ANR-0691green.pdf

8/9/2019 ANR-0691green.pdf

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ANR-691

A L A B A M A A & M A N D A U B U R N U N I V E R S I T I E S

www.aces.edu

The greenhouse business is one of the fastestgrowing industries in Alabama as well as in theUnited States. People everywhere want theirhome landscapes to be colorful year-round,

businesses want to be attractive to customers, and al-most everyone can appreciate the beauty flowers andplants bring to the environment. New greenhouses,garden centers, nurseries, and landscape companiesare springing up everywhere.

So, should you become involved in this growingindustry? There are many aspects to consider beforesowing the first seed or purchasing the materials tobuild a greenhouse. Careful consideration of the manyfactors involved in a commercial greenhouse can savemany hours and dollars in losses. While you can’t planfor everything, a well-thought-out plan can help plot acourse as the business grows.

A large percentage of small businesses fail withinthe first 2 years. Complete as the information in thisdocument may seem, it is designed to provide generalguidelines for starting a greenhouse business. Spendtime reading as much material as possible to prepare

for operating a business. Experience is a good teacher,but preparation can help avoid costly mistakes.

Reasons for Starting aBusiness: Your Motivation

Many people look at a business and think, “I cando a better job myself!” Many new businesses are es-tablished with this spirit. But what are good reasonsfor wanting to start a greenhouse business?

Sometimes an individual sees a real need for high-quality plants in a town or area. Another individualmay see a need in the market for specific kinds of

plants, such as rare herbs or herbaceous perennials.These opportunities for profit are solid reasons formotivating an individual to consider establishing agreenhouse business.

Another reason is a love of plants. While it is im-portant to enjoy your work, a love of plants cannotmake you a good businessperson. Remember that thereal reason to establish a business is to make a profit.If you cannot show a profit in several years, the busi-ness may no longer be viable.

Are You Ready for Your Own Business?

After considering your motivation for startinga greenhouse business, consider your personalitycharacteristics. Many people want to start a busi-ness because they want to be their own boss. Manyentrepreneurs who start businesses will tell youthat you are not the boss. The banker becomes aboss if you borrow money. Customers become the

bosses because you must satisfy them. While theremay not be any one person to report to at work,going into business for yourself means you nowhave multiple bosses.

What characteristics do you have that will make you a good greenhouse grower and a good busi-nessperson? The answers to the following questionsmay help determine if you are ready to strike outon your own.

Are you action oriented? Can you make deci-sions after considering the facts at hand? Businesspeople often don’t have all the facts needed to

make a black-and-white decision. Decisions fre-quently must be made under pressure. Can you getthe job done? Are you results oriented?

Are you dedicated to success? Can you worklong hours, often 7 days a week when necessary?Greenhouse plants must have attention every day.During some seasons, the work can be 70 hours per

week or more. You, as the boss, must be preparedto commit the time and attention required. You mustbe dedicated to getting the job done. You should alsolearn from your failures and not get discouraged.

Are you a manager? Can you delegate assign-ments to employees or do you need to do every-thing yourself? You cannot do everything yourself if

you are the boss. You must hire competent peopleas part of your team and give them responsibility toget jobs done.

Are you a good planner? A manager needs toplan for growth in the business, plan when to plantand harvest crops, and plan for unforeseen chal-lenges such as cold temperatures in the greenhouseor crops that are not ready at harvest.

Greenhouse

Business

Starting a


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2 Alabama Cooperative Extension System

Do you have the appropriate knowledgeand experience? Have you grown the crops youplan to sell? Have you ever operated a businessbefore? It is better to learn (and make mistakes)by working for another greenhouse and get somegood experience before starting your own busi-ness. While a college degree in business or horti-culture may not be required, there are many things

you will need to know concerning crop culture,greenhouse operation, people management, sales,and the day-to-day operation of a business.

Do you have enough resources? Do youhave enough money to start and operate the busi-ness while you get established and until you canpay your own bills? What other resources do youhave and are willing to risk on the success of thebusiness? Will you qualify for a loan? Who will give

you a business loan?

Do you have people skills? How well do you work with people as the boss and as a salesperson?Can you interview, hire, and fire someone? Can

you handle employee and customer complaints?Managing a business involves managing your time,other people’s time, your customers’ complaints,and your suppliers, as well as your banker, attor-ney, accountant, and financial planner.

Are you flexible? Can you adapt and grow as your business grows? Are you innovative enough tocontribute to the expansion of the company? What

will customers want next year? Where will the mar-ket be in 5 years?

Analyze yourself carefully to make sure you areprepared for the challenges. Not everyone is made

to own a business. Not everyone has all the skillsneeded to operate a business. Identify the skillsand strengths you have and determine if you canhire another person or several individuals to makeup for your weaknesses.

Where Is Your Market?The marketing process includes a range of ac-

tivities intended to identify and satisfy the desiresof consumers while earning a profit for the busi-ness. These activities include identifying customerneeds, developing products and services to meet

those needs, establishing promotional programsand pricing for the products and services, andimplementing a system of distribution to the cus-tomers. It is essential to identify and understand themarket, know who the competition is, and developa market niche. Remember, grow what sells, not

what you are fond of.

