TEN YEARS AGO, KOSTAS PANAGOPOULOS routinely rang up 20 or more sales in the early evening as people dropped into his East 55th Street florist shop to grab flowers on their way home from work.

Then the discounters arrived. A host of Korean greengrocers and others were branching into the flower business, piling their petals high and selling them cheap. Today, the early-evening crowd at Mr. Panagopoulos' store, Floralies, has dwindled to five-and that's on a good day.

Yet far from fading away, his shop is actually growing. Its revenues are projected to hit $2.5 million this year. That is more than double where they stood when Mr. Panagopoulos first realized he had a choice to make. He could quickly rethink his business model-or find a new line of work.

"We knew that we could not compete with them on price," he says. "So we focused on quality and other markets instead."

More than a decade after discounters began proliferating around the city, selling roses for as little as $9.99 for two dozen, many traditional florists have adjusted. In the process, they are demonstrating that there is more to success than offering customers the lowest prices, that consumers are willing to pay up for higher-quality goods and services.

It is a lesson that bodes well for thousands of other small businesses around the city that are facing an onslaught of discounters, from big­box stores to tiny sidewalk stands.

Distinguishing features

"The idea is to do something that the discounters are not doing," saysAri Ginsberg, a professor of entrepreneurship at New York University's Stern School of Business. "By having a different strategy, small businesses can do very well."

The statistics bear him out. Since the mid-1990s, the number of flower shops in the metropolitan area has held steady at approximately 650, according to the Society of American Florists, a trade group in Virginia.

At Belle Fleur, on Fifth Avenue in Chelsea, the path to becoming an enduring success began with the decision by the mother-daughter ownership team in 1995 to offer a level of service that would draw in customers and keep them coming back year after year.

Last fall, for example, when their driver was stuck in gridlock in midtown, Belle Fleur proprietors Marilyn and Meredith Waga quickly lined up a stretch limousine to ferry 20 centerpieces from their shop to the St. Regis Hotel for a Conde Nast party.

"It didn't matter that we were losing money on the delivery," says Meredith. "If we needed to get them there by helicopter, we would have done that."

For weddings, the Wagas' most profitable line of business, the duo regularly spends hours with the bride and her family to make sure they get all the details right. The strategy makes for longer days, but higher revenues.

"They understood what was important to us and made it happen," says Debbie Palmer, who hired the florist for her daughter's 200­guest wedding in March. This year, the Wagas expect to do as many as 100 weddings. At prices ranging from $10,000 to $100,000.

For Zeze, a Brazilian-born florist and owner of an eponymous store on East 52nd Street, the key to success was less how than who. From the outset, Zeze zeroed in on capturing the business of the rich and famous.

Being a stone's throw from ultra­posh Sutton Place was a good start. To get well-heeled passers-by to notice his store, Zeze used his shop window as a billboard. His displays, including a live piglet in a farm setting, won an award from The New York Times in the early 1980s for best windows of the year.

Better yet, they were beginning to draw a crowd. Pop singer Sting and his wife asked Zeze to work in their home. Soon after, some of Sting's friends, such as Bruce Springsteen, began calling.

"I'm busier than ever," says Zeze, whose recent offerings have included 6-foot-tall roses from Ecuador at $30 a stem and rare yellow peonies from upstate New York at $20 each.

On Fifth Avenue in Brooklyn's Park Slope neighborhood, where foot traffic is a bit lower and less well-heeled, the owner of Blooms on Fifth has had to reach further to draw in the business. Sure, Ted Giannopoulos has a nice-looking store, but he also has a Web site, not to mention ads in local papers, as well as flowers people just don't see at the local fruit stand.

"These are the kinds of things that only professional flower shops do," he says.

Special services

Discounters don't do floral arrangements for the city's top hotels and restaurants. That is a market that now belongs to the likes of Floralies' Mr. Panagopoulos.

He began 10 years ago by cold­calling New York hostelries. Within weeks, a couple of hoteliers asked him to stop by with samples. Three months later, he signed contracts with the New York Palace and the Four Seasons, under which he still provides up to 15 arrangements a week for their public areas at as much as $500 each.

Having established a reputation, Mr. Panagopoulos can devote more time to floral designs in order to keep his edge and less time to marketing. He regularly travels to Asia to get new ideas.

Last year, the manager of four­star restaurant Le Bernardin took notice. "I had always admired his work at the Four Seasons," says David Mancini, general manager of Le Bernardin. "We wanted someone who could articulate a creative vision, and we knew Kostas was the guy for us."

Ms. Kim does not pay rent. Instead, she splits her profits evenly with Grace's. The arrangement keeps her operating costs low and at the same time keeps the grocer from having to enter the flower business itself. But on most weeks, Kim is lucky to break even.

"I often see signs for two dozen roses for $8 to $10," says Myung-Soo Lee, a marketing professor at Baruch College. "Even if they are paying half as much money for the flowers, I still can't imagine how much they are making."