help me with some New shop decisions

[goldfish]

Many corporate customers are big wire-out senders. We offer a special package for corporate accounts, which includes wire-out services at no charge. We tell them that, if they want to place out-of-state flower orders, they can "hire" us for free, which is more cost-effective than wasting their secretary's time.

To promote, we send out our designer to talk to HR manager directly. We also offer a free flower arrangement so that they can "test" us.

 

[theRKF]

Wire out are a legit business, and excellent customer service, and a component of serving your local customers. What's frowned upon is lying about your location and the service you offer.

Nothing wrong with saying "Come to Edward's Flowers - we'll take care of you, no matter where your order is going." You don't have to mention the WS you subscribe to. Brand yourself as the one-stop destination.

Ryan

 

[BOSS]

Most people here say to remove the branding of the WS and to brand "Your store" but then you are not getting the word out that you can do wire outs, thus missing out on this amazing "free money" opportunity.

I look forward to seeing you totally destroy my point and explain to me how it really is. I really am, I am here to learn.

Ryan made my point already, but since I always have to add my two unnecessary cents, here ya go....

Brand YOU and YOUR shop, service and abilities. While you may/will find a use for a WS, do NOT utalize the WS logo as your image. It used to be advantageous to do so, but in todays climate, where the FTD (as an example) logo is found in Krogers, Walmart and on deceptive web sites like Urban Florist and Kays Flowers there is little value in associating your business with a national brand.

I have not one WS logo on anything, not the van, not the building, not the stationary, not on the site...Smith's IS the BRAND in Midland MI...gone are the days of promoting the FTD Logo, because it drives sales directly to them as customers are confused easily.

These days, we still wire out thousands of orders a year, but we never tell the customer how we do it, by mentioning another competitors name, we just tell them WE can do it, generally they do not care how you do it, as long as you do what you say you are going to do!

 

[12BucksFor2Dozon]

Jerry you bring up an intersting point. The current situation is a lot more wire ins than wire outs. I get the whole "free money" mentality of wire outs, and it makes total sense. But the only way to do it, as far as I understand is:

1. Decal your store to death with your WS branding and announce to everyone: "We are an official "insert WS name" store, we'll get stuff delivered anywhere (I am overdoing it but you get the point), or...

We tried that when we first opened (billboards, shop promos etc) very few people actually used us for wire outs (probably due to the relatively low population density around us and the fact we are basically located in a retirement area). Good luck trying to outmarket the entrenched order gathers and dOGs that have the full page ads in your yellow pages and are paying $10-15 PPC at Google and Yahoo. You are probably much too late in the game to get noticed as a sender. And, oh yeah, everyone is using ProFlowers nowadays anyway (can you match the $166 million they spent on marketing last year??), so, IMHO, much of the bouquet market has been "disrupted" by new technology. Good luck trying to grow the everyday arrangement market.

2. Create those fake flower directories that show you as the delivery place in every city of every state and gather orders (which I guess is REALLY looked down upon on this site, and I have no problems or desire to do that).

Ehhh...that's a whole 'nuther can of worms...if you decide to play deep into the OG games, I wouldn't blame anyone for trying to use tech ploys to get orders, although feel free to read some of my previous posts about *my* personal attitude about such people. The underlying problem is that the OTSs aren't really your "partners"...they will gladly shoot you some dough for sending their overpriced orders there way, but remember they are also attempting to get the customer to bypass you and order direct ship from them. ProFlowers has changed the whole model of flower delivery, and Wall Street agrees that the future of flower delivery is direct ship. Just compare the share prices of FTD v. Provide Commerce (proFlowers) over the last few years and you will see what I mean.

Am I just not aware of other ways of doing it? Most people here say to remove the branding of the WS and to brand "Your store" but then you are not getting the word out that you can do wire outs, thus missing out on this amazing "free money" opportunity.

Now, I am not trying to go against the grain, I am just bringing up a point that to me, a total outsider to this industry seems interesting. I look forward to seeing you totally destroy my point and explain to me how it really is. I really am, I am here to learn.