Selling plants directly to consumers in a retailbusiness is different from selling plants wholesaleto garden centers or other retail businesses. To

determine if a consumer market is large enough,conduct a demographic study—a study of the char-acteristics of a particular area. This should help youassess whether a greenhouse business is feasible.Characteristics that should be of interest are popu-lation, projected population growth, age distribu-tion, income levels, age of community, number andsize of residential areas, types of housing and lot

sizes, trade areas, gross retail sales, unemploymentrate, and major employers. Some important ques-tions to consider are the following:

• Do enough people live or shop in the marketarea you choose?

• How much competition do you face?

• Are a lot of other businesses already growing andselling the products you would like to produce?

If you will sell plants to a wholesale market:

• Are there distributors or wholesalers who couldpurchase your plants?

• Can you sell directly to retailers in your market

area?• Are there enough retailers who could purchase your products?

• What advantages, such as higher quality plantmaterial, a broader product mix, or improved ser-

vices, can you offer retailers to encourage themto purchase plants from you rather than fromtheir current suppliers?

You need to understand the market, how itlooks today, and how it will look in 5 years beforedeciding to go into business. It may be difficult tocollect enough information about the market to

make a decision. The local chamber of commercemay be able to offer assistance. Ask the local li-brary for additional information. The telephonebook is an excellent resource when assessing thecompetition. Take a little time to look for sourcessuch as census reports, demographic studies, news-papers, and the World Wide Web. Other very goodinformation sources are real estate agencies andthe county Extension office. Be creative to find asmany facts as possible to help you make decisionsabout the market.

Characteristics of the markets will have an impacton the type of marketing you choose. Plants can be

marketed at wholesale, retail, or, in some cases, mailorder. Wholesale production greenhouses sellrelatively large amounts of products to a small num-ber of accounts. They may sell to florists, indepen-dent garden centers, grocery stores, mass merchants,home centers, landscape businesses, or groundsmaintenance firms. Many wholesale greenhousesgrow a wide range of products throughout the yearfor daily, seasonal, or contract sales.


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Starting a Greenhouse Business 3

A retail greenhouse sells a relatively smallamount of products to a large number of indi-

vidual customers. This type of operation generallyrequires high product quality, active marketing,and superior service to succeed. Many retail mer-chandisers do not grow plants, but purchase allor most of their products from wholesale growers.The greenhouse serves to maintain plant health

until sold, not to increase plant size. Retail grow-ers produce a variety of plants to sell from theirown retail operations. Because it is often disruptiveto have customers selecting products in a produc-tion facility, the retail facility is often separate fromthe production facility. The retail facility may be atthe same or at a different location.

What Type of Business Will You Establish?

Another consideration in starting a greenhousebusiness is to decide how the business will be

structured legally. Usually, the business is struc-tured in one of three ways: sole proprietorship,partnership, or corporation. Each legal structure hasseveral advantages and disadvantages. Consult anattorney and accountant to decide on the structurethat best suits your needs.

Most entrepreneurs start in the sole propri-etorship legal form of business. The primary ad-

vantage of this form of business is that you, thesole proprietor, are responsible for the assets andliabilities of the business. You are the boss. Youhave complete liability, and you are taxed person-ally for the profits of the business. However, yourpersonal and business assets can be taken awayif the business has financial trouble and you owecreditors money.

A partnership, with one or more partners, isanother type of business with some different ad-

vantages and disadvantages. A partnership mayhave more resources and partners sharing the re-sponsibility and the liabilities, but you have at leastone other individual that you can consult regardingbusiness decisions. Some people find this a greatadvantage because one person may be good atgrowing plants and the other may be good at op-

erating a business. This interaction can work to theadvantage of both. Like the sole proprietor, all part-ners are liable for the business’s assets and theirown personal assets can be jeopardized if the busi-ness has financial difficulty.

The corporation is the third form of businessstructure. Today, more greenhouse businesses arecorporations because of the advantages a corpo-ration offers. Unlike the sole proprietorship andpartnership, the corporation is only liable when

financial difficulties arise. Only the business assetscan be taken if creditors demand payment. Theprimary disadvantage to a corporation is that thebusiness is taxed twice: one time on the profitsthe corporation earns and a second time when theowners of the corporation receive personal incomefrom that corporation.

Where in Your Market Will You Locate Your Business?

Location of the property in the market area willaffect the success of the business, especially if it is aretail business. Study the market to determine the bestlocation. Real estate agents will tell you that the threemost important considerations for a retail businessare (1) location, (2) location, and (3) location! For a

wholesale business, access to the market is more im-portant than the market’s (your customers’) access to

you. When considering where in the market area tolocate a business, think about the following.

Size and shape. The exact size and shape ofthe property will depend on what size business youare planning to start and the layout of that business.However, a minimum of 3 acres is recommended. Ingeneral, property with more road frontage is moreexpensive, but it is also more visible to customers.Plan for expansion. Is there enough room to growin the next 5 years or so until you can afford to pur-chase more property for the business?

