The Time to Get Ready for Tomorrow is Today
By: Clay Wilkerson
With all the economic challenges we face right now it would be very easy for the average business person to sit still in fear and do nothing. Uncertainty tends to do that to us. We hear about the condition of the housing market, continued job losses and the chaos on Wall Street and it makes us want to hold onto our money and maintain the status quo with our business. It is sort of a defense mechanism that seems to kick in these kinds of times so I understand this reaction. In fact, I have to admit that as a consumer, I have reacted the same way on some level. But, the more thought I have given to this mind set from a business perspective, the more I have come to realize the flaw in it. The fact is this is not the time to sit tight or “hunker down” as some might say. Just the opposite is true. This is the time for all of us to look forward to next spring and next year and begin to think about what needs to be done now so that we can be ready when the economy turns around, and it will turn around. Already, economists are beginning to slowly find consensus on the idea that we have hit the bottom or close to it. Most of them caution that it will be a slow recovery, but a recovery nonetheless.
Based on that certainty, let me pose a couple of critical questions for you to consider. First, what are you doing right now during the downturn to put your business in a position to gain an advantage over the folks you compete with? That’s critical because if the “pie” is smaller than what it was, the only way your piece is going to stay the same size as it used to be is for you to do a better job in some key aspects of business management than what your competition is doing. Second, what are you doing in order to prepare for the future when things turn around? The time to get ready for tomorrow has always been today. If we wait until things turn around to begin planning how to take advantage of the new opportunities, we have waited too late. It is precisely when things are not going well that we need to be looking ahead and planning for better times.
With those two questions in mind, let me suggest a few things you might want to consider in order to put your business in a more competitive position today and tomorrow.
Reduce Costs by Upgrading Existing Equipment
Technology is exploding and manufacturers are constantly figuring out how to build better and more efficient equipment. Many times you can get a fairly quick return on your investment simply by replacing older less efficient equipment with new more efficient models. For example, you can reduce your energy cost 15-16 % simply be replacing an older gravity vented standing pilot heater with a new more efficient power vented model with an intermittent pilot. Another example of savings would be to change over from older less efficient thermostats to more accurate and efficient environmental controls. Those are just two examples of several we could mention where upgrading your existing equipment would reduce your costs and put you in a stronger position now and in the future.
Automate Where it Makes Sense
Evaluate your business and processes and automate where it makes sense. Automation is a great place to gain some efficiency by either reducing labor and/or using your labor more efficiently. Just keep in mind there is no one-size-fits-all with automation. Every greenhouse operation is different to some degree and you have to determine where it will work for you. However, everyone should evaluate where and when to automate based on the potential to meet at least one of two goals. First, the equipment should save you money, either in labor reduction or in some other gain in efficiency, so that you get a return on your investment in at least 2-3 years. Second, the equipment should allow you to speed up production or streamline processes so that you are able to hit critical production windows. Due to the ever narrowing window of sales in our industry, sometimes you have to evaluate automation not based on the labor it saves you but the increased sales opportunity it provides you because you are able to get the product to market at the right time in the right quantity.
Adopt Better Irrigation Practices
Irrigation is one of the areas that the average greenhouse or nursery operation can gain the most efficiency for the least amount of money spent. For example, many greenhouse operations (commercial and retail) continue to do a large percentage of their irrigating by hand even though it is one of the least efficient and most expensive ways to irrigate. In addition, many of the existing irrigation systems that are currently being used are inefficient and outdated. The good news is that this process can be automated and/or updated through a variety of means (micro sprinklers, drip, booms, etc) with a few fairly certain results. First, labor cost will be reduced because fewer man hours will be required to perform the tasks. In many cases, the labor is reduced so dramatically that the new system pays for itself in one season of use. Second, water will be applied more efficiently. That seems counterintuitive, I know, but it really should not surprise us that a well designed irrigation system or a piece of irrigation equipment could do a better job consistently than people can applying water. Finally, the amount of water used will be reduced. Any time you transition to a more efficient means of applying water you will naturally reduce the amount of water used, and by extension, the amount of energy needed to pump the water. So, automating your irrigation based on a well designed system has the potential to reduce labor cost, while at the same reducing your water and energy costs.
By no means is this list comprehensive, but they certainly represent important areas of consideration for both now and in the future. Changes in any one of these areas will cost you and that is the reason some greenhouse owners & managers struggle with the decision, especially in the current economic climate. But if all you see is the up front cost you really miss the point. The right question is not, “What does it cost?” The right question is “How quickly will I get a return on my investment?” And, if you follow that sort of mindset in managing your business, you will almost certainly make good decisions today that will prepare you for tomorrow.