Are Your Saving And Spending Ideas In Order?

Economy stock image, coins, dollars, money

Hi, this is your friend Sid writing to you again. I’m not here to criticize, but to help you profit from some new thinking about your business.
This article may be a little abrasive for some of you so I apologize in advance and suggest you sit down to think about it a bit. I’ve been where you are and have bought all the t-shirts you have.

Do You Really Understand Savings?

An old and almost obsolete saying is “pennies make dollars.” Most people won’t even bend over to pick up a free penny. We’re just talking about pennies and it takes 100 of them to make a measly dollar. What can you do with a dollar?
Likewise, most people won’t take two minutes to call a store about what they need to know before they spend too much or buy the wrong thing.

The trouble with the way some define saving money is that they have an incorrect belief that they save money while buying things we don’t really need.

Save $5,000 on a new Suburban? Yeah, right. It’s still $44,000. I haven’t been seeing many new vehicles in garden center owners’ garages lately. But I do see aging Suburbans, Tahoes and Excursions that are not paid off yet.

What about not buying things we really should buy? Like saving $44,000 with good advice. Oh, you can’t afford to spend the $4,400 to get good advice? You put that on the down payment for the Suburban, huh?

I’ve got news for you. Saving $25 on the $750 monthly payment is anything but saving.

Allow Me To Define Reality

Saving money on a company vehicle that doesn’t deliver stuff or move people to jobs for customers is not making money. It is spending money – and a lot of it. A car is a depreciating expense, not an investment.

I don’t care what anyone thinks. Save money by not paying the “stupid tax” other people pay for buying expensive living expenses they don’t need.

Saving money means having a back-up fund to cover for contingencies – and stupid mistakes.

If neither of those happens, then it is money that can be invested.

Investing Is A Better Strategy

Making money requires investing to either increase the value of what we sell or to reduce expenses. Some of the best spending is on investments that help you get the most out of what you already have, like better display benches. Benches increase the perceived value of what you already sell so you can increase prices without the customer noticing.

Another good type of investment is to buy things that will make money while you own them. A good example of this is to invest in improving the operation systems of your company so you can increase profitability and perhaps draw more money from its operation to put away in savings and someday expand, retire, or give away if you like.

Take a look at the graph above for what I mean by a good type ofinvesting. I may sound a little self-serving with the last items, but I believe in my product.

Sorting out expenses from investments is not an easy thing to do. Maybe some help would help.

Help comes in many forms. For example, there is expensive help, and there is profitable help. You’ve had both types on your staff, right? One talks about getting the job done while spending a fortune on stuff that doesn’t sell, and then they quit. And there is the kind of help that gets the work done at a reasonable cost and makes money for you with no drama.

I read that landscape consultant Monroe Porter once said, “Make money to grow. Don’t grow to make money.” That’s wise advice.

Take A Close Look At Inventory

Another area of savings is on inventory purchases. In almost every client situation I have encountered we have been able to move a substantial amount of money that is tied up in inventory that does not sell well into working capital that can be invested to improve the business to sell more inventory that does sell well.

Think about this: Your company probably spends more in a year on inventory than the total value of the business if you were to be able to sell it today.

In fact, I would bet you spend more on inventory than the total value of everything the owners of the company own.

Let’s check. Add up the beginning inventory, inventory purchases, wages and wage benefits associated with the inventory (all wages), and operating expenses to house, handle, advertise, and sell the inventory.

If you just added all that stuff up you see a big scary number that should scare the daylights out of you. And it should put everything you thought you knew about your business into a new, different, and more realistic perspective.

Having spent a good bit of time on the supply side of business I hate to do this but I have to tell you that vendors come in many forms as well. There are those that know the business side of the business and how to help you make money with their product. There are vendors who know the product side of the business and help you buy it from them.

And there are those vendors that don’t know much at all and don’t know what they don’t know. Those are the ones that got a lucky break to work for a good company that doesn’t know they’re getting snowed.

Speaking of snow jobs, I think there’s a big one coming and I finally invested in a snow blower last year. I couldn’t afford one before I bought it.

Again, I’m not here to criticize, but to help.
Your friend,
Sid

Leave a Reply

More From Finances/Operations...
2016 SHSG covers.indd

July 31, 2015

SHS Griffin Releases 2016 Catalog In Print And Expanded Digital Formats

SHS Griffin has announced the release of its annual seed and plant catalog for the 2015-16 season. Available in both print and digital formats, the 2016 catalog features more than 400 new and improved varieties from the industry’s leading breeders. The 262-page print catalog covers the company’s full seed portfolio — more than 3,400 cultivars of annuals, perennials, ornamental grasses, herbs and vegetables. From the SHS Griffin vegetative offering, the complete spring-annual assortment from Syngenta Flowers is featured, alongside new introductions and top sellers from nine top suppliers such as Proven Winners, Dümmen Orange and Suntory. More than 120 vegetative perennials from Syngenta Flowers are also included, including several SHS Griffin exclusives. The SHS Griffin 2016 digital catalog includes all of the product information and photography from the print edition, and more. For the first time, SHS Griffin has added a range of digital-only bonus content: detailed crop culture, quick […]

Read More
Marvel Mahonia (Plant Development Services)

July 31, 2015

Retailers’ Choice Awards For Best New Products Presented At SNA 2015

A team of independent garden center retailers, along with the Garden Center Group’s Sid Raisch, walked the SNA show floor in search of their favorite new products.

Read More
Steve Bailey

July 30, 2015

How To Determine A Gross Margin Percentage Goal At Your Store [Talkin’ Finance With Steve Bailey]

One retailer asked this question: Is there a gross margin percentage that is considered a good goal for garden centers and their various product lines? Check out financial consultant Steve Bailey's advice.

