Garden Retail: Making it through the credit crunch

Keeping your business afloat during trying times can be a challenge, but smart money management can save the day, advises Leslie Kossoff.

Blithe expressions like "credit crunch" are easy for the media to bandy about and use as a catch-all term for their business reporting, but these terms don't, in any way, reflect the reality that you're living. Whether your centre is flush with cash or just getting by, day by day, you're facing financial challenges that won't go away for a while. That means that you have to be clever about how to make the most of what you've got to get you through these lean times.

You and your banker

Conventional wisdom is that there are no loans to be had. Banks aren't giving any because they need to keep as much cash on hand for their own purposes after making the mistakes they made. That raises the question of whether it makes sense for you to visit your banker.

But there is no better time than now to either start or keep building a relationship with your bank and banker. If you've not done so, make an appointment - better yet, arrange a lunch - as soon as you can. You want that relationship right now because it will serve you well later.

If things aren't going well, and there's a possibility that you're going to have to restructure any outstanding loans, you want to have built that positive relationship long before the time to ask the question arises. Bankers, in particular, don't like surprises - especially not in times like these. You don't want them coming to you before you get to them.

If you're looking at the possibility of expansion (because many of you either are doing so or should be) you want to get in early to discuss what the bank can do for you in the immediate, mid- and longer term. Banks love good customers and if you're in their good books, your banker will do what he or she can to help you get the funding you need.

Or, if you've got some cash stashed away that can make more money than it's now earning, you want to sit down with your banker and start having the conversations that lead to you being one of their "wealth management" customers. Just because you're not in that class right now doesn't mean you're not going to get there, especially - as they will no doubt tell you - with their help.

Looking at your costs

And, as always, you have to look at your costs of doing business. You need to be as smart as you possibly can about where every penny is going.

To do that, enrol the help of your employees. Make sure they know the real costs of everything they do or are involved in. Turn them into mini managing directors. Get them to think about the cost of time, money, resources or any other measure you can give them. Then ask them to come up with ideas on how any cost-causing waste can be eliminated.

Next, take a look at your suppliers. As the credit crunch extends, they are starting to change their policies. Many are asking for more upfront money from their customers - you - before they're willing to deliver. Depending on your cash flow, that may not work for you. See what your options are with long-time ally suppliers who may be having a hard time of it and by looking at what other suppliers will offer you for the same or like materials.

Finally, even though payroll is always the highest expense of them all, do everything you can to keep your employees. If you're going through hard times, talk to them about it and see if some might be able to move to part-time work. They want to stay as much as you want to keep them. Help them to help you by showing them how much you value them.

Discover new trends

And counterintuitive as it sounds, start looking at what else you could do. When times are bad, it can be useful to think about the things you would do "if only ..."

That means by the time the up-cycle starts and you're bouncing back, you have already done the hard part and figured out some answers. Better yet, you want to already have taken some action.

Some things don't cost money. Research, looking at the competition, uncovering the next "big thing"... those are hallmarks of best of breed organisations.

Garden retailing isn't going to be the same in the next two, three, five or 10 years. The more you know - and do - now, the quicker your success and the less you'll have to worry when the next "credit crunch" arrives.



  • Build a relationship with your banker
  • Consult your employees on money-saving ideas
  • Look at your options if suppliers are now asking for money upfront
  • Retain your employees - even if it means they have to go part-time

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