How do I show a buyer which greenhouse crops make the most margin without guessing?
Track sales, direct costs and a fair share of shared costs for each crop, then present them side by side. Use the actual records for each crop cycle, explain how you split energy and labour, and show where the split is an estimate and where it is measured.
Buyers distrust margin claims that rest on feel. Start by listing each crop and the revenue from each cycle, taken from invoices and not memory. Then add the direct costs: seed or plugs, growing media, nutrients, packaging and the labour that clearly belongs to that crop. The result is a gross figure per crop that anyone can check.
Shared costs are the hard part. Heating, lighting, water and general labour serve everything under the roof. Choose a fair method to divide them, such as by area or by weeks occupied, write it down and apply it the same way to every crop. Say openly that this step is an estimate and show the effect of a different split.
Be ready for the awkward cases: a crop that sells well but ties up space, or one that has a thin margin but anchors a key customer. Explain those honestly. Finally, have your accountant review the work so the crop figures reconcile to the financial statements. A buyer who can trace every number tends to trust the rest. Keep the raw records on hand so a buyer who wants to rerun the numbers with their own split can do it.
Key takeaways
- Build margins from invoices and records for each crop cycle.
- Write down how you share energy and labour, and apply it evenly.
- Explain crops that matter for reasons other than margin.
Related reading
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Buying
Due diligence
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentWhat is the operating profit margin?
- 02Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 03Business Development Bank of CanadaGovernmentHow to minimize negotiations when selling your business
- 04Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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