Read More
Latest Stories
2016 SHSG covers.indd

July 31, 2015

SHS Griffin Releases 2016 Catalog In Print And Expanded…

SHS Griffin has announced the release of its annual seed and plant catalog for the 2015-16 season. Available in both print and digital formats, the 2016 catalog features more than 400 new and improved varieties from the industry’s leading breeders. The 262-page print catalog covers the company’s full seed portfolio — more than 3,400 cultivars of annuals, perennials, ornamental grasses, herbs and vegetables. From the SHS Griffin vegetative offering, the complete spring-annual assortment from Syngenta Flowers is featured, alongside new introductions and top sellers from nine top suppliers such as Proven Winners, Dümmen Orange and Suntory. More than 120 vegetative perennials from Syngenta Flowers are also included, including several SHS Griffin exclusives. The SHS Griffin 2016 digital catalog includes all of the product information and photography from the print edition, and more. For the first time, SHS Griffin has added a range of digital-only bonus content: detailed crop culture, quick […]

Read More
Marvel Mahonia (Plant Development Services)

July 31, 2015

Retailers’ Choice Awards For Best New Products Presente…

A team of independent garden center retailers, along with the Garden Center Group’s Sid Raisch, walked the SNA show floor in search of their favorite new products.

Read More
Steve Bailey

July 30, 2015

How To Determine A Gross Margin Percentage Goal At Your…

One retailer asked this question: Is there a gross margin percentage that is considered a good goal for garden centers and their various product lines? Check out financial consultant Steve Bailey's advice.

Read More
Chuck Hoover, Tagawa Gardens

July 29, 2015

Give Your Young Employees A Personal Stake In Your Comp…

One retailer asked the following question: What are the best techniques for recruiting new staff members to replace those who are due to retire in the next couple years?

Read More
Petunia ‘Trilogy Red’ (American Takii)

July 29, 2015

Catch Your Customers’ Eyes With These Sun-Loving …

Now is the time to start planning for which annuals will be on display at your garden center in 2016. Check out this slideshow of breeders’ picks for their favorite new sun-loving annuals for the garden retail market in the coming year.

Read More

July 29, 2015

Digital Technology Helps Crack The Millennial Code [Sta…

With a well-trained and knowledgeable staff, Kurt Fromherz says you can forge a deeper connection with your customers and with your community.

Read More
Bauman Farms

July 28, 2015

Local Garden Centers To Visit During Farwest 2015

While you’re in Portland for the Farwest show, set aside some time to pay a visit to these local independent garden centers and check out some of the innovative things they’re doing.

Read More
Farwest Seminars

July 28, 2015

What’s New And What To Do At Farwest 2015

Are you planning to attend the 2015 Farwest show? Here's a list of things to do, including new activities, at the event, which take place Aug. 27-29 in Portland, Ore.

Read More
Bob Peters featured image

July 28, 2015

J.R. Peters’ Founder Dies At 97

Robert "Bob" Peters founded the garden fertilizer company that became JR Peters and has been an active supporter of the greenhouse and garden center industries since World War II.

Read More
IGC Show App

July 27, 2015

Want A Guide To This Year’s IGC Shows? There̵…

IGC Show organizers have launched new free apps for IGC East and IGC Chicago, available for download in the Apple App Store and on Google Play, that offer information on conference sessions and special events.

Read More
Impatiens Lollipop Series (Ernst Benary Of America)

July 27, 2015

18 New Annuals That Are Great For Either Sun Or Shade […

Now is the time to start planning for which annuals will be on display at your garden center in 2016. Check out this slideshow of breeders’ picks for their favorite new sun and shade varieties for the garden retail market in the coming year.  

Read More
Ingenico EMV

July 27, 2015

Why PCI And EMV Compliance May Not Be Enough For Retail…

A report from the National Retail Federation indicates that while companies are becoming more compliant with PCI standards, it may not be enough to protect them from fraud. Note: Thanks for Epicor for sponsoring this EMV story.

Read More
Ian Baldwin

July 27, 2015

Ian Baldwin: Validating Customer Complaints Can Pay Div…

In his latest blog posting, Ian Baldwin says when you deal with customer concerns in an empathetic fashion, you’re more likely to earn repeat business and future sales.

Read More
Farwest Nursery Tour

July 24, 2015

Farwest 2015 Show Promises To Be Far From Ordinary

Farwest, which takes place Aug. 27-29 in Portland, Ore., is the show to discover new nursery and retail-focused products, equipment and services, find new, popular plant varieties, and network with thousands of top industry professionals.

Read More

July 23, 2015

Lakeview Nurseries’ Michelle Harvey Appointed To Massac…

Following a passion for government policy, Harvey says she’s excited to be able to educate elected officials about issues important to the horticulture industry.

Read More

July 22, 2015

Economic Growth Will Fuel Garden Demand [2015 State Of …

As the housing industry continues to rebound and the economy improves, economist Charlie Hall says consumers will unleash pent-up demand, which means good news for garden retailers.

Read More

July 22, 2015

Local Garden Centers To Visit During The Nursery/Landsc…

While you’re in Dallas for the Nursery/Landscape EXPO, set aside some time to pay a visit to these local independent garden centers and check out some of the innovative things they’re doing.

Read More
Texas NLA Trade Show Floor

July 21, 2015

What To Do And What’s New At the Nursery/Landscap…

Are you planning to attend the 2015 Nursery/Landscape EXPO? If so, here’s a list of things to do, including new activities, at the event, which take place Aug. 13-15 in Dallas.

Read More