Making the most of SUMMER DOWN TIME
PHILIP CHRISTIE DOES NOT SIT AROUND biting his nails. Neither does his wife, Karen, co-partner with him in their all-natural specialty meat company, Smoke Signals.
But they have a right to. After a very solid first season selling smoked beef, pork and poultry (no antibiotics, no preserving chemicals) at farmers markets up and down the southwest coast, the couple took about eight weeks and created a detailed business plan that changes the stakes completely — pun intended (their steaks come from as close as Central Florida and as far away as Scotland).
They’re reaching for a new bigger market with aggressive thinking and planning, and investing heavily in their own bet. In other words, they’re doing exactly what the experts recommend for smallbusiness owners with a good product and untapped markets, struggling through summer downtimes.
“There’s an increasing awareness that during a downtime you need to look for alternate or ancillary sources of revenue, for alternate cash flows, and to look at your business’s core competencies,” notes H. Shelton Weeks, chairman of the Department of Economics and Finance and Lucas Professor of Real Estate at Florida Gulf Coast University.
Philip Christie serves a customer at a local farmers market.
COURTESY PHOTO “But that can be good or bad — if you get away from the core business you can put your resources at risk,” he adds.
A few years ago, points out Professor Weeks, a lot of small-business owners simply closed up shop and headed for the mountains each summer.
The Christies thought about it, they admit — they were tired after the tumult of six hard months keeping up with demand in a new and promising business.
The strategy of escape and rest — once the mark of the successful entrepreneur in summertime Southwest Florida — is no longer cool, even in the mountains.
NAY So the Christies have been planning, hoop-jumping and permit-chasing, instead of vacationing. Mr. Christie is now a certified food safety manager listed in the National Registry of Food Safety Professionals, and Smoke Signals Meats now has USDA and FDA licenses to smoke meat, along with a mobile food vendor license.
The Chrsties have also been spending money, or planning to. After hiring a Dutch expert who specializes in helping high-end meat sellers in Western Europe and the United States do it the right way (Henning Bolersleeve), and after finding a bank to provide a business loan (the Sanibel-Captiva Bank of the Islands), they put their money not where their mouths are, but where their sweat and effort are.
Last week, they went out and bought something you won’t find in the backyards of avocational meat smokers or grillers. It’s not a Weber Genesis E-330, listed at $949. It’s not a Saber Cast 500 P, or a Napolean Prestige P-500, or even a Vermont Castings 3-burner VC332EP (about $1,000).
WEEKS Instead, it’s the German-made Autotherm Universal Smoking Chamber, which is running the Christies about $65,000. And that, roughly, is what they will also pay for the refrigeration to go in their new specialty meats store, designed at about 3,500 square feet, which they plan to open in the fall in Lee County.
“We talked a lot about it, and we decided we got such a good response (the first year) we had to open a retail store to really make this work,” Mr. Christie says.
“If the doors are easy to open, we’ll continue this,” notes Mrs. Christie. “If they’re not, we’ll see.”
Of course, they plan to add products — smoked fish, and artisan cheeses made by an Italian woman in a cave in Tuscany, they say — and they will continue to work the farmers markets from Marco Island and North Naples to Charlotte County.
Business owners such as the Christies should proceed with bold caution — a paradox, not a contradiction, suggests Douglas Nay, professor of management and chair of the Department of Business and Technology on the Charlotte County campus of Edison State College.
“It’s often difficult for small business owners to make an extraordinary living, but the businesses with the most risks can have the most rewards,” he explains, citing construction and food businesses in particular.
“So you do what makes you successful — for example, you get new products before your competitors, which gives you first-mover advantages.”
That’s what the Christies have done.
“And you watch your expenses closely, particularly real estate costs — the rent,” “Many developers are trying to recover the cost for empty space by hijacking the cost for small retailers. That’s like the airlines charging heavily for tickets purchased a day or two in advance of the flight. It makes no sense because the planes are going, anyway — but we won’t go there.” adds Professor Nay, who spent 37 years as an international business consultant for Dun & Bradstreet before coming to Edison State.
“Many developers are trying to recover the cost for empty space by hijacking the cost for small retailers. That’s like the airlines charging heavily for tickets purchased a day or two in advance of the flight. It makes no sense because the planes are going, anyway — but we won’t go there.”
Minding the cash and stock
Among other advice business consultants and advisors offer are two seemingly obvious yet frequently ignored rules: first, watch your cash flow like a hawk. And second, don’t buy more than you can sell (or less, either).
The Christies learned the latter lesson last winter in the early weeks of their opening. Mr. Christie found himself driving to local food banks, where he would give away smoked bacon and pork chops, smoked ducks and the occasional smoked ham that hadn’t sold. Soon, the customer demand caught up with him, and flew right past him, he recalls.
So there will be great care in ordering for the new store, he says.
“You see people who put so much into their business, and they’ve made a goal of it for so long, and they think cash flows are stable, and then they get the call — somebody’s not going to be able to pay them. And then suddenly they’re in trouble from a cash-flow standpoint,” says Professor Weeks.
“That probability has increased, post recession. So financial flexibility is at a premium. Have a plan.”
The Christies do. “That’s covered,” Mr. Christie says. ¦
FGCU Professor Shelton Weeks offers three basic concepts to benefit businesses during summer’s dormant days:
>> 1. “This is an opportunity to look at your business’s core competencies, and at the way you’re doing things. Ask yourself, are you doing everything you can? Are you doing anything you don’t need to be doing?”
>> 2. “This is related to number one. Monitoring cash flow is vital. Whenever you’re in a down economy, looking at your own but also the cash flow of customers can give you financial flexibility. Have a plan for the ‘what if.’ What if you get one of those phone calls that come on a Friday, and he says, ‘I know it’s Friday but I won’t be able to pay you this afternoon — you’ll have to give us another 30 days.’ If you have a plan, then you may be able to make payroll, or meet your other obligations.”
>> 3. “The third rule comes in two parts. I tell folks to identify their key business relationships. I think of this as an internal as well as an external necessity.
“Internally, your employees are the key to your business. Make sure they’re not worried about whether your business will be here tomorrow — if they’re concerned, they may be floating resumes. You never want to lose a key employee. But if you lose a key employee, such as a face person dealing with customers, for example, that can be damaging. So manage those relationships. Being open and as straightforward as you can is a very important part of that.
“And managing relationships with the people who hire you or pay you as a vendor — managing external relationships, which is the second part of this — is just as important. Prioritize those relationships. Maybe they need a hand held. And not just customers, but your own vendors. Make sure they will be there and delivering for you as well.”