Jenny (00:29)
way I can tell a professional flower farmer from an amateur one is by how detailed they are with their numbers. Because the fact is, most flower farmers don't actually have a growing problem, they have a numbers problem. And today I want to show you how knowing just a handful of key numbers can completely transform your flower farm. And not by making things more complicated,
but by helping you operate like a professional business owner instead of just guessing your way through decisions. And I know that this is a huge problem that all of us business owners have, whether you're just starting out or you're 15 years into it, decision-making gets really hard because we have to make so many different decisions and getting clarity on what the next right step is for us gets really cloudy sometimes.
But that can all be resolved if you simply know your numbers.
Now, when I say knowing your numbers, I know that may sound kind of boring and like very business owner-y, but it's so incredibly important because it's about getting that clarity. It's not necessarily about control or being nerdy or like some financial analyst or anything like that. You don't have to be any of those. You don't actually need to be really great at numbers or math or anything, but you need to have those numbers so you can have
clarity within your business and know where to move forward to achieve your goals and to find success. Your numbers aren't judging you, they're informing you. And a lot of farmers avoid the numbers because they feel intimidating or emotional or sometimes even tied up with shame. But numbers are neutral. They're just data. That's all they are. And data...
Is exactly what you need to drive those business decisions. And here's what happens when you don't know your numbers and you're just kind of guessing. Decisions get made emotionally. You keep selling things that just feel quote unquote, worth it to you. You probably hesitate to raise your prices or charge what's appropriate. Everything feels equally urgent. don't have clear priorities to focus on in your business and more.
And when you know the numbers on what's earning you the most amount of profit or revenue or what's not, that's what gives you that clarity and clarity reduces anxiety. Uncertainty fuels it. And I think that one of the most important tools in beating out competition and business is just being crystal clear on what is working, what's not, and what direction you want to go in.
When you know that you are unstoppable and numbers are those decision support tools. It's not necessarily a report card. And I know that a lot of people avoid looking at the numbers because they're scared of what they're going to find. And I just want you to know that the goal is awareness. It's not perfection because you can't solve problems until you know exactly what it is. And I hear this all the time that
When they see like professional or successful far farms, people just say, they're just lucky. Or they live in this really affluent area or insert whatever excuse here. I think it's more that they had extreme clarity on what they wanted to do. So they went out and did it. And they did that because they were informed. They knew what the numbers were telling them. They knew where the demand was. They knew what was going to be profitable. And then once they knew that they just got after it.
Very early on in my business, I started tracking a lot of this stuff. Like the first year I got into the big farmers market we're at right now, I kept a log of everything I brought to the market and everything that came home so I could easily tally how much I sold of everything. So I knew exactly how many bunches of ranunculus I sold, how many bunches of dahlias and zinnias and everything else and mixed bouquets.
And so very early on, I knew exactly what was selling well, like what wasn't. And so I knew what resonated with my customers, what was in demand. And from there, I figured out what was profitable for me and what wasn't. I basically just narrowed down or niche down what we grew.
So now we only focus on the most profitable and most in demand things that, know, our bestsellers and all that, and eliminated a lot of the unnecessary noise and stuff. didn't need to grow, which by the way, if you want a record keeping template, like the one I use for my farmer's market to tally, like how much we're selling of each product, you can grab a template for free at trademark farmer.com forward slash free guides. And I'll leave a link for that in the show notes too.
But the next point I want to make here is that professionals really start with a few core numbers. You don't need to track anything and everything in your business. And I hear this all the time with my students inside of my business program is that they're like, how am I supposed to track every single hour of the day, every single hour spent on whatever crop I'm growing or whatever crops I'm growing and track all these different numbers. And the answer is that you don't. That's an impossible standard for most small scale flower farms.
