As stated earlier, the horticulturist who would communicate most effectively incorporates a friendly and conversational tone into letters and calls, and emphasizes the positive rather than the negative. In addition, horticulturists should learn to describe their products and services in ways that evoke enthusiastic and receptive responses. For example, a customer may call a flower shop before Christmas to order “something for the front door.” A salesperson can suggest “an evergreen door swag” or “a cluster of fresh pine boughs with accents of red holly berries and pine cones, tied with a red velvet bow.” Both descriptions are truthful and refer to the same product, but the second enables the customer to visualize the product better. In a similar fashion, a landscaper can describe a proposed patio as “800 square feet in area, made of brown
brick, with a built-in grill and surrounding plantings” or as “800 square feet of patio living area done in brick of a warm earth tone and incorporating cooking facilities and cooling shade.” The second description has the important quality of evoking the anticipation of use.
Letters and telephone conversations are extensions of the ornamental horticulture business and must be handled professionally.
Business letters are the most permanent form of communication. Their permanency is their greatest advantage. A good business letter is written in correct form and conventional format, in a polite and friendly tone, with thorough and accurate coverage, and as briefly as possible.
Proper form requires a letterhead that is restrained and that contains the firm’s name, address, and telephone number; a date line; inside address; salutation; body (message); complimentary close; signature; and notations.
Use of the telephone for business communication permits questions to be asked when clarification is needed. The development of an expressive voice is important to good telephone communication. The voice must be pleasant and interesting to hear, and the person behind the voice must be knowledgeable, interested in the caller, and professional in manner.
To place a business call correctly, the caller should know in advance what the call seeks to accomplish, what points are to be covered, the sequence of coverage, the information sought or to be released, and the commitment to be sought or offered on behalf of the firm.
Answering a business call requires good listening skills coupled with the ability to comprehend and organize information or questions as offered by a caller.
The internet offers additional means of communicating with present and potential customers. The use of e-mail is fast and appropriate for certain types of communications, but is not appropriate or suitable for business communication that is emotional, confidential, sympathetic, or critical. Websites offer the opportunity for companies to display their products and services and communicate with customers in a way that suggests they are up to date and skilled. For that reason, websites should be carefully designed to be helpful to users and not waste their time or convey a negative image of the company.
The advances in communication technology offer many new variations on the traditional ways of communicating with customers and suppliers. Business people need to select the most appropriate techniques and use them in a way that enhances their services to their customers.
A. SHORT ANSWER
Answer each of the following questions as briefly as possible.
1. List six qualities of a good business letter.
2. List the eight parts of a business letter.
1. Assume that you are the general manager of Dakota Gardens, a retail nursery at 1504 W. Purdue Road in Bismarck, North Dakota. Write a letter to a customer,
Mr. Tracy Kostecki, at 2600 Ball Avenue in Bismarck. The letter concerns his overdue account of $187.56, which has gone unpaid for ninety days. You have written to him twice already and tried to reach him by telephone, but he has not been available and has not returned your calls. Prior to this indebtedness, he has been a good and valued customer who has purchased and paid for much larger amounts of merchandise, always promptly. Your normal procedures are to turn bad
accounts over to a collection agency after ninety days.
2. Practice your telephone skills by working with another person in the simulation of a business call. Before beginning, make up a realistic premise. Select a firm name and type of business. Select a customer or vendor name and problem. Make several calls, varying the problem (for example, an order, a complaint, or a request for a bid). Sit facing in the opposite directions or on opposite sides of a screen that prevents any contact except by voice. The local telephone company may be able to provide a telephone simulator training kit for greater realism. Record the conversations on tape and play them back for critiques.
Upon completion of this chapter, you should be able to
• list four characteristics of a good record system.
• list the four basic types of business records kept.
• explain the benefits of properly kept records.
• define profit-and-loss statements and balance sheets.
• explain the components of a price.
• describe fixed and variable overhead.
