Do you want to know how much money flower shops make yearly? If YES, here are 8 factors that determine the income & profit margin of flower shop owners. The major motive behind starting any business is money, hence whenever any entrepreneur wants to start a new business, one of the first questions that they usually ask is how profitable the business is.

This narrative also applies to entrepreneurs who are looking towards starting a small flower shop. They would want to know how much they are likely going to make annually from the business.

The truth is that there is no one-mold-fits-all when it comes to how much a small flower shop is expected to make. There are some factors that we are going to look into before giving an estimate of how much an average small flower shop makes yearly and these factors are;

8 Factors That Determine How Much Money Flower Shop Owners Make

1. The Size of the Small Flower Shop

The fact that it is a small flower shop means that there is a limit to the amount the shop is expected to make. But it is important to point out that ‘small’ in this context is relative. Some flower shops may decide to operate as mom and pop shops without any structure, and they can as well operate as a well-organized businesses with solid business structure. In such situation, the amount they are going to make will be different.

2. The Location of the Small Flower Shop

When it comes to setting up a new business, location plays a major role which is why feasibility studies and market survey are essential. For example, the amount a small flower that is located in a low traffic area will make yearly will be far lower compared to the amount a small flower that is located in a high – traffic area will make.

So, if you want to make it big with your small flower business, then you must be ready to rent a shop facility in a high traffic area, a location with the right demography of people with the purchasing power. Please note that you are going to be paying more to rent a store in a high – traffic area as against the rent you are expected to pay in a low – traffic area.

3. The Type of Flowers and other Products Retailed in the Shop

Another important factor that will determine how much a small flower is expected to make yearly is the type of flowers retailed in the shop. You will agree that there are small flower shops that are into retailing of all sort of cut flowers, floral arrangements, potted plants and artificial flowers.

The profits you are expected to make selling these different types of flowers will be different when compared to the amount a small flower shop that only sells fresh flowers is expected to make.

4. Other Related Products and Services Offered by the Small Flower Shop

Aside from retailing a wide range of cut flowers, potted plants and artificial flowers, retailing products like flower pots and vase et al will surely boost the amount you are expected to make from your small flower shop. So also, if you offer delivery services, it will definitely help you make more money than your competitors.

5. The Management Style of the Small Flower Shop

Another key factor that will determine the amount a small flower shop is expected to make yearly is the management style of the flower shop. Trust me, the results you will get when you have a good manager and an average or bad manager will definitely be obvious and different, even if you give the managers same conditions to work and same products to retail.

6. The Business Model of the Flower Shop

There are different business models that a small flower can adopt and these business model offers different results. For example, the amount a flower shop that also runs an online flower store with deliveries makes yearly will be different from the amount a strictly brick and mortar store will make yearly.

7. The Advertising and Marketing Strategies Adopted by the Small Flower Shop

Another key factor that will determine the amount a small flower shop can make yearly is the advertising and marketing strategies adopted by the store. Trust me, there are several advertising and marketing strategies that can help a business increase their earnings, but you may be expected to spend more.

But the results you will make will far outweigh the amount you spent on advertising and marketing. Of course, you don’t expect a small flower shop that is engaging in aggressive advertising and marketing to make same amount yearly with a small flower shop that is passive with its advertising and marketing.

8. The Number of Years the Business is in Existence

In business, the number of years you are in existence will go a long way to determine the amount you will make. For example in your first fiscal year (FY1) you might make a fifty thousand dollars ($50,000), in your second fiscal year (FY2) you might make one sixty five thousand dollars ($65,000) and in your third fiscal year (FY3) you might make seventy five thousand dollars ($75,000). Interestingly, most businesses including small flower shops usually breakeven from the third year of operations.

In conclusion, the amount a small flower will make yearly is strictly dependent on all of the factors listed above. According to industry experts, flower shop owners just starting out take in about $40,000 per year on average but that figure could be higher or lower.

Estimated Profit Margin for a Small Flower Shop

In order to calculate the profit margin from a standard small flower shop, you should be able to place a figure on the recurring and ongoing costs of running the flower shop. Generally Speaking, for a small flower shop, your profit is sometimes expressed as Cost of Goods Sold. A 40 percent 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 percent labor. As a matter of fact, a small flower shop can make a profit margin of up to 70 percent on the cost of flowers & supplies.

Joy Nwokoro