Free money??? Hasn’t experience taught you that anyone touting THAT line probably has a knife behind their back, ready to strike??? Please, there is nothing FREE about the money made being a OG/dOG. You are basically making money off the ignorance and desperation of the filling florist, most of whom either don't care they are filling at a loss or just can't do the math necessary to prove to themselves they are losing money.

In my mind, the whole OTS game is severely flawed as it exists today, and perhaps you need a couple of months of getting hosed to prove it to yourself; that's fine I needed it too...good luck!

 

[Jerry]

Edward, I was just explaining the ONLY way you will make money at the WS game. So if you don't go down that slippery path, or you just want to promote yourself, your shop, your town. My point is still to make any money belonging to the team is, 5 outgoing to 1 incoming.

Most on these boards are long time florists, they have achieved their goals, or are close enough that it works for them.

You have said the shop you are puchasing is more of a filler than sender. You have done the numbers enough to know filling is a looser. NOW the decisions start, can you make money belonging(how long to get to 5 to 1 ratio, and how much money), or will you stay as a filler. There are other options that have worked for many florists also.

Looking back on my start up, the first thing I would look at today would be, what is the age demographics of your customers(local). I feel AGE of consumers in an area will tell you the longevity of a business, will you be a reciever or a sender of orders, how sharp of an increase or decrease you should expect. And which way to market.

The internet has expanded your local market to the world, and visa versa.

Again decision time???????

 

[Bigted]

What works for you

Edward, You have said the shop you are puchasing is more of a filler than sender. You have done the numbers enough to know filling is a looser.

Ed, you need to decide what model works best for your shop. While incoming orders are less profitable than local orders, they aren't necessarily unprofitable. Order selectivity, good cost control and conversion of some of the recipients to local customers can make for a profitable business model.

Good luck

 

[wildflower]

Thanks, everyone for your responses. Mark, I am not saying that I want to do THAT, I am just putting it out as a way people do it. As you know, I have other directions I am going in (and was discussing w/you privately) which are in exact opposite to that strategy. I just wanted to see if there was more to it than just marketing the WS brand to bring the "commission" business in.

The store we are buying is not based on WS at all, I believe it's less than 10% of their Income even though the old owners do not understand that after their dues and fees, it's not really income. Their main business is big accounts, like Homes for the aging, Hospitals, David's Bridals (where they have a booth inside a store, which gives them a steady stream of weddings) and just a word of mouth of a store that has been around for over 25 years. They do a lot of weddings, and have done them for several generations in some families. The employees have been there for 10-15 years minimum and are treated as family not as "work for hire". It's quite a great environment. I want to bring some youth to it, but retain the charm of the place.

BTW, if I have not already i want to thank you all for very honest and complete replies, I am very glad you guys are not holding anything back. I read this site for a week before I posted, and to be honest, my own opinions were already somewhere along the lines with what I hear in this thread. I just wanted to raise some questions that I was not 100% positive about There are more to follow. Wait till I go into escrow and stuff starts coming up.

 

[Lady Biker Florist]

Great thread by the way!

Quick question for Ryan: As of January 1st my mom is not longer any part owner. Nothing has changed, she just thought it would be a lot easier on me to do it now not that she is planning on going anywhere soon, but she's almost 83 and just thinking ahead. FTD has her as the owner. I had not thought of it until reading this thread. Just a technicality, but in your opinion should we contact them or just leave it alone. Thanks!

Wildflower, I used to belong to both WS's and thought wire ins meant I was making money. I thought the busy-ness also meant good things. Since we dropped TF (could have been FTD as I am no longer loyal to either one) and completely stopped purchasing any holiday containers the busy-ness died down and has proved to be a very good thing all the way around.

As Rock said, you need to USE the WS as best you can. FTD eventually puts some of their nice containers on sale at a ridiculously low price. Including shipping I got one version of the Laura Ashley vases for $1.49. That's a steal. The Valentine's Day red square vases that they also use for a birthday bouquet I just got including shipping for $1.87 ea. This kind of thing helps justify paying the membership fee and the other dumb fees.

