Getting a foothold in the flower business is not easy for any entrepreneur. The $60-billion-a-year industry is dominated by a few incredibly well-known incumbents, most notably Teleflora, 1-800 Flowers and FTD, the biggest player in the game for more than 100 years.
Entrepreneur and Farmgirl Flowers Founder Christina Stembel, upon moving to San Francisco and being bitten by the “founders bug” that seems to affect so many in that city, didn’t just want to take on the best-known incumbents in the business – she wanted to do it with a sustainable, high-growth and completely bootstrapped operation.
“I wanted in: I was having about five business ideas a week. I wanted it to be something that I thought had a really positive impact in the world, and I wanted to solve a problem in a new way. But I also wanted to be able to bootstrap,” Stembel wrote in INC.
Suffice to say, it wasn’t easy work. Though Stembel knew something about agriculture from her midwestern roots, it was mostly about commodity crops like corn. Also, she wasn’t a professional florist or even a highly trained amateur, had no space in which to work other than her rented apartment and only had about $49,000 to get started with.
But flowers, she noted, were broken. The process for ordering them was lumpy, and the final products were generic. She believed she could do better, so she gave herself two years to either make it or run out of money and move on. From there, Stembel started buying bulk flowers at the San Francisco market at 3:00 a.m., watching YouTube videos to learn how to process them and building arrangements on her dining room table. She would then walk the city with her burlap-wrapped bouquets, asking coffee shops to let her display her work and her marketing cards.
“I’d go back every week and see how many cards were taken before deciding whether it was worth putting out another arrangement. Five Starbucks stores in the most densely populated areas of San Francisco drove almost all of my early business,” she noted.
At the two-year mark, Stembel wasn’t quite out of money, but she was perilously close, with a little over $400 in the bank. Her landlord finally caught on to the fact that she was running a flower shop out of her apartment, and told her it was time to move her SMB out. With two rents to pay, luck suddenly smiled on Stembel when she found a small stall at the flower market. Her orders picked up just enough that she could pay the bills and continue to eat (leanly). She even had to hire her first employee, as she had more orders than she could successfully make herself.
“I never took any outside funding, so every move I made had to be profitable, immediately,” Stembel noted.
And in the long run, it was. Farmgirl Flowers brought in $23 million in revenue in 2018, employs more than 100 people and serves customers all over the U.S., shipping hundreds of bouquets from coast to coast each day.
But the challenges keep coming, even as the firm grows bigger and better recognized every year. The decorative flower industry, Stembel said, isn’t quite the same place it was when she entered as a neophyte seven years ago.
She noted that the rapid decriminalization of marijuana in the U.S. for recreational and medical reasons has changed the economics of buying flowers – and made it more expensive.
“Growers can make more money growing [marijuana] as opposed to flowers. Sometimes you have greenhouses that you can get for $1.50 to $2 a square foot, versus 5-10 cents a square foot growing snapdragons,” Stembel told Fox News Business. “It definitely drives up costs. It’s more difficult. It’s more challenging with the inbound transportation and all the things you need to learn.”
But, like most of the challenges Farmgirl Flowers has navigated, it’s manageable, if difficult. Because, Stembel said, consumers are always looking for a better bouquet – for special events or just because – and over the last near-decade, Farmgirl Flowers has learned to build them.