Why Should I Create a Business Plan?
Horticulture is the art of cultivating plants for food, medicinal purposes, and ornamentation, such as flowers, fruits, nuts, vegetables, herbs, ornamental trees and even lawns. In greenhouse horticulture, cultivation takes place in a controlled environment which allows plants to grow and thrive in seasons and locations that may normally be unsuitable.
Some avid gardeners follow their passion and choose to share and even sell the products of their labor. The most successful and dedicated may continue to expand until they find themselves with a profitable greenhouse business, perhaps making regular small sales at the local farmers’ market. Still others may eventually find themselves operating a large commercial greenhouse system, providing anything from shrubs and baby trees to carefully sprouted annuals and vegetables suited for the home garden.
Thinking about converting your love for all green, growing things into a business to support you and your family? That takes time, discipline, and careful planning, but we’re here to help!
Writing Your Business Plan
A well-written business plan takes time to create, but the effort is worthwhile and necessary to ensure that your nascent business is realistic, and your goals are attainable. Ideally, the act of writing your plan will highlight any areas you’ve failed to consider and give you an opportunity to address them before you make the first step. This process helps ensure that your business will have the best chance to succeed. Most business plans project 3-5 years into the future, although circumstances and directions can change - keep this as a living document to help re-direct during times of change.
- Your business plan should begin with a brief summary of your vision, in broad strokes.
- The plan should introduce your founder(s), business leadership, including a brief bio for each.
- Next, start with a well-researched analysis of the current state of the commercial greenhouse industry, including market strengths, weaknesses, and potential for further growth and development. A competitive market analysis will consider similar businesses working in the same market segment you are, and evaluate their strengths, weaknesses, and unique approaches. Make note of the areas where you can out-perform and out-compete your existing competitors. From this information you can draw a well-reasoned and specific business strategy based on real-world data, not just hopes and dreams.
- Business plans are necessary documents for obtaining almost any type of outside funding - bank loans, grants, etc. If you’re looking for that kind of support, include a section early in your plan about funding sources and how those funds will be used. Also include here any additional information your supporters will need to make a funding decision.
- Define your products and services. Who is your target market and how does your product meet their unique needs? What is the lifecycle of your product or what is it about your business that will encourage customers to return? Are there any related products or services you will not pursue? Why?
- Develop a marketing and sales strategy. Will you be operating as a wholesale, retail, or mixed vendor? How will you attract new customers and encourage repeat customers? What kind of outreach will you use - visual advertising, mailing lists, online marketing or some combination? Will you plan seasonal sales events or stock seasonal items?
- Operating plans give a good overview of how you will manage your business on a daily basis. What equipment will you use to keep your inventory watered? Will you have employees who can monitor the health of your plants and address problems with disease or infestations before they get out of hand? How will you deal with problems like severe weather or excessive cold? What tools will you use to ensure fertilizer is applied at appropriate intervals and in appropriate amounts? How will you keep track of inventory and make sure that turnover in each category is ideal?
- In relation to your operating plans, you’ll need to research and compile a list of federal and state laws and regulations that may impact your operations, then map out a plan to ensure these regulations are actively managed.
- Take out a calculator or a spreadsheet and start crunching some numbers. You’ll need to have good data on the amount of capital you can work with, as well as projected operational expenses and income for the first year, two or three. These numbers are important - it’s fairly well accepted that most businesses will take a year or more to turn profitable, but if you run out of operating capital even before you’ve been able to buy your first shipments of seeds or cuttings, it will be hard to move forward.
- Finally, make sure to infuse some character into your business plan - this document should reflect your dream and grab the attention of the right people. Investors aren’t looking for random people to throw money at -- paint a vision of a thriving business that sprouts happy customers and encourages your potential partners to see themselves as part of that picture.
There are a lot of resources available online for creating a solid business plan. You can look at everything from basic outlines to fairly in-depth discussions of a small business plans that apply to pretty much any industry on the U.S. Small Business Administration website. You can also find tips for creating more specific business plans for greenhouse operators by searching on the web.
