The Floral CEO

 

Hello flower friends. I had an interesting coaching session. I always love meeting. I always do like an onboarding call when somebody joins the Mastermind to really help understand their goals and what they're struggling with. And I had one of those, and we were really just going through this kind of exercise of figuring out how, as someone who is starting her business to really.

Figure out how she can make money, how she can structure things so that she can actually pay herself. Uh, what would it look like if, you know, she currently had eight weddings at X dollars? How do you figure out, okay, what if I want 20 weddings? What would that financially look like? So I wanna talk through.

If you are just starting out, or even a lot of this, even if you've been a florist for a while and things are not, you're not running your business as a CEO Digging into your numbers and understanding, here's your opportunity for a little refresher lesson. So let's go into, try to think how much money could we make if.

Things got bigger, things expanded. So how I would break this exercise down is, depending on the data that you had, uh, you could start that going, okay, I received this many email requests. I got this many email requests to actually correspond with me out of that. Requests, um, and email correspondence. I got X percentage to meet with me, and then I got X percentage to a proposal, a consultation, and then a proposal.

And then I got X amount of people to, uh, actually agree and send me a contract. So let's just say maybe your cl what I call closing rate is 10%. So most people who I know who get to that stage have a lot higher closing ratio. They have like a 30 or a 50, if not like I 75. Sometimes if your closing rate honestly gets too high, you're probably too cheap.

Uh, but. Let's just say this person has now booked eight weddings and they met with and did proposals with 16. So they have a 50% closing ratio, and I'm just making these details up. They have eight weddings booked currently and they have, um, let's just say. You know, their total revenue for those eight weddings is going to be $25,000.

So what I'd like to do is go and figure out what is our average, even though we got some outliers. Um, I think that they got an $8,000 in there, but they have a 7,000. They have a 1000. So if I go 25,000 divided by eight. To get an average, the average wedding 'cause in hopes we're hopefully gonna get another eight.

We're hopefully gonna get another seven. We hope we're gonna get less of these a thousand dollars ones. So her average we could just guesstimate to be 31 25, 31 25. Is a number that if we wanna have some estimates or some educated guesses of what our revenue forecast could be, we would go in and go, okay, if we need, we have eight weddings and we want 20, so we need 12 more.

Weddings. That means with our current close rates, we need to speak to 24 additional people with our current closing rate of 50%, and we need to have an average of 31 25. So those additional. Would be those additional 12 weddings. If we had them at the um, $3,100 mark, which was our average, that would be in an additional three thou 37,500.

So then we add our 25,000, that is our eight weddings. So that's 62,500. Well, obviously we have. Expenses against this. So what do those expenses look like? Um, if I take, uh, let's just say we pay $50 a month for a, a website, and then we have Canva Pro, and then we have some type of, uh, QuickBooks or something like that for $60.

So let's just say on a monthly basis. You have about $400 of expenses. Um, you know, annually here in Minnesota, we have to pay the Secretary of State to renew our business name. That's a hundred dollars. Uh, the, like, personally, my vehicle is in the business name, so I gotta buy tabs and all the things that come along with maintaining a vehicle, gas, everything.

So. You need to go in and figure out what are my expenses to turn the light on for my business? Then the second layer is, okay, if I am operating in the correct pricing module of, you know, at least three times markup, if not 3.5 to four. Then backing into, I could safely probably say 30%, especially if you're learning 30 to 35% is probably going to be spent on buying your flowers because you're learning, you're probably not great at sourcing yet.

So if we say 35%, we're gonna be really conservative. So if we take.

Our 35% off, we have $40,625 left over. Then if we minus out our, let's just say our $300 of expenses that are to turn the light on, so that's gonna be $3,600.

One second, plugging it in. Okay, so then we have $37,000, let's say we estimate per wedding that maybe we're gonna have. 'cause we'll have 20 weddings and maybe we'll have two days of freelancers, uh, on. Four of the weddings, or five of the weddings. So that's gonna be, let's just say we have them for six hours and we pay them $25 an hour.

So one 50, so 300, and we have that five times, so 300. So that's gonna be $1,500.

All right.

So then we have

minus our $1,500 in our labor. So right now we have $34,510 left. So what, here's what I would do next. I would figure out. I want to make sure that I'm saving for my taxes, so I need to minus. If we were at 6,500, I'm gonna estimate 10% to be taken away for sales tax. So that gets us down to $28,000. So at $28,000.

I wanna make sure that I'm building a cushion. What if I wanna join the floral CEO mastermind? What if I want to, um, you know, buy a course? What if I wanna buy a, a cooler, whatever it is, I would build and take some profit or a savings net and start to equate that into my business. So if I'm looking at 28.

Thousand dollars. I can go and say, let's just say I'm going to dedicate 10%, or even if that's scary, 5% to be dedicated to a profit bucket, which is a bucket that is just where your business actually deserves to make money. So if I do. Ten five percent, that is $1,400. That is not going to buy you a cooler or anything like that.

So what if I did, if I did 7%

times point? Seven, seven equals

okay. So that would take away probably a fair enough chunk that you would have a little bit of cushion 'cause you have a little bit of profit now. The rest realistically. Could go to owner's comp, so. With making 60, I think that we were at a $68,000 total. Minusing expenses, flower costs, uh, labor taxes, and building in some profit.

We could potentially pay you as the owner about $26,000. Out of that $26,000, 26,505, we definitely do need to pay our, the government, um, because you know, we're gonna have to pay Social security, Medicare and Minnesota sales tax, federal income tax, all the things. But that just gives you a way, especially if you have some numbers to be able to back into.

If I blew this up, if I grew this, what would that look like? Because when you can do that, you know, you. You can see the future, and you can do this in a spreadsheet. Like put all of your weddings in a spreadsheet. You can put the totals that are estimated to be at now. So then that's how you can get your formula of what your average wedding is.

And then you can do that same thing with the number of contacts, the number of leads, and what position you got them to, you know, consultation or whatever. And then you can divide. And really conquer, like knowing your numbers and so that you can confidently go forward with making estimations in your business.

Using this formula or this way is just another way for you to actually be able to forecast the future. A lot of times we'll just say, we don't know. We have no clue, but when you have no clue. It's really hard to make any logical decisions or any decisions that you feel like are going to be impactful in your business.

You are in a scarcity mode because you have no idea, frankly, what's going on, and I just want better for you. So go and do some preliminary numbers. If you are in a spot where you're really trying to do big things and you have this big dream of maybe, you know, quitting your job or just. Yeah, contributing on a significant level or whatever that is.

You have the freedom to go in and, and just look, just soak up that information and start to feel confident in your numbers like you never have been before. And I keep mentioning, uh, the. Basically profit and this kind of foundation comes from the book. Profit First, which I have talked about on several podcasts.

It is a book that really breaks down how to actually build profit on in your business from day one. So if you've never rid written, read that. I will put that in the show notes because. It is a great book for you to take advantage of, um, really learning some different fundamentals in your business. I hope this episode was helpful.

Uh, please, uh, take us on Instagram with your biggest takeaways. I love to hear from you guys, and I appreciate you listening to the podcast today. Thank you so much, flower friends, and you have an amazing flower filled day.