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• Jan Peterson

# Basic Math For The Everyday Florist

Updated: Aug 6, 2021

The general rule of thumb is to maintain a margin of 30% on each arrangement you make. In other words for every arrangement that leaves your shop, the actual cost should not exceed 70%.

While there is no industry standard, here is the most common pricing formula. Here's how it works:

In general you mark up your flowers 3-3.5 times, supplies are 2 times and labor is 20% of each arrangement. So for every flower and green that goes into a design, the flowers should be marked up three to three and a half times what you paid for them. The container is marked up twice what you paid and the labor should be 20% of the arrangement.

Say you're doing an arrangement for \$100. Here's how you would figure out your costs:

1.) Labor - You can use the 20% of the \$100, or \$20. Labor is a bit tricky because you may have designers at different hourly rates and your designers might work at different production levels. For simplicity sake, let's use the \$20 for labor.

2.) Hard Goods - Let's say your vase costs you \$10.00 from your wholesaler, so you need to figure that cost as \$20.00 (or 2 times what you bought it for).

3.) Flowers - Now comes your flower budget. If you started with \$100, less the \$20 for labor, less the \$20 for the container, that leaves you \$60 for flowers.

Let's say your arrangement includes: 5 hydrangeas, 7 roses, 3 gerberas, 2 stems of waxflower and 6 stems of greens. You pay: \$1.00 for your hydrangeas, \$1.00 for your roses, \$1.00 for your gerberas, \$1.00 for your filler and your greens run about \$.50 per stem. We are using round numbers for simplicity - but in reality, your pricing varies somewhat.

So your flower cost is as follows (cost x 3 x number of stems) or:

\$15.00 for your hydrangeas (\$1.00 x 3 x 5)

\$21.00 for your roses (\$1.00 x 3 x 7)

\$9.00 for your gerberas (\$1.00 x 3 x 3)

\$6.00 for filler (\$1.00 x 3 x 2 )

\$9.00 for greens (\$.50 x 3 x 6)

That totals \$60.00 - right on your budget.

If we figured the actual cost on that arrangement it might be \$15 for labor, \$10 for the vase, \$20 for flowers - or about \$55. But you also have other costs that must be covered - like rent, utilities, vehicles, phones, wire services labor for staff other than designers. All of these overhead costs need to be covered by the products and services you create. By sticking to a formula for each arrangement or event you produce - you're operating costs will be covered and you will be able to maintain a healthy margin.

Keeping on Track by Simplifying

This may seem a tedious task to do for every arrangement, but once you get the hang of it, the exercise will help you maintain a healthy business margin.

You can simplify the process by posting a sheet of flower prices for your designers. Prices on flowers tend to stay level on most items, except during holidays or off season, when demand exceeds supply. But you should always review what you pay and commit to memory the cost of your flowers.

You can also have your designers use only certain containers for arrangements, so they stay in check with the supply cost.

To simplify, you can set a percentage goal for each arrangement. In our example, you could set a percentage goal of 60%, so the designer has a chart based on the retail price of each flower. I was always a stickler about this and made my designers write down the flower and cost of what they used on the back of each order ticket. It wasn't popular, but it forced them to stay on budget and be more creative with what they had to work with. It also created a consistency in our shop so customers knew what to expect.

Any good designer can make an arrangement beautiful with nice flowers, but a designer who can make something beautiful and work within a budget is the true gem.

Wedding Work

Wedding and event work are different animals and should be priced differently. Using the same principals as pricing arrangements, you also need to add additional labor and set-up time into your event work. This can be done in the pricing you give for each item for the event, or you can charge an overall labor and set up fee.

If you price your labor and set up in item pricing, make sure you use at least 30-35% as a labor charge, especially if you don't charge for a consult. Weddings take a lot of time. There are back and forth meetings with the bride and the family, time spent researching color palettes and flower availability with wholesalers, multiple staff members helping with the set up. Make sure your are factoring in all that extra time and effort and that you are being paid what you are worth. You may also consider having standard minimum charges for weddings. Most brides have a flower budget in mind, so don't waste your time on those that have unrealistic expectations and want you to do everything for nothing. You'll spend too much time on the DIY crowd and your talents will go to waste. The florist business is hard work - make sure you reward yourself and hang on to every dollar you deserve.

"Price is what you pay. Value is what you get"

Warren Buffett