Zoning regulations. Make sure the propertyis zoned for business. Check to see if zoning islikely to change in the near future or if it has been

disputed in the recent past. Are there any specialrestrictive clauses that may inhibit your expansion? Are there regulations on the size or height of signsthat can be used to promote your business?

Accessibility. The business should be closeenough to major roads for delivery and transporttrucks to have easy access. Are there any weightlimits or restrictions on large trucks? For a retailgreenhouse, locate the business so customers cansee it from at least 200 feet and can get to the busi-ness easily and safely. Plant shopping is often doneon impulse. If customers have to cross major barri-ers or make a special effort to get to your business,

chances are they won’t.Labor availability. Operating a greenhouse

business is labor intensive and obtaining expe-rienced, dependable labor can be troublesome.Readily available labor and support facilities shouldbe within 20 minutes drive of the greenhouse site. Isthere a good source of skilled labor in the area, suchas a high school program with horticulture students,a university, college, or technical school? Also, extraunskilled help will be needed during peak business


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times. Good sources of extra, part-time help are highschool students or older, retired adults. Labor shouldbe available at a price you can afford.

Water quality and availability. Is city wateravailable or will you have to dig a well? If you diga well, how much water is available and how long

will it last? Many greenhouses require about 6 acre-feet of water per year for every acre of greenhouse

production area. Regardless of the source, have a water quality test performed. This is an inexpen-sive, easy procedure that may save a lot of moneyin the future.

Private labs or your county Extension agent canhelp take the water sample and have it analyzed.Check the level of soluble salts and bicarbonates.Low soluble salts, a level below 0.75 mmhos/cm, isbest because fertilizer is often added to the waterduring irrigation. When present in excess amounts,some salts are toxic to plants. Water bicarbonatelevel is important in plant production. A bicarbon-ate level of less than 100 ppm (parts per million) isrecommended for growing most plants.

You will also need a plan for water collectionand a plan for water runoff from your greenhouse.

Utilities. How many are available, and whatare the connection fees? You will need electricityand, depending on other equipment and needs,

you may need gas, water, or sewer services con-nected. Check with each supplier to determinecosts and to anticipate any difficulties they mighthave in supplying services.

Taxes. What is the tax rate on the property? Are taxes likely to increase substantially in the fu-

ture forcing you to move the business elsewhere?Local building codes. What codes will affect

which buildings you construct and where on theproperty you locate them?

Neighboring businesses. What affect willother businesses have on traffic flow of customersinto and out of your business?

Natural slope and drainage of the land. Grading land can be very expensive. Greenhousestructures should be located on a slope of 5 percentor less. Avoid locating a greenhouse on a flood plain,in a frost pocket, or on a hilltop where heating costs

will be high. Avoid an area where nearby structuresor trees will cast shadows on the greenhouses.

Resale value. Someday it may be necessary tosell the property, for good or bad reasons, so havean estimate of its resale value in the future.

Your Business LayoutIn a wholesale production greenhouse, the

primary factor to consider in arranging buildingsand equipment is materials flow and how it im-pacts labor utilization and future expansion. How

will materials come into the facility (delivery andunloading), be stored until needed, and be movedthrough the production process? How will productsmove out for packaging and be delivered to cus-tomers? Labor is often the single largest expense ina greenhouse business, therefore, materials move-ment and handling should be arranged to minimizethe labor required. One possible arrangement isshown in Figure 1.

Figure 1. Site plan for the arrangement of a wholesale

greenhouse and support facilities

Materials flow is also important in a retail op-eration, but customer movement and access arealso critical. How will products move from deliverytrucks to the display area, from the display areato the checkout register, and from checkout to thecustomer’s vehicle?

What type of structures or areas do you needto start the business? A production facility and sev-eral other areas might be useful. Some examples ofspecific structures and areas to keep in mind whenconsidering the construction of a business are thefollowing: greenhouses, shade houses, work area,soil mixing area, storage buildings, pesticide room,roadways (large enough for trucks), parking facili-ties, sales room, offices, landscaped area (displaygarden), break room/kitchen, rest rooms, cashierlocation, loading dock, and shipping area. Thesizes of each of these specific areas depend onplans and goals for your individual business.

Future Expansion

Greenhouse Greenhouse

ProductionReceiving OrderStaging Shipping


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Greenhouse StylesGenerally, there are two styles of greenhouse

layout commonly used for new businesses: de-tached or freestanding houses or ridge and furrowor gutter connected houses (Figure 2). Detachedgreenhouses stand independently and may be con-structed using different greenhouse types (gable,Quonset, etc.). Access from the work area to thegreenhouses is often through a central, coveredcorridor or uncovered aisle. This layout style is

is lower than the cost for other greenhouse types,usually $2.75 to $3.25 per square foot excludingheating, cooling, and benches. Many new busi-nesses start with one or more houses that are 25 to40 feet wide and 90 to 100 feet long. However, thistype of construction can be applied to either thedetached or the ridge and furrow styles.

