A Sydney florist has learned the hard way that “being overly nice to people” is a sure-fire way to business failure, in the second episode of entrepreneur Mark Bouris’ TV show The Mentor.
Kim (surname withheld), who operates Cronulla Florist, appeared on the Channel 7 show in a bid to turn around her unprofitable business, which was sending her into a major debt spiral.
“I work for 17 hours a day but my business is not profitable. It’s often a scramble to pay the rent –sometimes I have the emergency call to my mum to help me out, and I am in debt [totalling around $113,500],” said Kim.
“I’m desperate – I need your help. I’m struggling financially, emotionally…”
From the outset, Mr Bouris noted that, like many SME operators, Kim was confusing customer service with generosity — and this formed a major part of her business woes.
“What’s clear to me is that you’re extraordinarily generous and nice — but sometimes that generous can cost you,” he said.
“This is not a popularity contest, you’re not here to make friends.”
Mr Bouris surmised that “Kim thinks that being overly nice to people is customer service. She’s wrong.”
Demonstrating the important of value-adding as part of an up-selling strategy, Mr Bouris took Kim to meet Jack Singleton, head of Roses Only.
“We’re in the business not of flowers, but we’re in the business of making people happy. 80 per cent of flowers go out our door are accompanied by [other products],” said Mr Singleton.
“If you took away the value add that we do, we wouldn’t make any money.”
Another cause of Kim’s financial struggles were an excessive rent being charged by her arcade landlord.
“$880 a week is way too much rent — that rent needs to be slashed so that Kim can keep the shop open,” said Mr Bouris, noting that such an amount equated to almost all of Kim’s earnings.
He suggested using the very presence of her business in an arcade setting and its attraction to passersby as a means of negotiating a better rent for the premises.
“What Kim doesn’t realise is that colour and vibrancy of a florist shop — that is how it presents itself in an arcade — is great leverage when it comes to negotiating with a landlord.”
Mr Bouris was then able to negotiate a three-month rent-free period for Cronulla Florist, followed by a slashed rent of $350 per week — a massive saving of $530 each week, or $27,560 over a full 12 months.
Tough lessons are the best lessons
While some of these lessons were hard to hear, Kim told My Business that by taking Mr Bouris’ advice, her business – and her life – have been transformed.
“When I applied for the TV show, I was pretty much at emotional rock bottom,” she said after the show had gone to air.
“I’ve had a bit of anxiety the past couple of weeks because I actually didn’t know when it was going to air – it was one of those situations where you want it to air so you can just move on with your life.”
She said she initially feared the response of the show and people trolling herself and her family, but that ultimately the show had been a fair portrayal of the whole experience and that since it aired, she has been flooded with support from across the country.
“It’s been overwhelming, the response, from the whole Australian public. I’ve had interstate people, local people, people within my industry reaching out and saying how brave I was to expose myself like that on national TV,” said Kim.
“I’ve had so many customers in today – I’ve had lots of people dropping in just to see the newly made over store and congratulate us, and say that they weren’t aware that we were down here.”
But as well as the boost in awareness of her business and its physical transformation, Kim said the whole experience had been a boon for her bottom line.
She said taking on the advice on upselling “has helped astronomically.”
“Just from selling gift cards, getting a $5 sale with every walk-in customer and every delivery has made a huge difference to my bank account in just a few short weeks,” said Kim.
Kim stressed that, despite it being edited out of the show, she was fully aware of the nature of upselling from her previous 17 years in the industry, but that she felt this was more of a “commercial business” than a community business.
“But in terms of the actual importance, I can now pay a part-timers wage on just the add-ons that we sell in the store has been incredible, it’s been a real eye-opener.”
Kim’s other tough lesson was on the importance of receiving and even seeking out constructive criticism, and in turn not taking that criticism too personally.
“When Mark told me that I was pretty much too kinds and generous, I took that completely as a personal dig. But it wasn’t until after the wedding expo, we had a bit of a fallout, the way he spoke to me in public,” she said.
“I went into his office and let it rip, and I got it all off my chest [but] that was the complete turning point for me and I can now find that line between ‘it’s ok to be nice, but don’t let people take advantage of you’.”
Advice for other business owners
If there is one key piece of advice Kim can impart from the whole experience, she said it was the importance of having a business mentor.
“I have sought financial advice through accountants and bookkeepers, but my advice would definitely be to get a mentor,” she said.
“Whether you reach out to a local business who may even be in the same industry as you, and ask them if they’ve got 5 mins they can spare you for any questions you have.
“Having a mentor, who has been in small business and allowed it grow, that would be best.”
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.