Everyday is Labor Day

Labor Day is celebrated the first Monday in September. It began in 1894 and had a different meaning than it does today. What once was a day of organized labor unions and political speeches, has turned into a day of picnics, firework displays and the official beginning of fall. Many schools use to begin class after Labor Day although now most have been in session several weeks so it becomes a break for teachers and students who often try to squeeze in one last short vacation. The NFL officially begins its season on the Thursday following Labor Day. With all this activity, let’s add one more activity to this official start of fall. Let’s take a look at Labor Costs as they impact your business.
Labor costs are one of the greatest percentages of most flower shop operations. Ideally, labor costs should be no more than 33% or business operations with an ideal goal being more like 28%. However, this is not the case in most retail flower shops. Labor costs can be as high as 40% – 50% making for a very unprofitable operation. While the business may be well patronized, the result is that there is minimal profit being generated.
Most laborers when ask will have the same response, “over worked; underpaid”, when really the truth of the matter is that the amount of work expands to fill the day. The same design that takes 40 minutes to complete can be accomplished in 20 minutes when a customer or transportation engineer is waiting. This is just human nature. Why rush if I don’t have to. Multiply this by the number of staff persons times the amount of daily orders and you can see this is a disaster waiting to happen. In most cases, the staff person does not even realize they are doing this and what impact good or bad it is having on the business model. While it is impossible to run a marathon every day, most operations can improve their daily output with a little help and guidance.
First thing to do is to have every designer record their production for a day. Have them do this for a week to get a pattern and also help identify the busier days and the less busy days. In general, each designer should be able to generate 10X their hourly salary for every hour they are on the design bench. Most designers have multiple tasks to perform such as waiting on the trade, answering phones, processing flowers, etc, so it would not be fair to evaluate their output based on an 8 hour day. This also might help the shop owner identify areas of needed staffing. Does there need to be a part time person who comes in at a lesser rate of pay to unpack and stock the shelves, process flowers, or any other job that requires the designer to be pulled away from production? Could one designer and one part time staff person accomplish the same amount of work that it is currently taking two designers to accomplish? The other pattern that you might see evolve is how many ‘generic’ or repetitive orders are being generated. If this is a pattern, which is good, then consider having the designers do a production of multiple designs at the same time. Instead of doing each vase as a “one of a kind”, consider making 6 to 10 of the same design knowing that they will all be sent out to different recipients. They can also be modified or upgraded with different additions – Lilies in one, Gerbera Daisies or Roses in another to give a more personalized look. What is amazing is just how many repetitive orders are actually being generated. On the other hand, it also makes one aware if the sales person is selling too specific which is often the case. While many customers do have favorite colors or flowers, many could be accommodated with the addition as we talked about previously.