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| Ten ideas to help you cut costs | |
| Written by Bernice Klassen | |
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It is imperative that during these economic times we use all the resources available to us to become the best lean and mean machine we can. We can no longer just scratch the surface but need to do delve deep into the issues and really think about solutions. Some of these may be old news to you but I hope you find something that makes you reevaluate and hopefully saves you money in return! 1. Think green Going green is not only good for the environment, but also good for your budget. Paper is one area you can really cut back on. In this age when your computer is literally at your fingertips, I find it amazing how much people still print off information! If you need to print off something, print using both sides of the paper if possible. Use the blank sides as scrap paper when ever you can. Evaluate all paper products including toilet tissue to not only ensure you are getting the best price but also that the product is environmentally friendly. You can also cut down on paper by eliminating paper towels form your business. Get back to using rags – often second hand stores have these or you can make your own out of old clothing. Microfiber cloths are amazing! They are better at dusting than anything else and this comes from someone who thought it had to smell like Mr. Clean to really be clean. I now use microfiber cloths for everything from my mirrors to granite countertops to hardwood floors and the dust doesn’t settle again as soon as you turn your back. Other cleaning alternatives include good ol’ vinegar/baking soda, which is perfect for cleaning without harsh chemicals and less expensive too. Lighting is another great way to reduce costs – first by the type of lighting and second by the length of time your lights are on. 2. Overhead bills. Heating/cooling/water/ electricity: Spend some time evaluating the most cost effective companies to go with. Brainstorm ideas to save at your end. For instance: Is the amount of walk- in traffic justified in leaving the front door open during the warmer months of the year? I understand it is wonderful to be able to be “part of the hustle and bustle of the street” but how much are you paying in extra electrical and air conditioning fees? In the winter months: How do your deliveries leave the building? How long are the doors left open, requiring extra heat? How often do you walk in and out of your cooler? Can you cut back the number of trips in and out? How many lights are on in your store? Can you get away with less and better still, take a green approach? What about the condensed water from your cooler? Where does it go? Can you utilize that water? Because it is distilled, it is quite easy to PH balance for your buckets but it also would be great for plants because it would be free of fluorides that tend to cause brown edges on plant leaves. 3. Staffing. Consider that there are alternative solutions to laying off staff. It has been calculated that reducing one employees hours to seven from eight, providing that employee makes $10.00 per hour, can save you $3,650.00 a year. Having two staff working four days a week each would mean you could have double coverage on Friday and single coverage the slower days. Take a really close look at your average sales per day and plan your staffing accordingly. They may also have to contend with switching their shifts around. Talk about these concessions with your staff because many employees are willing to make that sacrifice in order to maintain their jobs. Extra special planning during your holidays can greatly reduce your staffing requirements, but you will need to be organized. 4. Hours of operation. When evaluating your staffing requirements, take a long hard look at your hours of operation. If you are in a mall setting it may be difficult to reduce your hours of operation but you will never know unless you try. If you tell them the option may be that you can not afford to be in business at all, I think they will need to be more lenient. It may be a difficult argument as malls generally open longer hours when things are tough, but if this is not to your advantage, you should find someone who is good at negotiations and have them approach the management of the mall. Having a phone service that allows you to forward your calls to your house during hours you are closed could work for you. 5. Budgeting your purchases. If you have already made some large purchases and you aren’t sure of the product due to the change in the market see if you can cancel or even redirect the dollars to a larger variety of products rather than large quantities of a single item. You must look at last year’s sales and understand the percentage that sales are down and budget accordingly. 6. Find ways for free advertising. One of the best advertising I did years ago was a radio ad to the first caller during Administration Week. That caller got free flowers for their person in the office but I received piles of orders from the second, third, and fourth callers. The actual ad was not free but the results far outweighed the costs. The timing of the ad meant that I had to be at work two hours earlier that week but it was well worth the effort! Promote yourself. Find organizations that are looking for an evening demonstration and call them up. Take product that is not sellable because it won’t last for the customer, and send it to the business down the street, reminding them that it needs to be gone in x number of days because it is your name that is at stake. Maybe, it requires replenishing on your part… go the extra mile and provide this service if the business wants to start a weekly or bi-weekly flower program. When they need flowers, they will