And the truth is that you don't actually need 47 different metrics. You just need the right ones, a few of the right ones. And there's tons of different numbers and different metrics you could track. You could track, I mean, there's millions average order of value, customer lifetime value, labor efficiency, conversion rates, return on investment, shrink. could go on and on all day. And the mistake that some people make is that
they try to track too much too soon, but it's one of the fastest ways to kind of shut down and end up doing nothing because when you have this long list of metrics to track, it feels so overwhelming that you end up just not doing any of it or doing like a really, you
a half effort job at tracking it. so professionalization starts with just tracking foundational numbers and then getting more detailed as your business matures. So I want you to start with these non-negotiable core numbers. First thing is revenue, expenses, and profit overall. And so if you're new to these kinds of words, let me just give you like a quick little
definition of each. When I say profit, I don't mean just cash in the bank. So profit is the financial gain, or I guess if you have a loss, it would be the loss for the year. So after expenses. Revenue is simply all the amount of sales you bring in for the year. And then profit is the financial gain, leftover after expenses. For the purposes of this conversation, that's how we'll define it. So
Make sure you are tracking the overall revenue. So all the sales, all the income you have coming into your business, the expenses. So all the money that you spend to run your flower farm and then profit, which is really just the difference between your revenue and your expenses. This alone will give you a huge boost on everybody else.
in my business programs. We survey everyone who comes into the program, just to kind of get an idea of where everybody is at. And we're doing a lot of like data studies with this kind of thing. the majority of people, like upwards of 80 % of people who join our programs, they don't even know if they're profitable or not yet. So
It just starts with looking at your overall sales and what your overall expenses are so you can figure out your profit. And that alone is going to get you ahead of 80 % of the people out there also trying to run flower farms. So those are the basic foundational numbers that you have to track in your business. And please,
tracking this does not have to be difficult.
If you just open a business bank account and you have a debit card for that business bank account, so all of your expenses go on that business bank account card, and then all of your income goes into that business bank account. Your business bank account statements will just reflect what the income and what your expenses are. So you can pretty easily figure out your rough profit. Like that's bare bones basic, like how to get started tracking this stuff and
It can pretty much be automated. So you don't have to worry about like, you know, getting all different receipts together and figuring out that you got a dollars from this platform and $200 from your website. And you know, you can make it really simple. So those are the foundational things that I want you to start with. And then as you get more advanced, you will probably start tracking things like revenue and profit by sales outlet. So.
how much revenue you're bringing in and how much profit you're making from your farmer's markets, CSA, weddings, retail, or whatever you do, farm stand. And then as you get even more advanced, you'll probably start to get into tracking your revenue and profit by product. So this means all of your different flower types or maybe your top, you know, five to 10 flower types. Maybe not every single one. If you grow like 75 different things. but this is all stuff that we track in our business and has been absolutely invaluable to
making a highly profitable small scale business. Now, the other thing that I highly recommend everybody tracks are your crop yields. So what you actually harvest from your fields, this is just really helpful for profitability projections in crop planning, which like crop planning is like the basis foundation of success for every season on the farm. And so that's a number that I don't think is very hard to track. Just whatever you're harvesting.
jot it down on your phone or a piece of paper, whatever you got, you can buy those rain proof or waterproof pads to jot down notes on if you're a pen and paper person. ⁓ there doesn't have to be hard. It does not have to be complicated. Does not have to be hard, but these are numbers that you want to track. then eventually you'll move on to tracking more advanced things like your conversion rates, your customer lifetime value, your average order value, customer acquisition costs, and more of that stuff.
I don't even want you thinking about that right now. If you haven't even started very finely tracking your total revenue and profit overall from your sales outlets and from your different products. Now what happens when you do this is that you turn guessing into a strategy because without those numbers, every decision feels like a gamble. And when farmers don't know their numbers, they default to copying what other farms are doing.
They chase trends that they see on social media and they keep offers that seem profitable without ever really knowing it. And I cannot tell you the amount of students I've had in my business program that have finally ran the numbers and found out that the farmers markets they were doing, the dahlias they were growing or the forest deliveries they were doing were actually losing them money.
And now when this happens, it's not a lost cause. They just need to make adjustments to make them profitable. And usually we help them do this by cutting their costs and by increasing their prices when possible or when it makes sense to, but you know, without knowing the numbers, they can't know the next right steps to fix the issues at hand and make things profitable. Because here's the thing, what works for somebody else may be unprofitable for you.
Every flower farmer is as unique as the person who runs it. Or did I say flower farmer? meant flower farm. Every flower farm is as unique as the person who runs it. And I've said that a million times before on this podcast, but it's so true. Every business is unique. You have your own unique situations and markets and growing conditions. And, ⁓ that's what makes flower farming a really unique industry is that it's really difficult to copy and paste business models.