• calculate profit as a percentage of the price.
balance sheet overhead costs equity
profit-and-loss statement break-even point markup
KEEPING BUSINESS RECORDS
Each year, many talented ornamental horticulturists go out of business. A large number of them do not understand where they went wrong. They worked as hard as they could, their customers approved their work, there seemed to be a lot of work, yet they suddenly found themselves without sufficient working capital to continue. They often accuse assorted culprits such as unfair competition, unreliable suppliers, fickle clientele, and, of course, government regulations and taxation. Although there are many reasons why small businesses fail, a large number fail simply because their owners or managers do not keep or properly utilize business records.
Talent and hard work, while essential, are not enough to ensure survival in business. A rudimentary understanding of money management
is also necessary. Too often, a person interested in growing plants, designing with flowers, building landscapes, or maintaining a property attractively is not interested in financial statements, preferring to leave those matters to accountants. Every business needs a skilled and attentive accountant, but it is the responsibility of the owner to collect the data needed by the accountant and to interpret the statements that the accountant supplies. Just reading financial statements is not enough either. They must be used to keep the business on track and moving forward.
Records give direction to the operation of a business. Current and complete records show where the business is succeeding and where it needs help or change. They permit a comparison of the present situation with past achievements. Properly established, a good record system is
1. simple to use and structured to fit the needs of the particular business it serves.
2. easily understood by the person(s) who make decisions on behalf of the business.
3. accurate and consistent.
4. able to provide current information whenever needed.
It is important that the business owner work closely with the accountant when the recordkeeping system is being established to ensure that the financial reports generated by the accountant provide information that management personnel can use. Accountants who are unfamiliar with the green industry may need guidance when creating the account lines that will track the operations of the business in a meaningful manner. The data collected and reported by field and office workers must be in a form that enables the accountant to do his or her job while preparing financial statements useful to the company’s leadership.
There are great differences in the ways ornamental horticulturists engage in business, but essentially four types of records are kept:
1. Sales (including services performed).
2. Cash receipts (monies obtained each day from cash sales and clients paying the bills that have been classed under accounts receivable).
3. Cash expenditures.
4. Accounts receivable.
In retail and some wholesale operations, sales and cash receipts may be recorded simultaneously on a cash register. The register may also be able to record the data by department within the store (a refinement that is more important to some operations than others). In service operations, such as landscape contracting or maintenance firms, sales records need to include the client name, site serviced, task performed, materials, equipment, and labor time (Figure 25-1).
At the close of each business day, all monies received that day (cash or checks) should be deposited in the bank. The exact amount received should be deposited so that the bank statement can be used to balance the cash receipts record. Some business owners take small disbursements out of the cash register drawer, or even use cash receipts to buy lunch when they run short. Such practices lead to erroneous cash receipts
figure 25-1. A typical work record for a landscape firm. It provides a comprehensive yet concise summary of all costs for a particular job. (Delmar/ Cengage Learning)
records. Small amounts of cash should be taken from a petty cash fund established specifically for that purpose. Personal expenses should remain that—personal. The small business owner should go to the bank or write a personal check payable to the business if cash is needed.
All cash expenditures should be recorded and a receipt or cancelled check obtained for each payment. Records should indicate the date, name of the person or firm paid, reason for the expenditure, and item(s) obtained.
Accounts receivable should be kept current. Bills must be prepared when goods are shipped or delivered, and when services are rendered. At the end of every month, each account should be listed along with the amount due and an indication of whether it is current or overdue by thirty or sixty days or longer.
Complete records of the business activities of a firm can give the owner-manager insights into many areas of the business that determine its financial health, such as:
• monthly sales
• cost of sales
• cost efficiency
• time requirements for various services
• depreciation of fixed assets
• operational overhead expenses
• profitability of specific promotions or services.
From this recorded information, the required tax and other governmental forms can be completed and filed. Thorough records, correctly interpreted, can also catch employee fraud and error, warn of excessive waste and spoilage of perishable materials, and offer guidance on which areas of business need to be promoted more or less as a result of their high or low profit return.