A year ago today, on 26 July 2016, Erin and I signed a Partnership Agreement (no, not that kind of partnership – we became civil partners many years before that) that stated that we “wished to associate ourselves as partners in business” and that this Partnership would be called “The Edible Flower and/or such other name as the Partners may agree from time to time in writing”.
Our aim was to set up a business that would bring us joy. And amongst other things, would earn us enough money to live on.
Since then a few big things have changed…
- We’re now the proud owners of a functioning business – The Edible Flower, a supper club and catering company.
- We’re also now the proud owners of 121 Middle Road, a lovely old farmhouse, garden, outbuildings and two fields just outside Saintfield, County Down (we moved out of Erin’s mum’s into Middle Road in October 2016).
- We’ve set up a kitchen garden full of Edible Flowers and lovely organic veg that is keeping us and the business supplied with salad leaves, herbs and lots more. It also brings me a great deal of joy!
- George the Cat sadly died (not business related of course, but a pretty big deal in our lives).
Those would be the headlines from the last 12 months.
The first year – a financial overview
As far as I can see it’s not particularly usual to publish key financial information about your business on social media but I can’t really see why I shouldn’t. I think it’s interesting – and I hope you find it interesting too.
Since we started The Edible Flower we’ve made 2,161 meals, and made total income of a smidgen over £46k (an average of £19 per meal). The costs of cooking all those meals was £21k – that is for ingredients, travel, non-Erin and Jo staffing, and other job specific costs – giving us average gross profit margin of 54% (we were aiming for 55% so that’s not bad). The overheads of running the business during this period were £20k.
So, over the first year, a profit of £4k.
(I actually do our finances from April to April so these numbers are slightly unfamiliar – but nice to see them consolidated for the first 12 months of trading.)
A few months ago we saw that we were going to start being profitable and began paying ourselves (we worked for free for the first 9 months). We started to take £200 a month each out of the business as a salary (technically it’s partners’ drawings not a salary as we’re a partnership). This is a small amount of money for working very, very hard but never have I had so much satisfaction from £200. We made it – out of nothing it seems.
The aim of course, it to be become profitable enough to pay ourselves enough to live on and stop eating into our savings each month. We got a way to go but we’re heading in the right direction.
What makes us money?
Below is a chart showing where out £46k of income has come from. The coloured layers show the income from the different types of work we do.
At the bottom in blue are supper clubs. We do about one event (sometimes over two nights) a month. These are our steady regular income and are a great way for us to create work for ourselves (other caterers just have to sit around and wait for jobs to come up?!). Supper clubs don’t make us lots of money – normally about £5 to £8 per hour for our time to cover overheads and profits (our time is effectively included in the profits) – and if they don’t sell out it’s very easy to make a loss. But they are great advertising for the rest of our business. Almost every catering job we’ve done comes from word of mouth recommendations and can be traced back to a supper club or previous catering job.
Then comes a bunch of skinny colourful layers that include small catering jobs, cookery classes, street food events, community events and moveable feasts (our “moveable feasts” are where we cook you a feast for a party and then deliver it to your house for you to heat up and serve yourself). As you can see, none of these types of job make us a huge amount of money – but they are all potential growth areas if we decided to take the business in that direction.
On top is a nice chucky slice of large catering jobs in red. This big chuck of income represents just a handful of jobs, that make up over half our income. That’s because when you’re feeding large quantities of people meal after meal, the income just adds up. There is a huge amount of work involved in a really short space of time, the profit margins are good and we really enjoy these jobs – choreographing a whole series of meals for the same people over a few days is exhausting but great fun – and often in interesting or stunningly beautiful locations.
The dotted line is the cumulative costs of running the business. As you can see we’ve been shirting along the lines of breaking even pretty much since we set up. That’s because we’ve never had to make really big investments in the business. There is just a constant, seemingly never ending stream of things that we need to buy to function. We’ve set up our kitchen and scaled up our tableware and kitchenware steadily over the year as we could afford it – as as we needed it for bigger events.
But hopefully a change is starting to happen. Since April 2017 you can see the dotted line (costs) is below the stack of colours (income), i.e we’re in profit!! And hopefully those two lines are starting to diverge – profits are starting to increase.
To expand or not to expand, that is the question…
When running a business, it’s hard to escape the never ending pressure to expand. Bigger is better. Or is it?! It would certainly be nice to have some regular staff (other than Erin and me) to take some of the pressure off and derisk the business (currently Erin and I basically can not be ill). And we’re increasingly having to say no to people requesting us for their events as we’re already fully booked. But ultimately Erin and I are both total control freaks and find it hard to imagine trusting anyone to go out and deliver The Edible Flower experience without both of us there.
There is also the thorny issue of VAT.
Currently we are not registered for VAT. Like any corporate, if we hit the threshold of £85k of annual income then we have to register for VAT – and to include 20% VAT to all our prices. We would then pay this VAT we received (our “output VAT”) to the government, less the VAT we paid on ingredients (our “input VAT”). But sadly the vast majority of food is zero-rated so we don’t have any input VAT. So effectively, by going over the VAT threshold we would suddenly have to pay 20% extra tax on everything we earn, potentially negating all chances of being profitable.
If we got bigger we would also need some serious investment in a catering kitchen. We currently operate out of the one kitchen in our house. It’s a nice big kitchen with all the necessary sinks for our environmental health officer to be happy – but you couldn’t have a team of chefs working from it everyday.
And that’s not mentioning the fact that neither of us really want to run a big catering company. I love how efficient we are – how little food waste we have – and how our work lives and non-work lives are entwined (though that’s definitely a double-edged sword). We love being hands on with everything we do. We love being in control and answering to no-one but ourselves. We know every ingredient, every process and put love into every dish. How do you scale that?!
We have a five-year plan but I won’t bore you with the details. It shows the catering business expand a bit and various other business streams coming along (the market garden, self catering accommodation, a brewery, cooking school etc). We made the plan because we wanted to keep in our minds what might happen, rather than predict exactly what is going to happen. All we know is that we work well together, hopefully we have the ability to be flexible, we definitely have the energy to work hard and I know our business will probably look entirely different in a few years time to anything we could imagine.
However, we did take the time to agree and set out the values that we wanted to underpin whatever business we ran together… Here they are.
• From Scratch and Handmade
• Made with Love, Served with Merriment
• Connected to Earth – the Planet and the Worms
• Delicious, Inspiring, Surprising and Beautiful.
So, there you are. We don’t know what it will be, but expect more delicious, inspiring, surprising and beautiful things from The Edible Flower sometime soon.
And finally, feel free to get in touch..
Do get in touch if you…
1) want to work with us – we’re all looking for interesting, enthusiastic, hard working people to help,
2) want to learn from us – setting up your own supper club or catering company and want a bit of advice – do pop round for a tea and a chat,
3) have all the answers – run your own business and have the answer to the big question of expanding or not. Please let us know the answer – or just come and chat to us about your experiences!
4) Or, if you want to come to a supper club or get us to cook for you. Obviously!