How to Build a Self-Sufficient Team for Your Greenhouse Business

A self-sufficient greenhouse and gardener team | PivotPoint Business Solutions

The owner we were working with suddenly says, “Guys, unfortunately, I have to cut our meeting short.”

“Is everything okay?” we reply.

“I just got a notification that there is a problem in our shipping department,” he says.

Knowing the owner and the fact that he already has a highly-paid Shipping Manager, we ask, “Isn’t that Keith’s job?”

The owner says, “Yes, but he needs my direction, plus we have a shift change coming up.”

Welcome to the Owner’s Trap! Owner centricity is one of the biggest value “killers” in the eyes of potential successors or buyers who want to ensure the business can operate independently of the owner.

According to the first-ever “2024 State of Succession and Exit Planning in the Horticulture Industry” survey by PivotPoint Business Solutions, many businesses are still too owner-dependent. An alarming 43% of owners surveyed had never taken a vacation longer than two weeks, and 64% hadn’t in the past two years. Being able to step away from the business without disrupting operations is a strong indicator that a solid management team is in place.

Building and maintaining a capable internal management team is crucial to the long-term success and value of a business. Consistent communication with key personnel — whether they are family, employees, or potential successors — aligns everyone with the company’s goals and future plans. Yet, 58% of owners said they want to spend more time developing a self-sufficient team, while only 8% of their daily time is dedicated to human resources or people development.

The Strategic Role of HR in Business Growth and Succession

Last month, we discussed the significance of having trusted advisors to guide you and your team toward a successful exit. This month, our focus shifts to the importance of establishing a skilled management team and a knowledgeable workforce for effective transitional planning. Achieving this requires either a dedicated HR function (if your business has more than 50 employees) or an external HR partner or advisor — a role that many owners often overlook. A dedicated HR resource is essential not only for managing transactional tasks such as employee documentation (I-9 and H-2A), benefits, and record-keeping but also for providing strategic insights for business growth and staying compliant with an ever-increasing array of labor regulations. Potential buyers will closely evaluate the strength of your human capital, particularly given the labor challenges facing the industry. Failing to recognize the value of HR can lead to a diminished sale price for your business.

Moreover, the horticultural industry, like many others, is facing generational shifts as Baby Boomers retire and younger workers, with different values and expectations, enter the workforce. Compensation, benefits, work-life balance, social equity and diversity, and opportunities for development are key considerations for attracting top talent. Businesses need a dedicated HR professional to stay competitive in hiring and to navigate the complexities of modern labor regulations.

Owners should be mindful of the cost of hiring top talent, but investing in quality people is essential for maximizing business value. Reducing EBITDA to fund compensation overhead at the market rate it takes to hire top talent is acceptable. If key roles are missing or underdeveloped, a buyer will lower their valuation, knowing they will need to hire or improve those areas after acquisition.

Why Sharing Your Exit Plan Strengthens Your Team and Business

Your team is likely thinking about your exit plan — even if you haven’t shared it. A lack of transparency can create uncertainty and drive talented employees to seek stability elsewhere. According to the survey, only 34% of owners with an exit plan have shared it with their team, and 30% have only partially communicated their plans.

Your key management team will play a crucial role in any transition, whether passing the business to a family member or selling to a new owner. Training and mentoring them to become your successors will reduce dependence on you and ensure smooth operations even in your absence.

It’s important to have an exit strategy, but when and how you communicate it is just as vital. Only 47% of owners have a plan for informing their employees about their eventual exit. To maintain engagement and loyalty during this process, consider retention bonuses or phantom stock programs as incentives for key employees. When employees see a plan for the future and know they will benefit, they are more likely to stay engaged and support the transition.

If an owner’s knowledge isn’t shared across the team, the value of the business will suffer. By delegating day-to-day tasks to your key team members, like managing shipping issues or shift changes, you empower them to take ownership of their roles, making the business less dependent on you. A successor or buyer will value a team that can run the business independently, and having an HR professional or advisor can help retain top talent while navigating labor regulations.

Transparency with your team fosters confidence and commitment, and investing in people will ultimately increase the value and attractiveness of your business to potential buyers.