Many greenhouse construction companies offerpackages for constructing Quonset greenhouses.These commonly come with either steel or alumi-num bows and the manufacturer specifies the bowspacing depending on the structural strength of thebow material. However, before purchasing, selectthe frame based on load-bearing requirements. This

will be determined by whether or not the structure will support equipment or crops. Hanging the heat-ing system, irrigation equipment, or hanging bas-kets from the framing will increase the load-bearingrequirement. The end walls are often constructedof wood or metal framing covered in polyethyleneor rigid plastic with aluminum doors for access.The side walls are often wood or metal with specialfasteners for holding the polyethylene in place. Thefoundation for a Quonset greenhouse is usually aconcrete footing poured at intervals dictated by the

bow spacing.Polyethylene manufactured for greenhouse

application comes in 20- to 50-foot widths, 1 to 8millimeters thick. It costs $0.12 to $0.18 per squarefoot. Two layers of polyethylene are frequently ap-plied to greenhouses to reduce heating demand.Double-layer polyethylene houses generally cost30 to 40 percent less to heat than do single layerhouses. The two layers are kept air-inflated using a100 to 150 ft.3/min. squirrel cage blower mountedto the inside plastic layer. Purchase 4-mil plastic for

Detached Ridge and FurrowFigure 2. Detached and ridge and furrow greenhouse styles

common for small growers who are starting with10,000 square feet or less, but who plan to addhouses as the business grows. This style has ad-

vantages and disadvantages. Each house can becontrolled by its own heating/cooling system toaccommodate crops requiring widely differentenvironments. Efficient movement of people andmaterials, however, can be a problem, especially ininclement weather.

Ridge and furrow greenhouses are connectedat the eave by a common gutter. Different types ofgreenhouse construction can be used for a givenrow of connected houses. Internal walls may sepa-rate individual greenhouse sections where cropsrequire different environments or internal wallsmay be absent where large, single crops are to begrown. Some advantages of the ridge and furrowstyle are lower construction costs compared todetached houses, especially for future expansion,lower heating costs per unit compared to detachedhouses, and more efficient movement of peopleand materials.

Greenhouse TypesThe most common greenhouse construction for

most new businesses is the Quonset type (Figure3). These houses are constructed with arched raf-ters covered with one or two layers of flexibleplastic, usually polyethylene. One disadvantage ofpolyethylene is that it is subject to ultraviolet lightdegradation and must be replaced every 2 to 3

years. The cost of construction for detached houses

Gable

Figure 3. Quonset and gable types of greenhouse construction

Quonset


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the inside layer and 4- or 6-mil plastic for the outside.Use 6-mil polyethylene for single layer applications.Polyethylene can be installed on wood portions ofa greenhouse by nailing wood batten strips overthe film into the foundation boards and end walls.However, because polyethylene will require replac-ing frequently, investing in special fasteners willmake the job easier. Fastening systems are available

for single- or double-layer applications. A second commonly applied greenhouse type

is the even span, gable roof (Figure 3). This typeof construction is appropriate where rigid glazingmaterials will be used such as glass or rigid plas-tics. The cost of construction for glass-covered,detached- style houses is higher than for Quonsettypes, usually $5.50 to $7.50 per square foot ex-cluding heating, cooling, and benches. However,these structures are more permanent and requireless maintenance. Gable construction with rigidglazing is a good choice when plans are long-termand the business is well capitalized. This type of

construction can also be applied to either the de-tached or the ridge and furrow styles.

Gable houses use galvanized steel, aluminum, ora combination of the two materials for constructingthe frame. The weight of glazing material, the weightof equipment attached to the frame, snow and windloads, and the width of the greenhouse will have animpact on the type and size of materials chosen, sizeand spacing of support posts, and the design andconstruction of trusses. Glass is very heavy and re-quires strong support while rigid plastics are lighterrequiring less support. Trusses and support posts

may be spaced 6, 10, or 12 feet apart dependingon load requirements while roof and side bars arespaced according to the width of the glazing materi-al used. In recent years, eave heights have increasedto 12 to 15 feet or higher in southern greenhouseconstruction because taller houses ventilate betterand stay cooler. Gable houses, especially those cov-ered with glass, should have a strong, concrete, orconcrete block foundation that extends below thefrost line according to building codes.

Glass is the traditional greenhouse cover-ing against which all other materials are judged.Originally, glass panes for greenhouses were 18 by

16 inches, but larger sizes are becoming more com-mon. Actually, larger panes are less fragile than aresmaller panes. Many greenhouses are covered withdouble-strength float glass (1 ⁄ 8-inch thick) costing$0.85 to $2.00 per square foot. Large, glass panesand tempered glass may cost $3.00 to $7.00 persquare foot.

Fiberglass reinforced panels (FRP) are rigidplastic panels made from acrylic or polycarbonatethat come in large, corrugated or flat sheets. FRP

panels are available in 24- to 57-inch widths and upto 24-foot lengths. These materials are durable, re-tain heat better than glass, and are lightweight (lessstructural support needed). Light transmission maybe better than glass simply because less structuralsupport is needed, therefore, fewer shadows arecreated. The cost of FRP panels range from $1.00 to$1.25 per square foot depending on the guaranteed

life-span of the material.Double-layer structured panels (DSP) are made

from acrylic or polycarbonate and are constructedof two layers of plastic held apart by ribs spaced1 to 2 inches apart. The double-layer constructionincreases structural strength and heat retention, butdecreases light transmission compared to single-layer materials. Panels may be 4 feet wide and upto 39 feet long. DSP made with polycarbonate costs$1.75 to $2.50 per square foot while those made

with acrylic costs $2.00 to $3.50 per square foot.