I did the same thing with TF just before we left them. I got a few cases of the Thomas Kinkade teapots and a couple other nice items at a huge discount. Granted there are a lot of places to find nice containers so you have to weigh out if this is a benefit you think you need.

Making sure you go over your statement with a fine toothed comb is definitely a huge must, but it sounds like your wife already has a handle on that. They do add on advertising you never authorized so watch them. Another warning is that sometimes when you take advantage of some benefit they offer you a side benefit is an advertisment in the selection guide. Well we all know we don't want those, but after the three months are up they don't ask you if you want to continue, they just keep you on and then start charging you for the advertisment. I raised such a ruckus when this happened to me they reversed the charge.

I can't impress on you enough that having your own website unrelated to a wire service is of the utmost importance. When I switched from an FTD website to a Media 99 website we went from 50/50 local vs. outs to about 98% local deliveries. I like outs as much as the next guy, but not coming in from Wyoming going to Rhode Island via us in Michigan. This comes with another whole set of probable problems.

A few things I have found from customer feedback to be positive that I have done on our website. Our home page is uncluttered and the navigation of the site is an extreme no-brainer. I have a few of our own pictures/arrangements and working on more, but I buy up old wire service containers cheap and it ends up making your site have different things to offer than everyone elses. I have purchased many wire service containers from florists going out of business for $1.00 per container and many of these are no longer current FTD selections on any but a few websites out there. Media 99 has all the old pics I have ever needed.

Many, many people will be calling you on the phone to place their order while looking at or having already viewed your website. We keep one computer with our website on it ready to view at any given moment. This interaction is rated high among customers. Know your website!

I don't know about you but I am a frequent Interent personal shopper for all kinds of things. (shoes) Nike.com, (great socks) worldssoftestsocks.com, christian patches for leather vests, saddlebags, clothing, ALL Christmas shopping, books, batteries, special light bulbs, etc. etc. etc....and my point is that when they don't know their website the whole thing is a lousy experience and I either don't order or don't order from them again and I tell others not to order from them. So I have to believe most people are like that when ordering flowers. No one likes added frustration when ordering anything.

Your photography is the bomb!

 

[CHERYL BAKIN]

shop purchase

Wildflower: one thing that everyone has touched on, briefly & in many fashions is: Do you have a marketing plan for your store? If not, get one created ASAP. It can just be the big "idea things" first....like:
1. create a store website
2. notify all existing corporate customers of the change in ownership, with offer to make a special deal/purchase
3. Market to your brides!! This is big money!! -- you mentioned a connection with David's Bridal -- are you tracking how many brides come thru David's referal & what this is costing you in terms of $$ and cost at Davids?
4. market to your local funeral homes/large corporations./hospital gift shops/ etc
5. cold calling to all local area businesses. (1-4 days per week, 2 hours/day, make some calls -- in person -- with flowers & "atry us, you'll like us" offer.
6. membership in your local chamber of commerce, business association, networking group. This can get you referrals, but takes some time to build.

The list can go on. The point is that you need a concrete plan for marketing, as well as an overall business plan, to be successful. Much of what we talked about earlier in this thread has to do with the business plan/business tools that you need to use. Some of them overlap with the marketing, some of them are independent. Both will affect your ultimate success or failure. (the days when we could just open the door, turn on the lights & wait for the phone to ring are long gone!)


Good luck!

Cheryl

 

[12BucksFor2Dozon]

Thanks, everyone for your responses. Mark, I am not saying that I want to do THAT, I am just putting it out as a way people do it.
...

Yeah...I guess once again I got on my horse and started riding away, oblivious as usual. Please know I didn't mean to imply things that I know nothing about, like the condition of the business and different income streams. It sounds like the business *could* be a winner...do you mind saying what they are asking for it? Because there was a thread here once about florist business valuation and the responses were all over the place, from 35%-10% of the gross (plus inventory and such etc etc)...

It would be interesting to know, if you don't mind of course, when the dust settles what the final selling price was as a percentage of yearly sales.

