Secrets Of Succession

Secrets Of  Succession

Succession planning is one of those things growers would rather not think about. Between production and marketing and getting plants to retail on schedule, it’s one subject that is happily pushed to the back burner. But like all important matters, planning for your growing operation’s future is something that shouldn’t be ignored, unless you are someone who thrives on risk.

“Although it is hard to think about your mortality, it is a very necessary process to ensure the longevity of your life’s work,” says Anna Barnitz, chief financial officer of Bob’s Market & Greenhouses in Mason, W.V. “Don’t delay the implementation of discussion, planning and drafting of the necessary paperwork.”

The first generation owners of Bob’s Market & Greenhouses, Robert (Bob Sr.) and Corena Barnitz, who founded the business in 1970, had just begun succession planning in 1995 when Bob Sr. suffered a serious heart attack.

“Thankfully, he pulled through and is still working today,” says Anna. “If things had gone differently, the business may have been lost due to the burden of estate taxes.” 

Family Business Planning

Bob Sr. and Corena’s five sons currently are equal stakeholders of the company with their father. While the second generation runs the day-to-day operations and management of the company, Bob Sr. still comes in daily to stay abreast of the operations and makes input on major company decisions, Anna says. The second generation began running the business as it grew. In 1988, the gross revenue of Bob’s Market was under $1 million and 2007 revenue will near the $13 million mark.

While each of the sons initially did his own thing, all eventually came back to the business and found his own niche. The eldest, Bobby, heads up the plug production division, which accounts for 50 percent of gross revenue. He also is very active in the industry, currently serving as president of OFA. Rick, the second son, is head grower overseeing 17 acres of greenhouses. The third son, Scott, who holds a degree in electrical engineering, heads up the five retail stores, the rooted liner division and oversees new product lines. Jeff, the fourth son, who had been a trucker for a national freight company, naturally assumed management of trucking and truck maintenance, as well as construction of new greenhouses and maintenance. The youngest, John, is on the shipping side, overseeing order pulling and finished production.

The transition of ownership began in the mid-1990s, when Bob Sr. began gifting stock to each son in small increments every year, says Anna.

“Over a period of years, the mix of stock ownership desired was eventually achieved,” she says. “While the transition of the running of the business has seemed to fall into place naturally, the paperwork side of transition does not happen without planning. In an industry that seems to go at a pace of 110 percent much of the year, it has been challenging to place the importance on carving out time to sit down and discuss the business side of transition.”

Although Anna says the transition has gone well, hard decisions have had to be made. “For instance, does a son continue to own stock should he not have an active role in the business? Our decision was that it was best for our company to develop a ‘Buy/Sell Agreement’ between the shareholders in the event that one sibling should desire to leave.”

She adds that because each company will have unique situations specific to their particular businesses, using a qualified estate planning professional is highly recommended to work through any situations that may arise. 

The Sooner, The Better

As CFO of the company, Anna says conveying the importance of the succession process to the stakeholders was the greatest challenge, due to the time demands of a rapidly growing business. And it’s an ongoing process. While the transition of ownership and management from the first to the second generation is nearly complete, the company now needs to plan for succession to the third generation as it enters the business.

“After completing the major steps of transition from the first to the second generations, discussion and succession planning should have continued for the second to third generations,” she says. “With two sons and three third generation in-laws in the business full time, we are once again at the point for discussion, planning and implementation. And again, many hard questions must be asked of ourselves and answered.”

Anna says the process has offered many lessons, the largest of which is that a succession plan cannot be static. “As situations change, the plan should be reviewed periodically and updated,” she says. “What once seemed to fit the plan may in time be too constraining or lenient as time and situations progress. Again, the use of qualified professionals should not be overlooked. They can help minimize the tax consequences of the succession plan.”

To other greenhouse owners who are hesitant to shift their succession plans to that front burner, Anna says it’s never too soon to make plans for your operation’s future. “Get started!” she advises. “Secondly, put it in writing. Should tragedy strike, emotions and grief may easily distort well-meant verbal agreements.”

