Starting a Greenhouse Business in Minneapolis
Answered by: Conrad Richter
Question from: Linda McNally
Posted on: May 7, 2000

I am overjoyed to have found your site! What a wealth of information!

My husband and I have just purchased a small (40 acre) farm in Minnesota, about one hour north of Minneapolis. We want to set up a greenhouse business for herbs. I have a number of questions for you.

1. After browsing your book list and the question and answer page, I would like to purchase a number of books from you. What would be your top 10 picks? (Our marketing plan involves selling direct to higher end restaurants in the Minneapolis Metro area, to grocery stores, organic co-op grocery stores and the public).

In no particular order, I suggest you get the following books:

a. Growing and Selling Fresh-cut Herbs;

b. Starting a Nursery or Herb Farm;

c. Medicinal Herbs in the Garden, Field & Marketplace;

d. Herbs for Sale;

e. Growing Your Herb Business;

f. Manual for Northern Herb Growers;

g. Encyclopedia of Herbs & Their Uses;

h. Growing and Using Herbs Successfully;

plus the four Richters Commercial Herb Growing Conference transcripts.

These books include cover growing in greenhouses and in the field, running a herb shop, marketing, and more. Another good book to consider is "Potential of Herbs as a Cash Crop" which is focussed on field production of dried bulk herbs. It doesn’t cover value-added products, but for field production basics this book is still one of the best. Richard Alan Miller, the author, is available to answer questions on the Richters website.

2. After evaluating a number of greenhouse suppliers, we located local company that appears to offer a quality greenhouse at reasonable price and is familiar with our local conditions. We can either pay cash for these greenhouses or purchase them on a "lease to own" program. We do have the cash to purchase several large greenhouses but think we will opt for the lease to own program (the difference is actually minimal and due to fed tax laws, we can write off the entire monthly payment because it falls under "leased equipment" rather than depreciate it over longer term). We plan to build just one greenhouse to start with, so that we can get our feet wet.

I would like to find a book, web resources, etc., on proper greenhouse manangement. I do have a degree in agriculture, but the primary focus is on livestock. What would be your top 3 picks?

Ball Publishing in Chicago has a number of excellent texts on greenhouse management.

I would also like to operate a greenhouse that is as environmentally friendly as possible. I have a number of thoughts on this. Organic would be good. Paper pots would be good if those are suitable. I would also like to utilize my own soil as much as possible. We have cows, chickens and horses and would compost this. How do we go about sterilizing this so that we don’t have weed seeds, fungus, etc., introduced into our greenhouse? Are there commercial sterilizers available?

For a commercial operation, paper pots are too labour-intensive and too hard to handle. It may be possible to use paper pots as a attraction to garner publicity about your operation initially, but over the log term you will likely find that they are too costly, except perhaps as a niche product for the environmentally-aware market (which is still not sensitive to the evils of plastic pots, trays, etc.).

Yes, sterilizers are available commercially. There are horticulture industry suppliers in most areas that would be able to sell you an electric sterilizer.

How you handle your soil is not a trivial decision to make. The decision to sterilize your own soil implies you are planning to mix your own. Many smaller greenhouse operators are finding that the labour cost of preparing one’s own greenhouse soil is too high compared to commercially available mixes.

Again, with an eye to marketing, mixing one’s own organic soil mixes can be a plus, but there are risks of costs and quality.

3. I would like to tailor plantings to that I can offer fresh, local organic products to local markets in the winter time. Obviously, this involves heating, which is expensive and cuts into profits. However, the home on this property has two furnaces, one of which is a federally licensed alternative fuel furnace that utilizes used motor oil for its fuel. I was at first leery of this furnace, but after doing research on it and contacting several people across the country who own these furnaces, I am quite comfortable with them. Major benefit is that the fuel is free and some places will actually pay us to remove it, so this will greatly affect our profit margin. These units are quite expensive, so we feel fortunate to have one on hand. We would remove this furnace from the home and utilize it for the greenhouse. Since this furnace is safe for heating homes, do you think it would also be safe for greenhouses or are there special considerations for the plants? (Dumb question, maybe, but -- hey -- I’m a newbie.)

