Hope Blooms Flowers and Things is a FTD floral shop owned by Dorothy Hope since the year 2000 (“Dorothy Hope,” 2016). The floral shop is open six days a week and offers full floral services including flower bouquets and arrangements for weddings and events (“Hope Blooms Flowers & Things,” 2016). The shop itself sells greeting cards, gifts, artwork, locally grown flowers and home decor. The business has a wedding and event planner, and it works with photographers and other event resources to remain as full-service as possible. The store is also deeply involved in the community, and a quick look at their Facebook site reveals community succulent classes and philanthropic projects that help the homeless. It also shows a young boy holding up his Rose-a-Month card, and he is holding a beautiful single rose for his mother (“Hope Blooms Flowers and Things!” 2016). Hope Blooms Flowers and Things is not Dorothy Hope’s first floral shop, and she is looking to sell the business and retire but wants to make sure her business keeps servicing the Eagle, Idaho area, in which it is deeply intertwined (“Dorothy Hope,” 2016). The community expectations of this business are a benefit and a challenge to future buyers who have large shoes to fill in Ms. Hope’s absence.
Business Model Evaluation
Evaluating the business model of this floral shop requires determining exactly how the organization makes money (McClure, 2016). In the case of Hope Blooms Flowers and Things, there are two primary sources of revenue. The first source is that of the flower and gift shop, and the second is the FTD floral shop. Ancillary sources of revenue include wedding and event planning and plant classes, which are significant but not primary money makers.
The flower and gift shop revenues bring in tourists and locals in search of gifts and local flowers. This also provides visibility to ancillary services offered through the company. In combination, these items create significant revenue that is complimented by the FTD network. The FTD network brings brand recognition and quality standards that are recognized by many, and it allows Hope Blooms Flowers and Things to gain customers through FTD’s website that provides local and international shipping options. Likewise, the store’s personal website adds these options. FTD has a well-known return policy, which is much like the store’s return policy, however FTD’s nationwide popularity brings comfort to customers.
It is clear that the staff at Hope Blooms Flowers and Things is more than adequate. They are long-term employees with a devotion to Ms. Hope and a commitment to their team. This will be difficult to maintain through an ownership change, as trust will have to be gained. Training will not be necessary as far as floral education and event services knowledge is concerned, but teambuilding exercises will be necessary with the new ownership to build trust among employees who may feel less comfort while undergoing changes in ownership.
Feasibility and Due Diligence
The floral industry has suffered over the past five years due to poor economic conditions that decreased disposable income and discretionary purchases. However, it is still a six billion dollar industry in the United States, and high income areas tend to perform better due to higher levels of disposable income (“Florists in the US,” 2015). Eagle, Idaho is a suburb of the state’s capital, and its annual family median income is $90,503 compared to the U.S. average family median income of $64,585 (“Eagle, Idaho,” 2016). The economic performance of this area yields encouragement and feasibility for those in the floral business.
When performing due diligence of Hope Blooms Flowers and Things, the organization’s tangible assets are underwhelming compared to its intangibles. Floor inventory is a mix of new, eclectic items and those that have depreciated but remain as space fillers to fill the space in the eye of the consumer. The plants, however, have a high turnover rate, especially the succulents, which are inexpensive to purchase but can be sold at a higher price once cultivated. Fresh, local flowers also bring in customers, but many of these are grown in the gardens of locals, and the profits do not go to the business. The flower arrangements for events are the biggest revenue for the business, and with the help of FTD, that revenue is spread to delivery services as well. The business has received some complaints about the cost of delivery through the FTD service, and this is a negative that cannot be resolved without the removal of FTD services.
It is clear that Hope Blooms Flowers and Things is a thriving business that has a good product mix that meets the needs of its community. The biggest asset it has is its owner, who has been in the flower business for decades and has developed a following. The biggest risk involved in the purchasing of this business is losing Ms. Hope to retirement. Therefore, it would be advisable to negotiate a phasing out period of Ms. Hope’s influence over six months to one year that would introduce new ownership to the community and allow the current staff to build confidence in the new business. Retaining current staff is a high priority due to their known expertise in this suburban region.
Purchasing vs. New Venture
A new venture floral shop would likely be profitable in an area like Eagle, Idaho because of their economic ability to sustain new business. However, Eagle is a close-knit community that is not unwelcoming to newcomers but tends to support long term small business owners. As Hope Blooms Flowers and Things has been very active in the community, it is a great advantage to purchase the existing business rather than start anew as long as the staff and reputation of the business can be maintained with the help of the previous owner.
- “Dorothy Hope.” (2016). Linkedin. Retrieved from https://www.linkedin.com/in/dorothy-hope-2039536
- “Eagle, Idaho.” (2016). Sperling’s Best Places. Retrieved from http://www.bestplaces.net/economy/city/idaho/eagle
- “Florists in the US: Market Research Report.” (2015, Dec.). IbisWorld: Where Knowledge is Power. Retrieved from http://www.ibisworld.com/industry/default.aspx?indid=1096
- “Hope Blooms Flowers & Things.” (2016). Retrieved from m.hopebloomsflowers.com
- “Hope Blooms Flowers and Things!” (2016). Facebook. Retrieved from https://m.facebook.com/hopebloomsflowers/
- McClure, B. (2016). Getting to know business models. Investopedia. Retrieved from www.investopedia.com/articles/fundamental/04/033104.asp