How to Run a Flower Shop (1) - Stock Control

The British cut flower industry generates an approximately £2 billion annually, it is just second to the music industry, however, 80 % of the Dutch imported flowers in the UK go to supermarkets or other retail outlets. Running a flower shop is no longer as easy as it used to be. To run a business successfully, small firms have to have a competitive edge, they should lead the trends and provide the niche and professional services to customers which others can not. Because of this, owners/senior florists in flower shops have an extremely important role and responsibilities in the business. Make or break of a business can sometimes hugely depend on these personnel.

Owners/Senior florists are required to be multi-skilled, not only will they be creative and skilled in floral arrangements and designs, they should also be competent in other areas, such as sale, administration, marketing and management. To cover some of the areas, I will be focusing the following topics : stock control, health and safety, staff management, customer care and operational planning in my next few blogs to build up a wider picture.

A. STOCK CONTROL

‘Efficient stock control allows you to have the right amount of stock in the right place at the right time. (Business Link, 2008)

 
Stock control, also known as inventory control, is used to show how much stock you have at any one time, and how you keep track of it. It is a code of practice used within a shop to allow stock to be rotated so that wastes are minimised and profits can be increased. An efficient stock rotation system will ensure a shop runs efficiently, and stock is always fresh and up to date. It also ensures that capital is not tied up unnecessarily, and production is protected if problems arise with the supply chain.

1. Types of stock
In a flower shop, the types of stock can be classified as below:
- Fresh flowers and foliage;
- plants;
- artificial flowers;
- accessories- such as teddies, champagne, chocolates, vases and containers;
- sundries- i.e. ribbons, wraps, tissue papers, cellophanes, baskets, oasis, wires and decorative accessories;
- equipment- includes scissors, knives, strings, pot tapes etc.; and
- stationery- invoice pads, receipts, pens, calculators, papers, ink cartridges, till rolls and markers etc.

2. Why control Stock?
To decide how much stock to keep will depend on the size of the shop and how much space and cash are available, this is an art which can only be mastered through experience, particularly in a flower shop, where stock fluctuates enormously during different seasons. In a nutshell, owners/ senior florists not only want to have enough stock but not too much to waste. The purposes of effective stock control are to:

a. Lower costs and improve efficiency. It is expensive to keep too much stock, especially at peak seasons as price could be double or triple. Besides, most of the shops only have very limited space. You want to ensure tools, materials and stationery are in stock, otherwise orders have to be cancelled and money lost, or business can not be run smoothly, you do not want to run out of printing inks or papers when a relay order is in print.

b. To ensure the stock is always fresh and enable your shop keep up to date with fashion, too much stock can be become obsolete and out of fashion.

c. To understand what has sold so repeat orders can be replaced, that enables forecasts to be made for busy periods.

d. To ensure cash flow, which allows more money for peak seasons or special occasions.

e. To enjoy competitive advantage when buying in bulk.

f. To evaluate sales and conditions of stock so price reductions can be put in place.

g. To help tracking stock loss through theft or damage. Too much stock can be difficult to track and therefore open to theft.


3. What needs to be known and how?

For a flower shop, the owner/ senior florist should know what stock is in, what stock is needed, what are the reorder levels and what is the reordering time (i.e., how long will it take from the wholesaler to the shop), who is reordering and what are the stock wastages.

Living in the technology age, although most businesses can not survive without a computer, most of the flower shops still rely on manual systems as they are small businesses with very limited resources, it really does not matter what systems are in place as long as they work. In most cases, more than one system is used at the same time.

There are plenty of systems in aid of efficient stock control, they can be:

• computerised or manual;
• formats such as spreadsheets and databases are most common,
• product codes are particularly useful, it can be simply a combination of letters and numbers or a computerised bar code.
• Waste book, a record of all wastage, mainly of the perishable stock, helps to identify excess and change of buying habits from customers. Returns can be made and suppliers informed.
• Stock books or cards can be used to record and manage all stock, weekly, monthly and annually.
• Colour coding systems to indentify which stock sells better.

In practice, for fresh materials, stock should be rotated and all staff should made aware of the system, always using old stock first. Strictly regulate waste, keep dated records of amounts and varieties disposed of, so return can be made and supplies informed. For sundries and dry stock, ensure the shop is stocked up, a well stocked up shop attracts more customers. Carry out an annual stock check of all items including fixtures and fittings, for tax and insurance purposes. Carry out a weekly, monthly and annually report of all stock.

Tomorrow, I will be talking about health and safety issues.