Business - Survival in an Economic Downturn II

Horticultural businesses from greenhouses to landscape maintenance companies are being impacted greatly by the economic downturn. The following is a continuation of the series on business survival in an economic downturn.

Business survival in an economic downturn - Downsizing

Downsizing may be necessary to remain in business during an economic downturn. The following are some points to consider:

• Eliminate marginal accounts - those accounts where profitability is limited. Examples would be very small accounts, accounts with long travel distances, accounts with a poor payment record, etc.
• Reduce the labor force to the minimum necessary. The most inefficient employees should be the first to be let go.
• Reduce equipment inventories to the minimum necessary to do your work - extra trucks, power equipment, and other machinery that can be eliminated.
• If leasing buildings/yard area, consider moving to a smaller location or a location with less rent.
• Evaluate your enterprises and drop those that are not profitable. For example, hardscaping jobs may be harder to come by in an economic downturn, grass cutting will continue will less of a reduction.
• Nursery and greenhouse businesses should evaluate crops and eliminate those that are marginal or show little profit.

Gordon Johnson, Extension Horticulture Agent, UD, Kent County