 

[12BucksFor2Dozon]

...
The list can go on. The point is that you need a concrete plan for marketing, as well as an overall business plan, to be successful. Much of what we talked about earlier in this thread has to do with the business plan/business tools that you need to use. Some of them overlap with the marketing, some of them are independent. Both will affect your ultimate success or failure.
...

Could not agree more, Cheryl. I still sometimes call us a "marketing" business, not a flower shop, often to the dismay of my partner and employees. At first they thought I was simply nuts; some computer geek calling a florist a marketing company??? But this gentle prodding has awakened in them the sense that we can't expect to sit back and make sales happen and that success is an large part depends upon our ability to build our "brand" and generate new revenue streams.

 

[wildflower]

Cheryl, we do have a plan, more of an ongoing plan, that the owners started and we plan to streamline and expand. That plan is very similar to what you outlined, and thank you for that, 'cause it reconfirmed with me what I wanted to do in many areas. We are already member of the local chamber and my wife as the manager has been going to the meetings. We are actively pursuing corporate accounts and local businesses such as funeral homes, limo companies and doctor's offices (the current owners own two doctor's offices, so there are built in connections).

Mark, it's no big deal

Re: price, since we are not in escrow yet, I dont feel I should be discussing it, after we buy it wont be a problem at all. The price has to do with purchase price that was paid 8 months ago by the current owners when the business was sold, to minimize tax liabilities on the sale. BTW, I hope we get to talk this week, I sent you a PM with some info and I hope you are done w/those weddings and we can talk.

 

[CHERYL BAKIN]

continuing dialogue

Wildflower: I did not get your private message if it was me you were sending to. You can post again, or just call me. I'm here most evenings until at least 8 or 9 pm, because of all our weddings.

We (at least I) am not prying about the price you are paying for the shop. Just giving you food for thought, though. For instance:
1. Is the inventory the same amount that it was 8-9 months ago when the current owner took over? If it is, fine. If not, sales price to you should go down.
2. Have the currentl owners purchased lavishly? Are you & your wife responsible for any of these bills, or are the current owers paying them off the the time of close?
3. Are all the payroll taxes current & paid?? (this is a biggie!!) You want to see the last 12 to 18 months of forms & cancelled checks. If not, part of the proceeds needs to be held in escrow. & paid accordingly to the proper agencies, inclduing amounts for penalty & interest.
4. Is there any rent or utilities that are not current? If not all current, see # 3 above for the solution.
5. Are sales (under the current owners) the same as what it was under the old owners? Do a month by month match of sales from 2003, 2004 & 2005 & 2006. If not, then sales price needs to be adjusted.
6. Are there any long-term contracts for yellow page ads, newspaper ads, etc that need to be examined? Who is obligated to pay the on-going debt? Again, an adjustment may be nexeccary.
7. Are there any vehicles that come with the business? Are they included in the price, or leased or financed? If you, leases will possibly need to be bought out or financing redone to move them to you & your wife.

What I'm trying to get across, is that this is a business transaction....and it needs to be at arms length. This is something that florists, and other small buseinss people have difficulty doing. It's black & white...put the cards on the table, and be honest (both sides). While it is nice that you are concerned about the current owner's tax implications, THIS REALLY SHOULD NOT CONCERN YOU!!! You need to do what is in your best interest ....not what is in their best interest! (this is why my earlier post suggested that you need an accountant and an attorney BEFORE you complete this purchase).

Florists, in general, are some of the best and most trusting people in the world. Because we are generally honest, hardworking and trustworthy, we think everyone else is too! Experience has taught me that this is often not the case!! (some if it was a bitter lesson...couldn't quite believe that I could have been taken by someone.......)

This is your hard earned money that you are about to be parted from....take the time (all the time you need) to do your due diligence. Do not let anyone pressure you into signing on the dotted line until you have all the questions answered that you need answered, and until you have turned over every possible rock that you can. In today's business environment, businesses are being unloaded quickly....people are being pressured to sign today "cause I have someone else....". Don't be swayed.

If they do indeed want to sell & this is the right business for you & your wife to invest your love, labor and money, then they need to give you the time and the financials to make sure that it is right.

