Steps can be taken now to stay ahead

Many HW readers will have cut their teeth as part of a parks management team, or perhaps a fledgling grounds-care and landscaping service during the 1980s - the decade that ushered in privatisation and ushered out, forever, any presumption in favour of state control.

Or so we thought. Here we are, 20 years on, witnessing the rapid nationalisation of banks across the globe - and a degree of state intervention in markets that until even just a few short weeks ago, was simply unthinkable.

And when world leaders are doing the unthinkable, it should be no surprise that down here, in the real economy, even the most seasoned managers are finding it tough to know what to do next.

That stasis is being exacerbated by the inability of many commercial horticulture operators to secure funding for development plans. Today, we report on Little Dodd Garden Centre, whose owner has been told by five banks that while they like his plans, they can't lend the money he needs now (p13).

Executive adviser and HW's business management writer Leslie Kossoff calls it the "holding period", which will last until the key governments and central banks determine how they are going to handle the crisis.

Before Monday's rejection by Congress of the unprecedented Wall Street bail-out plan, it was to be hoped that this "holding period" would begin to ease within a few weeks, with some, albeit very much reduced, fluidity coming back into lending. But at the time of writing, with markets still reeling from the shock of that rejection, that "holding period" has just got a lot longer.

But, advises Kossoff, there are steps that can be taken now to ensure that when some movement returns, horticulture businesses seeking finance for crucial developments are one step ahead (p3).

First, operators are going to have to make a better - and different - business case when seeking funding. See your banker now, says Kossoff, and ask what it is that banks will be looking for from successful applicants when lending resumes. Second, look more creatively at alternative sources of funding - private equity firms for instance. Thirdly, if you are not operating in a consortium yet, look again at the potential to create a more compelling package for investors as part of a co-operative or other combination.


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