Garden News - OT
Justin Smith (Wed, 18 Aug 2010 15:40:19 PDT)

Hi All,

It is certainly most distressing to see a small specialty business bought up by a much larger firm then apparently run into the ground. It is certainly easy to "blame" the large firm for destroying a beloved specialty business. Though if one were to take a look closer look and had access to "the books" that might paint quite a different story.

There are a lot of people here that run their own business. I dare say that you woefully underpay yourself for the special knowledge you have, the loving care you give your plants and the dedication you give to others like you that you know enjoy bulbs too. If you get sick, retire or decide to move to hawaii and live on the beach who will take over that small specialty business?

Normally the only group to have funds available to purchase a thriving business is a larger business in the same field. Though some larger firms do sometimes buy into an industry they don't know that is not common. Now, that larger firm, must hire someone who has vast experience, has loving care for the product and dedication to customers. Chances are nobody with those qualifications will apply for the job, especially at the salary that the previous owner paid themselves.

Also they have to replace the other family members that use to work there. Family is a great source of cheap or free labor. Something the large firm cannot do.

Salary and benefits will cut into profits quickly especially in today's work world with mandatory benefits, minimum wages, insurance, labor laws, environmental regulations and many other safety rules and such that must be followed.

Selling a ton of tulip bulbs is much more profitable than selling a dozen Worsleya bulbs. (you must figure in the time required to grow and care for the bulbs along with everything else required)

If every small family business paid themselves what their skills and labor are worth very few family business's would exist, they could not afford to stay in business.

So next time you see a small specialty firm go out of business or get bought up think of this one thing.

"Being a huge money maker is not the reason why it failed or why it was bought up and ruined by that larger firm."

I don't have an MBA so think of them what you will, but thinking MBA's go around intentionally driving their business into the ground is just not factual. The more likely scenario is that they see a small firm for sale and buy it thinking there is a good chance to make it work, but the first they they must do is make it profitable! That usually requires changing what they sell.

Justin
Woodville, TX 8b/9a