In our last blog post, we talked about the best (and worst) ways to market your floral shop. Now that you've done a great job at marketing, and have a few leads, it's time to figure out how much you're actually going to charge for your services.
Many of our Curate users actually price out their events IN the consultation. After you've spent time getting started and comfortable with your pricing, you'll be able to do the same!
One of our Curate florists described the problem with floral proposals the best I've ever heard. She said, "The problem with wedding floral proposals is that you have to use the left and right side of your brain at the same time."
This is so true! As a creative businessperson, you have to first get the overall vision. Then, right when you hit a spark of creativity, you have to pack up the luggage and make the trek over to the left side of the brain to see whether it's even possible. Then, for the next hour or two (if you don't use a software), you're in an eternal game of Pong between the right and left side of your brain.
Profit
The key is this: you have to be profitable. That sounds simple but it's hard to get your mind wrapped around sometimes when you're starting from scratch. If you have a service or a product, you need to make sure that's bringing profit back. Do you have a freelancer who you pay $15/hr? That means if a customer is paying YOU for that freelancer to set up on a Saturday, you need to be charging more than $15 to gain profit off the transaction. You spent the time training the freelancer how you work, you spent the effort marketing your services, and you invested up to this point, now you have to profit. You probably need to be charging $45/hr or $60/hr depending on your profit needs. But you have to bring in profit. Your profit is sometimes expressed as Cost of Goods Sold. A 40% COGS means that if you sell a $100 arrangement, $40 of that is the product that goes into it. Sometimes profit is expressed as markup. Many in the industry advocate a 3x markup on flowers, 2x markup on hardgoods, and 20% labor. Which leads to our next point:
How much profit do you need to make?
For the educational pieces that we do, we advocate that every situation is different. We can't tell you that a certain COGS percentage is perfect because we don't know your situation. Some florists could personally live on $20,000 and be exactly where they want to. Others couldn't afford to be in the industry if they're not profiting $200,000. We really love the diversity in the floral community and
don't advocate a single markup. HOWEVER, we do recommend that you know what your markup is. Here's a blog post on
how to determine your markup and a markup calculator that will come in handy too:
Pricing Arrangements
There seem to be two major ways that florists price out arrangements. The first, and most prevalent, way is the precision method. These florists price by looking at the actual COGS inside of the recipe. Whenever a client shows a Pinterest picture, they'll adapt it to their style in their head and then they'll list out exactly what they want included. They mark that it has 4 white roses, 3 white stock, 3 white hydrangea, a vase, etc. They'll look at the wholesale price of each of those items, then multiply by their markup. So if their white roses are $1.15 each and their floral multiple is 2.8, then the retail price of their flowers will be $3.22. If they add a 20% labor, then the retail price for each is $3.86.
The second is the "conceptual" pricing model. Some florists price out arrangements by essentially looking at a paricular picture and pricing what they think that concept should cost. Typically florists who do this say, "I've been in this long enough that I just know that it's priced that way." These florists eventually do have to put together a stem count for their wholesale order. In order to do the calculations, they build out an estimate of the number of flowers and increase or decrease to make sure they're hitting profit.
How do you add labor?
Labor is a tricky question. Florists typically do one of three things:
- Build labor into their markup.
- Use a % for their labor.
- Estimate the number of hours and charge accordingly. If someone builds in their labor, they're simplifying down their process.
We have some florists on our software who do a markup of 4 or 5 but no labor percentage Because it's all built in. We have other florists who use a percentage for their labor by simply taking their flower prices (after markup) and adding a 20% or 15% for labor. Some florists who use percentage even list out a percentage item on their proposal as a separate piece and emphasize that it's for labor. That percentage changes from florist to florist.
Pricing Rentals
How do you price rentals? I've written my take on this in
another post, but as a quick recap,
the core formula you should use is:
Cost multiplied by markup then divided by the number of times of usage.
Some others people price their rentals through keystoning them. That's just multiplying the price you bought it from the wholesaler and multiplying by 2. So if you bought a votive for $2, then you'd charge $4 for someone to rent it. Many florists include their labor and cleaning fee in that that amount as well.
Want some help with figuring how much to charge for rentals through our method? Download a free rental calculator!
Delivery, Setup, and Teardown
Your delivery, setup, and teardown are an entirely different process than building the arrangement. At our shop, our design team and our execution team are mostly separate. You want to make sure that you're covering all of your costs here. So do the calculations of what you're paying your team and what your profit margin needs to be and add that.
One time, the Chuppah we were working on had issues and we were kicking ourselves for not charging enough for the delivery and set up because we were practically donating our time by time we got it up. This was a trial and error for us but we realized we needed to charge more. Many florists give their clients the options of dropping off any items after. Some florists include a late strike fee in case the strike is beyond 11pm.
In addition to these things, you should also consider the time it takes to visit venues and special time intensive items. The list could be potentially endless depending on the event you're working on but the most important thing to remember is that your pricing needs to be profitable.
Keep an eye out for our next blog post in this series on wedding consultations!