Hi All,
We currently have 2 options and would like some expert LJ advice as to what you would do in our situation.
Option One
We could join a group of Local Nurseries offering our plants to a far wider base of customer. This would mean being paid after 90 days.
Option Two
We could go it alone, still working with other Nurseries that we choose to. With this arrangement we would be paid after 30 days.
There is not a 3rd or 4th Option, so it is a simple choice, which we need some help with.
So our question is simple, Option 1 or 2, what would you do.
To clarify, the level of sales for each option is around the same, but Option 1 does offer more widespread clients than Option 2.
Views: 11
Replies
Three replies are not enough in our situation, though we are grateful, as between our two heads we cannot decide.
What we decide will dictate to future of our business, so, sorry more help needed please.
90 days is far too long to give anyone that length of credit in this current business climate especially a start up company like yours is, you may as well not of bothered growing the plants when you get taken for a few thousand pounds......and you will sooner rather than later if you give that length of credit facilities
If it is all or nothing then option 2 is probably going to be the most profitable for you, as your cash flow should be healthier. At the moment interest rates are very low so financing two extra months while you are waiting for funds if need be is relatively cheap but with inflation running at 3% plus, a base rate rise to at least 3% can't be ruled out, with an overdraft at 5% over base an extra two month wait for your money could lose you 1.5% in interest costs or more.
If you are selling into a bigger potential marketplace which is option 1 surely you will see greater sales, if you can maintain your profit margin on a greater sales volume and cope with 90 day payments this could be a good route to go.
What stops you running with option 2 at the same time, keeping your options open .
It is hard to take decisions especially on living stock- you need the carrige to start. but as some with more trade experience on LJ are saying . Do the calculation if you can trail it for a year, if you already have your customers and you can maintain them that is wonderful as you will have some on shorter terms.
I keep trailing and from about 10 new products 5 working well. The key to expanding is if you can work in parallel- expanding your marketing ways to have more customers and expanding your products to offer them.
I am sure that you will find the right way- you have lots of experience and intelligent. keep adding and growing but try to estimate that you have enough not to crush- we only live once.
Use your experience to avoid mistakes but not to be scared from taking opportunities.
In any case I really wish the best to both of you, It is so wonderful to work with people that loves what they are doing like you . Good luck- Ofer
are there any guarantees they will sell? / sell more /? buy more? / pay you ???????
in this climate i would not do sale or return for fear of co's going bust ...........No chance.
control your own sales and guarantee your own cash generated/ income : dont take risks.
£3 k in your bank is better than a maybe/potential £6k risk being paid by others ........:/
look at your own site/ market or small dealer you know AND trust . ebay / web/ markets/ leaflets - etc
Good luck www.gardens4u.co.uk
but when you are a retailer / manufacturer or a nursery you do take more risk than a maintenance business.
if you want to be big you invest more and it has more risk- that is clear.
rob, an old man said to me once that if everybody turn left- so if I will turn right I might arrived before.
if there are jobs that less people are willing to take than there are usually paid better jobs.
I know that ~I struggle to sell to garden centres as they usually prefer top work with big supplier that save them paperwork etc. So it can be a ticket in, but for sure no need to take huge risks- so if it does not work- no crush.
add the cost of that to the price- if the plants are good you will have no problem.
I found that down south the market is still alive.
I at some point invested a lot of money on advertising - It looked mad but it created a good profit and was worth it- even that the cost of the adverts seems crazy and scary.
On the other hand somethings do not work- than stay away.
Real progess made today in discussions, I think that we are winning.
I acknowledge that for those doing maintainence or a garden build, 30 days is the norm. However for those of us supplying the Trade in general, 30 days is not the norm.
This will be resolved by mid-November, in the meantime, confident of a positive outcome, we are pressing on in other areas.