Counterintuitive as it may seem, the idea of downsizing your cut flower operation may make sense for you. After growing cut flowers on my own farm for five years —as I now enter my sixth season— as is true for most of us, I use the downtime of the winter season to analyze my business.   What I learned was this:  Having spent the majority of my working life as a self-employed person, I approached my cut flower business similarly.  The intention of being in the business of growing was to grow this business, make it bigger, increasing sales year after year.   And I did that.  Starting on a little less than half an acre and, with no established market, I increased production to three acres within four years.

At the height of production for Charlotte’s Garden, I had established a market that included participating in three farmers’ markets each week, selling bouquets and grower’s bunches at two independent supermarkets, half a dozen florists, a local wholesaler, and an occasional wedding.  I was growing on 3 acres in the field and 4000 square feet in two hoop houses.  To keep up with the increased production, I employed two full-time people to work on the farm, and three part-timers to help out at farmers’ markets— all of this in addition to me working 50 to 60 hours a week.  Additionally, I had two trucks on the road three days a week, one of them a real gas-guzzler.  
My entrepreneurial training over the past 20 years had informed me that this is what I am supposed to be doing, that this is the measure of my success.  However, as I examined my business, I wasn’t successful.  While it was true that my business of growing was indeed growing, it was also burning valuable resources, primarily cash.  And while sales had increased exponentially over those four years, the costs associated with those sales increased right along with them.  Psychologically and physically, I was toast. 

It’s a Quality of Life Thing
One of my reasons for being a cut flower grower was to attain a certain level of Quality of Life.  It was my dream to work on my own land, at more or less my own pace.  And I did that.  Trouble was, the pace I’d set was too high.

Here’s what my Quality of Life looked like before I downsized:

• Monday through Wednesday: planting, weeding, manage employees, make bouquets and bunches, generate invoices, prepare for Thursday farmers’ market, make deliveries.
• Thursday: 8 hours at one farmer’s market, return home, make bouquets and bunches for Friday deliveries, generate more invoices.
• Friday: make deliveries, back to the farm to prepare for two Saturday markets, supervise employees, load trucks, look forward to getting up at 3:30am.
• Saturday: two farmers’ markets, two trucks on the road, 8 or 9 hours later, unload trucks, deliver more bouquets if the supermarkets had sold out, then general collapse. It was a hot Saturday night!
• Sunday: supposedly a day of rest, but then we had all the people who wanted to visit the farm after buying from us at the markets. Plus washing the buckets, organizing the upcoming week’s orders, scheduling the truck maintenance, and weeding, planting, and more weeding. Somewhere in there was laundry and paying bills and grocery shopping.

So that was our week. It wasn’t the Quality of Life I had in mind.

Analysis
So how did I wade through the process of downsizing my business? First, I had to analyze my income.  What I found is that I was making around $21,000 per acre.  Not bad for agriculture.  But what were my expenses?  Aside from the money I spend each year to capitalize (reinvest) in my business, I had to consider wages paid, cost of fuel for my trucks, tractors and equipment, cost of seed, plugs and shrubs, and the cost of supplies, such as herbicides and fertilizer, and greenhouse supplies, to name but a few. 

What I learned was for every $1.00 I made in sales it cost a $1.10 to make that dollar. I was losing money. Obviously, I wasn’t profitable but thought that was typical for the first five years as a new business grew. And, the tax advantages were significant. The losses from the business offset the income from my wife’s day job.  But still, why run a business to lose money, especially a business that requires a lot of hard labor?

The next question was how do I restructure the business to make it profitable, and retain Quality of Life?

I looked at where my sales were strongest and had the potential to increase, and I cut out customers that cost the most to service.  For example: we were participating in two farmers’ markets on Saturdays.  One market required us to drive two hours each way to get there, and the other about 30 minutes.  At the time of my downsizing, gas was approaching $3.00 per gallon.  Would our customers at that market be willing to absorb a fuel surcharge?  Not likely.  Instead they might have turned their attention (and money!) toward a grower who didn’t need to raise their prices because they didn’t have to travel such a long distance. 

One of the reasons you go through the effort of farmers markets is to be able to charge retail for your flowers. Another is to generate leads for more business: weddings, special orders, LARGE special orders, referrals. With the distant farmer’s market we were building business in a place that was costing us a lot of money to service. That didn’t make sense. Much as we enjoyed the customers and the experience of being in that market, we ended up cutting the distant market out as a customer. 

The other market was not only closer and less expensive to service, but we realized the potential to increase sales. We found we could sell out week after week, creating more demand for our flowers.

The next decision: focusing on retail pricing at farmer’s markets, and retail pricing only. This meant letting go of Wholesalers. This was an easy decision.  After all, the only reason I sold my flowers wholesale was to unload an excess of one flower or another. 

Selling to florists, just as selling to the Wholesalers, is selling flowers, well, at wholesale prices.  And supermarkets—while I may consider them again in the future—meant wholesale pricing, and a whole lot of labor.

I skinnied-down to selling at one farmers’ market only and to one florist who consistently made large orders, and ordered enough to make it worth my time. I went from growing on three acres of field production to just one.

Getting over yourself.
Aside from having to push out the big dent to my ego, this was a fairly easy process.  And, as spring approached, I was feeling less stressed, in charge of the forthcoming season, and not so grouchy.  Sure I was going to do most of the work myself, but theoretically, I was going to be keeping more of the money I work so hard to earn.  I would do this with just one part-time helper, and with the generous help of my wife, Charlotte, at the farmers’ market.

The Lesson
Here’s what I learned from going through this exercise: I learned that I could make nearly $30,000 per acre in sales growing on one acre compared to $21,000 per acre growing on three acres.  Also, there was less time on the road involved, so I didn’t need my gas guzzling Ford pick-up for deliveries or going to the farmers’ market.   Instead, I use my fuel-efficient, diesel-fueled van.  Payroll was slashed by 80%.  And, because I was growing less, I bought less seed and plants.  Simply put, I spent less money.

Another way I was able to increase my per acres sales was to focus on premium flowers, blooms that bring in more dollars per stem.  Increasing lily production was an important part of this plan, as well as peonies and hydrangea.  Tulips are key for an earlier start in the season (April 1st), and tighter succession planting overall is a required skill. 

Will I get a handle on this business and be more profitable?  Probably.  And I’ll do it because I intend to remain in this business.  Had I not revised the way I do business, downsizing it, I was destined to burn out, or eventually quit.

Downsizing isn’t for everyone
If you find yourself questioning what you’re doing and why you’re doing it, if you’re struggling to be profitable, and your quality of life is in danger of packing-up and leaving you, you may be ripe for downsizing.  Analyze your business, talk to your accountant and other growers.  Sharing information is the one gift we as flower growers can give each other, and not just about which flower is best and how to grow it.  Making difficult decisions is never easy, but it’s better than not making them, or ignoring them so long that the decision is made for you.   If you need further convincing, get in touch. ï ¹

Joe Caputi and his wife Charlotte own Charlotte’s Garden in Louisa County, Virginia. Joe can be reached at joe@virginiaflowers.net.