I am not familiar with these furnaces. In principle, any furnace that is safe for humans would be safe for plants too. A key will be how you distribute the heat through the greenhouses. What type of heat transport system you use will dictate your options. For example, many growers swear by hot water or steam because the heat distributes more evenly and closer to the plant zone of the greenhouse. But the installation and maintenance costs of such systems are much higher than forced air systems.

For a forced air system, I would say that your heater might work, but make sure that you have adequate fans to blow the heated air. Also, make sure that the heat exchanger and the burners can operate in a humid environment. Of course, the heat output must match the heating needs for the greenhouse structure you contemplate.

My question regarding greenhouse heating is this: is there a formula for determining the heating requirements of the greenhouse that factors in the temperature rise so that I could determine (on average) how much fuel I would need to have for X cubic feet greenhouse space? I need to compute heating costs/needs into my business plan.

Yes, there are formulae in the greenhouse management texts that are available from Ball to help you work out the expected heat unit needs.

Also, are there herbs that grow better in cooler temperatures so that the temperature rise could be minimized for winter production?

Yes, some herbs can tolerate cooler temperatures than others. The book, "Growing and Selling Fresh-cut Herbs" has the best information about this.

What sorts of herbs are more suitable for the higher temperatures in a greenhouse in the summer?

Most of the common culinary herbs will grow in greenhouses year round. A few such as chives and tarragon need a winter freezing for revitalization, but even they can be grown through the summer with proper attention. The key is to provide adequate cooling with ventilation and shading.

Do you know of any studies on the feasibility of utilizing the composting process to at least partially offset the cost of heating greenhouses?

I am sure that such studies have been done, but I have no idea where to find them. I know that there have been studies on tapping methane gas from land fill sites to heat greenhouses. One was done for a proposed greenhouse complex in Toronto many years ago, and no doubt it was based on other similar projects. I have no information on how you can tap into such studies.

Years ago, in Europe, growers used fresh compost in cold frames as a source of heat. I think the idea was to keep the frames from dropping below freezing -- it was not so much an attempt to supply the heat needed to promote growth.

4. We are not sure what herbs are most suitable for greenhouse growing and which ones are in highest demand. We are particularly interested in herbs that could be sold as fresh produce OR dried for private label. Do you have any suggestions?

The book, "Growing and Selling Fresh-cut Herbs" covers this in great detail.

5. We want to be able to dry our produce as well. Can a person build a dehydrator or are there commercial ones available? Any suggestions?

There are many types of dryers and drying systems, for just about every scale of operation from cheap home-quality table dehydrators to huge automated systems the size of a large building. Which is right for you will depend on a lot of factors.

Yes, you can build your own. With a thermostat, fan, heating lamps, and screens you can easily build a system that can process several kilograms a day of dried material. From there you can build even bigger systems using much the same simple components.

Commercial systems come in a variety sizes and designs. Marlin Huffman discusses commercial drying systems in the transcripts for the Richters Third Commercial Herb Growing Conference. At the fifth conference (November 2000), one of the speakers will discuss a unique design using a greenhouse to dry field grown medicinal herbs.

6. We are in the process of developing a 5 year plan for this new adventure. This first year is basically for educational purposes, getting our feet wet, etc. Down the road, I envision a retail shop on the premises where people could purchase herbal candles and soaps, as well as wreaths. I also would like to tap into the growing home market by offering back-yard greenhouse kits that would come complete with a variety of culinary and medicinal herbs, would like to offer "kitchen herb gardens" and "patio herb gardens" that could be marketed to those individuals wishing to have a few herbs for container gardening as this could tap into the growing number of individuals living in townhouses or apartments who do not have adequate space for larger gardens.

