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Business Fundamentals

Business Fundamentals: Ten Traits of Entrepreneurs

This highly successful independent garden center (Al’s) in Sherwood Oregon incorporates all the business features of well run operation.
This highly successful independent garden center (Al’s) in Sherwood Oregon incorporates all the business features of well run operation.

New nurseries and garden centers are started every year in order to serve the growing desire for plants to fill gardens, business parks, and greenscapes. In order to improve the chances for success the beginning entrepreneur must have a creative and enthusiastic ability to handle not only the production side of horticulture but also the financial and organizational skills inherent to starting any new business. The following traits should be reviewed before any new enterprise is contemplated.

1. Leadership

The cornerstone of any successful business, whether during its initial phases, or after many years with recognizable sales, is the existence of one person or a few partners who had the vision to take a risk to develop a new product or service that would appeal to many buyers. Moving an idea from the concept stage to mass sales requires a motivated self-starter who can manage time, resources, and details in order to see a project through fruition (1). During the initial phases of establishing a new venture an entrepreneur must be able to work alone maintaining a strict sense of self-discipline. There will be situations that are uncertain and ambiguous (2). Any new venture has an inherent level of risk. By performing a very careful study of a particular segment of the nursery or garden center industry the prospective business owner can reduce the risks to a manageable level. It’s not necessary to re-invent the sale of plants or services. Simply by offering better customer service or offering a higher quality product a new business can succeed very well. While new concepts are very powerful, ultimately execution determines the degree of business success (3).

Having the opportunity to be express creativity will have to be balanced by extended working hours, which result in a potential strain on family time, and a reduction in disposable income. The level of responsibility that comes with owning a business can be very intimidating when companies are first starting out and a track record has not been established. There may not be a sufficient number of employees to delegate authority to. None-the-less, leadership must be accompanied by an enthusiastic, positive outlook (4) that is still compatible with a fulfilling personal life.

2. Fill a niche

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Rather than selling plants in black plastic pots the niche marketer might consider adding the more upscale cedar box.

Whether it’s developing a new product line, a new delivery system, or a new service that accompanies selling plants, a beginning entrepreneur must find a segment or niche of the green industry to capitalize upon. Astute gardeners have more choices than ever for plants, hardware, and information sources (5). But spending an extensive amount of time traveling to different locations, or viewing web sites for on-line shopping, can take away from the joys of spending time outdoors in the garden. Outside of the shoppers at a mass merchandiser, the independent garden center shoppers are looking for more than the commonly stocked, commodity items.

For example, a 5 gallon containerized maple shade tree, without fully formed leaves can usually be found at any nursery in the late winter. The plant tag attached to the trunk of the young tree can provide the common name and perhaps the height at maturity. Conversely, a columnar Norway maple that would fit nicely between two closely space homes could be stocked, fully leafed out in late spring, in a fabric container, along with a colorful plant tag listing the not only the height at maturity, but also the width, the fall leaf color, and directions for planting. Gardeners shop with more than their pocket books. They are looking for a pleasant shopping environment, with well trained and knowledgeable employees. Their level of self expression is fulfilled when they find a particular plant, tool, or container. They will sit through a seminar at the nursery if offered a comfortable garden chair to sit in, as well as cup of gourmet coffee. In the world of plants, sales are based on unique items sold by dedicated employees who genuinely care for their customers.

3. Ability to sell

Landscape full size dissected Japanese maples sell well to the households with the higher incomes. Still, it takes salesmanship in order to move them out of the nursery.
Landscape full size dissected Japanese maples sell well to the households with the higher incomes. Still, it takes salesmanship in order to move them out of the nursery.

A passion for setting up nursery beds and greenhouses, working with labor, or designing a demonstration garden are important in becoming a successful nurseryman or retailer. However, technical and production skills still pale in comparison to the ability to sell products, services, programs, and financial plans to customers, service companies, and financial loan officers. Wholesale nurseries that supply the chain stores often compete on price. But in doing so they often have to design very large operations and employ large labor forces. Independent retailers can not compete with mass merchandisers (6) on price. Nor can they stock the same products as a chain store.