It's possible you can do it and you can learn from other people who are more experienced and more successful than you. But this is why knowing your own numbers is just so wildly important because it shows you what sells well, what doesn't, what drains your time, what looks good, but might actually be underperforming profit wise. And you can use your numbers to answer questions like, what should I grow more of? What should I stop offering?
Which sales outlet deserves my focus next season? And that's one question I always, always testing people on is like, where is your biggest focus right now? That's going to drive your business forward. And this is where strategy replaces vibes. know, like vibes are great. You know, your gut and your intuition, those matter too. But honestly, the hard facts are what drive most business decisions towards success.
Now, if you want more examples of how I do this on my farm or want examples of real numbers and how those numbers have influenced decisions we've made, check out episode number 30 of the Six Figure Flower Farming podcast. It's called The 2024 Numbers Are In, Flower Profitability 101. That's one of our most popular episodes and one of my favorites. And if you like this one, I think you'll like that one as well. Which moves me on to my next point.
is how knowing your numbers really changes how you price your products. And pricing is one of the biggest levers you can pull in the profitability of your business. And there's this massive issue in our industry right now of people massively under pricing and under charging.
And underpricing, I think is rarely a confidence issue. It is a data issue. Because when you have the data, it makes you feel confident in your decisions. So if you don't know your costs to grow a bunch of dahlias or a bunch of zinnias, pricing really becomes emotional or competitive. You're looking at what everybody else is doing around you and just trying to fit in somewhere. price a little bit cheaper than them and then it becomes a race to the bottom.
And that does no one any favors, right? And when you do know your margins, pricing simply becomes factual. And this is what professional flower farmers do. They don't guess at their prices. They set pricing floors based on real hard data. It becomes a lot easier to charge 35, 45, $50 for a mixed bouquet when you know what it factually costs you to create that.
So at a minimum, I think you should be tracking the cost to produce your top selling flowers. So this includes the labor hours and any materials and inputs to grow those specific crops. let's just say like dahlias, for example, you should know how many hours you're spending to grow those dahlias, sell those dahlias, all the, you know, soil or fertilizers or, you know, pest and disease management stuff, all that goes into it.
And knowing what that costs you. this can get tricky to get a picture of all the costs that go into flower production because you want to include pre-harvest costs, post-harvest costs and overhead in there. So if you need help with that, that's something I teach really in depth in my flower business program. But anyhow, once you figure out those numbers, you can use them to set those non-negotiable pricing floors. Because if you know that it costs you $15 to grow a bunch of zinnias.
Then it gets a lot easier to charge $20 for that bunch of Zinnias because you know, you have to make a margin on it. You have to make a profit on it, but there's so many flower farmers out there who charging, you know, 11, 12, $15 for a bunch of Zinnias, not knowing that they're actually just breaking even on that product and not making a profit on it. And I'm just throwing out random numbers out there. I don't know what it actually costs you specifically to grow those flowers. I know what it costs me, but, um,
That's why you have to dig into knowing your own numbers. If you're interested in learning more about pricing, check out episodes number 34 and 35 of the Six Figure Flower Farming podcast. It's all about navigating cut flower pricing. So there's a part one and a part two, which are episodes number 34 and 35. Now the last point I wanna make here about why it's so important to know your numbers is that knowing your numbers makes growth predictable.
It can make things really predictable in your business because growth and scaling feels really chaotic when it isn't measured. And one, I have a couple examples of this I'm gonna share with you, but every single season I have like a roller coaster of emotions where I go from, my God, everything is terrible. We're gonna have to close our doors. We're not making any sales.
to, my gosh, these are the best sales we've ever had. I'm rolling in the dough. We're going to start buying stuff for all of our employees and we're doing amazing and everything in between those two extremes. Right. And it's all just an emotional reaction that I have to whatever is going on to that moment in time. But I know better than that now, because I can step away from that emotional roller coaster when I just sit back and look at the numbers.
