Greenhouse Business

Discussion in 'Landscape Architecture and Design' started by williamslawn, Dec 10, 2002.

  1. williamslawn

    williamslawn LawnSite Member
    from SC
    Posts: 202

    I have an chance to buy an established wholesale nursery business. It comes with (4) 32X100 Greenhouses and all of the accesories. The owner will assist in the transition period to help retain current customes. Is there anything I should consider before purchasing?
     
  2. Lanelle

    Lanelle LawnSite Bronze Member
    Posts: 1,361

    A tight non-compete clause. I presume you have a background in greenhouse growing. If not, there are some risks that need to be considered. You will need to have a pesticide license to spray inside.
     
  3. J&R

    J&R LawnSite Senior Member
    Posts: 835

    You need to see his last 5 years C tax returns to what his profit or lost was or 5 years sells tax records to what kind of sells record he has. that will be the proof you need to see if it's worth buying.
     
  4. williamslawn

    williamslawn LawnSite Member
    from SC
    Posts: 202

    I do have my pesticide lic. I am also meeting with the current owner to review his books and tax records. They are going to keep two greenhouses to do some retail sales and I will be doing mostly wholesale so I will not get the no compete contract. Thanks for the information please feel free to give some more advice.
     
  5. devildog

    devildog LawnSite Senior Member
    from sc
    Posts: 270

    this one is interesting. we operate a house and have done so for 3 seasons. has been a flustrating experience i would most likely do again. its a lond learning curve. the first question i would ask, why is he selling the houses? are they on his/her property? will you be forced to move them at some point in the future. take a close look at the chart of accts, if they have any. find out what the cost of sales per unit is. make sure expenses have not been moved to cost of sales.

    what are you buying, besides the houses; trays/fert/buckets/mix, employees/accts/supplys & so forth. 2-3000 ft houses sound to the aver person like alot of space to grow, you'll be amazed how fast the space gets used up with benching (i presume your buying these as well). i question, if two houses can provide enough sales to cover expenses (your going to become married to these houses/products 24x7 - 365), let alone cost of sales issues. its become very difficult to compete with the Baucoms and the like who are peddling the product to anyone who gets their phone number a buys the rack minimun, in terms of their volume. your thread did not mention, woody, perennials, annuals (they each have their unique issues)?

    as you most likely know, we bring in alot from fld into SC. the cost of sales alone for these houses will be making the profit % very slim, when compared to the price of these product coming from fld and baucoms.... bottom line, why is he selling????? has he discovered the profit % has slipped to the point he can no longer justify their operation??? send me email or a pm if you have specific questions. with regards... devildog
     
  6. BigJim

    BigJim LawnSite Senior Member
    Posts: 382

    We ran a wholesale and retail nursery operation and found the wholesale side was not profitable,it was cheaper to buy the plants off other wholesalers and retail them.It was easier to pick up the phone and order 100 plants,and have them delivered than try to grow them on ourselves.Specailising in one particular plant type can be a good earner,but wholesale/retail is hard work.A friendly bank manager and a large overdraft help too.
     
  7. kris

    kris LawnSite Bronze Member
    from nowhere
    Posts: 1,579

    This doesn't sound good.
     
  8. aquaturf

    aquaturf LawnSite Member
    from MA
    Posts: 28

    I have always wanted to get into the greenhouse business, but when I do the numbers, it becomes clear that you need a big operation to really make money. How big? Depending on crop mix and market channel, you'd be looking at at least 25,000 sq ft. And you'd have to employ a lot of automation to cut labor. $$$

    It will be hard to run a wholesale operation with only 12k sq ft. Are these houses gutter connected or free standing. Most wholesalers operate as efficiently as possible, in gutter-connected houses with automated production and handling systems. You can't really do that in single hoop houses. I would be really curious as to why they want to remain in retail but dump wholesale. Buyer beware!
     
  9. devildog

    devildog LawnSite Senior Member
    from sc
    Posts: 270

    no doubt, he's (the seller) most likely too a close look at the #'s and has come to realize the profits are shrinking and cost/expenses are increasing... profit can be made with two houses depending on the product produced and the market competition in the area. We do have an extended season here. With Regards... devildog
     
  10. williamslawn

    williamslawn LawnSite Member
    from SC
    Posts: 202

    It is a situation where the wife is doing most of the work and the husband wants out. There profit for last year was $26,000. They did not max out there greenhouses. They only grew a spring and fall crop. They are closed (retail) 7 months of the year. I think the business has alot of potential. Theyare keeping the 2 greenhouses for retail until their inventory is gone
    They have all the supplies and should make some good profits based on their projections. They said they will be willing to sell the other 2 after the inventory is gone.
     

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