7. Do you have any suggestions for suppliers of flats and such?

As mentioned previously, there are horticulture industry suppliers in every region that can supply what you need.

Another aspect of our long term plan involves offering tours on self-reliant living, complete with a petting zoo for the kiddies, hay rides, workshops, etc. I "stole" this idea from a very successful apple orchard in our area that offers everything from pick your own apples to fresh baked pies. They offer hay rides, build mazes out of hay bales for kids to play on, etc. They also offer books as such.

This sort of "whole farm" marketing is proving to be very effective. We encourage it for herb farms. There are unlimited opportunities here, especially for "branding" your farm in the eyes of your market.

I was involved in the pet and pet supply industry for over 15 years and owned my own business for 6 years. It is terribly difficult for independent shops such as the one I owned to make a go of it. In the past 4 years, 70% of the independents in our area went out of business due to lack of profits. We were able to maintain a profitable business by offering quality products, quality service and by being diversified. I understand that it will be critical to apply the same principles to our new adventure as well. We want our farm to pay for itself and to be able to support our family eventually so that my husband can quit his "outside" job down the road. In light of this, we will also be doing some horse boarding and some dog boarding. We are also considering putting some land into producing shrubs and trees for landscaping companies to purchase or perhaps doing some landscaping ourselves once my husband is able to quit his full time job.

We always say, "Don’t quit your day job," if you are starting out new. It will take a while before you have product to sell, and in the meantime you will have many bills to pay. Diversification is generally a good idea too, although at some point you have to narrow your focus to stay efficient.

The herb industry is susceptible to the same types of market consolidation that you experienced in the pet business. Wherever possible try to stake out a "brand" identity in your area that can help you get through the inevitible price pressures. And don’t fall victim to the price cutting mindset because you will find that you have to work much harder just to make the same money, albeit at higher sales volumes.

I know this all sounds ambitious, but do you think -- with careful planning, attention to detail, aggressive marketing and lots of hard work -- that it is feasible?

Of course it is feasible. Many people are doing exactly what you are doing.

We are fortunate in that we are, except for our mortgage which is small, debt-free, and due to the sale of our business and current home we will have working capital. So, our income requirements are quite reasonable, which will enable us to put any profits back into "the farm."

We also chose to purchase a parcel that is fairly close to several larger markets. (Minneapolis/St. Paul, St. Cloud) There is a growing interest in these areas for organically grown products, a growing interest in home grown herbs (which we would be happy to supply) and a large number of high-end restaurants within an hours driving distance.

The land that we purchased was used for cattle, but not for over 10 years. No chemicals on the fields, etc. It has approximately 10 acres of woods, which we will set up for trails for riding horses and hay rides and the balance is pasture and meadow. There are several sites that appear quite suitable for our greenhouses, but what sorts of things should we consider in the selection of the specific spot?

The greenhouse management books will help you to select your site. There are many considerations to make, including sun and wind exposure, accessibility by equipment, etc.

We would also like to put a couple acres into a small orchard.

We are calling our new adventure "Stepping Stone Ranch." We can envision a place where suburbanites and city dwellers could learn more about home gardening, herbs, backyard greenhouses, small acreage self-reliant living, etc. Any suggestions, recommended reading or links would be welcome.

I found your question and answer section most helpful. Thank you so much for the wonderful site! So much to ponder! So much work to do! So much to learn! This is going to be hard work, but we are used to that...and we are excited about the many possibilities and challenges.

Thank you for taking the time for this long email. I understand you are an incredibly busy person and that I asked a lot of questions and appreciate any help you can offer.

We are glad that you found our website helpful. We have been helping thousands of businesses with seeds, plants and information. We want to be your trusted supplier for many years to come.

One of the best things you can do for yourselves is to attend herb conferences where you can learn from other people who are doing the same things you want to do. The Richters Commercial Herb Growing Conference is intended to help people like you.

Once I receive you suggested reading list I will order them right away.

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