[Hua11.com Original] We artisans all share a sentiment: loving flowers, loving life, and being friendly and kind to others. This is a cherished traditional virtue and something we take pride in, alongside our craftsmanship.

However, opening a flower shop or studio involves more than just craftsmanship and sentiment; it also requires business operations. Since it is a business, it inevitably involves concepts such as cooperation, partnership, and investment. Nowadays, many people with some spare money are optimistic about the flower industry but lack the craftsmanship, the intention to learn it, or the passion for it. Therefore, they choose to invest in florists and collaborate with them to enter this beautiful industry.

Generally speaking, the partnership form is like this:

1. The investor (capital contributor) provides all or most of the funds and holds most of the "shares" or dividend rights.

2. The florist provides a small part of the funds or no funds and holds a small part of the "shares" or dividend rights.

(Since small flower shops usually operate as sole proprietorships, the concept of shares is not involved. The above description borrows the operation concept of a company for easy understanding.)

To put it simply, the investor provides the money, and the florist provides the effort.

A successful flower shop operation consists of three roles:

1. Florist

2. Capital provider

3. Marketer

Roles 2 and 3 can overlap or transform into each other to some extent. Having funds can use financial leverage (money) to develop more customers and solve the sales problem. If the marketing is good and the cash flow is strong, the funds will be relatively abundant, which is more conducive to operation.

From the perspective of industry development, these external capitals do bring benefits and allow florists to focus more purely on their craftsmanship, which is enjoyable for them. "Professionals do professional things," and everything looks very promising.

But is the actual situation really like this?

Below we will tell two small stories about two common situations: "Partnership in the form of capital investment" and "Partnership in the form of shop investment":

Story One (Partnership in the form of capital investment):

Little A is a creative and thoughtful florist who has always wanted to open a flower shop but has been struggling with insufficient funds. Coincidentally, a friend, Little Z, comes from a relatively wealthy family and is also optimistic about the flower industry and wants to invest in opening a flower shop but has no craftsmanship. So the two hit it off and decided that Little Z would contribute 70% and occupy 50% of the dividend rights, while Little A would contribute 30% and also occupy 50% of the dividend rights, and the flower shop would be managed by Little A.

After a round of "detailed and meticulous" analyses, they decided to open a mid-to-high-end flower shop in a community with a large flow of people. After the tense preparations in the early stage, the flower shop opened smoothly.

But soon, they found that although there was a large flow of people, they were all people with relatively weak consumption power, and neither Little A nor Little Z had marketing experience. So, at the end of the month, when taking inventory, the shop was in a net loss. At the beginning, Little A and Little Z could still analyze the problem amicably, but as the operating pressure increased and the honeymoon period passed, they began to blame each other. Little A believed that since his contribution was larger, the final operating decisions should be his; while Little Z believed that Little A should not interfere in the operation of the store, which would cause the business direction to fluctuate. At the same time, they both thought that marketing should be strengthened, but they had no direction, so they randomly joined some Internet platforms and learned from others to "burn money to buy traffic."

As a result, it didn't take long for the shop to be unable to operate and was transferred. The two also had a very stiff relationship because of the proportion of the money after the transfer.

In this story, their cooperation made several common mistakes:

- There was no agreement on whose opinion to follow in case of a disagreement (If it is determined according to the dividend ratio, it should be a relationship of 51% and 49%, not 50%: 50%).

- The investor (Little Z) participated in the operation.

- The initial positioning was not determined based on the location and the attributes of the crowd. (Refer to: [Hua11.com · Flower Shop Risk Defense Series 3] Analyzing flower shop locations: Have you considered these potential pitfalls?)

- Marketing had no plan and was randomly invested. Especially for Internet platforms, it is very easy to form a money-burning black hole; (Refer to: [Hua11.com · Marketing Advanced Series 7] How should my flower shop engage amid vast online marketing channels and new tactics?)

- There was no exit mechanism (referring to how to handle when Little A or Little Z exits the cooperation).

Story Two (Partnership in the form of shop investment):

Little Z is a coffee shop owner, and Little A is a florist who wants to start her own business. Little Z, optimistic about the flower industry, had his own storefront. He proposed setting aside about 10 square meters for Little A to create a "shop-in-shop" model. Little Z offered attractive conditions: rent-free, and profits split equally. Little A, who lacked business experience, saw the rent-free offer and believed her excellent craftsmanship would lead to significant earnings. She agreed enthusiastically.

Little A worked hard to decorate the 10 square meters beautifully and professionally. She also purchased a small, high-quality silent freezer, which was a significant expense. However, she believed it was worth it and expected the coffee shop to bring many customers with spending power.

