Dare to Be Diverse
Q Last year, at the height of the recession, things were pretty rough in my garden center where sales were concerned. How can I add to my bottom line for next year and beyond?
Diversity is key to success.
I think it’s safe to say that last year has been a wild ride for most companies. But as those of us in the lawn and garden retail business know, living through the economy’s ups and downs is a lot like growing and selling plants during weather extremes: Sometimes all you can do is hope for the best and prepare for the worst. Coming from a farm and nurseryman background, I’ve learned that one of the key factors in keeping your head above water is to offer a variety of products and services to help keep the cash flowing through both the blue-sky and stormy days. On the farm, although our main crops were soybeans and cotton, the chickens provided us “egg money” and the pigs were considered “mortgage lifters.”
In that same way, the more flexibility you can put in your company, the better your chances are of keeping your finances in the black. It’s all about getting as much business from your existing customers as you can while cultivating new clients along the way. So what does that mean for those in our line of work?
Obviously, a company that can add new services such as installing holiday decorations, cleaning and storing clients’ lawn furniture, and selling firewood has a better chance of keeping the doors open year round. And these services may also be the “mortgage lifter” and supplement the income if your primary business is experiencing sagging sales. But before you begin offering these new services, there are a few things to consider.
One of the most important factors is that these extra activities don’t spread you too thin. They should be compatible with your core business so they don’t eat into your profits. You could quickly become a jack-of-all-trades and master of none. If you can’t do these add-on services with the same degree of quality you are known for in your main business, any dissatisfaction customers might have about those activities could spill over and harm your main profit center. So it’s important to decide how many active services you can have going at one time and still do them all well.
One way to sort this out is to categorize the services into two areas: those you could perform in combination with your regular season — such as design consultations, water feature installations, power washing decks and party setups — and those that would help keep employees busy during off-season months, such as installing holiday lights, snow removal, or Christmas tree and wreath sales.
The services that can be done with your existing employees, scheduled in off-peak hours and accomplished with little extra equipment are your best bets. For instance, storing clients’ patio furniture might be ideal if you have extra storage space or can rent it at a reasonable rate, and then charge for the cost of cleaning the furniture along with your pickup and delivery services. Other types of seasonal add-ons may be more of a gamble because of factors such as weather, equipment costs and additional supplies. For example, a snow-removal service requires special equipment: plows, blowers, salt and sand, to name a few. And with the unpredictable nature of the weather these days it’s hard to anticipate when or if a significant snowfall will occur. In warmer areas of the country, power washing decks and driveways is a popular service to offer because the equipment costs are low and it is something you can easily offer your existing customers.
Another service that is gaining in popularity is selling holiday decorations, including lights, trees and wreaths, and then adding services to install them. Both commercial operations and residential customers are potential clients. Most residential installations can be done from a ladder if you want to keep your costs low. A bucket truck might be required for larger jobs. Since most lights go up in October and November and come down in January and February, you may need to consider whether this service would cut into the fall or spring operations for your core business.
Some owners I’ve talked to are using a holiday lighting franchise company. The advantage is the franchise offers training and marketing support so you’re not trying to figure it out on your own. They also have design consultants, so you can offer custom styles. The owners report that there is a good percentage of repeat business once a client signs on. They also offer lighting maintenance and storage services, so depending on how long the clients keep their lights up, there are opportunities for added profit. The downside: Franchise fees and royalties take a bite out of your bottom line. There are always pros and cons to consider.
Selling firewood and holiday trees are also possible off-season services. You need to weigh the value of these offerings against how many other businesses you may be competing with and the costs involved, such as a tree bailer to wrap up the holiday trees, and whether you have easy access to wood and tree supplies.
For each of these services the key is to determine whether you have the time and personnel to ramp up a new business and manage it effectively. You should also be sure there’s a balance between the volume you can bring in from the added service and the cost of the equipment, training and potential liability.
Some companies have found a good way to test the waters is to perform the service for themselves, a friend or family member. Putting up your own holiday lights or power washing your friend’s deck will give you the hands-on experience you’ll need to develop accurate estimates for these additional activities.