Entrepreneurship in the bud

Nation's Business, April, 1997 by Steven Blakely

I have been working in sales but would like to start a flower shop in my hometown. The market looks good: The town has a funeral parlor, four churches, and about 3,500 residents; the one local flower shop recently went out of business. I know roses are red and violets are blue but how to start up, I haven't a clue. J.N., Grafton, Ohio.

It takes more than flower power to succeed in the highly competitive, $15 billion floral industry. "It's a very difficult business," says Jennifer Sparks of the Society of American Florists (SAF) in Alexandria, Va. "There's a lot of turnover."

The SAF represents 9,000 florists nationwide, has basic information for students interested in the industry, and runs professional seminars during the organization's annual convention; call (703) 836-8700.

You can look beyond the bloom and get to the roots of the business through the two major floral wire services, they offer training, information, videotapes, and professional help to their members. Contact American Floral Services (AFS) in Oklahoma City (1-800-456-7890) or Florists' Transworld Delivery (FTD) in Southfield, Mich. (1-800-788-9000).

Paul Goodman, president of Floral Finance, an AFS newsletter, says, "The barriers to entry in the retail floral business are very low--you can open a shop with basic equipment for about $30,000."

He recommends, however, that anyone who wants to get into the business should first work for a florist to gain experience or should get training at a floral-design center.

Goodman says floral retailing "is one of the most difficult retail businesses there is" because wholesale costs are hard to control, the product is highly perishable, rapid turnover of stock and tight control of inventory "shrinkage" are essential, and sales volume is crucial.

"The average retail floral shop does about $250,000 in gross business a year," Goodman says. "You can't expect to make much money until you get up to that level."