remember to call you, or may even give you the order in person while you are there. Make sure your business name is very clearly marked. Which brings me to another point. Far to often we do not put our name on the enclosure card, the envelope, the packaging…nothing! How is the customer supposed to know where the flowers came from if we don’t cover all the bases? Is the delivery person going to say which shop it came from? Probably not! Donations also help get your shop name out. However, let me make it very clear. Unless you budget for charitable donations, don’t make them! This is a slippery slope that can put you in the red before you know it. I suggest making signs that state when people should have requests for donations submitted so you can go through all the requests and decide which ones serve you and your community the best. 7. Delivery methods and efficiencies. Route out your deliveries, amalgamate deliveries and save fuel with Cardlock cards. If you are doing your own deliveries, map them out to the most cost effective route. Set aside very specific times for regular deliveries and charge extra if someone wants deliveries done outside these timelines. Install gadgets that monitor the vehicle speed for the best fuel consumption. Check with other businesses in your area to see if there is a service that you can offer to them as well to subsidize your own deliveries or vise versa. You could save note only on fuel consumption but also on delivery personnel, insurance – all sorts of ways. Deliveries from your wholesaler should also be monitored. Hopefully you are including the cost of delivery in the price of the product or it is coming straight out of your pocket! Watch for things like the weight or bulkiness of the product when shipping. Look for a transportation company (could be your local company) that will pick up your product at a better rate if there is no timeline attached to it. It helps tp plan ahead on your large purchases and think of double stacking when you can. I remember a time when I knew it was going to cost me $$$ to ship an item I needed and my retail price would no longer be competitive in the market. I managed to find two other products from the same area that I wanted and would fit in between the main product easily. I could then spread the cost of the entire truckload of freight over all the items and thereby be competitive in the market. If the product is not perishable, there are many trucking companies that have trucks coming home empty and would much rather fill them and charge a lesser rate as they would still be increasing their revenue. It may require a bit of calling around, but well worth the effort in the long run. 8. Insurance and phone/wire services. A while ago, I saved myself over $2000.00 a year by changing a personal car insurance company, along with my house insurance. Even though I had been with the other company for over 12 years, their rates were so much higher and they made absolutely no effort to retain my business. Loyalty needs to go both ways! There are so many options for phone and wire services today. One really needs a degree in that stuff…or someone who can really do the searching for you. With all the technology today and the extra fees for belonging to a wire service, you need to really do your homework and decide if the number of orders you are receiving are enough of a benefit to you financially. Leaving sentimentality behind (because the process has been around since Noah and the Ark) look at the numbers and the alternative. Be sure your customers can access your shop from their computer and make sure you check it first thing every morning as not to miss orders. There are different secure ways for your customers to pay online or you can keep up the personal end of things by calling them directly for their credit card information. 9 Barter for what you can and negotiate and get quotes for what you can’t. Learn your prices, read the fine print and don’t take anything for granted. Know what you are getting and get it in writing or email. Know what markups you need to make. If you are buying an item at $3.00 and your margin is three, your end product will need to be at $9.00 (or 8.99 in my world). 10. Look at pricing. I remember when I worked at a wholesaler that was selling a Christmas wreath, which no one else in the market had at $13.99. Every time I walked past that wreath I would get upset! What was wrong with $14.99 or even $15.99? I knew we could have sold it at that price and we could have improved our profit. If we had purchased 200 of these wreaths and priced them at $15.99 we could have increased our profit by $400.00. On one item! Make sure you are getting what you think is reasonable but still making a profit. It’s easier to go down in price than to go up. As I always suggest: have an end date. When do you want to be sold out by? In fresh: remember the value of negative and positive space. Remember the value of a highly trained skill called floral design. It is worth money! Think about having a two tier pricing system - one for designs and one for cash and carry. I hope there is something in this article that inspires you to find ways to cut corners and still be a profitable business for tomorrow.  M.G.
Bernice Klassen is experienced in nearly every aspect of the floral
industry, including retail, wholesale and grocery chain. Armed with a
business administration degree, with a specialty in marketing and
management, Bernice is now offering her services as a floral consultant
to the industry. Bernice maintains that she doesn’t necessarily know
better, she has just been around more blocks than most and can offer
knowledge from all avenues of the floral industry. Contact Bernice
directly at
This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
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