However, after starting, Little A found that she not only had to manage her flower shop but also help with coffee shop customers and event decorations. Worse, some customers were allergic to pollen and refused to enter the coffee shop. Little Z believed this affected his business and asked Little A to adjust her flower materials, remove many varieties, and increase the proportion of dried flowers, leading to additional expenses.

Over time, Little A realized she wasn't making any money but had invested significantly in decorating Little Z's storefront. Meanwhile, Little Z's customer base grew, many attracted by Little A's flower shop. According to their agreement, the profit from coffee sales had nothing to do with Little A.

Frustrated, Little A withdrew her flower shop after six months, losing a lot of time, energy, and money.

In this story, Little A's biggest mistake was misjudging her position in the partnership. She thought she was getting a good deal, but this mentality led to her being exploited and doing many things she shouldn't have. Florists must carefully distinguish whether an "opportunity" is a "pie" or a "trap."

What is the investor thinking? What does the florist have to undertake?

Generally, investors without much sentiment for flowers pursue pure return on investment. Even if they don't make profits, they should create value for themselves (provided they don't lose money). For example:

- Let their friends know they are "seemingly sentimental," improving their status in their social circle.

- Have a stylish "home field" for gatherings with friends.

- Bring traffic to their other businesses (commonly seen in cross-industry alliances, such as the "coffee shop + flower shop" model in Story Two).

- Become a case of "online and offline integration" for Internet companies (since the start-up cost of a physical flower shop is not high and gives a "real" feeling).

Given these interests, florists inevitably face pressure from investors. These pressures may include:

- Balancing the store's income and expenditure, with possible performance requirements.

- Unrealistic store decoration and expenditures (investors may impose their aesthetic preferences, which may not be professional).

- Inconsistent control over the style of floral works, incorporating too many investor opinions.

- Inability to control the positioning and pricing of store products, with many adjustment requests.

- Inconsistent operation standards for all customers, with random pricing for the investor's friends.

Generally, when business is good and profitable, everyone is in a good mood, and many conflicts are overlooked. However, when income declines or losses occur, conflicts of interest increase. Tasks not originally required may be demanded, or blame for losses may be directed at you. If income decline continues (due to economic conditions or poor management), your partner may reconsider the partnership, possibly replacing you with someone cheaper. This can lead to partnership breakdowns. Few people can share both joys and hardships, which is why large company teams are more stable, while small companies are prone to bankruptcy.

For floral studios, the investment is not too large, so investor pressure is relatively less. But the investment in physical flower shops is larger, and florists will bear greater pressure. (Refer to: [Hua11.com · Flower Shop Startup Series 1] How much does it cost to open a flower shop or a floral studio?)

To sum up, florists have to consider many complicated factors. Originally, being in this industry was to escape complications and spread beauty. But inappropriate investors can make florists more tired and distant from their original intentions.

So, should we avoid accepting investments from investors?

Not necessarily. Besides understanding the investor's purpose, the most important thing is to establish clear rules for all possible scenarios before the cooperation. This includes (but is not limited to):

- The dividend ratio between the investor and the florist;

- The scope of responsibilities for both parties;

- (Preferably) Confirm that the investor does not participate in the actual operation;

- In the event of specific problems, who has the final say;

- Whether the investor will make additional investments, whether it is paid in one lump sum or in installments, and whether the dividend ratio will be adjusted after the additional investment;

- Whether to implement a salary system, whether the investor and the florist receive a salary, and if so, how much;

- The timing for the payment of salary, commission, and dividend, and how to handle delays;

- What proportion of the dividend is included in store operations (i.e., how much is retained as operating funds instead of being fully distributed);

- Who has the right to determine the pricing of store products;

- Who takes the lead in operational positioning and the purchase of fixed assets;

- Establish a regular internal meeting system;

- Exit mechanisms for investors and florists;

Etc...

After confirming these details, both parties should sign a contract and execute it according to the agreed terms. In general, both parties should uphold the spirit of the contract. Only in this way can smooth and long-term cooperation be guaranteed. Remember, florists should not be slaves to capital but maintain an equal partnership.

Nevertheless, a special reminder to florists and students: Investors who have the ability to make investments generally have a much lower default cost than you (even if they lose everything, it's okay for them, but if you lose your investment, it may affect your basic livelihood). Once the investor's idea changes, default (breach of contract) can happen at any time. Don't have illusions. We artisans should always be prepared for this situation.

Well, there will be "pies" and there will also be many "traps." Let's keep our eyes open and see clearly. So, do you choose to open your own flower shop or studio, or accept investment and start a business in partnership? I believe you can think calmly and find your own answer.

(Regarding partnerships, you may also be interested in the following article: [Hua11.com · Flower Shop Risk Defense Series 2] Revisiting partnership: Two florists team up to open a flower shop/studio. How is this idea?)

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