How to Start a Floral Business: Tips on Seed Money, More

While operating a profitable floral shop is not easy, you don’t need a lot of capital to get started.
Hanah Cho
By Hanah Cho 
Updated
Edited by Kim Lowe
Tips for opening a flower shop

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When the flower shop where she worked closed, Amy McManus figured she could open her own in the Baltimore neighborhood of Canton, which lies along the city’s outer harbor. It didn’t faze her that she had only three years of retail floral experience.

“This was an opportunity,” McManus tells NerdWallet. “I needed something at that time in my life that was exciting.”

McManus had no clue how to run a shop. But she developed a business plan for Crimson & Clover Floral Design with help from a counselor at SCORE, the SBA-backed nonprofit that offers free mentoring to small businesses. She learned on the job, constantly referring to her business plan in the early years. She ran into frustrations and obstacles, including zoning issues and trouble with a lease. But today, McManus has attracted a local following for her design work at events and weddings. The retail shop is also doing well at a bigger location in a newer part of the city, McManus says.

Starting and operating a profitable floral shop isn’t all about smelling the roses. As with many retail businesses, technology has changed the way people buy flowers. The margins can be thin on some orders, and inventory management can be difficult because flowers are perishable.

“This is a tough business,” says Paul Goodman, president of Floral Finance Business Services in Jenks, Oklahoma. “Not many people make much money because it doesn’t get big enough or it isn’t run well.”

Still, the floral business can pay off.

You can earn a salary — including taxes and benefits — worth 10% of annual sales of up to $500,000, Goodman tells NerdWallet. For sales above half a million, tack on another 5%. On top of that, you can also earn 10% in profit off the bottom line if you manage your business well, he says.

So let’s say you run a shop generating $500,000 in yearly sales, you can take $50,000 in salary and another $50,000 in profit.

A retail floral shop generates on average $362,318 in annual revenue, according to the Society of American Florists, a trade group that represents growers, wholesalers and retail florists. But the majority of florists most likely bring in $200,000 or less in annual sales, Goodman says. That would add up to $20,000 in salary and a possible $20,000 profit.

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Tips on opening up a flower shop. Pictured: Crimson & Clover in Baltimore.

A flower business doesn't require a lot of seed money

Getting started in the floral business doesn’t have to require much capital. That’s because you can start the business at home with a large cooler, Goodman says. You buy flowers from wholesalers. Then you’ll need accessories including vases and ribbons and other items such as pruning equipment. Depending on the city or state, you may also need to obtain a trader or reseller license.

If you’re opening a storefront, however, you’ll need $30,000 to $50,000, Goodman says.

To compare financing options, NerdWallet has created a comparison tool for small-business loans. We gauged lender trustworthiness, market scope and user experience, among other factors, and arranged them by categories that include your revenue and how long you’ve been in business.

When she was starting up in 2003, McManus obtained a $60,000 Small Business Administration loan from the Columbia Bank in Maryland to open her 600-square-foot shop. In the early days, she also used her credit cards to restock her flowers. “You have to buy them every single week,” she says. “You don’t want to have an empty cooler because you’re a new store. Why would they come back in?”

Opening a store also means hiring employees. If you don’t have the experience, or just have no desire, to handle the creative aspects of the business, you’d hire a designer to create floral arrangements. Because you can pick up a bouquet practically anywhere, be it the corner store or the supermarket, design is becoming more important for a business, Goodman says.

Although there is no industry certification or license requirement, you can become a certified floral designer or an accredited member of the American Institute of Floral Designers, a trade group that oversees both certification processes. That certification or accreditation can cost as much as several thousand dollars.

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Wire service pros and cons

Most retail florists belong to at least one of the major three floral wire services: FTD, Teleflora and BloomNet, a subsidiary of 1-800-Flowers.com. You pay a monthly fee, and you may also have to pay a one-time joining fee, depending on the wire service.

Wire services facilitate orders between florists nationally and internationally. Say a customer in Manhattan wants to send flowers to a friend in California. The florist in New York uses a wire service to connect with a florist in California to complete the order. Each florist gets a cut of the order, with the receiving florist taking a bigger share. The wire service takes a small commission as well.

Joining a wire service can provide an additional revenue source for your floral shop. But in some cases, it may not make financial sense. That’s because wire services are also e-commerce marketers, taking orders directly from consumers and then filtering them to local florists.

Steven Rosenberg, owner of Superior Florist in New York, says the e-commerce platforms take at least a 27% cut on orders, leaving little to no profit for florists. His shop fills very few wire service orders as a result, he says. "I’m losing my shirt” on those orders. So, he says, many florists won’t fill them — “I’m one of them.” Rosenberg is a member of Real Local Florists, a trade group that educates florists and urges consumers to shop local.

You have other options besides wire services.

McManus, for instance, works with BloomNation, a marketplace for local florists. BloomNation also provides technology tools to help florists run their businesses online.

The Santa Monica-based startup was founded three years ago to help local florists increase sales and stay in business, says David Daneshgar, co-founder at BloomNation.

If you sign up with the marketplace, which has 3,000 florists in its network, you get to keep 90% of sales.

Ray Le Du, a florist with BloomNation and co-owner of Blue Water Flowers in New York, says he has noticed a difference in business. “My slow days aren’t as slow as they once were. I would credit that to the BloomNation presence on the Web and getting orders that I may not have gotten before.”

After operating her store for seven years, McManus moved into another location in 2010, more than doubling her space. She now employs three people.

Although opening a store may not make sense for every florist, it was the right move for McManus. The new location in Baltimore’s Roland Park generates a lot of business, she says. And it works for them, McManus says, because “we’re selling an experience.”

Resources for budding entrepreneurs

NerdWallet has info on money-saving online legal tools for advice on the legalities of starting a business and gaining lower-cost access to an attorney.

The Society of American Florists has a business resource page for retailers. As a member, you have access to education workshops, networking events and sales and marketing support, says SAF membership manager Brian Walrath.

The American Institute of Floral Designers provides certification and education. It oversees the CFD and AIFD certification process.

For information on floral wire services, check out Teleflora, FTD and BloomNet.

Real Local Florists was created in 2011 to support and promote local florists.

Teleflora publishes “The Profit Minded Florist: A Financial Startup & Operating Guide for Retail Florists.” It was first published in 1987 and written by Paul Goodman. The latest revision was released in 2011.

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