1.0 Executive Summary
The purpose of this business plan is to secure $75,000 for the development of a flower shop based in Yakima County, Washington. Flower Shop LLC (“the Company”) was founded with the intention of providing a wide range of premium flowers for both individual purchases as well as events. Revenue generating operations commence in the first quarter of next year.
Operations
The Company will operate from a brick and order retail location in Yakima County. The location is expected to operate within 1,000 square feet of space which will accommodate a large area for customers as well as a significant amount of space for preparing flower arrangements. The Company will produce contribution margins of 70% on sales (B2C).
A significant portion of the Company’s operations will be geared towards events including weddings, anniversaries, corporate events, as well as funerals. The Company will coordinate these efforts with a wide range of event planners and funeral directors within the target market area.
The third section of this flower shop business plan will discuss the operations of the business further.
The Financing
As noted above, the Company is currently seeking a $75,000 loan in order to commence operations. This business plan assumes that the Company will receive a 10-year loan carrying a 7.5% interest rate. These funds would primarily use for the build out of the location as well as furniture, fixtures, and equipment. The Founder will contribute $25,000 towards the venture.
If needed, the Company would be a strong candidate for a working capital line of credit to further the operations of the business. This document assumes that no further credit facilities will be acquired during the first five years of operation.
The Future
The Company will continue to expand the scope of its marketing campaigns on a yearly basis with a focus on creating additional visibility among the general public while also establishing ongoing relationships with event planners, wedding planners, and funeral homes throughout Yakima County.
Market Overview
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
The funding discussed in the executive summary will be allocated as follows:
2.2 Management and Investor Equity
The Founder is the 100% owner of the Flower Shop LLC.
2.3 Exit Strategies
Given the significant demand for flowers on a year-round basis, the Company would be able to sell this enterprise for a significant premium. In this event, a qualified business broker will be retained in order to conduct a formal valuation prior to marketing the business to a buyer.
3.0 Operations
As noted in the executive summary, the flower shop will provide a wide range of premium flowers from its easy to reach location in Yakima County. The business will be open to the general public as well as among partners that will purchase inventories on a B2B basis.
As it relates to B2B sales, the Company will primarily focus on establishing ongoing relationships with event planners, funeral directors, and hospitality businesses within Yakima County. The business will strive to establish ongoing standing orders with hospitality enterprises that will source their flowers through the business on an ongoing basis. This will be in highly important part of the Company’s revenue generation.
The business will also enroll as a service provider among major servies that accept orders and then route them to flower shops.
4.0 Overview of the Organization
4.1 Registered Name
Flower Shop LLC. The Company is registered as a limited liability company in the State of Washington.
4.2 Commencement of Operations
The Company will commence operations in the first quarter of next year.
4.3 Mission Statement
To provide a wide range of premium flowers on a cost-effective basis for the Yakima County public.
4.4 Vision Statement
To become a highly recognized and noted flower shop that delivers outstanding bouquets and arrangements.
4.5 Organizational Objectives
• Continue to work with a wide range of flower wholesalers so the business can receive preferential pricing.
• Implement numerous marketing strategies that create significant visibility among the general public as well as corporate partners.
• Provide a place of gainful employment for the Company staff.
• Maintain physically sound protocol so the business can remain profitable even during a challenging economic climate.
• Established ongoing relationships with wedding planners and event venues throughout the target market area.
• Adhered to all laws regarding the sale of flowers to the general public
5.0 Market and Industry Analysis
5.1 External Environmental Analysis
This section the business plan will document the current economic climate, the flower shop industry, the customer profile, and the ongoing competition at the business will face moving forward.
At this time, the United States is undergoing a challenging economic climate. This is principally due to the fact that there have been significant changes in global trade policy as well as domestic economic policy. The Federal Reserve and other government agencies are taking appropriate measures to ensure that economy continues to grow.
Even during a challenging economic climate, business will be able to remain profitable. As has been one of the themes throughout this document, the sale of flowers is important among wedding specialists, event venues, restaurants, and hospitality enterprises. The business will have control operating costs as a function of its revenue.
5.2 Industry Analysis
As of this year, flower shops generate $7.9 billion of revenue. There are 37,000 locations throughout the United States that operate in this capacity. This is a mature industry, and its future growth will be similar to that the economy as a whole as well as natural increases in population.
5.3 Customer Profile
The demand for flowers spans the entire socioeconomic spectrum. The Company expects that wide range demographics within Yakima County will come to the location in order to source their flowers. In regards to event focused operations, these individuals will operate as wedding planners, event planners, funeral directors, as well as managers of hospitality businesses.
5.4 Competitive Analysis
The Company will face a moderate to grieve competition as a establishes its flower shop operations in Yakima County. The business will maintain a major differentiating factor by being able to source a wide range of floral species as well as providing these products on a very cost-effective basis.
6.0 Key Strategic Issues
6.1 Sustainable Operations
Flower Shop will have sustainable operations as a result of the following:
• Significant contribution margins from the sale of flowers on a B2B and B2C basis.
