The Floral Hustle

Hello, Flower friends, this is Jen and you're listening to the Floral Hustle Podcast. On this week's, Minnesota, I wanna talk about forecasting, and you're probably like, what do you mean forecasting? And I mean forecasting how much money your business is going to make. Forecasting backwards into getting paid what you're hoping to be paid so you can look at the numbers and back into, I need to do this to get paid this.

So to, to start out with a simple way to forecast your year is a Google sheet, a Excel document, and by month you put in, okay, this is my wedding weddings plural, and this is what I'm expecting from a um, gross sales perspective. Then if you have figured out what your profit margin is, so for one of your weddings on average, um, let's just say you, your wedding is $10,000 and with all of your expenses, you spend $2,500.

And so you have a $7,500 margin, but that margin doesn't cover your website. Your, your rent, um, your. Let's just say your salary, uh, any programs or subscriptions that you have to run your business efficiently, your, um, tax person, any of those things. So when, at the end of the month, when you look at, I made this.

Amount of money. I minus my sales tax from that. And then I had this left out over after paying for all my flowers, I had this much left over after paying for all my help, then I had this much left over after paying my monthly expenses. So that would be your profit margin percentage. So if it's $10,000 that you made that month and you spent $2,500, that's $7,500 or 75% would be your profit margin.

Uh, it could be 50%, it could be 30%, it could be 10%. So backing into that math is a critical thing to help you really understand. If you wanna make a certain amount of money, you need to back into that by knowing what your profit margin is. So then take all those weddings. And have a formula figured into your Excel that at a X percentage profit margin, I would have a income of this.

Then you can do that for every month. Every month you could go and figure out, here's all the weddings I have booked. When you book a wedding, go and plug that information. So this would be your source of forecasting for you to really understand and get paid in your business. Then you are going to be able to write a formula so that you're taking that total on every single month and forecasting it into annually.

Then you can look at are there big expenses that I am incurring this year? Um, personal development expenses, or a trip that is a work-related trip or a workshop. Or, um, an upgrade of a cooler, whatever it would be. You wanna look at those bigger one-time expenses in that grand scheme of what your overall revenue and what your overall net profit revenue is going to be, because those are expenses that you have to plan for, to understand backing into paying you.

Um, completely. So if you have, let's just say $10,000 of larger one-time expenses and you had, um, $60,000 of net profit, so that will bring it down to 50%, then you probably wanna leave some running capital in the business. So you can write checks for things ahead of time, uh, such as, um, You know, like if you need to buy a bunch of VAEs for a wedding upcoming and the deposit that you've collected doesn't cover that.

I personally put all my deposits in a separate account so that when that wedding hap, I take and transfer that deposit into my checking my business, checking as realized revenue of actual revenue that is recorded for that month. I don't count my deposits beforehand because. You, you know, it's not, not a wedding that I've completed, so I'm not saying that I've made that money yet.

I'm not using that money. I'm just leaving it for when the wedding happens. If I am buying some items for the wedding, I could potentially transfer it over on larger weddings. I take a larger deposit and sometimes we'll transfer like a thousand into there or whatever, just so I can cover those type of expenses.

But normally I'm just letting that deposit sit there until that wedding, so I'm not using that in any of my forecasting formulas. At the end of the year, I'm reporting to my tax person because they're looking at my savings account that I have deposits for next year of X in the savings account. So they're separated for myself.

For my tax person to understand, because that's not realized revenue. I'm not collecting sales tax on it yet. I'm not doing any of those things. So we're just keeping that separate from a accounting perspective. Then I'm looking at my total revenue for the year. Im, you know, if, if for some reason you sometimes your weddings shrink or you have a, you know, Most of your weddings, like if you have a, something in your contract that says you can't shrink more than 10% or 15%, um, of your gross total so that you know that somebody's not all of a sudden going to be dropping half of their wedding budget or something along that lines, you could even, okay, just in case I'm going to shoot lower and I'm gonna say that we'll have a shrink of 10% of our, our wedding totals for people making adjustments just to really be safe.

So then you're looking at that $60,000, that a hundred thousand dollars, that's, that's forecasted for the year. Then you wanna back into, I want to pay myself $75,000. I wanna pay myself, whatever. And then back into that on a monthly basis or quarterly basis, depending on how you do your payroll. I personally do payroll on a quarterly basis because it's less expensive and it's still inevitably ending up in the same place.

Anyways. Then I'm going in and saying, okay, if I wanna do 7,500 because the majority of my revenue doesn't hit till, let's just say May. I'm going to have to pay me that $75,000 from May till December, and then that would look like X amount of money. If I have resting capital, so money that's just sitting in the business account, I could try and divvy some up.

For those first five months of the year and pay myself, uh, somewhat of a draw. If you, some people will use their deposits to pull out that draw. I am just u starting in May and then paying myself payroll for the last. S basically three um, quarters, or I'm doing the last two quarters of the year and just paying myself a larger amount.

You can go in and break down monthly. Um, there are programs like Gusto that can help pay that cuz you're also having to pay for, you know, disability, um, insurance, workman's comp normally. And then social security, Medicare, uh, state taxes, federal taxes. So at that time of payroll, all of those things are figured out and taken care of.

Then you go back into, and you do check-ins. So it is, let's just say September. Are you tracking to pay yourself? Is your revenue still tracking? So you could do a monthly CEO day that you are checking into if everything is on tracked from what you forecasted, what you need from an income standpoint, what you, your goals are of the business.

And then from there you're going to go, okay, well we, I didn't, you know, this wedding, these shrunk, or I added some weddings, I added some revenue. Okay. And then from there you can also make adjustments. Okay, I'm on track to make $50,000 more than I thought because of some bookings that I took on. Then you can go and adjust your income, you can adjust your forecasted revenue to add those weddings on.

And I would realistically do that when you book the wedding because it's, uh, you can make it a process. I get the wedding, uh, contract back. I'm entering it into my calendar. Then I am entering it into my forecasting so I can, you, you keep on top of every wedding added is added to your forecasting. Then from there, you just keep touching base on if your forecast is, is matching what your actualized revenue, if your profit margin is, did you have unexpected expenses?

So you can keep on track of the app for the rest of the year, and you'll also have a really great grasp on things when you go in for tax time because you'll have been on top of your forecasting, your taxes, your profit margin, your expenses, all those things will be on lockdown because you have been on top of it this whole time.

Feel like a better c e o. You will feel like you are more in control of your business and you will feel like you are more successful because all these things, once they're coming into alignment, Thanks so much, flower friend, and have an amazing