When 70 per cent to 80 per cent of your company's revenue is generated in just three months of the year, how do you save your business if that small time window is compromised?
That's the challenge that faced Lori Wotherspoon, co-owner of Vancouver-based KJM Country Gardens. As one of only a small handful of dedicated garden centres in the city, KJM caters to urban gardeners and benefits from a large customer base.
As with most gardening operations, KJM's business is seasonal and the bulk of its plants are sold in April, May and June. However, during the last three years, certain elements have combined to threaten its high season.
"We've suffered three very inclement springs," Ms. Wotherspoon says. "This meant far fewer people bought plants. Last year, the weather didn't really turn good until July, so a lot of people didn't bother to buy or plant anything at all that season."
At the same time, KJM Country Gardens found its business undercut by big-box stores in Vancouver that started to sell mass-produced plants earlier in the year than KJM did, and at lower prices.
"This makes it difficult when we have late springs, as the big-box stores effectively take our business by selling plants in February, and their prices are difficult to compete with," Ms. Wotherspoon says.
KJM Country Gardens needed to find a way to generate revenue outside of its short high season. In a time of global recession, borrowing funds to expand the business was tricky.
"We entered the gardening industry in 2007, at a time when the economy took a nosedive and the banks tightened up their lending," she says.
KJM Country Gardens is a family business, with "KJM" representing the initials of Ms. Wotherspoon's three children: Kenny, Jordan and Melanie. After working as a registered nurse for 20 years, Ms. Wotherspoon's entrepreneurial spirit was triggered when she saw an opportunity to open a garden nursery on her existing property in Southlands, a semi-rural area of Vancouver.
"I was at a point in my career where I needed a change, and was looking for a business opportunity somewhere," she says. "I loved gardening and my son Jordan was studying horticulture. Together we decided to dive into a whole new industry."
Ms. Wotherspoon and her son and now business partner, Jordan McDonald, started out in 2007 selling just plants at KJM, including trees, shrubs, perennials, annuals, and vegetable starter kits, before adding garden accessories and organic soil fertilizers.
Although KJM was already functioning as a full-service garden centre, with the threats its main source of revenue – the three-month growing season – faced, it needed to find a way to generate business during the off season.
The solution was to turn KJM Country Gardens into more of a destination shopping experience, with a particular focus on educating customers about growing and consuming environmentally friendly products.
Ms. Wotherspoon already owned a miniature horse, and she created an urban farm experience for children by adding a couple of goats, several bee hives and 50 chickens. At KJM, children can now learn where eggs and honey come from, while adults can purchase these products and also enjoy a latte at the onsite coffee bar.
In addition, the KJM team started to host a series of workshops and events in the low season. "We teach all kinds of gardening techniques, from growing vegetables to pruning fruit trees, worm composting and making a kitchen herb container," Ms. Wotherspoon says.
She also holds a lavender festival, hosts farmers markets, creates a pumpkin patch in October and sells Christmas trees in December.
Customer appreciation is an important part of her community-building ambitions. "More recently, we've started to host exclusive shopping events, like an oysters and champagne evening for customers on our e-mail list," Ms. Wotherspoon says.
Since bank loans were hard to come by during the recession era, Ms. Wotherspoon took out a personal line of credit against her own property to raise funds for these business expansions.
Thanks to diversifying her business, Ms. Wotherspoon succeeded in establishing KJM Country Gardens as an educational and fun family shopping experience that is profitable year-round.
In 2009, 78 per cent of KJM's gross sales were made in the high-season months of April, May and June, and just 12 per cent was generated during the low season. By 2011, that split had turned to 59 per cent of revenue generated in the high season and 41 per cent in the low season.
"Overall, during the last two years, our company has shown a 25-per-cent increase in growth each year," Ms. Wotherspoon says.
The educational experiences offered, have resulted in more return customers, who come back to buy plants and pots.
"This year we've seen an increase in young families coming in to buy vegetables who are interested in organic gardening," she says.
KJM Country Gardens is also getting more brand recognition, with Mr. McDonald offering expert advice at the annual Vancouver Home and Garden Show.
Special to The Globe and Mail
Jeff Kroeker is a lecturer in the accounting division at the Sauder School of Business at the University of British Columbia.
This is the latest in a regular series of case studies by a rotating group of business professors from across the country. They appear every Friday on the Report on Small Business website.
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