• The owner has five years of experience working as a florist.
• The Company will generate highly predictable streams of revenue from standing orders among hospitality enterprises.
• The Company will enjoy a significant degree of economic stability as it establishes B2B relationships.
6.2 Basis of Growth
The Company will expand via the following methods:
• Expansion of the number of flower shop locations operate by the business in Washington.
• Continued expansion, the Company’s, marketing operations with a focus on direct outreach initiatives with third-party enterprises.
• Continue expansion of the types of floral inventory offered by the business.
7.0 Marketing Plan
7.1 Marketing Objectives
• Establish ongoing relationships with companies that frequently purchased flowers for their business operations.
• Use multiple forms of online marketing to create brand-name awareness for the flower shop among the general public.
• Enroll them on numerous small business associations in order further increase brand visibility.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• First year revenue will reach $446,000.
• Gross profits will reach $320,000.
Year 2
• Revenue will reach $477,000.
• Gross profits will reach $342,000.
Years 3-5
• By the fifth year of operation, sales will reach $585,000.
• Gross profits will reach $419,000.
7.4 Marketing Strategies
The Company we use a number of marketing strategies to create significant brand name awareness for the flower shop as a establishes and expands its operations. Most importantly, the Company is sourcing a highly visible retail location within Yakima County in order to ensure that the business is able to be seen by thousands of passes by a daily basis. The location will feature extensive exterior signage that showcases the premium level of quality that is offered at the location.
Throughout the life of the business, the Company will use numerous online marketing strategies to create significant brand visibility. The Company will establish it online presence prior to the launch of operations with a focus of getting ahead in regards to certain engine optimization. The Company’s website will be frequently updated in order to ensure that it can maintain its visibility among all major search engines.
Direct outreach with a number of regional businesses will also be of extensive importance to the Company’s operations. This will include establishing ongoing relationships with hospitality businesses, restaurants, event planners, wedding planners, as well as funeral homes throughout the target market. This will alternatively lead to a number of standing orders being placed which will create a significant degree of predictability within the Company’s operations.
The Company will also provide flowers for charity events, which will position the business as a community minded enterprise. This will also further increase brand-name awareness among the general public.
8.0 Organizational Plan
8.1 Organizational Hierarchy
8.2 Personnel Costs
9.0 Financial Plan
9.1 Underlying Assumptions
• The Company will have a compounded annual growth rate of 6^.
• The Founder will contribute $25,000 towards a venture.
• The Company will acquire a $75,000 loan to establish its operations.
9.2 Financial Highlights
• The Company will achieve contribution margins of 70% on B2C sales.
• Contribution margins of 60% will be generated on standing orders.
9.3 Sensitivity Analysis
The Company’s revenue is only moderately sensitive to changes in the economy. Flowers are in demand specific for a wide range of purposes in any economic climate. The flower shop will have highly controllable operating cost as a function of revenue, which will allow the business to remain profitable while servicing its underlying financial obligations.
9.4 Source of Funds
9.5 Financial Proformas
A) Profit and Loss Statement
B) Common Size Income Statement
C) Cash Flow Analysis
D) Balance Sheet
9.6 Breakeven Analysis
9.7 Business Ratios
Appendix A – SWOT Analysis
Strengths
• Strong demand within the target market area for ongoing access to premium flowers.
• Limited competition among Company’s operating a similar capacity.
• The Company can develop additional flower shops once the initial location reaches maximum capacity.
Weaknesses
• Operational complexities given that flowers are powerful.
• The barriers entry for a flower shopper are relatively low.
Opportunities
• The Company can establish additional locations within Washington state.
• Continued expansion of the Company’s marketing campaigns with a focus on establishing standing orders.
• Sales of other products that complementary flowers.
Threats
• Supply chain issues could cause the underlying cost of flowers to increase.
• Ongoing issues within inflation could significantly increase operating costs.
Appendix B – Risk Analysis
Development Risk – Low
The Company’s has already begun the source of location that will have the flower shops operations. The primary matter needs to be addressed the securing the funding discussed in this document.
Financing Risk – Low/Moderate
The $75,000 will be principal used for the buildout of the location as well as inventory. The risks related to this investment are offset by the high gross margin generated from flower sales.
Marketing Risk – Low
The Company will engage in a wide range of direct outreach initiatives with hospitality businesses, restaurants, event planners, wedding venues, and funeral homes to develop a standing order roster. These risks will be tempered through the use of online platforms to source orders.
Management Risk – Low
The founder is a highly experienced florist who will be able to properly bring the operations of this business to significant profitability.
Valuation Risk – Low
The valuation risk is offset by:
• Limited competition within the target market among flower shops.
• Highly predictable income from standing orders.
Exit Risk – Low
In the event that the businesses to be sold, the Company will coordinate with a qualified business broker to manage the sale. As noted earlier, there are no long-term plans to sell the business. In this event, the Company will try to work with an established florist to acquire the flower shops operations.