How to Run a Profitable Wholesale Cut Flower Farm
Edited by Krystle, BR, IngeborgK, Netstars22
You might enjoy the idea of spending your days in a greenhouse full of beautiful looking, wonderful smelling flowers, but if you want to make a living at it, you need to be a good business person, too. Here’s how to run an operation that will let you smell the roses (or zinnias…or chrysanthemums…) and make money at the same time.
Write a detailed business plan and have it reviewed by at least two other successful growers.
Be willing to grow anything that there’s a market for. In the U.S., avoid “commodity crops” like roses, carnations and chrysanthemums, which are grown outside of the country in places with labor and production costs are too low to compete with.
Find a void and fill it. The key is to find a niche market. One example is flowers that don’t ship well (e.g. zinnias, snapdragons) because then you won’t compete with wholesalers who bring in flowers from all over the world. Another example is growing dahlias in greenhouses during the winter, as you may be the only one providing it at that time. Vicki Stamback, a successful cut flower business owner in Oklahoma, recommends: “The harder a flower is to grow, the more money-making potential it has…If you really want to make a name for yourself in the market, do something no one else is doing.”
Build a customer base.
Look through the phone directory to see which florists have the biggest ads. Ask them what they have the hardest time getting at a good price.
Farmers’ markets are a possibility if the clientele are supportive of local farmers, but not if they attract bargain-basement shoppers.
Know the production cost of every flower that leaves your farm. You will need to have several heated greenhouses and in order to turn a net profit, you need to know exactly how much it’s costing you and how the flowers you sell are going to cover that and then some.
Set your prices. How much do you need per square foot to break even? You should be generating at least twice that. Don’t bother trying to undercut the wholesale prices; instead focus on providing a better product. Consult a publication like the USDA Wholesale Cut Flower Price Reports for reference.
Put a face to the business. To set yourself apart from the wholesalers, develop strong relationships with your customers. The key to that is consistency. Many florists might be skeptical because local growers tend to come and go. Make your deliveries reliably, get a good reputation, and your business will grow through word of mouth.
Be willing to make emergency trips on the weekends, but only if they buy enough to make it worthwhile.
Return phone calls right away.
Drop customers who don’t pay or who don’t buy enough.
Hire employees. You will need more employees during peak season than in winter. Don’t try to do it all alone; if you want the business to be profitable, you need to be reliable, and in order to be reliable, you need help.
Use crop rotation, cover crops and compost to build fertility and break the cycles of pests, diseases and weeds. Use organic methods if you can, but you may decide to use chemical treatment if an issue threatens to ruin an entire crop.
If you hire employees to make deliveries, be sure to rotate so that you still get to see the customers on a regular basis. It’s also a good idea to go on deliveries with the new driver for several weeks so that customers feel comfortable with him or her.
Expect to get paid every time you deliver. If a customer wants to pay every thirty days, do so only after they’ve paid reliably upon delivery for three months.