Tips for Building a Profitable Cut-Flower Business
By the Hensley's team, with thanks to the Slow Flowers community
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Ten Tips To Measure Profitability: We Unpack the Many Ways Flower Farmers Track Costs and Income
Flower farming is booming, driven by florists and shoppers who want fresh, seasonal, locally grown flowers. Low startup costs also help explain why so many people are getting into the business, whether with a backyard cutting patch or a small flower farm.
Almost overnight, many gardeners find themselves running a small farm business that needs as much care as the sunflowers, zinnias and cosmos. Growing beautiful flowers is thrilling for beginners, and selling bunches and bouquets to neighbors, friends and market shoppers is only the first step. Next comes one of the hardest parts of the job: working out which crops make money and which, unfortunately, don't pay as well.
A Utah flower farmer several seasons in at her flower farmdescribes how most new growers feel. In the first year or two you are simply thrilled that someone bought your flowers, but after a few seasons you start studying the numbers and wondering whether you are really earning anything. She believes growers need to look closely at pricing to understand what their flowers are worth.
About the Survey Data
A recent Slow Flowers member survey included several questions about how growers think about crop pricing and profitability. The questions were developed with help from a farmer-florist at an Oregon coast flower farm who also works as a business coach and researcher focused on helping flower farmers succeed and has written abook on profitable flower farmingfor growers of every size.
Most respondents said they don't target a specific net sales margin, and many named farm efficiency as the topic they most want to learn about.
The results show growers want more control over the factors that determine whether a flower farm is profitable.
Digging Deeper: Ten Tips for Profitability on Your Flower Farm
To explore further, the Hensley's team gathered the practices and strategies of four Slow Flowers growers, including the two above, and distilled them into 10 tips you can use on your own farm.
Also contributing are a grower at a North Carolina flower farm near Asheville (who has also written abook on growing flowers) and a grower at an Ontario flower farm in southwestern Ontario.
1. Track Labor Costs
Labor is notoriously hard to track. Most flower farmers juggle many jobs at once, the Oregon grower says, often to their own detriment, so it is tough to know how much time went to each crop and to the tasks that support it.
She uses a crop costing tool called Know Your Costs to Grow, created by Oregon State University's Center for Small Farms with Oregon Tilth.
Instead of clocking every minute spent on a bed of zinnias all year, you sample your time. Many tasks, like weeding, take about the same time whatever the crop, so you can time a task on one crop and apply it to others. A few times each season she times herself and her crew weeding or doing other jobs, then works out labor cost per unit based on how long it takes to finish a bed or a set area. Time per 100-foot row usually turns out similar across flower crops. Once you have that baseline, you have something to compare against.
Labor also matters when making bouquets, the Ontario grower says. Speed is essential: the farm's grocery bouquets sell at a modest wholesale price and are small, with few ingredients, so no one can spend several minutes on each. With stems prepped, she can make roughly one bouquet a minute. Even growers who aren't yet drawing a paycheck, such as one who recently moved from leased land to a farm of her own, still count the cost of their own labor alongside their crew's.
2. Know Your Inputs
If you know how much compost you bought for the year, for instance, you can work out the average cost per bed, row or crop. Knowing the total spent and how it was spread across your beds lets you estimate that average, the Oregon grower says.
At the North Carolina farm, the grower concentrates on big-picture expense figures. At year's end she reviews cost of goods sold, payroll, expenses and profit, and her accounting records show exactly what she spends on seed, plugs and supplies. On the income side she tracks each sales channel separately: farm stand, florists, DIY buckets, online sales of bouquets and bulbs, weddings, workshops and teaching, and calculates cost of goods sold for each. That shows her when a crop costs too much to grow; she dropped lisianthus, for example, because it takes a lot of labor and blooms when demand is low, so she can't charge enough to justify it. At the Utah farm, the grower tracks every input and sale in a spreadsheet, listing the cost of plugs, corms, seed, plants, compost, drip tape and landscape fabric, plus labor.
Comparing what she actually harvested with what she expected shows her which crops pay; that is how she found statice wasn't profitable for her.
3. Evaluate & Refine Sales Channels
Once you know who buys your flowers, you can also look at what each channel costs. Instead of focusing on a good day's market revenue, ask what it cost to make those sales. If two people spend a full day on setup, travel and teardown, you may be taking home much less than the top-line number suggests.
That review may show that some channels, like CSAs, earn less, the Oregon grower notes. Growers often value CSAs because the flowers are presold and the money comes in early. But with only a handful of subscribers, that income won't go far through the winter, and unless a CSA can grow, it may not be worth continuing.
She believes many farms spread themselves across too many channels trying to sell everywhere. She learned this herself: selling to so many buyers left no time to build relationships or find ways to sell each one more flowers week to week and over the season.
Instead of scattering her efforts, she focused on building a very successful roadside farm stand at a previous farm in California, which brought in strong revenue for a small stand. Watching sales showed her to stock less on slower weekdays and to build wholesale accounts to move flowers cut early in the week.