Independent retailers focus their efforts on perceived value of their products (7) rather than price. They look to stock a multitude of products that are larger, more select, more unique, or have higher price tags than the chain stores. They work on the basis of 80% of their sales are to 20% of their customers. Unlike the traditional farmer growing a commodity item, an astute independent is a price ‘setter’, rather than a price ‘taker’. Finally, a horticultural entrepreneur understands the emotional needs of his customers, which includes the beauty, serenity, creativity, and individuality that comes with arranging and enjoying a range of different plant types.

4. Possess a skill

Under an ideal scenario a nursery owner would have attended a 4-year University program in horticulture, been raised on a farm, can feel comfortable talking about borrowing money, and has no qualms about trying to sell a $200 containerized weeping spruce to developer looking to build luxury condominiums. While there may be individuals that posses all of these skills and experiences, in general they don’t frequently exist. Entrepreneurs with business backgrounds often don’t have the technical training required for specialized horticultural crop production. Traditional crop farmers looking to diversify into nursery stock often envision rows of perfectly formed trees, shrubs, or perennials without thinking through the entire marketing sequence.

Community colleges offer introductory courses in horticulture and business management. Local nurseries frequently need summer sales help caring for and selling plants during the winter-spring sales push. The U.S. Small Business Administration (8) offers on-line classes in starting a new business. It is possible to find a small family run nursery to become friends with. Finding such a mentor can be invaluable. All of these people or organizations are available for the eager entrepreneur to learn from.

5. Willing to learn

The beginning entrepreneur who does not question his or her shortcomings in establishing a new enterprise will face daunting challenges that could have otherwise been solved by ether self study or seeking out a qualified consultant. Fortunately the nursery and landscape industry has a very strong base in the Pacific Northwest. There are active state industry trade associations including the Oregon Association of Nurseries (9), and the Washington State Nursery and Landscape Association (10). Each of these state organizations has monthly trade magazines, and both annual as well chapter association meetings in different locations. On the national level the American Nursery and Landscape Association (ANLA, 11) provides education, research, public relations, and representation services to more than 2,200 members. Included in the the membership is a subscription to the American Nurseryman magazine, which is published twice a month. This 80-plus page trade journal is replete with practical articles on all phases of the nursery, landscape, and garden center industries. The ANLA also has the most extensive collection of books, software, and videos related to the production, marketing, labor, and pest management of commercial plants.

6. Can communicate

A key business skill is being able to communicate effectively with not only employees of the company, but also customers, the media, and other nursery producers. When the situation is called for, a patient, reasonable personality will be needed to mediate two different groups that often have widely opposing views. In trade groups, extroverts are often looked to serve on a committee, assume the role of executive secretary, or help secure speakers for an annual meeting. Nursery producers with out-going personalities are often called to either speak before a group of fellow growers, or a consumer trade show attended by dedicated gardeners. Those who are not shy will find that news reporters can provide excellent media coverage for free.

7. Can handle finances

The brilliant golden foliage of Chief Joseph lodgepole pine (Pinus contorta var. latifolia 'lsquo;Chief Joseph'rsquo; Chief Joseph lodgepole pine) makes for a fascinating product at a garden center. The high inherent value of this species all but precludes its sale to only the most affluent shopper.
The brilliant golden foliage of Chief Joseph lodgepole pine (Pinus contorta var. latifolia ‘lsquo;Chief Joseph’rsquo; Chief Joseph lodgepole pine) makes for a fascinating product at a garden center. The high inherent value of this species all but precludes its sale to only the most affluent shopper.

The U.S. Small Business Administration reports that over 50% of small businesses fail the first year, and 95% fail in the first 5 years (1). These statistics should challenge any beginning entrepreneur. The primary explanations behind these numbers are as follows:

  • Lack of experience
  • Insufficient capital (money)
  • Poor location
  • Poor inventory management
  • Over-investment in fixed assets
  • Poor credit arrangements
  • Personal use of business funds
  • Unexpected growth

Clearly, a primary contributor to early business failure is mismanagement of money. During the first few years of any new enterprise owners need to be extremely frugal. On rural property it is entirely feasible to start a 1 acre container operation raising specialty ornamentals (12) or herbaceous perennials (13) without leaving the security of a regular paycheck and benefits from a day job. In short, control the destiny of your company by being as self sufficient as is reasonably possible (4).

