As entrepreneurs, owners, and managers, we’re all often faced with times when we must consider the viability, or lack thereof, of our company, business model or marketplace. When things just aren’t working like they used to, do you shift gears with product or restructure? Or do you call it quits?
The green industry is no stranger to business closings. Google “garden center closings” and you’ll be faced with a fair number of results on recent closings of prominent garden centers — some that were in business for more than 100 years. Yucca Do Nursery, a grower and occasional retailer of natives here in Texas, placed an elegantly written statement addressing their recent closure, with reasons including a changing marketplace, changing people, and climate and water concerns. In their words “The nursery business is a tough one, littered with the debris of failed startups and the abandoned, dilapidated ruins of greenhouses that held them.” Brutal, but honest.
When you search for new garden centers opening, you’ll get a few results; however, most don’t appear unique in their business model, inventory, or approach to marketing or customer experience. They look like the same type of garden centers that are closing across the country. The handful of openings that do feel a bit different to me are distinctly “urban” garden centers, with very small spaces and assorted inventory that crosses over into home living products. Less focus on plants, more focus on living.
This is not to say that there aren’t healthy, traditional independent garden centers out there that are doing things right and making money. But, I think it’s fair to say there are a lot of garden centers out there doing things the same way they’ve been doing them for the last 30 years, and with a look, feel, and experience that is indistinguishable from one business to another. A reluctance to innovate has put many in our industry into what looks like a bubble frozen in time.
So, how do you know if it’s time to shake up your products, services, and processes, or close up shop? There are of course several simple indicators as to a business’ health — and that of the owner. Are you hitting your sales projections? Are you putting your own money into the business, or running up debt? These are two clear signals your business is not financially sustainable. Of course, many businesses will weather times of non-growth or short periods where they may need to carry some debt. But if this is an ongoing condition, then it’s time to look at long-term viability.
As an owner, it’s also your personal health that may be at stake. Are you still passionate about the work you’re doing? Or do you feel relieved when you think about shutting down or selling the businesses? If you’re working yourself into illness, it may be time to let go, or at least pass the torch to new management. I’ve seen a lot of comments in relation to recent IGC closings that echo this sentiment: “I’m tired.” ” I’ve worked myself to the bone, but I can’t make enough money.” “I want to retire, but I don’t have anyone to pass the business to.”
Are you too personally invested in what and how you’re selling because it’s important to you, without realizing your customers don’t care about the same things you do anymore? If you love your product more than your customers do, you’re in trouble. This is a prevalent condition in the IGC industry. Sometimes, it’s a lack of understanding of the changing marketplace that’s crippling you. Customers are different than they used to be, and they may need different things from you. We can’t expect new customers to love our idea of gardening the same way we do. Not to mention, your marketing must also change to reflect current market trends. Refusal to change, invest, and innovate can cripple businesses over time.
Think you still have a little retail steam left in you and your market? Sometimes closing or selling aren’t your only options. Changing your business model in a way that reinvigorates you and your profits could be the answer. Small iterations that stay in tune with your original model and goals can sometimes give you the leg up you need. Significantly modernizing and differentiating your production selection, remodeling your facilities, providing online shopping, adopting new technology, employing a new marketing strategy, or completely flipping your staff; these are iterations that can infuse your garden center (and you) with new life.
But sometimes, small steps aren’t enough — you might need to turn things on their head with a new business model and value proposition. We call this “The Pivot.” Pivoting is especially important if legal issues, regulations, or big changes in the marketplace make your current operation unsustainable.
An example of IGC pivoting could mean rebranding from a garden center that sells traditional gardening products into a destination event and rentals venue. Maybe you shift completely from outdoor gardening products to an indoor gardening shop. Or, it could mean you shift from selling plants altogether and instead offer installation and landscape upkeep services. Or maybe your business becomes something completely unrelated to gardening. Your café could end up being your primary business moving forward. A pivot is a big shift forced by marketplace realities, and requires letting go of your old retail garden center model.
The trick is, you must pivot fast enough to recapture market share. Clutch your old, struggling business model to your chest for too long, and you’ll miss your chance.
If you’ve decided as the business owner that your heart or health just aren’t up to keeping the business running, why not first turn to your employees?
Selling your company to a group of employee investors can be just the shot in the arm the business (and you) need to get back on the right track. If you don’t have employees or family members who can or want to step into your shoes, closing or selling may be the best choice.
Legacy shouldn’t always drive future business decisions, and you don’t really owe anything to the past. Knowing when to say goodbye, or at least when it’s time for a total makeover, can be your key to a bright business future.