4. Use Bouquet Recipes to Control Costs
It's tempting to let your inner florist make the most beautiful, original market bouquets possible, but those rarely earn the most, the Oregon grower says. She has learned to work quickly and efficiently with ingredient combinations that look more valuable.
Her top-selling bouquets use one or two focal flowers, one or two branching fillers, one green and one airy, short-lived accent. That mix gives enough space, lightness and contrast in shape and texture to look beautiful and valuable.
Eventually she no longer needed detailed written recipes or to stop and add up costs while building a bouquet. She knows the wholesale value of each stem and tallies it mentally as she works, stopping when ingredient cost reaches about a third of the planned retail price.
At the North Carolina farm, the grower plans plantings around her bouquet recipes and design clients, which helps her assign costs to each sales channel. She aims to grow focal flowers, supporting flowers, and material for line, filler, foliage and whimsy, and a crop-planning spreadsheet helps her cover every category each month of the season. The Ontario grower, who farms several acres of cut flowers for subscriptions, a farm stand and weddings, sometimes controls costs by buying in flowers. It makes more sense for her to buy snapdragons from a grower with a large greenhouse operation who produces them year-round at a lower cost.
5. Tailor Record-Keeping
Comparing what your plants actually produced with what you sold shows what share of your flowers has no market, the Oregon grower says, and it may reveal that you only need to plant half as much of a crop to meet demand.
One tool used at the North Carolina farm is an accounting-software report for each flower showing which was most profitable across sales channels. The numbers are honest, and they often reveal that a flower the grower loves isn't one her customers favor.
6. Start Simply
You can start by tracking production costs for just a few crops. In her ongoing research, the Oregon grower works with a group of flower farms, each studying two crops, to see what those crops cost to grow and compare them with each other and with other farms. Measuring labor and inputs crop by crop and per bed answers practical questions, such as whether a single available bed would earn more in zinnias or dahlias.
7. Research Market Prices
At the North Carolina farm, the grower checks prices from other wholesale sources to make sure hers are competitive. She follows larger regional wholesalers and national suppliers of U.S.-grown flowers, noting factors like stem length and count. Since she sells both retail and wholesale, this information keeps her from undercutting her wholesale customers.
Knowing market prices also matters when she uses her own flowers in weddings. A common mistake is for farmer-florists to price their own flowers below the ones they buy in, which gives away profit. A flower used in a wedding is one she can't sell at the stand or to a florist, so she counts its full value in wedding recipes.
8. Know Your Markup
Most growers who track costs use different markups for wholesale and retail. The North Carolina grower uses a relatively low markup at her farm stand because it is rural and customers must drive there, and because it is self-serve: there is no customer service involved, unlike a farmers' market, and shoppers do a bit more work.
For wedding flowers she uses a higher markup that varies with the season and flower type. Spring crops usually cost more per stem; a ranunculus corm costs far more than a zinnia seed, so getting spring crops in the ground takes a bigger investment.
The Utah grower builds profitability into each stem by adding set percentages for overhead (such as web fees, card fees and fuel), owner pay and profit margin. The result is her true cost per stem.
Some crops come in under her wholesale price, and others well over it. For those she checks market value and decides whether she can raise the bunch price a bit or whether the crop simply can't be profitable and should be dropped.
For example, she chose more productive zinnia series that sell better over a larger-flowered series. Sunflowers are clearly profitable for her, with a wholesale price well above her true cost per stem.
9. Pay Yourself
The growers agree that profit starts with paying yourself. At the North Carolina farm, the grower put her early years of income back into building infrastructure. She now pays herself a set salary based on a regular work week. Her hourly rate may be lower than in her off-farm job, but she also keeps the business profits, and paying herself as an employee has tax advantages. She also employs a small part-time seasonal crew for most of the season.
10. Know That Bigger Isn’t Always Better
This tip ties closely to #3, reviewing sales channels. As a farm matures, focus on the most profitable use of your resources and energy, and on work-life balance when deciding how to grow. Review successes and failures at the end of each season, the North Carolina grower advises. She meets with her staff to discuss what they overplanted and what should go; even with records of every stem harvested, she values their impressions because they cut and deadhead daily.
A few years ago she built a decision matrix to show which channels took too much time or weren't enjoyable. She cut back on weddings to make room for farm workshops and ended most wholesale sales to florists, keeping one loyal shop that buys everything she offers. For both profit and happiness, a smaller farm made more sense.
BONUS: Look For Hidden Sources of Revenue
Sometimes a last-minute idea pays off, as the Ontario grower found. When an early fall freeze was forecast and her field was full of late-season dahlias she couldn't save, she posted on social media inviting followers to pick a bucket of dahlias for a set price. Dozens of cars showed up, many buckets sold, and happy customers left with armloads of flowers, bringing in unplanned income in a single afternoon.
