Buy my bushes, please!

Buy my bushes, please!

Don’t let suppliers drive your business. Today’s ‘discount’ inventory costs more than you think.

It’s that time of year when landscape companies get calls from clients anxious to be the first ones on the production schedule of the 2009 season. For many, it’s also the start of a new season of crisis control, responding to pressures put upon us by others.

Three Kinds of Pressure
1. First, there’s Mother Nature. The seasonality of our business has its pros and cons. Mother Nature often prevents us from doing work because of snow, rain, or frozen ground. But once winter starts to end, Mother Nature starts motivating clients to want to get their work scheduled early, or get started on work so it will be completed by the fall. We can’t stop either the good or bad effects of Mother Nature, so we just have to respect her.

2. Our own operations force more pressure on us. As winter ends, sales teams are anxious to start filling the production board because they want to get a head start on their sales goals, plus they want to try to get ahead of the tidal wave of clients who will all want to have their yard be the first one to get a spring makeover. It’s natural to want to sell work to pay back the overhead that’s crept up all winter. But don’t let this pressure run your business. Don’t let ‘getting busy’ become more important than having a strong financial plan for the year.

3. This leads us to the third type of pressure we have to deal with — suppliers who want us to order green goods and take delivery early. They offer great incentives of bulk savings, delivery discounts, and the best pickings from the greenhouse and more, enticing us to commit to orders we may not need and want right now. But stop and think about this. If we make those orders and take delivery early, we’re left with a raft of issues we now have to deal with:

Cash outgo early in the season
Space needed to store inventory
Employee time needed to tend inventory until we can plant it
Inputs like watering, pest control, fertilization, dead-heading, trimming and more needed to maintain it until we can plant it
Equipment, housing, and other inputs needed to handle it until we’re ready.

Who’s Best Interest is This In?
Now we have a lot more problems and are already distracted from our main business, which is thinking about creating designs and good client relationships profitably. We’re now in the ‘nursery’ business, and hoping we can use all those plants in our inventory.

It’s a great deal for our suppliers, though. They imply they are looking out for our best interests by preparing for our spring rush, but is it really in our best interest? We may be over-exposing ourselves to extra inventory, which we’ve taken off their hands. We pay early, take delivery early, and reorder the same year-to-year, taking their “hot potatoes” off their floor and saving them thousands in inventory carrying costs. And, we now get to manage extra hassles and costs of our own to keep that inventory alive and ready. This works for the suppliers, but is not in our best interest.

From a design and professional standpoint, this gets worse. The plants we now own, which might very well be the same types we ordered last year, might not suit our clients’ projects at all. How could we possibly know if they’re suitable, if we order them first, then develop the projects later? This is all backwards! It’s like a doctor ordering plenty of one antibiotic and hoping all the patients he sees have the one ailment that needs it. We need to adhere to a sensible — and professional — practice of “Diagnose before you prescribe.”

Own Your Own Destiny
Change the “Buy my Bushes” strategy to “ Buy my Plans.” Why are we design/build professionals left holding the suppliers’ “hot potatoes” all the time? We don’t need to put ourselves in this position. We need to stand up and dictate how we will change the relationship between our suppliers, and with our clients. We need to resist this trend and head our own ship of destiny.

As a design/build professional, you need to take stock of your business practices and ask why you do some of these things. There are many different business practices where you should ask, “Have I taken the appropriate steps in the best interest of my company, my clients and the quality of work I produce? Is this ultimately a direct reflection on our reputation of professionalism?”

When you have a focused business “Process” that helps you resist these outside pressures, you will find ways to handle them in your own company’s best interests. And this will also be in your clients’ best interests.

Our “Process” should not have us bugging clients to buy our inventory. It should be diagnosing first what is in the best interest of the project and the client. Liquidating our inventory shouldn’t be a pressure keeping us up at night. We can’t let our suppliers fill the prescription before we know what we definitely will need.

If All the Stars Line Up Just Right….
That’s a no-win situation for us. The only way it works is if all the stars line up perfectly so that we can accommodate everything — the suppliers, the plant inventory, our employees — and at the same time, land the ‘ideal’ projects that happen to require exactly those plants, exactly when they’re ready for planting. How often can this happen?

A better approach is using the “Just in Time” inventory concept. It’s transformed many businesses dramatically, allowing them to operate in a lean way and use inventory when they need it. A classic example of this is the way Dell Computers builds computers only when the customer orders them. Contrast this with IBM, which held large inventories of specialized computers, hoping people would buy. Uh oh! When technology changed and consumers wanted new computers, IBM was stuck with outdated inventory. Dell proved they had the right idea — make it on demand — don’t hold things in inventory.

If we consider this success story, (and you can’t deny its common sense) our application should be: “As a design/build professional, I will buy your bushes when I need them, because I need them, and you can keep them alive in your nurseries, available for us. This really looks out for my interests.”

This lets us then focus on what is right for the clients’ best interest after we have diagnosed the real project needs.

4 Ways to Handle Outside Pressures
Here are a few tips on handling your ‘tidal wave’ of spring pressures:

Start early in your planning, focusing on your marketing and processes so you have a solid financial foundation when you start. Make sure this is your top priority, and don’t be pressured by others’ priorities.
Unless you already have projects planned for the next few months, you can’t be sure what products you’ll need. Negotiate with your supplier to order the products you know you’ll use, but arrange for staggered delivery and payments on them. That way, the supplier is responsible for the inventory, not you.
Consider dealing directly with growers if you can order far in advance.
Challenge yourself by thinking progressively about how you manage your business. Are you working longer hours without a proportionate increase in your prices? Are you able to schedule work projects months ahead, rather than weeks or days ahead? Are you getting better projects? If you can’t say yes to these questions, start looking for a better way to manage your business.

This year, instead of ‘Buy my bushes,” try “ Buy my plans.” Keep the focus on your own business goals. Take control by being the director of your business, and stop letting suppliers direct it.

Do you have thoughts on this? What are your biggest pressures when the season starts? We’d love to hear your opinions and experiences. Call us at 614-764-0104 or email us at kinman1@aol.com.