8. Secure personality

To start a new enterprise takes initiative and drive that can come from a deep sense of self discipline, patience, and a belief in one’s own self. Setting high standards of performance for the company and employees that staff it, can only come from a leader who can handle the pressures of business decisions, and yet stay committed. Success lies with those who tackle the challenges of starting a new business with steady resolve, and building new pathways in a positive, self-assured manner. Procrastination can only slow the process, and lead to missed opportunities. A true business leader can balance the requirements of work with those of family and needs of the community.

9. Organization

Being an effective leader in a beginning business won’t be sufficient without the organizational skills of being able to monitor the entire structure and day-to-day activities that make a company succeed. By setting up a system (14) of hiring employees, and maintaining good accounting practices, a manager can assure that production proceeds smoothly. For small firms the owner often leads the marketing effort until the company expands sufficiently to build a sales staff.

A business owner’s role has to be one evolution and flexibility (15). The road to success will be paved with set-backs, mistakes, and un-fruitful choices. None-the-less, a manager needs to strive to attain the goals set out in the mission statement. A manger can empower employees, but must still provide guidance initially. A truly effective organization is one that where both the manager and the employees understand each others role and responsibilities, thus moving the enterprise forward.

10. Keep looking to the future

The business leader of the 21st century will quickly find that there is an ever changing evolution in production strategies, employment, and markets. While the plant industry is somewhat immune to downturns in the economy, retail independents will have to continue to find new methods to lure shoppers away from the ever expanding base of chain stores. The range of garden products, from hardware to plants, grows larger all the time. Future establishments will have to present the highest image, the best customer service, more Internet presence, and more value-added items. Wholesale firms will have to embrace the growing interest in water recycling, low maintenance plants, and trend to tie gardening to environmental stewardship (5). In short, plant entrepreneurs will have to view their business as any other firm that must continually evolve. Without the ability to change, business owners will find their competitors have passed them by, and they will be left with products or services that have lost their earlier appeal.

Resources

  1. Are you ready: Is Entrepreneurship for You? Startup Basics, U.S. Small Business Administration.
  2. Setting Up Your Own Business: Assessing your business skills. 1996. Carol Thayer, Extension Specialist, Small-Scale Entrepreneurship, University of Nebraska, Lincoln, NE.
  3. Don’t turn up nose at ‘stale’ old concepts. 1998. Jay Goltz. In: The Street Smart Entrepreneur. Addicus Books, Inc., Omaha, Nebraska.
  4. How to Make Money Growing Plants, Trees, and Flowers. 2000. Francis Jozwick. Andmar Press, Mills, Wyoming.
  5. Positioning for the Future in the Nursery Industry. Charles Hall, professor of agricultural economics, the University of Tennessee Institute of Agriculture.
  6. The role of independent garden centers versus the mass merchandiser. 1996. John Stanley. The Digger, Oregon Association of Nurserymen, February, 1996, p. 31–32.
  7. New Farmers for a New Century. 2000. John Ikerd, emeritus professor of agricultural economics at the University of Missouri.
  8. On-line courses to starting your own business. U.S. Small Business Administration.
  9. Oregon Association of Nurseries, Wilsonville, OR.
  10. Washington State Nursery and Landscape Association, Sumner, WA.
  11. American Nursery and Landscape Association, Washington DC.
  12. Growing Profits: How to Start and Operate a Backyard Nursery. 2000. Michael and Linda Harlan. Moneta Publications, Citrus Heights, CA. Distributed by Chelsea Green Publishing, South Burlington, VT.
  13. Herbaceous Perennials Production: A Guide from Propagation to Marketing. 1998. Leonard Perry, professor, University of Vermont Extension Service. Available from the Northeast Regional Agricultural Engineering Service, 152 Riley-Robb Hall, Ithaca, NY 14853–5701. Also see Perry’s Perennial Pages.
  14. In a Word: Systems. 1998. Jay Goltz. In: The Street Smart Entrepreneur. Addicus Books, Inc., Omaha, Nebraska.
  15. Are You a Good Leader? SCORE – Counselors to America’s Small Business. SCORE Association, Washington, D.C.

 

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