Now or Later?

The day the first seed was planted was the first day your business began to grow. Whether it is a first- or fifth-generation growing facility, business growth is the goal. Sure, for a short time production will increase with tighter aisles, closer plant spacing and tiers of hanging baskets, but the realization will surface that growing flats under the benches just isn't practical, and the quality is suffering.

Indications of needed expansion

Product is sold out before the season is over. If you are out of product before the season is over, you aren't maximizing your potential. While surplus is not desirable, telling your customers you are sold out is an open invitation for your customers to work with the competition. What if your customers like them better? What if they deliver faster? What if they always have what you do not? Don't let it get to this stage.

You have little competition. If your customers are loyal and you dominate the market, capitalize. Chances are, your customers will follow your lead. When you offer more product, they will buy more product. Whether it be a new product line or expansion of current products, your customers will not only sell more but word will get out that you can deliver. Now you can be the fear of your competition since customers will like you better. You will deliver faster and always have what the competition does not. Once you have won market share, be sure to keep it.

The competition you do have is expanding. If the competition is expanding, should you? They are taking the opportunity to better serve their, and maybe your, customers. Don't give them the chance; persuade your clients to move.

Increased demand for your product. Your name is out! Since you always have what the customer needs and do not grow flats under the benches, your product is high quality, and customers are willing to pay for it. The better the quality, the higher the demand.

Growing methods are affecting your plant quality. You have tried to place plants on tighter spacing, add one more tier to the hanging basket run, and yes, you have tried to grow flats under the benches. You also learned that this results in leggy, bug-infested plants that don't sell. This is a sign it is time to expand, space plant material properly and offer the quality your customers deserve.

Current space prohibits multiple turns. Multiple turns are not accomplished in your current facility simply because there is not enough space to plant a new crop as the previous one moves out the door, or your staff is not available to plant. Multiple turns can make a big difference. With more space or automated equipment, just one more turn will increase profits.

Your staff can no longer handle the daily tasks within a reasonable time frame. The nature of the horticulture business is alternating peak and slow seasons throughout the year. However if your staff is working 80 hours a week watering and pulling orders, leaving them unable to plant the next turn, expansion might be the next step. Automated pot fillers, transplanters and watering tunnels, paired with irrigation booms, hanging basket systems and automated controls allow your staff to make more money for you in less time. This addition may or may not require expansion of the current structures, but surely qualifies as an expansion of your business.

Expansion steps

Determine what product line you will introduce or expand. Which product line will have the highest demand, highest return on investment and, therefore, greatest profitability? This may entail the introduction of a new product line or a simple expansion of current offerings. Remember to consider all costs, including plant material, containers and soil, as well as additional staff, increased delivery trucks and utilities to name a few.

Prioritize your needs for the products to be grown. Different crops have various needs. Prioritize the needs of the crops you have considered. Revert back to the category above in this analysis, as a glass glazed house may be required for one crop while a polycarbonate glazing may be sufficient for another. This will have an impact on the return on investment and profitability of the crop selected. In addition, consider automation, including irrigation booms, hanging basket systems and automated controls. These items may or may not be priorities, depending on the crops grown.

Determine layout/design. Assess the current layout of the facility. If adding structures, determine what structure your facility will accommodate. Consider size, orientation and use. Consider the flow of tasks, including propagating, production, packing and loading. If adding equipment, consider the strength of the current structures. Will additional structural materials be required to install irrigation booms, hanging basket systems or other systems? If transplant machines or automation is considered, take into account the potential need for a headhouse to accommodate any or all of these additions. Consult with others in the industry to determine structure and equipment vendors to serve you.

Costs. Consult with manufacturers and suppliers of greenhouse structures and automated equipment. What you think you need may not fit the bill. Discuss your greenhouse or equipment expansion project with more than one supplier. You will receive different viewpoints and suggestions for your expansion. You may begin with several potential suppliers, but will most likely end up with just one. Be sure to compare and analyze what has been offered. While structures and equipment may appear to be the same, features such as durability in both equipment and structures, ease of use in equipment, and simplicity of installation of booms, etc. may differ.

In addition to the cost for structures and equipment, solicit pricing for earthwork, electrical, mechanical and plumbing as needed. Permits, taxes and other applicable charges should be considered.

Secure financing / leasing. Secure financing from your financial institution or leasing company. Leasing in the greenhouse industry is gaining popularity. Your vendor of choice can provide the necessary information and advice on leasing.

Build. Sign the contracts and get the structure in operation. The excitement of the new facility or equipment will have you and your staff generating that return on investment with energy!

Marketing. Now that you have made the decision to expand and invest your time and money in the expansion, don't fall short -- market yourself. This is another opportunity to invite current customers (and competitors' customers) to see what you are all about. There is always excitement with anything new -- show off the new place or equipment with an open house or other marketing events.

Sell. With the added space, your high-quality plant material is nothing but the best; new and old customers will be enthusiastic about the new offerings.

Although growth may induce excitement, it will likely be paired with some element of fear. Careful analysis of your current facility, equipment and staff will guide you to make the right decision on expanding your business. Proper growth is the key to success. Expand too early, and the increased expenses may hinder your growth. Expand too late, and your customers may have already experienced the competition.