People purchase flowers and plants as gifts and for their own enjoyment. This growing business niche should be considered like any other retail business with a perishable product line. There are two ways on how to start a floral business. You could start one from the ground up and build the business. The other way is find one that is for sale and make the purchase. There are valid reasons to go either way. The big plus for buying an existing business is they have a following from an existing customer base. This fact will mean an immediate cash flow to the new owner. A purchase of an existing business will cost far more than starting one from scratch. This is the basic reason to start from scratch.
The lower cash outlay to become an owner of a floral business could be the one factor that makes a person go one way versus another. If a person is going to open a brand new shop, they will have to pay particular attention to the location of their new store. Drive-by traffic and walking traffic can make a big difference in how fast the business grows. This type of floral operation would be the typical florist’s shop that you can find in many shopping centers. There are other variations of this type of floral business that a knowledgeable person could start or buy from a current owner. You could get into the wholesale side of the business and supply retail shops. You could supply businesses with floral arrangements that they want delivered every week. Weekly deliveries that are done on a contracted basis could be in addition to the normal business of the shop.
Where to find floral businesses that are for sale
One of the first places to start the process of looking for a business is to contact companies that franchise floral shops. They will know of any for sale or how to start a new one. Another quick source is to use an Internet search engine and see what comes up under floral businesses for sale. Acquireo.com has a list of Florists for Sale. A third excellent way to discover businesses for sale is to contact business brokers to see what they have listed in their firm. All of these sources will probably bare fruit and will jump-start your search for a business you can buy. A study of what is being offered will help you see what kind of money is needed to buy an existing shop that has been successful for a few years. The business brokers will usually know if the current owner is willing to carry back some paper or not. Knowing the lay of the land will give the prospective buyer knowledge of what they will need to do to buy an existing business. Being forewarned and aware could help shape an offer in the best light. A seller that claims that they will not consider an offer that is not the full price may waffle when shown an offer that is close to what they want and will entail a short term payment period for the balance.
Local newspaper ads are sometimes good places to find an offer to sell by an owner. You might also check with wholesale florist. They may know of a shop where the owner wishes to retire so they are looking to sell. Digging out possible purchases is grunge work, but it could pay off in the end with a great purchase of a successful business. Looking and asking is what it is all about and the time spent this way will give you a feel for what the market seems to be asking for a business.
Negotiating the deal with the current owner is sometimes better left to the broker than a direct face-to-face with the owner. The professional business broker has done this before as part of getting a buyer and seller together. Their experience may be worthwhile when working out the final price for the sale. If terms are needed, it is better coming through them than in an immediate meeting. Giving every body time to think is all it takes to let a deal simmer and then come to completion.
If you have the money we can deal
The long time saying is “money talks”. When buying a business this is absolutely a fact. Hard cash deals are difficult for a motivated seller to turn down. The secret for the buyer is to make a trial offer and see what kind of counter offer comes back from the seller. If you have all the money in cash, this makes your offer very attractive if it is even close to the bottom dollar the seller will accept. If you will need some term to buy, the seller will ask for more money as a final price. Most sellers have two prices in mind, the cash price and a terms price. It may be to your benefit to arrange for another source of needed extra money over what you already have available. Possible sources for this money are a bank loan, a business lender loan or family and friends. A business lender makes loans all of the time to buyers of businesses and they are very well versed in this type of lending. Because of their special knowledge, they may be easier to deal with. You can find several such lenders by doing a search for business loans on the Internet. If your credit rating is strong and you have other assets, you may be able to get a loan from your local bank. Friends and family are a final choice after the first two have not panned out.
It is to your advantage to offer an all cash deal to any seller as this will usually save money and give the offer more creditability. Money talks very loudly when buying a business. Let the seller stew over your offer and make the decision to accept the offer or reject it. If the business has had few offers, then yours may look like a gift from heaven.
The floral business is a niche business in the world of small businesses. A shopping center shop can be a little gold mine due to the traffic that wanders by the business. Customers buy gift for others and they also buy for their own enjoyment. Fresh flowers smell good and look marvelous when professionally arranged. If is hard to walk into a shop, browse and not buy something. The return on investment can be very good when the business has a substantial clientele. This solid success will also raise the price of this existing business so you can expect to pay top dollar to purchase it. Remember though that you start getting your money back almost immediately as the cash flow will begin right away.
If you start a new shop in a center you can expect slow growth for a while until you develop a clientele. Your cost of doing this should be far less than if you have purchased a going business. The decision is yours to make depending on the funds you have available to own a business. This is a common choice that new owners have to make.
Read more information about starting a flower shop
About the Author:
Bill Henthorn formerly was principal broker and owner of a resort / commercial real estate brokerage in Honolulu which specialized in representing sellers in transactions up to $50MM.He currently serves as the marketing director of http://www.acquireo.com