An article I read the other day suggested we have seen such unprecedented growth in stock markets and technology in the last 15 years that we have forgotten life and business are cyclical, and there will be highs and lows. Anyone who has been in business since the ’80s will remember the tough times we faced in the early part of that decade. As a new university graduate, I recall the job market was pretty bleak. Then in the ’90s businesses were faced with another downturn. Our current woes may be bigger and last longer, but the world will right itself.
Economic downturns can be an opportunity for savvy business managers. Tough times will force weak businesses out and help older business operators make the decision to retire. A new leaner industry will be the result. With a bit of careful planning and sound management decisions you can position yourself to capitalize on these events.
To prepare for the opportunities that may arise, your first focus should be to conserve cash. Manage your receivables. While this is always sound advice, in lean times it’s imperative. Don’t extend unnecessary credit, and when you do extend credit, be sure to invoice and collect promptly.
Keep your inventory tight and clean. Figure out which of your products sells the most and which sells the least. Get rid of those that sell the least and focus on your top producers. If you have a good supplier relationship, try to keep “just-in-time” stock levels to free up cash. Don’t use unnecessary credit.
Sell off any old fixtures, inventory, delivery vehicles, etc., that you can do without. The cash you collect will have more buying power as prices continue to fall.
Outsource any operations you can if it will reduce your costs and make you more effective. Do you really need a full-time bookkeeper, driver and extra designer? Could you hire an independent contractor and save money?
In troubled times the first thing most businesses will cut back on is advertising. Successful operators maintain or increase their marketing efforts. Florists have a major advantage over gift and sundry retailers, a close customer relationship. People don’t have the same connection to any other retail shops that they do to their full-service florist. Florists help customers celebrate life’s highs and lows. You know their likes and dislikes, their children and often their home décor. This allows you to target your marketing approach and increase your customer contacts. Be creative and personalize your offerings, to build revenue.
Take time to review and analyze potential new revenue streams. Ask your staff for input. Are there services you can offer for a fee without having to add cost? You are already paying staff to be on site: what more can they do to help your customers? If plants are already a good part of your inventory, would your corporate clients appreciate a maintenance service? Snowbirds may be willing to pay for plant-sitting services. Real estate is now a buyer’s market: a plant rental service may help stage a successful sale.
Once your own house is in order, watch for opportunities. There may be a better location coming open or perhaps you can negotiate a better lease rate. The business that’s closing across town may have a profitable product line that you could add to your existing mix. If a floral competitor closes its doors, there may be an opportunity to expand your market share and delivery zone. Find out if you can buy its customer database. Is there a particularly talented staff person who will add to your strengths? Maybe your competition would like to retire and would consider an offer to buy the business. Be open to possibilities.
Business closures are a fact of life. In good times anyone can sell flowers and they do. In tough times, operators have to decide this is the business they want to be in and work at it. Eventually those who dabble will fall by the wayside and those who are savvy will be left with a stronger industry made up of a creative pool of talent, better product, and happier customers who get real value for their dollar.
Point of View appears regularly in CF and offers our readers the opportunity to hear the perspective of other industry members. If you would like to suggest a topic or be part of the Point of View column, please contact Sue at
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