I like to think of myself as a floral entrepreneur. The idea of a second location has been on my mind for a few years now, as my business has been humming along, I’ve had the time to focus my attention on other projects, and I love a challenge!
I wasn’t sure whether I should take the risk and open another flower shop under the same brand or grow by purchasing an established business. Then, late last year, the perfect opportunity to purchase an established shop came along. I decided buying an existing shop would be the smartest way for me to expand. This new shop clicks with my eco roots and makes for the perfect sister store. The timing and feeling was just right!
March 1 was the day I received the new set of keys to my second shop, a very big day for me and my business. I started eco|stems back in 2009 with a dream, a business plan, and a small loan. Taking on a second store has been rewarding, challenging and has kept me on my toes to say the least!
There are many older florists who are looking for an exit to retirement and a new generation of florists coming up looking for opportunities in the flower world. Whether you want to own for the first time, are looking to expand, or looking to sell, there are a few things to keep in mind throughout this process that I want to share while they’re fresh!
- Be prepared to open the books if you’re looking to sell. A smart purchaser will be looking for two to three years of financial statements to prove the business is worth the investment. Make sure all of your sales are going through the register; you want your business to look as successful as possible with paper proof. Compile your documents in one place, and include anything that makes your business look great.
- Research whether it make more sense for you to start your own company with a fresh name and face or keep it the same as the well-established business. I loved the experience I got from starting my own brand from the bottom up. There are no expectations—you can set the rules and have it be the way you envision from the start. I chose to buy an established florist the second time around. The steady business from day 1 was the main reason I chose to go this route. The fit was perfect with my first store and the timing was right.
- Make sure you have the financing sorted out. Whether you use a financial institution, your own savings, or a loan from friends or family, know and study the ins and outs of the financials. Do you have enough cash on hand to manage a larger cash flow? Will you have enough income to service the debt? Run a few scenarios through a spreadsheet to see how the numbers work.
- Get a good lawyer, real estate agent, accountant, and banker. Be sure these people are working for you! Share your plans with them and don’t be afraid to ask them for their advice and opinions about the plans you’ve drawn up, that’s their job. Do your due diligence!
Here are a few other things to think about throughout the transaction:
- Cultivate great staff and keep them in the loop as much as possible leading up to closing. They’ll be key in helping with a smooth transition. Be sure any potential new employees are ready and willing to learn and take on any challenge with the changes and new processes you might implement.
- Give lots of thought to any changes you plan to make and their impact on customer retention and satisfaction.
- Call on friends and family for their expertise and a helping hand when needed.
- Make sure you have a plan to take control of the business website and domain information, social media accounts, passwords, bills, accounts, etc.
- Transition day is a big deal. Depending on how you structured your sale, you might be doing inventory. You can also opt to just take over with the inventory that was on hand on the eve of closing.
- Plan for the future. How does this new business acquisition fit into the future plans for your business? Update your business plan.