Flower shops, also known as florists, are a niche market that attracts a very limited number of potential buyers. Because of that, everyone who owns a florist and wants to sell it needs to compile all financial data from the past years and hire a business broker if possible.
At the same time, flower shops are also small business, so you don’t expect to sell it for a millionaire price, but you sure can take a good money from it if you know how to value your business correctly.
Flower shops are very famous not only by its physical stores but for its online sales as well, and there are more than 20.000 all over United States according to Society of American Florists.
Take a look at the tips below and learn how to make more from your earnings and sell your flower shops to best offer.
What Is Your Flower Shop Business Worth?
If you are going to calculate how much your flower shop is worth you can use the same method used to determinate other valuations.
First of all, research local markets in order to determine the number of flower shops, floral arrangement franchises and other flower and gift shops that exist in your area. This step is important to know exactly what the competition is around you and how you’re going to sell your business the best way possible.
After that, prepare a complete financial report for potential buyers. But if you don’t know how fill this report, make sure the following questions are answered:
- What are the sales?
- What is the profit?
- What are the growth trends?
- What is driving new sales and is that sustainable?
- What channels do new customers come from and what is the breakdown of each channel?
- What is your market position?
- Is your Location favorable?
- How reliant is the business on the owner?
- What systems and processes are in place to run the business?
Those are some classical questions that every business owner must have in mind before selling their business.
As flower shops are small businesses, these calculations may not be that difficult, but you can always count with some help from professionals.
Meet the main valuation drivers: Location, Reputation, Facilities and other factors, such as access to parking etc.
A good location, with no strong competition around, a respectable reputation, a beautiful decoration and a pleasant environment are some key factors to measure what your flower shop is worth.
What Makes A Flower Shop Business Worth More?
To make a flower shop business worth more you still must attempt to the valuation drivers written above — and, of course, make sure to always improve it.
Investing in flower sales is very important as well, especially in terms of online and wire sales. There are two types of wire sales: the wire out one, on which the buyer order flowers to be delivered in another city, and the “wire-in”, on which a buyer orders flowers from another city to be delivered locally.
These investments are fundamental to improve your business and make it worth more.
But if you are still in doubt, you can attempt to check some key aspects as well. Take a look:
- Predictable key drivers of new sales
- Stable or growing traffic from diversified sources
- Established suppliers of inventory with backup suppliers in place
- Traffic stats
- High percentage of repeat visitors and repeat sales
- Clean legal history
- Brand with trademark, copyright or legal concerns
- Documented systems and processes
- Growth potential
What Does The Average Flower Business Sell For?
It’s not common for a flower shop owner to sell his business for a millionaire price, that’s why the total transaction value can be considered “small”.
But that’s not the only conclusion we can draw after a 10 year-old analysis. After that period of time, we can gather a lot of interest data. Look at the number of deals made in the industry: the average valuation of a flower shop is $164,272, with an average multiple of 2.21.
It means that the average asking price is usually two times larger than the total sales of the 409 flower shops that were sold in the past 10 years, according to our research. The median or the exact middle of all deals made is $105,000.
What Is The Most Frequent Deal Size?
As flower shops are small businesses, most of the deals were set with less than $250k not only in 2015 but in all the years before. It’s by chance that the most frequent deal size is $50.000.
As expected, the second best-seller category is the one between $250k and $500k, but still it is much smaller than the first.
Is The Flower Shop Market Getting Bigger?
If you look at the chart, you’ll see there’s not a big difference in the yearly total transaction value.
In 2015, there has been more than $4.1 million in sales, while in 2014 the number was pretty much the same: $4.4 million.
The stronger gap happened between 2013 and 2014, with a difference higher than $3 million.
What States Have The Most Flower Shop Deals?
Are you wondering where the most deals were made throughout the country, or if your state has a hot market to sell fast? As you can see if you are located in California or Florida, you may get a lot more offers than if you are in Kansas or Indiana for instance.
Massachusetts and Arizona are not that bad neither, but their numbers are much smaller than FL and CA.
Why Would You Sell In The First Place?
The reason to sell always varies from each person. Maybe you are looking for new challenges, businesses and opportunities, or you just want to enjoy your family and retire. Although it can seem tempting to get your hard worked cash, make sure that you are clear on the motives so you don’t regret afterwards.
How Long Will It Take To Sell A Flower Shop ?
If you have read all the necessary steps to understand your valuation, and think you have focused on all the topics that make your company worth more, it is maybe time to start the process. Selling your business is a long-term process, and doesn’t happen overnight. Usually companies sell in 12 months, but you can also see deals getting closed in 6 to 9 months depending on the opportunity.
As flower shops are small businesses, the process tend to be a little shorter than it usually is in different markets. Gather all financial reports may be faster as well, and to find a potential good buyer can be pretty quick too.
What Is The Process Of Selling Your Flower Shop?
This step by step process will help you get less confused when you make sure you are ready and confident to let go of your business, and perform a nice and positive sell. Many entrepreneurs forget about a step, or just don’t have the right guidance to know all the stages necessary and get lost through the process. Don’t forget to go through all of these, and if you have any questions, comment at the end of the article or contact us for more help.
Who Will Buy Your Flower Shop?
If you are wondering about the buyers that can be interested in your flower store, don’t worry, there are many options and possibilities. From First Time entrepreneurs, to businessmen interested in new opportunities, the chances are that in the industry it may likely be a person who already had a store in the field.
Flower shops, also known as florists, are small business which all its gross income depends on sales, especially the wire and online sales.
Learning how to invest in technology and other ways to make your business worth more, take a serious look into competition and where the flower shop is located are essential measures or attract interested buyers.
If you want to start accelerating your buyout process, fill out our free valuation form and get your business valued today! Leave your comments on any doubts or feedback, we are glad to hear your thoughts!