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Posted:  09 Aug 2012 23:40  
Hello All! I have the task of starting an interior and exterior planting division for a floral designer.  I am a plant person but am still learning about the business side of it.  They are used to floral industry standards.
Right now I am charging for plants wholesale times 3, and $35 per hour for maintenance.  For containers I price it at x 1.5 of my cost.  I am puzzled by the installation fee, however.  Does that include other materials such as pot lifters, fertilizers, moss, etc. I am wondering how to price it--is it as a percentage of plant/container cost?
Could someone nudge me in the right direction, please?  I find this website so wonderful!  Thanks everyone!
Posted:  10 Aug 2012 03:35  
You don't start with a selling price and work backwards to find out what your cost is...that's a recipe for disaster!


That means the costs of merchandise you'll sell, equipment you'll use, vehicles you'll drive, insurance and licenses you'll need, cost of credit to fund purchases, costs of utilities to turn the lights and HVAC on at your facility, employee costs, consumables costs, etc. etc. etc.  Once you have REALLY accounted for all of these things and you have a monthly budget in place, you'll know what you need to charge in order to break even (we need) or make a profit (we hope).

To approach this any other way is asking for big trouble.  I can't worry about how much to charge until I know how much it's going to cost me to open my doors each day.  There are no magical formulas...every business in every market is going to have a different cost basis.

Posted:  10 Aug 2012 12:47  
What Clem said. If you don't know how much you are spending it is too easy to under price yourself and wonder why there's no money in the piggy bank. Find your costs then determine your profit needs.
Posted:  11 Aug 2012 16:04  
And one of the classic symptoms of a business that does not have a budget (i.e., does not even KNOW what its true costs are on an ongoing basis) is the habitual use of credit cards as stopgaps for cash-flow problems..."oh, I'll just put it on the Visa and pay it off later..."  That just reinforces the false sense of well-being that some owners cultivate by kicking the expense can down the road.  Eventually it will have to be paid off, and unless the business experiences a great growth boom and spike in profitability, "eventually" never comes.


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