Running a flower shop is a combination of creativity and business acumen. Mst florists would rather be designing arrangements than analyzing spreadsheets, but understanding your numbers is one of the most powerful ways to ensure your shop’s long-term success.

SAF’s Floral Management magazine featured an insightful article by Paul Goodman, MBA, AAF, PFCI, that laid out industry benchmarks every retail florist should know. We’ve adapted some of those key takeaways here to help you track your performance, make smarter decisions, and keep your business thriving.

Start with the Big Picture

Successful flower shops share a few common traits: they manage product costs carefully, keep payroll under control, and effectively manage their overhead. You don’t have to be an accountant to do this; you just need to track a few key numbers each month and make minor adjustments when something drifts off target.

Goodman has studied hundreds of retail flower shops, and the results are clear: when florists manage three key areas—Cost of Goods Sold (COGS), payroll, and facilities expenses—they’re profitable. When they don’t, profitability slips away.

Manage Your Cost of Goods Sold (COGS)

COGS represents what you spend on the products that go into your designs: flowers, foliage, containers, and supplies. It’s one of the biggest factors in determining profit and one of the easiest to overlook.

Here’s what healthy COGS looks like:

• Arrangements: 27–33% of retail price
• Flowers & greens: 20–25% of retail price
• Total shop COGS: 35–38% if arrangements make up about 65% of sales

If your costs are higher, take a closer look at your buying and pricing practices. Review your flower prices regularly, ensure your markups are consistent, and consider ordering in ways that minimize waste.

At Rio Roses, we’re committed to helping florists control costs by providing consistently high-quality blooms and predictable pricing. Knowing your costs and keeping them steady is the first step to protecting your profits.

Keep Payroll in Balance

Labor is often the largest expense after product costs, so it’s essential to make sure it aligns with your sales. Payroll encompasses wages, taxes, and benefits, and the ideal percentage may vary depending on your business’s structure.

Here’s a quick guide:

• If the owner/manager is on payroll: Total payroll should not exceed 30% of sales.
• If the owner/manager is not on payroll:

• Shops under $600,000 in annual sales: ≤ 20% of sales
• Shops over $600,000: up to 23%

If your payroll numbers seem high, start by evaluating design labor. Are too many hours going toward production for the sales volume you’re doing? Can your team cross-train to handle both design and sales during slower periods? Smart scheduling and team flexibility can make a big difference.

Control Overhead and Facilities Costs

Your shop’s rent, utilities, maintenance, and insurance should average around 8.5% of total sales, and never exceed 10%. If your facility costs exceed that, it may be time to reconsider your space. Perhaps you’ve outgrown it, or you’re paying for more square footage than you need.

Other operating costs also add up quickly.

• Advertising: 3–4% of sales
• Vehicle expense: 2–4% of sales

Tracking these expenses monthly, using even a simple spreadsheet, gives you the clarity to see trends and adjust before small issues become big ones.

Aim for Healthy Profit Margins

Once you’ve controlled your major expenses, you should be able to achieve a net profit before taxes of around 10% of total sales. Well-managed shops may even reach 16%.

Profitability isn’t about cutting corners; it’s about creating balance. By understanding where your money goes and setting clear targets, you can design with confidence knowing your business is on solid ground.

Knowing your numbers gives you the freedom to focus on what you do best: creating beauty. By tracking your key metrics, you’ll gain the insight to make informed decisions and build a more sustainable, profitable floral business.