Floors and WalksThe type of floor for a greenhouse will dependon the type of production (pots or flats on the flooror on benches), available capital, and soil drain-age. Bare ground should be avoided because ofpotential insect, disease, and weed problems andthe presence of a muddy growing surface. Weedmat overlain with 4 inches of 3 ⁄ 4-inch crushed stoneor pea gravel will help control weeds and providea porous medium through which water can drain.

Areas under benches can be treated the same way.If a solid concrete floor is desired or necessary, in-stall drainage basins and slope the floor toward the

drains. Concrete aisles are preferable where cartsand wheeled equipment will be used. Walkwayscan be 2 to 3 feet wide in a small greenhouse.

Adjust the width of walks for wheeled equipment.Larger greenhouses often have 2- to 3-foot second-ary aisles and 4- to 6-foot or wider main aisles.

BenchesBenches may be constructed from a variety

of materials and arranged in many different ways.Careful planning can result in 70 to 80 percent offloor area devoted to crops with fixed benches and

up to 90 percent utilization with rolling or movablebenches. Rolling benches are designed to open an18- to 24-inch aisle of work space at any locationalong a row of benches.

Supports for benches should be strong enoughto hold a large number of plants and the largestcontainer size anticipated. Wood, metal pipe, or con-crete blocks have been used as bench supports. Thebench surface should be strong enough to supportplants without sagging, but open to provide water


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drainage and air movement. Spruce or redwood lathand 1-inch square, 14-gauge welded-wire fabric orexpanded steel mesh make a strong, long lasting,open bench top. Bench height should be 32 to 36inches and width should be 3 feet if against a wallor up to 6 feet if accessible from both sides. Benchescan be purchased from a manufacturer in a varietyof sizes and construction types.

VentilationThe purposes of ventilation are to exchange

carbon dioxide and oxygen, to remove hot air, andto lower relative humidity. Forced-air ventilationrelies on electric fans controlled by a thermostatand a louvered intake vent. Fans pull cool air intothe greenhouse from the outside through an in-take vent and warm, inside air is pushed out. Fansshould be mounted in a waterproof housing withexterior, air-activated louvers to protect electricalcomponents from inclement weather and to keep

cold air out during the winter. It is important toinstall a screen over the inside of fans to preventinjury. There should be a distance equal to at least1.5 times the fan diameter between the fans andadjacent structures. The intake vent on the wall op-posite the fans can have an air-activated or motor-ized louver. Fan capacity should be large enoughto exchange the air in a greenhouse at least onceper minute. Recommendations for warm climatescall for a fan capacity to remove 12 to 17 cubic feetof air per minute per square foot of floor area.

Natural ventilation has made a comeback in theSouth in recent years in the form of retractable-roof

greenhouses and Quonset houses with roll-up side walls. Retractable-roof greenhouses come in a va-riety of types while roll-up side walls on Quonsethouses are relatively simple. In both cases, the ideais to move as much of the greenhouse structure outof the way as possible to expose crops to naturalconditions during warm weather.

CoolingOne of the best ways to cool a greenhouse in

the summer is to reduce light intensity. How muchreduction to provide depends on the heat load in

the greenhouse and the light requirements of thecrops grown. Greenhouse whitewash and shadecloth are popular choices. Greenhouse whitewashis a special kind of latex paint that is diluted in

water and sprayed on the covering surface. Thismaterial is designed to be applied in the spring andgradually degrade by the action of rain and sun sothat little remains by fall. Shade cloth is a black,green, or white woven fabric of polypropylene thatis applied over the outside of the covering. Shadecloth can be purchased with various weave densi-

ties that result in 20 to 80 percent light reduction.For many greenhouse applications, 30 to 50 per-cent light reduction should be sufficient.

Evaporative cooling relies on air passingthrough a porous pad saturated with water. Theevaporating water removes heat from the green-house. Fan-and-pad systems consist of a cellulosepad the length of one wall and at least 2 feet tall

with water supplied to keep the pad wet duringoperation. Fans along the opposite wall draw out-side air through the pads. Fan-and-pad systemscool more efficiently when the relative humidity islow, a condition that is infrequent in Southeasternsummers. However, a 5 to 10 degree reductionover the outside temperature can be achieved witha well-designed system.

