Foretelling your garden center’s future has everything to do with good financial planning and budgeting. Creating a budget and learning how to grow with it as your company grows is key to IGC success. That said, the numbers don’t mean much if you haven’t set any intentions for what you plan to do and how you plan to use the profits you earn. So, we can talk all day about budgeting and the distinct types of budgeting styles. But the challenge I’d like to put forth to you today is one of intention. Why are you setting the budget and profit goals you are, and what will you do with them if you hit your numbers?
Why am I asking this question? If you happened to read Garden Center’s September piece on “The cost of business,” you may have noticed that the garden centers highlighted — as well as many like them across the country — have seen serious gains over the last couple of years. To me, these gains represent a huge opportunity for IGCs to rectify a few of our failings over the last 20 years.
Failings? Bear with me a moment. It’s no secret that IGCs have collectively fallen behind the times a bit when it comes to infrastructure, technology and staffing. Change is hard, and when it feels like you might lose a piece of the identity you feel is important to you and your business, big shifts can seem either overwhelming or unnecessary. Regardless, our customers have changed, and so has commerce. Substantial changes are what most independent garden centers need if they are going to thrive and grow after the influence of the pandemic settles out. Changes in attitudes about customer experience, ease of access and the qualified staff we desperately need and how we value them, should be front and center.
Let’s talk a bit about the nitty-gritty of budgeting, and then I’ll circle back to intention. Forecasting, forecasting, forecasting ... it’s what a budget is for, right? When it comes down to how your budget can help you plan your future, it’s tough to spend wisely unless you have a clear plan. And it’s hard to have a clear plan when you don’t have good numbers to build a clear plan. If your books are a mess (we’ve all been there), now is the time to get them sorted, as painful as it may be. Only then can you reliably integrate your POS data and generate good reports that help you both build and follow a meaningful budget.
Spend or save?
Obviously, one of the primary goals of a budget is to manage your business’ cash flow. In terms of helping your business in the future, the purpose of your budget is to help you plan for future spending. Be it short term or long term, be it carefully or boldly. Unfortunately, I often see this budgetary intention twisted into a hardcore mentality of future keeping. End stop. I think we’ve seen this play out big time with big wealthy corporations, especially during the pandemic. Billionaires who were already billionaires are now much bigger billionaires and they don’t seem to have any plan to spread the wealth their employees earned for them. Greed plays the biggest part in such big corporate saving. When it comes to small IGC “saving” (if there has been anything to save), I would say it’s fear that’s motivating you to hang on to everything you gain at the macro level, even if it doesn’t make sense to do so.
Saving it all can also hurt you at the micro level when it comes to inventory management. If you’re never willing to spend enough on inventory, you’ll never make enough. This is a keeping mentality I’ve experienced across the green industry that manifests in an unwillingness to deviate from the budget in any way, even when it makes financial sense to do so. Pandemic-related product shortages may be tying your buying hands right now, but I encourage you to evaluate if you still have lingering commitment issues you could rectify when it comes to inventory spending.
Go with the flow
Given how fluid garden centers’ sales can be, I learned during my tenure to get extremely comfortable with treating my budget as more of a fluid guideline than a hard rulebook. It’s a tool to help you know where you are now and where you want to go, but it can’t predict forks in the road. Your budget is also there to help you decide what to buy and what not to buy in terms of inventory. But opportunities constantly present themselves and taking advantage of them might mean bucking the budget, be it the overall budget or department-level buying budgets. Sometimes that means taking bold risks.
Fear is, of course, a powerful emotion and motivator — and paralyzer — when it comes to building and managing your budget. The fear is understandable, but it can be wholly destructive to your business and cause you to miss big opportunities. Given that most IGCs won’t indefinitely sustain the type of exponential gains we’ve seen over the last couple of years, investments in infrastructure — physical and digital — and staff should be at the forefront of our immediate intentions.
Budget with intention
Let’s jump back to intentions for a second. Just as with any type of goal you set, if you aren’t decisive about it, say it aloud, write it down, then shout it to the universe — not to mention build it into your budget — what’s the likelihood of you achieving it?
So, what are your biggest goals and intentions for your garden center in 2021 and beyond?
Getting the budget profit numbers right is great. However, manifesting your profit intentions using your budget is the greatest.