International Competition Motivates a Floral Wholesaler

As a result of the growth of imported cut flowers into the U. S. markets, a local Virginia based floral wholesaler began a program of re-directing their business by reducing their dependence on their line of home-grown plants in favor of wholesaling flowers purchased from a variety of worldwide sources. The company was affecting cost-cutting measures and new marketing initiatives in an effort to increase gross sales and improve profitability. The owner of the company approached the local SBDC in October 2002 for assistance in formalizing a strategic business plan and creating a financing plan that would provide the direction and financial resources needed to complete the “re-invention” of the business.

The SBDC counselor interviewed the officers of the corporation and analyzed the historical financial statements and the projected P&L. It was decided that the business plan narrative would focus on the cost-reduction and sales- expansion efforts that were completed and/or were being implemented. These efforts would be quantified in the proforma financials. The narrative would also include a similar scenario for projects that were planned over the next two years and required additional working capital. The final documents were completed in July 2003.

The strategy developed depended upon the cooperation of their banking resource to re-finance the lines of credit as intermediate term loans and acquiring a loan for $150, 000. The counselor prepared a letter to accompany the loan application giving an assessment of the steps the company had taken and planned to take to return the business to a profitable status.

The client was successful in acquiring the loan and re-financing part of the short-term debt. The marketing and cost-reduction measures continue to be implemented and the SBDC continues to provide guidance and assistance in these efforts. Although additional challenges continue, the future of a business first established in 1941, and the family of fifteen employees, is more secure.