Leave a Reply

More From Finance/Operations...
Gotham Greens Atrium Style Greenhouse Chicago

May 23, 2016

What’s Good For The Environment Is Good For Business [Opinion]

Investing in technology to become more sustainable “always goes hand in hand,” says Abe VanWingerden, co-CEO of Metrolina Greenhouses. “If it is good for the environment, it normally is good for business over the long term.” That connection was abundantly clear in the responses we received to this year’s Top 100 Growers Survey. VanWingerden points to three investments Metrolina has made as good examples of how technology can reduce an operation’s carbon footprint and pay dividends financially. Its biomass system burns locally sourced waste wood — a renewable resource; its ozone water treatment system cleans irrigation water, reducing the need for fertilizers and pesticides, and improving plant quality and precision growing; and electrostatic sprayers reduce water and chemical use, and provide more targeted chemical applications. Other Top 100 Growers have found VanWingerden’s theory to be true, as well. Costa Farms’ investment in solar energy panels on three buildings at its […]

Read More
Petunia 'Supertunia Violet Star Charm' (2015 University of Georgia Field Trials)

May 10, 2016

New Southern-Centric Ornamental Production Conference To Be Held June 12-15 in Georgia

The 2016 Academy of Crop Production is dedicated exclusively to sharing information on advanced ornamental crop production and business management techniques for ornamental producers.

Read More
University of Florida Online Greenhouse Training Courses

April 25, 2016

University of Florida Offering Online Training Courses For Greenhouse Growers

There will be five courses offered, with the first starting on May 30. Courses are available in both English and Spanish and range from beginner level to advanced education.

Read More
Latest Stories
Gotham Greens Atrium Style Greenhouse Chicago

May 23, 2016

What’s Good For The Environment Is Good For Business [O…

Investing in technology to become more sustainable “always goes hand in hand,” says Abe VanWingerden, co-CEO of Metrolina Greenhouses. “If it is good for the environment, it normally is good for business over the long term.” That connection was abundantly clear in the responses we received to this year’s Top 100 Growers Survey. VanWingerden points to three investments Metrolina has made as good examples of how technology can reduce an operation’s carbon footprint and pay dividends financially. Its biomass system burns locally sourced waste wood — a renewable resource; its ozone water treatment system cleans irrigation water, reducing the need for fertilizers and pesticides, and improving plant quality and precision growing; and electrostatic sprayers reduce water and chemical use, and provide more targeted chemical applications. Other Top 100 Growers have found VanWingerden’s theory to be true, as well. Costa Farms’ investment in solar energy panels on three buildings at its […]

Read More
Petunia 'Supertunia Violet Star Charm' (2015 University of Georgia Field Trials)

May 10, 2016

New Southern-Centric Ornamental Production Conference T…

The 2016 Academy of Crop Production is dedicated exclusively to sharing information on advanced ornamental crop production and business management techniques for ornamental producers.

Read More
University of Florida Online Greenhouse Training Courses

April 25, 2016

University of Florida Offering Online Training Courses …

There will be five courses offered, with the first starting on May 30. Courses are available in both English and Spanish and range from beginner level to advanced education.

Read More
Sanitation programs are essential to preventing and removing food safety concerns.

April 7, 2016

USDA Launches GroupGAP Program For Fruit And Vegetable …

The new certification program is designed to help small and mid-size growers, including greenhouse vegetable producers, comply with new food safety regulations.

Read More
Young Plants Farm North Carolina

March 15, 2016

Young’s Plant Farm Obtains MPS-A Qualification

MPS, an organization that develops and manages certification for companies in the horticulture industry, has awarded MPS-A certification to Young’s Plant Farm in North Carolina and Alabama.

Read More
Charlie Hall Feature Image

March 14, 2016

Dr. Charlie Hall Will Offer Keynote Address At Farwest …

The Texas A&M economist will discuss factors affecting short- and long-term demand driving the future of the green industry.

Read More
Seed Your Future Logo

March 8, 2016

Longwood Gardens And American Society For Horticultural…

Under the direction of co-chairs Paul B. Redman of Longwood Gardens and Anna Ball of Ball Horticultural Company, the “Seed Your Future” initiative is designed to combat declining awareness of horticulture while promoting it as a viable career choice.

