April 9, 2015
Floral pricing can be a somewhat confusing thing to navigate, especially when you’re new to the wedding floral industry — or flowers in general! But, I think you’ll always be playing around with ways of doing it, so don’t think you’re stuck in any set structure! Heck, I still fiddle with my pricing here and there based on increasing my income steadily/future growth, etc.! I thought I’d share a few of the common ways that wedding floral designers price out a wedding. Before you decide on pricing, just know that it’s entirely specific to YOUR business. First, I should say, I’m no accountant and don’t claim to be any sort of financial wiz (my momma does all that for me — let’s admit, I’m too right brained for all that nonsense), but these thoughts are what has or hasn’t worked for me over the years as a solo, creative small business owner figuring things out all by myself.
To get us started, first you need to stop worrying about what everyone else is charging on their bottom line. You will always have someone that will beat your prices — and they don’t pay your bills, do they?! We should also start with thinking about the behind the scenes that goes into doing a wedding – working backwards to come to your end costs. If you have $15,000/year in overhead (rent, utilities, internet, etc.), then you need to build that into your pricing. If you KNOW you can get 20 weddings per year, then base your pricing on that as a starting point. I base mine on knowing I can get and only want 27 weddings per year — it’s just a good number for me, I can focus on my clients and give them the attention I want to, while staying SMALL. I don’t want to run a huge operation that has multiple delivery teams — I did that in my third year and it wore me out and didn’t make my income any better, so I went from 60 weddings to a solid 25-30, by choice. Take a look at the year as a whole, then start with writing down how many weddings you KNOW you can get – or that you are comfortable saying you’ll be able to get. Let’s say you’re brand new and you want 10 wedding floral ‘orders’ (I hate calling them orders, because it’s so much more than that, but I digress). Let’s say you know you can do 10 at $2,500.00. That’s $25,000. So, then you need to subtract your expenses over the whole year – let’s give it a round number of $11,000.00 – say you’re doing it from home and you need a little bit for internet, a computer, some studio decor, a small cooler, some office supplies, an SUV payment, etc. That leaves you with $14,000.00. Then, there’s the flower cost of course,… so we could say 25% of that 25k is for flowers and hard costs like supplies $6,250 – then your remaining ‘income’ (less taxes, blah blah, things like that) you have, roughly, $7,750.00 remaining to pay yourself. If you average 30 hours per wedding for the four days you’ll spend designing + delivering (gas) + 15 hours on average spent emailing, consulting, meeting, planning, writing proposals and ordering for the client. That’s 7,750/10 = 775 per wedding/45 hours = $17/hr. So, when you’re left with JUST that (and we didn’t even account for employees, merchant fees, or business taxes yet!). PHEW! Did that help you to get an idea for how much you want to charge? Or at least inspire you to either raise your minimum or set your pricing at a rate higher that 4x the hard costs (as I did in this example)? I don’t mean to be a negative nelly, I just am trying to help you get a sense of what you want to do as far as pricing goes so you don’t end up working all year for $5/hour!… trust me, I’ve BEEN THERE! … and it’s awful! I did that my first two years in business! Okay, so on to some different pricing structures:
1. Flowers (bunch pricing) and supplies + assistant labor @$10/hr + delivery at .50/mile x 4 = ___ + tax + merchant fee = TOTAL
This method is great for covering everything, and you can set that rate of “x4” to anything … x5, x6… but that “x#” is based on your overhead and your desired income. So, that’s not a one size fits all, but a great model for pricing! However, this model can backfire for orders that are more labor intensive, so you MUST set that “x4” number to a higher number to cover the labor… but since that number isn’t an accurate number, it can end up not properly covering additional labor or employees you’d need. Unless of course you build it into the assistant labor number. The best rule of thumb is always to account for more than you think you’ll need so you don’t affect the quality of work you’re providing to your client.
2. Flowers (stems priced at full markup of 3x, 4x, 5x…) + Supplies (at usually a 2x+ markup) + Labor Rate (a percentage you decide on … 20%, 40%… usually based on difficulty) = Subtotal + Delivery Rate (can be based on mileage x how many vehicles needed)
This allows for an itemized listing for each element, which many clients love to see the end numbers — For example, ‘Bridal Bouquet $250.00’. BUT, it leaves for waste, because you aren’t rounding up the bunch counts. So, it hurts you financially to do it this way. Unless of course you have somehow in your recipes made everything perfectly match bunch counts. But, I’ll tell you, it’s hard to keep up with perfectly rounded up bunch counts when a client decides they want to remove all the garden roses from all the bridal bouquets, or lessens something to where it throws your numbers off — talk about work! ;)
3. I’ve seen Preston Bailey recommend a method like this one, and I think it works for him because he gets floral orders that are $100,000.00+, so the markup doesn’t need to be 4x, it can be 2x in order to produce a good amount for a single wedding. Whereas a florist doing a $3,000.00 order must charge a different markup in order to profit since the ratio of expenses to the order is much different. This isn’t going to work for the average florist, so just know I’m not recommending this one, but sharing it!
Flowers (rounded up to bunch counts) + Supplies + Labor (hours x $10/hr for example) = subtotal x 2 + tax, etc.
4. Okay, so this one might not count as a fourth, because it’s pretty similar to #2, but heck, let’s add another!
If you’re a flower shop, you can afford to have waste, unlike a wedding only flower studio that buys flowers JUST for a particular wedding that can’t resell unused or items that haven’t been accounted for and paid for in a wedding order. This method also allows for the client to see itemized pricing. This system used to work for me when I owned a retail studio, but is also still hurt my bottom line with all the waste that we weren’t able to sell. So, if you’re a floral studio that also sells lots of flowers retail, and you know you can sell the leftovers, you can afford to do this kind of system…
Flowers (charged by the stem, at 3x + markup) + Supplies (at 2x+ markup) x Labor (usually a percentage, but can be a flat rate) = Item Cost (Bridal Bouquet, etc.) + Tax, Delivery = Total
Whatever system you decide on, it needs to be fitting to your needs, your overhead and your business goals! There’s no one-size-fits-all, trust me, I’ve tried everyone else’s and I’ll tell you it hurt my business in those first years! Just calculate what you need, and set it based on that! If you need to require a certain minimum in your contracts in order to make that happen, do so! I was scared for so long about booking a wedding with no set contracted amount, but as soon as I started doing it, my business became stable financially! More on that in another post! I hope this helps!!