Starting a retail business....

Discussion in 'Business Operations' started by Indiana, Feb 8, 2003.

  1. Indiana

    Indiana LawnSite Member
    Posts: 246

    I have been planning starting a retail space for plants and flowers this Spring. I'm sure we have all thought about it. I know I have thought about it for a few years. Now, I feel the time is right. I do have the time to add this space and work there about 20 hours a week. My wife would be there as well for about 40 hours a week.

    I have a location which is on a main drag through town and some signs. Also checked regulations and licenses and zoning. I have all my landscape suppliers from work I have done and a good idea of what I would like to start with. A small cold frame, 100 flats of flowers, some ornamentals, some of my wood products (trellises, gazebos, and misc.) and some pallets of mulch and dirt.

    I want this business to be an outlet for my wife to work in, market my service business, and expand a little.

    Has anyone tried this?

    I think start-up would be under $5000.

    Add some experiences and recommendations..... be constructive though, I don't want any aguements.
     
  2. dougaustreim

    dougaustreim LawnSite Senior Member
    Posts: 488

    Evaluate your overhead very carefully. We made this jump a few years back. We quickly discovered that we were investing more into the startup then we thought we would. Retail is a whole new ball game.

    It does work with our contracing etc, but it isn't the golden egg that we thought it would be. It enabled us to move to the point where we had some one here all the time to answer the phone, otherwise manage the office etc. We find that a lot of our landscape contracting customers like the fact that they can come to a physical location etc.

    We also found that as much as possible we match the inventory that we offer to the inventory we carry for our landscape business.

    I did read the other day in a trade magazine that 25% of the landscape businesses that go under, the opening of a retail location was the last straw.

    Go retail to build on the strength of the rest of the business but don't consider it if its intention is to strengthen a weakness in the current business

    Doug
    Austreim Landscaping
     
  3. John Allin

    John Allin LawnSite Bronze Member
    Posts: 1,489

    We did it about 9 years ago.
    Took about two years and $100K in red ink before we pulled the plug and went back to concentrating on what we knew how to do.
     
  4. Indiana

    Indiana LawnSite Member
    Posts: 246

    Thanks Doug.

    Something to think more about.

    I need to get more customers. Been a rough 2002 and winter 03 so far. I have lost several customers due to cut-backs and moving away, death and etc...

    Been thinking of packing it in and getting a job in my field. Considering it but not made up my mind completely.

    Local economy is sagging and making winter worse....

    So, maybe this will be my last year. Started in 1991 and thought I would fair better during bad economic years, guess I thought wrong.
     
  5. ladibugg

    ladibugg LawnSite Member
    Posts: 79

    Wow, this is the first time this has ever happened....I found a thread I thought I knew something about. Then I realized I don't know anything.

    But if I did...I would build a small greenhouse and supply it with what I wanted to plant someday at a clients house. That would make it into a writeoff.
    Then I would maybe plant something that might sell to general public joe. Lets say...ah...tomatoes.
    I put a "tomatoes for sale" sign out front and see what happens. If joe publics buys, I got myself a "retail" outlet and more writeoffs.
    If joe public doesn't buy, I give my freinds and neighbors some tomatoe plants and I still got me a writeoff.

    Can ya see where were goin here?

    If you have the need for another writeoff....
     
  6. bruces

    bruces LawnSite Senior Member
    Posts: 648

    Only trouble - to create these writeoffs takes cash.

    The worse the cash flow, the better the write off.

    Not a good thing.

    Much better to have tax problems (made too much money) than to generate writeoffs (made no money, have no money).

    All business ventures should look at economics first, then tax results.

    If it doesn't make sense from an economic standpoint, it doesn't make sense.
     
  7. devildog

    devildog LawnSite Senior Member
    from sc
    Posts: 270

    Given what you've posted a retail nursery operation, would be a another nail in your coffin. As you describe (in your last post), it won't take many more?

    Your description of the set-up sounds more of a seasonal nature operation, vice, a traditional nursery and or garden center. The later is a long term investment. Typically these operations take 5-8 years to development a substantial clientele, to make a profit. THATS RIGHT...min of 5 years to show a real profit. Allot of folks will tell you, it can be done sooner. They've just buryed their head in the sand and the operating costs elsewhere.

    If you will go into this little venture with a seasonal approach, you can, most likely turn a profit. Depending on the draw, to pay your wife. However, I think your true desire is for this to become a source of leads for your other landscaping operations. Which it can be, IN TIME. However, seasonal or market type operations are not a source of leads. Just DIY types. Time is what you will really sacrifice, to get this operation (in any form) up AND running. Retail / Garden Center sales are at their best on Saturday / Sunday. If you not already doing 24/7, to keep your present business going, you will be then. Can you afford to take these hours away from the other elements of a ailing business at this time?

    I would be happy to share our experience in the garden center biz with you if you wish to send a PM of specific questions. I would suggest... if you have 5k to spend, use it to put a marketing program together for the spring to revive your primary business and regain your market share, of whatever services you offer or perform. Or, to add an additional service that is in concert with your existing services or clientele. Just my two cents. With Regards... devildog

    A final thought, retail operation is like a boat; the two best days the day you buy it and the day you sell it. The rest of the time, its just a big black hole in the water you pour money into....
     
  8. Indiana

    Indiana LawnSite Member
    Posts: 246

    I think I have my answer, thanks.

    I have been praying and talking about his for some time and can't get peace about it. So.........

    I will take your advice and push towards expanding my service oriented business. I have enough to scrape by, but this time of year are any of us making loads of money?

    Winter is a time to reflect, plan and figure out where the money is coming from. Retail is something I know very little about and from what you guys have said something I don't want to know more about.

    My wife and I are needing more money monthly and annually. My second idea to do more spraying and fertilizing, which I will do this coming year.
     
  9. gogetter

    gogetter Banned
    Posts: 3,256

    A quote from a recent article in Pro magazine written by an industry consultant:

    "And for heavens sake, don't open a retail location. Roughly 25% of the failed landscape conractors that I work with put the final nail in their own coffins with a retail location."


    The article is entitled "Beware of entrepeneurholism". Interesting read.
     
  10. lx665

    lx665 LawnSite Member
    Posts: 147

    Write offs...spending three dollars to save one dollar is not good bussiness.

    John
     

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