In a Nutshell

  • Get to know your audience's buying habits and plan accordingly
  • Use periods of low demand efficiently and use them to complete less time-sensitive tasks
  • Create a tailored workforce that can be flexible to demand
  • Plan your finances to ensure you are covered during low demand periods

Coping with periods of low demand

All businesses experience periods of low demand at some point during their years in operation. However, the fact that this happens to everyone doesn't make it any less worrying at the time. Graham Richardson, MD at leading commercial nursery Johnsons of Whixley, gives his top tips on how to cope with low demand. 

As one of the largest commercial nursery businesses in Europe, our trade activity is mainly seasonal, therefore we have become highly experienced in coping with periods of low demand.

As a result of our experiences, we have been able to develop a system which utilises the quieter times, enabling us to plan ahead and create a business model that reflects the ever-changing demand.

Climatic conditions drive seasonality for us. During winter dormancy, commercial landscape planting is at its peak this is due to better mortality rates, establishment and often a planting specification that is significantly less expensive than in the summer months. However seasonal garden centre supply begins in early spring as better weather approaches but tails off again as summer approaches and gardens are being used, not created!

Poor weather conditions impact our ability to harvest crops but often the conditions onsite determine stock drawdown. Not only can it sometimes be impossible to plant an exposed site but, in some instances, economics determine if there is sufficient margin to spend on aftercare that was never envisaged – few landscapers will build in the cost of post-planting irrigation during a period of drought for example.

The weather's impact on garden centre supply is so significant that we can often experience a 50% swing in headcount – if the weather forecast indicated a ‘brilliant’ weekend we would staff up for Monday to Wednesday in the following week and shipping takes place on Thurs/Fri.

Use your knowledge to plan ahead

Understanding the planting habits of our customers and how they react to changes in the climate allows us to foresee when our quieter periods will be.

Planting is more problematic in summer, due to the need to irrigate, and people turn their attention to using the garden rather than creating or maintaining it. This means that trade trails off during this time.

Similarly, we know that dormancy and readily available moisture in the ground during winter means that demand for our plants will be extremely high.

However, periods of extreme cold can stop despatch rapidly – if a contractor is unable to work the soil, then they will not draw down orders.

TIP: Really get to know your audience and their buying habits so that you can plan accordingly.

Use quiet times to your advantage

Quieter times don’t have to be a bad thing, as long as you are prepared.

In the past, our business has been at a standstill but because we endeavour to keep a bank of cultural work, we have been able to provide staff other tasks to complete, such as reparative work on specific crops.

We have the added advantage that our quieter periods fall during the summer months, the peak holiday season, allowing us to be more flexible with staff wishing to take annual leave.

TIP: Consider which tasks you can save for a rainy day and add these to your bank.

Tailor your workforce

The ever-changing climate and seasonal weather fluctuations can mean that we have to adjust our workforce by as much as 70%.

Our solution was to increase flexible agency labour and decrease permanent employees, allowing us to flex staff numbers in response to demand.

This reduction, coupled with the increase in flexible agency labour, is a costly process but it enables us to remain a fair and considerate employer.

We are conscious of the financial implications of a lay-off for staff, so we only consider this option when we are confident all avenues have been exhausted.

TIP: Explore your workforce options and be clear with staff about your plans

Have financial back-up

Whilst there are many solutions to coping with periods of low demand, there is no denying that it can be an extreme financial burden.

We are lucky to have a fantastic relationship with HSBC bank which has a sympathetic attitude to farmers and growers. It provides overdrafts and funding tailored to our seasonal need and expects climatic issues every few years.

Unplanned interruptions are far more difficult to cope with, but our funding profile generates sufficient headroom to provide a short to medium term reserve.

Having several strings to our bow (giving us three channels to market) has been generally successful as if one channel suffers, we often find that another is more resilient.

Our seasonal lows have become our production high periods although the scale of combined despatch and production are now so great that a level of high intensity in growing and despatching exists all year round.

Funding (profit and borrowings) provides sufficient means to support anticipated demand but also enough of a ‘damper’ to cope with extreme conditions and periods limited despatch. An overdraft that flexes seasonally is one option, but increasingly confidential invoice discounting provides a neat solution that ebbs and flows with demand.

TIP: Make an appointment with your bank to discuss your options

Contributed by Graham Richardson
Ashleigh Smith
Article by Ashleigh Smith
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