Are you creating yourself a job or a business?

During our Business of Floristry call last month, we discussed the discomfort that comes with putting prices out into the market based on their ‘true cost’, rather than what we think the market can take. I wanted to expand on this topic a bit more…

Pricing is one of the ‘trickiest’ parts of floristry. It’s the piece that everyone wants to know about, to demystify, to work out what others are charging… The thing about price is that is simultaneously entirely scientific and enormously emotive.

When you calculate the true cost of your work (factoring in all your time as well as the cost of flowers, travel to and from venues/deliveries, sundries, and your overheads, website, accountant fees, insurance plus profit…), the true price can feel daunting to put into the market… will anyone really pay that much? I don’t want to price myself out… So then you cut the price a little… we all do/have done it…

Only here’s the thing:

If you don’t properly factor in all your costs, and include a profit, you are basically creating a zero hours contract job for yourself. You aren’t building a business.

Which then begs the question, why incur all the overheads, stress, and time to run a 'business' when you could freelance, earning comparably with less stress and no overheads? While this might sound dismissive, it's an important point for reflection.

So, do you want to create a job for yourself or a business?

We’re absolutely not saying don’t create your own business and brand. But sometimes we almost drift into making decisions about our lives and our work without thinking them through analytically. You might realise that what you actually need is a job, not the complexities of a business - and that’s perfectly fine. Or perhaps, you’re currently more suited to a job, with plans to scale to a business later. That’s also valid.

When making a decision about what your floristry ‘career’ looks like, there are lots of options. Each one has varying levels of tolerance around investment, cost, risk, commitment and reward.

Understanding business models

We explore the different ‘business models’ available to you as part of our Business of Floristry programme. Some of them are more ‘business-like’ in the traditional bricks and mortar sense of the word, and some of them are more freelancer / flexible. It just depends on where you are in your life, and what you want your life to look like.

But regardless of the structure of your ‘business’, the price you put on your products needs to reflect your costs and include a profit.

Factoring your costs

Your costs are made up of both fixed costs (overheads that stay constant regardless of how much revenue you make/work each year) and variable costs (that vary with the work you take on, eg the cost of flowers for a wedding).

If you only pay yourself for the hours you ‘work’ on a wedding or in your shop, are you doing all the other things that it takes to run your business for free? All the hours you spend doing your accounts, developing business leads, managing relationships, the admin in the run up to delivering an event, on social media, marketing…

And what if you can’t do the work for whatever reason (eg you’re sick or take a holiday). You bring in a freelancer to cover you, who you pay for their hours, but then don’t you get paid for creating that job opportunity? What about all the investment you’ve put into building your brand and the relationships that have generated the work that comes your way?

And, for all you flower farmer florists - if you actually counted how many hours you work on the plots, would your salary meet the minimum wage? You pay your freelancers that though, no…? (the whole volunteering debate will have to go into a separate post…)

Profit is an essential part of business

Assuming you have factored in all your costs, the next part that seems to make everyone squirm is including a profit. But profit isn’t about you usuriously taking money from your clients to line your pockets. Generating profit is an essential part of business to ensure that you have the ability to invest in future improvements to keep it thriving in the long run.

How are you going to pay to update your website, redecorate your shop or studio, refresh your brand, build new beds or buy a new polytunnel so you can grow more flowers…? What if you need a new delivery van, or your laptop breaks, or you invest in continued professional development? How are you supposed to fund that? This all comes from profit. Money that is retained in the business to be reinvested for future growth, or distributed to shareholders (you) in the form of dividends.

Sitting down and going through all your costs and putting them in a spreadsheet is so important - you have to understand what your actual costs and thus prices are.

“I waited until the last possible minute to do the homework from last month’s call because I was so afraid of the numbers and it all feeling like an impossible mission. Of course, you were right, as usual, and once I ripped the band aid off, actually playing the video and taking my notebook out it was super digestible and not scary at all!”

(Feeback from one of our Business of Floristry community)

Cost-up, market-down pricing

That said, annoyingly, pricing isn’t that simple. A ‘cost-up plus profit’ approach to pricing is one way of setting your price.

The other method is understanding what price the market (ie your customer) expects, and working backwards, ie ‘market-down’ pricing. Under this approach, however, you still need to understand what your costs are so that you can understand how to adjust them to meet that price and still pay yourself properly and generate profit…

There isn’t a dark art to it. It’s just numbers. Numbers don’t lie. If they’re the costs and you’ve included your overheads and profit, then that is the true price. So why is it so emotive and challenging for so many of us to put our true price into the market? Well, that comes down to a question of worth… and I have a LOT to say about that… but maybe that’s for another time.

Unpicking these topics is exactly why we developed "The Business of Floristry," our comprehensive 12-month mentorship programme and community designed to help florists transform their love of flowers into sustainable, profitable, and fulfilling businesses. Successful floristry isn't just about mastering floral design; it's also about understanding the intricacies of running a successful business, from understanding your costs to setting prices that reflect the value you provide. The Business of Floristry helps you navigate those intricacies with the collective wisdom and support of Cissy and our community of like-minded florists.

So, if you’re ready to take your floristry business from a zero hours contract to a financially, emotionally and environmentally sustainable business, why not sign up to The Business of Floristry, and start turning your passion into sustainable success.