Read More
Florida Green Industry

March 4, 2016

University Of Florida Study Shows Green Industry Genera…

According to the study, the rise of large retail chain stores with garden departments has made plants and other horticultural products more readily available to consumers than ever before.

Read More
Great Lakes Growers Expansion

February 22, 2016

Great Lakes Growers Expands Its Production Capacity For…

The Burton, OH-based grower has added 25,000 square feet to its operation, helping it to keep up with rising consumer demand.

Read More
National Garden Bureau Logo feature image

February 16, 2016

New Officers And Directors At National Garden Bureau an…

During the ASTA Flower & Vegetable Seed Conference, National Garden Bureau and All-America Selections elected new officers and directors.

Read More
Katherine Wolper

January 24, 2016

Ludvig Svensson Hires Katherine Wolper As West Coast Sa…

Wolper says she looks forward to listening to growers and understanding the concerns, obstacles, and opportunities they face.

Read More

January 20, 2016

Tips For Overcoming Challenges In Family Business From …

Our industry is run by a collection of family businesses, and every one, no matter how big or small, has its share of management issues. But there are several differences between one that is run successfully as a business and one that allows family politics to distract from the organization’s goals. In this year’s State Of The Industry Survey, we noted that labor recruitment and succession are two areas where growers struggle. In talking with the owners of Costa Farms for this month’s cover story, I thought some of the values they have incorporated into the operation’s management structure really stood out as practices that other family businesses could use. The participatory management approach to business and team building is one that Tony Costa, the second-generation owner of Costa Farms, instilled in his children, Maria Costa-Smith and Jose Costa, and son-in-law, Joche Smith, the current owners of Costa Farms. In […]

Read More
I-9 Form

January 13, 2016

Proposed Changes To I-9 Form Important For Greenhouse G…

AmericanHort’s Government Relations and Grassroots Representative Davi Bowen says growers need to become familiar with the new form and should be prepared to make comments if necessary.

Read More

January 13, 2016

Wenke Greenhouses Buys Zylstra Greenhouses

Two Kalamazoo, MI-based greenhouses have merged after Wenke Greenhouses closed on Zylstra Greenhouses at the end of November. The additional property and facilities will allow Wenke Greenhouses to expand its young plant business, among other areas.

Read More

January 13, 2016

Costa Farms Wins With Its Emphasis On Team, Solutions, …

Based in Miami, FL, Costa Farms has gone global by focusing on strategy, systems, and vertical integration. See how the operation continues to expand through its emphasis on team, solutions, and growth.

Read More

January 11, 2016

New Transportation Funding Bill Is Good News For Floric…

According to AmericanHort, perhaps the biggest benefit of the new bill is what it doesn’t include: a proposed amendment that would have prohibited the use of federal funds for vegetative enhancements.

Read More

December 29, 2015

The Home Depot Says No To Neonics

The Home Depot plans to phase out neonicotinoids by 2018, according to a recent statement on the company’s website. The large home improvement retailer stated that its live goods suppliers have reduced the number of plants that they treat with neonicotinoids, and now more than 80% of all flowering plants sold at The Home Depot are not treated with neonicotinoids. The retailer said it will continue this decrease unless: Treatment is required by state or federal regulation, or Undisputed science proves that the use of neonicotinoids on live goods does not have a lethal or sub-lethal effect on pollinators Aside from these exceptions, the retailer has implemented a complete phase-out of neonicotinoid use on live goods by the end of 2018. Meanwhile, The Home Depot has required all of its live goods suppliers to label plants that have been treated with neonicotinoids. “The Home Depot is deeply engaged in understanding the […]

Read More
Gardeners of all ages enjoyed the annual plant sale at McCorkle Nurseries

December 22, 2015

Allan Armitage Explains Why People Will Always Want To …

We may believe that an appreciation for gardening and plants is rapidly draining away, but there is reason to hope.

Read More
[gravityform id="35" title="false" description="false"]