HeatingTwo popular heating systems for greenhouses

are forced-air unit heaters that burn propane or

natural gas and hot water or steam central boil-ers that burn fuel grade oil. Unit heaters cost lessin initial investment ($.30 to $.50 per square foot)than central boilers ($1.00 to $2.50 per squarefoot), but cost more to operate ($1.00 per squarefoot versus $.60 per square foot). Unit heaters areeasier to install and require less maintenance thancentral boilers require, but even heat distributioncan be a problem. Central boilers provide evenheat and combustion takes place away from thegreenhouse, but installation can be time consum-ing. Generally, unit heaters are more appropriatefor small greenhouse ranges and central boilers for

larger ranges.Unit heaters burn gas in a firebox and heated

air rises through the inside of a thin-walled heatexchanger on its way to the exhaust chimney. Afan draws air in from the greenhouse, across theoutside of the heat exchanger and into the green-house. Thus, most of the heat is removed from theexhaust before it exits the structure. The exhaustchimney must be sufficiently tall to maintain an up-

ward draft and extend above the greenhouse roof. An 8- to 12-foot chimney is usually sufficient. Openflame heaters must be vented to the outside and be

provided a fresh air supply for complete combus-tion. Fresh air must be provided by an unobstruct-ed chimney to avoid carbon dioxide buildup andproduction of ethylene, both detrimental to plants.

Two warm-air distribution systems are popularfor unit heaters: convection tubes and horizon-tal airflow. A convection tube is a polyethylenetube connected to the air outlet of the unit heater,running the length of the greenhouse and sealed atthe other end. Warm air is distributed in the green-house through rows of 2- to 3-inch diameter holes


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on each side of the tube. Horizontal airflow relieson a number of horizontally mounted fans 2 to 3feet above the plants that circulate heat throughoutthe house. This system as well as convection tubesmay also be used at times when heating is notrequired, especially at night, to reduce relative hu-midity and discourage diseases.

Central boilers burn fuel in a fire box to heat

water to 180 degrees F or to steam in a heat ex-changer. Exhaust smoke passes through a flue toa chimney that vents exhaust to the outside. Theheated water or steam is delivered to the green-house to exchange heat with the air through pipecoils, unit heaters, or a combination of both.

Climate ControlTraditionally, the operation of heating, ventilat-

ing, and cooling equipment has been controlledby thermostats at plant level located close to thecenter of the greenhouse. This system is still used

effectively in small operations, especially those with detached greenhouses. For accurate control,thermostats should be shaded from direct sunlight,preferably by mounting them in a plastic or woodbox ventilated by a small blower. Thermostats havethe advantages of being simple, inexpensive, andeasy to install, but may be inaccurate and lack co-ordination with environmental control equipment.

Step controllers and dedicated microproces-sors overcome the limitations of thermostats byproviding more complex staging of heating andcooling systems and by coordinating the activitiesof heating, cooling, and ventilating equipment.These units generally cost from $800 to $2,500.Greenhouse environmental control computers addadditional levels of control over greenhouse equip-ment along with weather sensing, environmentaldata logging and plotting, and other functions.

Irrigation EquipmentHand irrigation using a hose, water breaker,

and wand is still one of the most widely usedmethods of watering crops for small greenhouseoperations. However, as the business grows, thecost in labor, the skill required to water effectively,

and the logistics of hand watering large crops be-come prohibitive. Many attempts have been madeto utilize impact sprinkles to water greenhousecrops, often with poor results. System design iscritical to prevent wet and dry spots, excessivefoliar wetting, and large volumes of runoff. Boomirrigation is probably one of the most effective anduniform methods of overhead irrigation. Water isdelivered through fan-pattern emitters mounted ona rigid boom that travels back and forth across the

greenhouse. Booms limit runoff when used correctly,but crops must be reasonably uniform in size, age,and water requirement under a single unit to be ap-plicable. The cost of installing booms is probablyprohibitive for most new greenhouse businesses.

Drip emitter watering is probably the mostcommon type of automatic watering system. Wateris delivered to each pot through a small-diameter,

polyethylene microtube held on the medium sur-face by a lead or plastic weight to keep the tubein the pot. Multiple microtubes on a bench aresupplied with water from a black polyethylene(usually 3 ⁄ 4”) header running down the center ofthe bench and connected to a water main. Eachbench may be turned on or off by a hand valve orelectric water solenoid valve installed where theheader connects to the water main. Many benchesor whole greenhouses can be divided into wateringzones, the size of which depends on the capacityof the water supply. Watering can be controlled bydevices as simple as on/off switches or as complex

as an environmental control computer. Drip emit-ters deliver water directly to the medium surfaceat low volume and, therefore, do not wet the foli-age. However, their application is usually limitedto 4- to 10-inch pots and crops must be reasonablyuniform in size, age, and water requirement undera single zone to be applicable.

Subirrigation involves supplying water by flood-ing to the drainage holes in the bottom of the pots.The water is absorbed by capillary action upwardthrough the potting medium. Capillary mats, gutterbenches, flood benches, and flood floors are sys-

tems that vary in complexity and cost. All share theadvantages of being adaptable to a wide range ofcontainer sizes and have the potential for recyclingrunoff water. However, monitoring nutrients, pH,soluble salts, and contaminants in closed systemsrequires good management skills.

