October 9, 2018
Every challenge creates an opportunity
By Warren Patterson
In the horticulture profession, most consumers do not know what is involved in bringing, say a Christmas tree to market. Most are pretty surprised to find out their “brand new” tree is actually 10 years old or more.
This lack of understanding, however, can then create challenges for all businesses when there is a significant change in market forces.
This year, there is a salt shortage that could significantly impact many of us. I must admit, I never thought much about where salt came from or how it got to our roads and sidewalks. But I do understand what this supply issue will mean if we don’t have enough salt for our roads, parking lots and sidewalks: potentially more accidents and injuries.
This significant change will impact any business that is involved in snow and ice removal. Business owners need to be very proactive to manage this, as it could potentially have devastating effects on their business.
The most important thing a contractor can do is be transparent with their customers. You need to first educate them before you can then talk about the implications this has on prices. Customers need to understand what the problem is, why and how it has occurred, and then what it will mean to them.
I have heard of some contractors who have written a very brief note of explanation to customers and included a news story to demonstrate the magnitude of the problem.
I have heard of some smart contractors who have added a “2018 Salt Shortage Price Impact” as a specific line item on their contract for this season, so customers know this is a one-time increase.
Most people in life are reasonable and will understand that significant market shortages result in temporary price increases. Look how quickly we have been trained to take a hit at the gas pumps whenever a hurricane enters the Gulf of Mexico and threatens production facilities.
To protect your business, you can also focus on becoming more efficient with your salt usage. Becoming Smart About Salt (SAS) certified is a good place to start by making sure your equipment is properly calibrated and your staff are properly trained to not use any more salt than necessary.
The key in times of a supply shortage is to secure supply. This year, the rules are changing. Some distributors are demanding up-front payment and some are requesting contractors take delivery in early winter. This can have a huge impact on your cash flow. Try to plan ahead now.
For every challenge, there is an opportunity. Warren Buffet, American business magnate and philanthropist, has always made more money in times of uncertainty because he focuses on what is important and then properly plans for it. If you are a snow removal contractor, take this challenge and make it an opportunity.
Landscape Ontario has many resources available online at HortTrades.com/salt-shortage-resources-page.
Warren Patterson may be reached at email@example.com.