September 1, 2020
The good ones thriveBY ROD McDONALD
In the late ’70s and early ’80s, there was a building boom in my area. Anyone who owned a truck, a ladder and a hammer declared themselves a framing carpenter. On the surface, that preceding statement appears absurd or, perhaps, comical. Sadly, those self-declared framing carpenters got work — but only because the good framers were booked up. One afternoon in 1978, I was having a conversation with one of the reputable framing carpenters. He said: “I will always have work. When I am too busy to get to everyone who wants me, then the marginal carpenters get that work. They work, only in the good times, never when it is slow.”
Those words proved true, again and again, as time went by. There were good homes and not so good homes being built in that time period. My brother built his first house in 1977. Two years later, a wind shear devastated his neighbourhood, including his home. The roof was torn off. A good thing that wind turned out to be, as the missing roof exposed an incredible number of deficiencies in not only the framing, but also the insulation. His front door had been framed with not a hint of surrounding insulation, which explained why it was always so cold at the entrance way. The builder was charged with building code violations, and with no great surprise, declared bankruptcy. This story was repeated again and again, as time went by, when homes were being renovated 20 and 30 years down the road. Workmanship that should have been carried out was either non-existent or poorly done.
Framing carpenters and landscape contractors have something in common: During the good times, everyone works. When things are slow, only the good ones thrive.
WE ARE IN THE MIDST OF UNCERTAIN TIMES, and one of the few sectors that thrived during the early part of this year were the garden centres and greenhouses. The family greenhouse where I work part-time closed down on May 25. There was nothing left to sell, and nothing left to buy from other greenhouses. If you did not make money this past spring, there was something wrong. Consumers were so desperate for plants that social media was filled with questions asking where someone might find this plant or that one.
I spoke with a staff member at Home Depot and she said customers were waiting around for trucks to be unloaded. Then they swarmed the racks before staff could even place plants on the shelf. As I wrote last month, impatiens had become to our trade what toilet paper had become to Costco.
The title ‘The good ones thrive,’ could also has been ‘The tough ones thrive.’
One has to have a certain level of toughness to survive in this business. I, like you, had friends who commented while shopping at my garden centre in the spring, “When I retire, I want to open up a place just like this.” I told one friend she was not tough enough to handle this business. She was not offended, but she was confused. I explained that she thinks we wander around smelling the roses, when in reality, we spend so much of our time unloading trucks, organizing benches and answering questions. Our work is both physically and mentally draining. This is not a business for sissies. I knew one person who attempted to manage a large greenhouse by working from 8 a.m. until 4:30 p.m. If she missed lunch, she thought she could leave at 4 p.m. When I tell that story to a group from our trade, there are always gales of laughter. If you want an 8 to 4:30 job, this is not the business for you.
Good times or not-so-good times, you will never get rich working for the bank. Debt is both a positive and a negative, and those who are good business managers know how to manage their debt load. I was never afraid of debt; I used it to build my business when I did not have liquid cash to finance projects. I also paid down my debt with accelerated payments, whenever possible. I would never accept a loan with a penalty for balloon payments or paying off prior to maturity. There are banks that penalize you for paying back loans too quickly, as they want to keep you on the hook, collecting interest every month. Find a bank, or better yet, a credit union, that is flexible in early repayments. I don’t like working for the bank. I like working for myself.
MANY YEARS AGO, a friend of mine got carried away with expansion and easy credit. He bought a lot of equipment with ‘nothing down and low payments’ and he bid a lot of work. He needed to bid a lot of work to pay for all the interest on his equipment loans. Two years in a row, he grossed over $2 million in sales, but netted only $6,000 one year and $20,000 the second. The following year he reduced his equipment and his crew size, and regained profitability. He has remained in the black for these last 30 years. He learned his lesson on how to be profitable, and the lesson is debt management. I love a story with a happy ending.
When times are slower, we have to provide even more reasons for customers to visit our garden centres and greenhouses. Cutting prices is not one of those reasons. Those who have attempted to increase business with lower prices have paid dearly for their foolishness — and quite quickly, I might add. Our margins are not so great that we should become price cutters. Even if we do try to lower our prices, we will never be as low as the box stores. Box stores have little investment in staff. They tend to hire warm bodies, not plant people. They place very little emphasis on maintenance or display and they always purchase from the cheapest wholesaler they can find. Box stores will drop a supplier of 20 years for someone five cents cheaper. There is no possible way we can, or should even want to, compete with the box stores. Lowering prices is a recipe for disaster.
We need to always be fresh with our displays. When I walk into a greenhouse or any retail store, it should proclaim this is the place I should shop. The displays should not only make me say the proverbial ‘Wow,’ but those displays should encourage me to buy. As my greenhouse manager used to say, compliments are always nice, but $20 bills are even nicer. I have walked into retail stores from our trade, that made it clear this is either a tired operation or one that is determined to achieve success.
A year ago, I had an idea of where our trade was headed and what to expect from the economy. Today, I have no idea. These are interesting times for all of us. What I do know, and for certain, is that the good ones amongst us will not only survive, but we will be the ones that thrive. Our attention to details, and the business plans we create, will keep us on the road to success.
Rod McDonald owned and operated Lakeview Gardens, a successful garden centre/landscape firm in Regina, Sask., for 28 years. He now works full-time in the world of fine arts, writing, acting and producing in film, television and stage.