Hope this helps!

Cheryl

PS....I'm not trying to preach to you. you are getting part of my "lessons" that I sometimes give in a local "so you want to buy a business" seminar & to some college business students that envision themselves as business consultants. My first message to the students is always: undertand the business before you buy it!

 

[CHR]

Cheryl -

You get my vote for Post of the Month. Outstanding advice to anyone interested in purchasing a shop.

I had the same thoughts about the sale being a wash with last year's purchase price. Much can change in a year although his wife's management could have grown the business and improved the inventory so the sellers may want to ask for more.

 

[Bigted]

Cheryl

Nice post. One thing I would add to check is, have the old owners received payment for any future weddings or parties that the new owner will have to provide.

 

[12BucksFor2Dozon]

BOSS and/or Ryan,

This thread is so full of great "newbie" info that I would like to nominate it for "sticky" status, if possible. All the great posts here should be mandatory reading for any entrepreneur thinking of getting started in the florist biz.

 

[theRKF]

Good thought, 12Bucks ... sticky it is!

Ryan

 

[flowerknife+us]

Drop FTD altogether.

You need to comb through the incomming logs of both wire services. From those logs. you need to determine where the origin of each of those orders. If they come from individual florists. Or if they come from the wire services themselfs. Or their minions.

I bet dollars to profits that the majority of your incomming is comming through FTD.

Teleflora does the same thing only their volume is less or at least distributed better.

It will be in your best intrest to divest yourself from being a work force for your biggest competitor(s).

You are paying for the shops technology with my wire service of choise. If it is working. what is the point of taking on other financial obligations so early on.

Your goal should be to look for the hidden money avaliable.

Sending FTD packing will put quite a bit in your pocket.

Some of the charges are membership. others are service charges.

All membership charges WILL be cash in your pocket! Wire and web.

As for service charge savings. You need to compair the apples and oranges of what the owner currently does. With what it will look like doing all the work through one.

If as i suspect. Ftd is sending them and the store is using Teleflora to send. Then the current outgoing won't be effected. The adjustment to be made is the requirements in labor and product to adjust downward for the loss of ftds incomming..

I suspect your experiencing the economic reality of filling 3rd. party vendor orders. Expensive isn't it.

I would suggest you keep happy whoever is the most capable/productive/loyal employee. Untill at least such time as to know more about that aspect of the business. Your only as good as your last order is appreciated.

I wouldn't rush out and tell the world about the change right away.

I would endevor to spark the intrest of the current clientel by changing everything about the physical location as possible.To the positive.

People like change, but not too much of it at once.

When they see you or others scurring arround "fixing the place up". the customers will ask. The employees will like it to. even though they will probably complain all the while.Well not always.


It goes without saying that the retail florist has been sucked dry by the wire services policy of letting third party vendors, as well as the activities of the services themselfs. I see no reason to support these parasites on my Dime. that is, Dollars. My advice is premised on that pholosophy.

A wire service should be viewed as a vehicle allowing you access to other profesionals on behalf of YOUR customer needs. Not as a way to keep you busy going broke.

Look at it this way. The biggest benifit is knowing that the work your eliminating to save money will only turn up as an expence for what ever competitor of your ends up with it. And they will be happy for the burden too. Trust me.

Just add up all of FTD's membership related charges. then deside how you wish to spend all that CASH.

You can progress one step at a time or rush off till your out of breath.

walking takes a little longer but you have fewer aches and pains for the effort.

good luck.

Start the minute the old owner gets hit by the door.

It's not to be viewed as how they liked it. Now it's hhhow you want it.

 

[milllion]

hey, i had 2 shops already on my 3rd. i hate those wire services. they cost u tons as you can see and its alot of work on the holidays when u get business no matter what anyways... if you locate sites like this and connect with people to order direct to each other, it works out with no fees. i guess its if you like constant work or more profit. just my experience with it. good luck! try this wedding lesd service i talk about it so much cause its cheap and really give great leads! www.topweddingflorist.com good luck! u seem swift to know what is working and what will make you$

 

[Sher]

So what is the cost of this service?