Financing the Industry By Bridget White

While visiting a Wisconsin greenhouse last week, I had aninteresting conversation about financial management that started methinking…who’s really financing our industry? Who really owns the buildingswe work in and the plants we produce? What happens to unpaid bills in a slowseason? And how do you determine what everything’s worth to even be able toanswer any of these questions?

The whole subject came up because the grower I was talkingto was owed money on a crop grown for another greenhouse. It was November, andthey were still owed almost $100,000 on a crop delivered in the first quarter.This customer was not under bankruptcy protection; it did not have adisreputable owner; and no one was trying to disavow the debt. The bill wassimply not being paid. When the two owners finally spoke in person, my friendlearned the reason for the late payment: “We haven’t been paid.” Thatoperation had not been paid for their deliveries and, in turn, had not paid foranything delivered to them. I kept thinking why is this anyone’s problem buttheir own? I certainly wouldn’t get many more hours of cell coverage if I toldmy mobile company that I would have to delay my payment until I received somemore working capital.

Financing ourselves

The grower I was visiting described the problem accurately:Our industry finances itself. Many greenhouse operations do not have a line ofcredit with their bank, and most don’t even work with a bank enough to considerit “their bank.” They go into the local branch every few years whentheir business needs a major capital investment for new greenhouses orenvironmental controls or whatever else they need that costs more money than isin the account. And that’s too bad because a good banking relationship is thecornerstone of any successful business. A line of credit allows you to paybills on time and without penalty; it allows you to order supplies during earlyorder for maximum discount; and most importantly, it keeps the business runningsmoothly during rough periods.

I’ve heard the arguments before about how banks don’tunderstand our industry, about how we get lumped in with agriculture as highrisk. And it might be true that some banks are initially skeptical ofhorticultural lending, but remember the purpose of the bank is to make money.If you come to them with a solid business, if you keep them informed of currentoperations, if you can demonstrate to them that you are not high risk, therelationship will develop. And when one green business falls on lean times, theripple will stop being felt throughout the industry.

News Flash

Back in my October column, I wrote about the start of GPN’sweekly e-newsletter, “GPN Weekly.” Well, as I write this, we haveover a month’s worth of issues under our belt and are already getting somegreat input from readers about additional things they’d like included in nextyear’s redesign.

I don’t want to rehash everything that was said about thenewsletter only two months ago, so I won’t go into detail about it’s contents.For those of you who read about the newsletter with best intentions to sign upbut still have not, get online and do it. For those of you who are readingabout the newsletter for the first time, you can go to to signup for our free weekly news alerts. This is a whole new approach to theindustry, and you don’t want to miss it.

Bridget White

Bridget White is editorial director of GPN.