: Does the purchase price include House Accounts (Accounts Receivable) take a look at these and see what is outstanding.
What Debt Are You Buying?
Take into consideration all the acquired debt when purchasing an existing shop. It is good to know what you will be responsible for once you take over ownership of flower shop.
- Are suppliers owed money?
- Are utilities up to date?
- Are Government and State Taxes up to date?
- Are there any liens on the business?
General Floral Business
In the end, a flower shop is a business, so you need to look into the profitability of the shop before delving into the specifics.
There’s a lot of business jargon that might get thrown at you, but basically, you need to look into the assets and liabilities that you get with the quoted price, from the equipment to the accounts receivable.
Sometimes, some shops might be valued higher because of goodwill or intangible assets of the business (eg. reputation and branding). You should absolutely ask to see their work, so you can see if it’s worth the asking price.
Flower Shops With Wire Services
Some flower shops participate with wire services. If this is the case for the flower shop you are purchasing, establish whether or not the hardware of the wire service has been paid off.
- Wire service hardware includes computer servers, printers, receipt printers and cash drawers.
- Is the shop you are planning on purchasing in a contract with a wire service?
- If you wish to continue to participate with said wire service, see whether you will resume payments on hardware or if the loan should be paid off before you take over.
Note: Not all existing flower shops for sale still owe balances on wire service hardware, if they do not, then you can just resume the monthly payments due if you wish to continue the wire service.
Flower Shop Equipment
Now, let’s get into the nitty-gritty of the shop and see if it is indeed the flower shop that you’ve been looking to work on.
A flower shop and its flowers thrive on great and reliable equipment, thus you should check up on its facilities. Check if they are still in good working condition and if they will be for the foreseeable future. Coolers, most especially, play a big part in the flower shop business, so you shouldn’t cut corners and make sure the one provided in the shop is a definite asset and not a liability to be replaced.
Some equipment and supplies might not have aged well, so you should take a look at those which might need to be replaced. It might be a frustrating buy if you can’t have the shop up and running right when you purchase it because of these hindrances. You can negotiate with the owner to even get them fixed it up for the purchase.
Flower Shop Name & Domain Name
Will you have full rights to flower shop name and domain name? You must also take into consideration any domain names the existing Flower Shop has, domain names are the address for the flower shop’s website.
- Regardless if you want to keep the existing flower shop name, it is always recommended to keep the domain name of the existing flower shop if it is placing higher on search engines.
- Make sure that you read and go over any limited liabilities attached to the existing Flower Shop name when purchasing.
- Make sure you have access to email accounts with the flower shop’s name, in particular, the one associated with Google Business account for the domain name.
Credit Card Processing
There are many facets to credit processing and good to know and understand the basics. Will you continue with the same credit card processing merchant the existing flower shop is using?
- If you are, then make sure to speak with the credit card merchant to change information.
- You will also need to update your gateway if you are processing credit cards online. Be sure to update the bank information to receive timely deposits of sales.
Payment Gateway: A payment gateway is necessary to process sales online or brick and mortar. The gateway can store and encrypt customers credit card information.
Credit Card Merchant: A credit card merchant functions like a bank account who authorizes you, the merchant, to accept credit cards as payments. These accounts will work with a payment gateway.
Payment Processor: A financial institution that works behind the scenes. Connects to both the payment merchant and gateway passing the information back and forth.
Payment Aggregators: Allows you to accept credit payments without having to set up a merchant account. Payment aggregators have an internal gateway so no gateway setup is required with no extra costs for a gateway. The best-known payment aggregators are Stripe, Square and PayPal.
Flower Shop Employees
Finally, you need to see the workforce of the shop. Management might change, but the employees don’t have to. Some might leave together with the original owner, while the owner themselves might stick around to help you learn the ropes around running a flower shop.
Of course, with new management, you might also change up a few policies around human resources, so taking a look at the current state can help you decide that. Hiring and firing people can also be a part of that process, so long as you can present a reasonable explanation. The important part is to have a team that can survive the shift in ownership and stay efficient and profitable nevertheless.
Will you need to Hire Staff?
In some cases, most, if not all, the staff will stay when new owner acquires the flower shop.
- There are times when the owner of the flower shop will also offer to stay for a specific time period to help out with training you, the new owner.
- Are all current employees staying?
- Will there be changes in scheduling?
Flower shops are usually the fruits of someone’s labor and passion for the most beautiful members of nature. It might have been the hardest decision for them to put up a price tag on it for whatever reason they might have. As a flower shop’s future owner, the best that you can do is make sure that their life’s work continues on, now with the renewed vigor of a fresh proprietor.
Be Hands On In The Floral Industry
It goes without saying that understanding the way the flower industry works is the key in pursuing a career as a floral business owner. Most business owners learn as they go, however, in the floral industry, floral designing, flower prep is important as all other business management tools.
- Even if you will have full-time floral designers, it is important that you understand floral design. Take a floral design class.
- If owning a flower shop is your dream, think of working in a flower shop for some time to understand the business.
- Have a flower shop owner mentor you, connect with other florists for help and guidance.
Florists, did you buy a flower shop? What is your experience? What key advice would you give to our readers? Please share your feedback or questions below in the comment section.