So like this past year in the spring time, we had some low sales compared to previous years because it just rained every single weekend this spring. like totally out of our control, but that hurt our sales. And I panicked about it a couple of months later. I was like really panicking that it was not going to do, we just were not going have a good sales year that year. But what I did was I went and I sat down and I looked at our numbers from previous years.
What our sales were, you know, in up to June or July in previous years and this year. And I saw like, ⁓ well, we're actually only 15 % behind where we normally are on average. And that 15 % is something I can probably make up later on in the season. And so that's what we did. But if I didn't have those numbers, those hard factual numbers to go back and look at, I probably would have kept panicking and spiraling.
And probably not, you know, coming up with a great, ⁓ plan to kind of right the ship. And that's why knowing these numbers is so important, not just for making those business decisions, but to help like level out the emotional roller coaster of business ownership even better.
So when you have those numbers in front of you, you can kind of handle those fluctuations in the market a little bit more easily, which is really helpful for me personally as a relatively emotional person. But the other part of this is that when your numbers are unclear growth and scaling and just overall business operations can feel really risky. But when the numbers are clear and you have that hard data to go off of growth,
simply becomes a math problem when you're trying to scale. And me personally, I hate math problems. I hate math. When I left high school, I was like, I will do everything in my power to never take a math class for the rest of my life. And well, jokes on me because I am a business owner now. But so if you're not a math whiz, I'm with you, but you don't have to be that. You just have to have clear numbers in front of you. And this is what allows professional farms to hire help with confidence.
invest in things confidently and plan ahead without panic. You can use previous seasons numbers to set realistic revenue goals, plan labor needs and decide where to invest next. So another example of how I use this in my business is that if I have a certain goal where we want to grow to, I just use numbers to figure out exactly what we have to do to get there. So here's an example. I know.
that roughly 10 % of our email list will purchase our cut flower CSAs. So if we have 3000 email subscribers, I can expect to get about 300 cut flower subscribers or CSA members that season. And I know this because this data has been true over many years. It's pretty much very closely aligned every year. It's right around 10%.
So I know that if I wanted to grow my CSA to 500 members, then I would have to grow my email list subscribers to about 5,000 people. And based on the historical data, I can confidently make that projection that that will most likely result in achieving the goal I want to. So in this way, knowing your numbers, like when you have a goal, you basically just have a formula to work off of.
And it can make things feel so much more achievable or at least if not achievable, it gives you a roadmap of exactly how to achieve what you need to achieve. And you know exactly what you need to do to get there. So predictability is freedom and you can use this in your own business in a lot of different ways as well. So to wrap up this episode here, if you want to take action,
on getting to know your numbers better and using them in your business to scale and grow and get more profitable. Here is your action step. And this should take you maybe about 20 minutes. If you have the data hidden in places from the last season, first write down your total revenue from last season. So just add up all of the sales you had come in from last season. And if you have to make guesses on this, that's fine. The numbers do not have to be perfect right now.
especially if you're just getting started, just do a rough guesstimate.
Then you'll figure out your total profit just by subtracting all of the expenses you had. So anything you spent money on for your business, subtract that from your revenue to find your total profit. And again, does not have to be perfect. Just try to make a rough guess here. And if you feel confident that you could figure out your revenue and profit by sales outlet, even if it's just a rough guess, just sit down and at least write down some insights or some notes and just like think about this for a little bit.
and I promise it will help you move forward. And that's it. So just start there. Don't try to optimize anything yet. Just observe what's going on in your business so you can get clarity on what is actually happening so you can take the right next step to move forward. Now, if you want more action assignments that can move your business forward like this one, I recently gave our email newsletter a huge overhaul to include a lot more stuff like this.
The weekly field note delivers proven actionable strategies and tools right to your inbox because business owners need results, not just like flowery fluff, which I see a lot of that out there. So you can get signed up and get in by going to trademark farmer.com forward slash note. That's N O T E or use the link in the show notes. And I will deliver some pretty awesome stuff to your inbox every week that can really help move your business forward.
And that's it for today. Thank you for listening to the Six Figure Flower Farming Podcast. Don't forget to head to trademarkfarmer.com forward slash note and sign up for the weekly field note. And don't forget that we publish new episodes every Monday. So I will see you next week. Same time, same place. Take care.
