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Start for freeMichael Jacobson took over his uncle's small, struggling flower shop and transformed it into a $9 million business in just four years. This remarkable story of entrepreneurship through acquisition demonstrates how innovation and technology can revitalize even the most traditional industries.
Michael's background was in corporate consulting and finance, not floristry. When his uncle asked for help selling his unprofitable Los Angeles flower shop, Michael saw an opportunity. The shop was doing about $600,000 in annual revenue but barely breaking even due to high costs and inefficiencies.
Identifying Opportunities for Improvement
Michael quickly identified several areas for improvement:
- Outdated, expensive phone systems
- Reliance on wire services and order aggregators taking 30-40% commissions
- Lack of technology and automation
- Inefficient supply chain
- Poor online presence and marketing
He set about systematically addressing each of these issues:
Cutting Costs and Improving Operations
- Replaced the $1,300/month phone system with a $120/month VoIP system
- Eliminated reliance on wire services like 1-800-Flowers, cutting out unnecessary intermediaries
- Invested in custom technology to automate operations
- Established direct relationships with flower farms to improve quality and reduce costs
- Built a robust e-commerce presence and digital marketing strategy
Investing in Technology
One of the biggest moves was investing about $350,000 over two years to build a comprehensive technology platform for the business. This included:
- Custom e-commerce website
- Inventory management system
- Point of sale system
- CRM and marketing automation
- Analytics and reporting
When they launched the new technology in October 2021, revenue doubled overnight. The improved web architecture and SEO immediately boosted online orders.
Scaling the Business
With the new systems in place, French Florist (as the business was called) grew rapidly:
- 2020 revenue: $3 million
- 2021 revenue: $4.7 million
- 2022 revenue: $9.4 million
They also expanded to new locations:
- Opened a second shop in 2022 that did $912,000 in first year revenue
- Opened a third shop in 2023 that did $1.2 million in first year revenue
Launching a Franchise Model
Seeing the success of their model, Michael and his team decided to launch a franchise program in 2024. They offer:
- Comprehensive technology platform
- Improved supply chain with direct farm relationships
- Marketing and operational support
- Financial resources and systems
They're targeting both new franchisees starting from scratch and existing florists looking to convert and improve their businesses. French Florist aims to triple revenue for converted shops within the first year.
Keys to Success
Several factors contributed to French Florist's remarkable growth:
Technology Investment
Building a custom technology stack allowed them to automate operations, improve the customer experience, and gain valuable data and insights.
Supply Chain Optimization
Establishing direct relationships with farms improved flower quality while reducing costs.
Focus on Digital
96% of French Florist's revenue now comes from online orders. They've invested heavily in SEO, paid acquisition, and conversion rate optimization.
Specialization
They allow staff to focus on their core competencies - designers can focus solely on arranging flowers rather than administrative tasks.
Data-Driven Decisions
Their custom analytics help with everything from inventory forecasting to employee productivity tracking.
The Flower Shop Opportunity
Michael sees significant opportunity in the floral industry:
- $19 billion U.S. market
- Highly fragmented - 30,000 flower shops averaging $350k in annual revenue
- Lack of innovation and technology adoption
- Many owners nearing retirement age
However, he cautions that it's a challenging business to scale independently without significant technology investment. The French Florist model aims to give independent owners the tools and systems to compete effectively.
Advice for Potential Buyers
For those considering buying an existing flower shop:
- Expect to pay 3-4x EBITDA, potentially less for struggling shops
- Look for opportunities to improve operations and cut costs
- Be prepared to invest in technology and marketing
- Focus on building a strong e-commerce presence
- Consider joining a franchise system for support and economies of scale
While it's possible to grow an independent shop, Michael believes the French Florist model offers an easier path to scaling to $2-3 million in annual revenue.
The Future of French Florist
French Florist currently has 5 locations and plans to open up to 15 more in 2025. They're focused on controlled growth, targeting the Southwest U.S. initially. Their long-term goal is to reach several hundred units over the next few years.
By combining traditional floristry with modern technology and business practices, French Florist has found a formula for success in a challenging industry. Their story demonstrates the potential for innovation and growth even in long-established markets.
Article created from: https://www.youtube.com/watch?v=GhxDmK8YRF4