Fertilizer Injection A fertilizer injector is a mechanical device that

introduces soluble fertilizer dissolved in water(stock solution) into the water pipeline for deliveryto the plants. A wide variety of injector devices are

available on the market with a range of capacities(gallons per minute) and costs. Inexpensive unitssuch as Hozon or Syfonex connect between a fau-cet and hose and suction fertilizer concentrate froma bucket into the water line using the Venturi prin-ciple. These units have a fixed injection ratio deliv-ering 1 gallon of stock in 16 gallons of water (1:16).These units are only useful for the smallest appli-cations because the injection ratio can vary withchanges in water pressure and large volumes offertilizer concentrate are required. Positive displace-


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Business records. Keep record of cash flow,inventory, income statements, and balance sheets.

Any general accounting records can be kept on acomputer and will be available to assist in planningfor growth of the business.

Employee records. A record of hiring dates,hours worked, rewards, and reprimands needs tobe kept. Tracking hours worked by employees can

help in planning for seasonal needs and in seeing where the greatest labor needs are.

Crop scheduling. It is useful to record fertil-izer applications on crops, planting dates, finishingdates, and other cultural practices for planning fu-ture production and as a cultural reference. Legally,

you must keep a record of pesticide spray dates,rates, and chemicals used.

Customer records. Keep a record of names,addresses, and telephone numbers to contact pastcustomers directly. Their payment record can alsobe useful.

Financial Resources:Funding the Dream

One of the most important considerations for your business is how it will be funded. The follow-ing list consists of some of the costs encountered

when starting a greenhouse business: property cost,taxes, material costs, contractor fees, labor or em-ployee costs, utilities and hookup fees, grading andsurveyor fees, permits and licenses, consultant fees,lawyer and accountant fees, loan interest, inventoryand supplies cost, your salary, employee benefit

fees, insurance fees, and engineer and architectfees. Table 1 lists many of the facilities and costsfor a small, wholesale greenhouse operation. Alsoinclude a cash reserve fund in the budget. The re-serve should contain enough money to operate thebusiness for, at the very least, 6 months, until youshow a profit. An emergency fund of 15 percent ofthe budget should be part of the budget to be usedfor unexpected expenses.

Now that you have figured out how muchmoney you need, where are you going to get it? Thefirst place to go is your savings. Most banks won’tlend money if you don’t have some of your own

invested. Consider relatives or friends after checking your own bank balance. You may get the capital tostart from someone who shares your vision.

The next place to consider would be the SmallBusiness Administration (SBA). While the applica-tion process may be lengthy, the interest rates maybe less than banks. Also, it may be easier to qualifyfor an SBA loan than to qualify for a bank loan.

SBA often offers two types of loans:1. Guaranteed loan—through the bank, guaran-

teed by the SBA up to $500,000.

2. Direct loan—directly from the SBA, limited to$150,000 with fixed interest rate.

Your bank would be another place to seekfunds. The best time to get acquainted with yourbanker is before you need to borrow money. Yourbanker will request a business plan that includes

your ideas and plans for growth of the business.

Writing Your Business PlanNow that you have considered many factors

in starting a greenhouse business, you are readyto put together a business plan. The business planincludes (1) a mission statement, (2) objectives, (3)organizational plan, (4) personnel plan, (5) plantproduction plan, and (6) financial plan.

The mission statement is simply your reason forbeing in business. While you may consider yourselfin business to produce plants, think of the business

Table 1. Capital Greenhouse Facility Costs

Five 24’ x 96’ greenhouses (Total 11,520 sq.ft.) $37,440 (Foundation and structure at $3.25 per sq.ft.)Double layer, 6 mil plastic $6,125 (At $.35 per sq.ft.)Environmental control systems $42,048 (Heating, cooling, ventilating, and utilities hook-up at $3.65 per sq.ft.)Fuel tank $550Stationary benches over 75% of production area $5,184 (At $.45 per sq.ft.)Land, including site preparation $15,000 (3 acres at $5,000 per acre)Office and work building, 2,000 sq.ft. $32,000 (At $16 per sq.ft.) Office supplies $2,700 Lunchroom $800 Pesticide storage $700Outside materials storage and work area $3,375 (30’ x 45’ at $2.50 per sq.ft.)Parking and drive $6,000Step-van truck with racks $24,500Electric back-up generator $1,175Emergency heaters $650Carts $1,800Fertilizer equipment $2,500Pesticide sprayer $2,400Flat and pot handling equipment $14,500Misc. tools and equipment $3,500

Total investment $202,947


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more in terms of your customers. Someone in thecustom tailoring business might have a mission state-ment that reads: “We help you look your best.” Someexamples of mission statements for a greenhousebusiness are the following:

“To help you create the garden you have inmind.”

“To make my community a more beautiful

place to work and play.”“To create an atmosphere of beauty and com-

fort in my hometown.”

The mission statement should be brief, onlyone sentence and should show your employeesand your customers what the overall objective isfor your business.

The next step in the business plan is to writeobjectives and goals. The goals are where you wantthe business to be at a certain future date. Makegoals for the short term (less than 1 year), for theintermediate term (1 to 5 years), and for the long

term (6 to 10 years). Goals need to be specific andmeasurable. If you cannot tell if you have met yourgoals, it is just a wish. For example, a short-termgoal might be to have $10,000 in sales the first yearin operation. The goal is constructed for the shortterm (first year of operation) and is specific enoughto be measured ($10,000 in sales). Goals shouldrelate to the four planning areas: organization, per-sonnel, plant production, and finances.

The organizational plan is the next componentof a business plan. Identify the way in which thebusiness will be organized and how you plan tomake additions. It may be as simple as one person:

you are the owner, sole proprietor, manager, andno one else works for you yet. It can be as com-plex as who reports to whom in a business thatemploys 100 individuals. Outline the chain of com-mand from who will answer the telephone if othersin the chain are busy, to who will check the green-house during cold nights.

The personnel plan is another facet of the busi-ness plan. This includes how many people youplan to hire and what types of skills you will needto make the business operate smoothly. Considerhow many people will be needed during busy

times and how much you can afford to pay them.Short-term, intermediate-term, and long-term per-sonnel objectives should be put to work in this partof the plan.

The plant production plan may be the easi-est component of the business plan to create.Production schedules should appear in this partof the business plan. For example, determinehow many crops of bedding plants to grow in thespring, what types of seeds and supplies to order

and when, and when the crops will be scheduledto finish. You may want to track crops by the weekand determine how many weeks the crop will bein a specific area.

The financial plan is the most difficult for manypeople wanting to start a greenhouse business. Thefinancial plan consists of a pro forma income state-ment (Table 2), a pro forma balance sheet (Table

3), and a cash flow budget. Pro forma means thatit is created before any income is made or any as-sets are purchased. Your accountant can help youmake these documents. Make a financial plan forat least the first year of operation, and it would bebeneficial to make a plan for the first 5 years ofoperation. The income statement shows how muchmoney you expect to earn in business, the costsof producing plants, and the costs of operating thebusiness. The balance sheet shows the assets andliabilities of the business and the amount of equity

you, as the owner, have invested in the business.The cash flow budget shows how much cash you

will need each month to pay your bills. The busi-ness plan is a great way for you to see the businesson paper before you invest much money. Yourbanker will require it and many other types of in-

vestors may want to see one as well.

Table 2. Income Statement (Pro Forma) January l, 20xxthrough December 31, 20xx

Gross Sales $75,000 Returns and Losses ($2,000)Net Sales $72,500

Cost of Goods Sold ($41,250) (Plants, containers, etc.) Fixed Expenses Salary and Wages $11,250 Utilities $7,500 Advertising and promotion $2,250 Other operating expenses $ 7,000 Subtotal fixed expenses ($28,000)Gross Profit Before Taxes $3,250 Taxes ($1,875)Net Profit After Taxes $1,375


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J.R. Kessler Jr., Extension Horticulturist, Associate Professor, Horticulture, Auburn University

For more information, call your county Extension office. Look in your tele-phone directory under your county’s name to find the number.

Issued in furtherance of Cooperative Extension work in agriculture and home economics, Acts of May 8 and June 30, 1914, and other related acts, in cooperation with the U.S. Department of Agriculture. The AlabamaCooperative Extension System (Alabama A&M University and Auburn University) offers educational programs,materials, and equal opportunity employment to all people without regard to race, color, national origin, reli-gion, sex, age, veteran status, or disability. Web Only, Reviewed June 2006, ANR-691

© 2006 by the Alabama Cooperative Extension System. All rights reserved.

ANR-691

Table 3. Balance Sheet (Pro Forma) Year Ending December 31, 20xx

Current Assets Current Liabilities Cash $3,000 Notes Payable $10,000 Accounts Receivable $5,000 Accounts Payable $3,000 Inventory $8,000 Taxes Payable $2,500Total Current Assets $ 16,000 Total Current Liabilities $15,500Fixed Assets Long-Term Liabilities Equipment $20,000 Bank Loan $15,000 Vehicles $15,000 Total Long Term Liabilities $15,000 Office Equipment $7,500 Total Liabilities $30,500Total Fixed Assets $ 42,500 Owner’s Equity $28,000Total Assets $58,500

Resource Materials While this publication provides a lot of food for

thought, you should read other materials. For morespecific information, the following publicationsmay be helpful in starting a greenhouse business:

Greenhouse Construction

R.A. Aldrich and J.W. Bartol, Jr. 1994.Greenhouse engineering.

Northeast regional agricultural engineering service. Ithaca, NY. NRAES-33.

Greenhouse Production and Management

James W. Boodley. 1998. The commercialgreenhouse. 2nd ed. Delmar Publishing, Albany,NY. ISBN: 0-8273-7311-2.

John M. Dole and Harold F. Wilkins. 1999.Floriculture: Principles and species. Prentice-Hall,Inc., Englewood Cliffs, NJ. ISBN: 0-13-374703-4.

Paul V. Nelson. 1998. Greenhouse opera-tions and management. 5th ed. Prentice-Hall Inc.,Englewood Cliffs, NJ. ISBN: 0-13-374687-9.

Vic Ball. 1998. Ball RedBook. 16th ed. BallPublishing, Batavia, Illinois 60510. ISBN: 1-883052-15-7.

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