Behind the Green Door: The journey of building and selling a business

A love of plants is what led Hawke’s Bay husband and wife Gillian Thrum and Phil Carson into business 26 years ago.

Time to read: 6 mins

Gillian had caught the business bug from her mother Alice when they were building a perennial mail order company. They were a cutting-edge pair and boasted being the third-largest such company in the country and the only women in the industry at the time.

As the cottage garden industry slowed, Gillian and Phil bought local garden centre The Green Door when it came on the market. The couple had their work cut out for the next three years, working to turn the business around while also managing the perennial business.

At the three-year mark, they made what they claim to be their wisest business decision – seeking external strategic direction from a retail specialist. The pivotal piece to success is that Gillian and Phil were willing to learn – they knew plants, but not retail.

They applied the retail advisor’s advice every time and to their surprise, it worked. When he recommended that they build an outdoor roofing cover, while they hated the idea, turnover increased 15% immediately.

They invested in infrastructure, something they’re not sure they would have done without external advice, including carparking and a beautiful retail store. Any investment had to relate to a return on their outlay, and they began to focus on margins, percentages and setting up formal Key Performance Indicator reporting and accountability. Then Green Door achieved a turnover they could never have imagined at the start. As Gillian says, “we noticed a gap in our skills and we filled it with the expertise we needed”.

A focus on service to customers was a key vision in their business. They were acutely aware of their “regulars”, which is important in a small town, and Phil became well known for his personal delivery service.

They also diversified, forming the landscaping side of the business and hiring an additional landscape designer (Gillian is renowned for her plant knowledge and landscaping skills). There was also intense debate on coffee versus café – the former won out in recognition that the café risked clogging the carpark. A key learning was to stick to the core business, knowing you can’t do everything.

They engaged specialists when needed and built strong and trusted relationships with their advisory specialists – chartered accountant and business advisor Roz Scott and HR Consultant Andrea Stevenson (both from Baker Tilly Staples Rodway Hawkes’ Bay), along with their lawyer and a social media expert (who made their online videos a huge success by showcasing Gillian in her own garden sharing her knowledge and skills).

What emerged was one of the top independent garden centres in the country, and Gillian and Phil became founding members of the Garden Independent Network (called GIN), which became a strong network of independent garden centres across the country, supporting and critiquing each other in business.

Together these initiatives built the value of The Green Door. It was a conscious decision to start structuring the business for sale a few years before putting it on the market so that it would be ready to sell. Gillian and Phil worked with Roz to ensure financial reporting was accurate and appropriate structures were in place.

The preparation for sale was carefully thought through. For chattels, they compiled an in-depth list and took the view that the buyer would be able to purchase everything they could set their eyes on. Stock was detailed, employees were well trained and capable, and consideration was given to how sick leave would be managed in the sale. They wanted to make it an easy process for the purchaser.

A seven-day a week business is a big commitment especially when weekends are your biggest days. It needed a great team and as the team grew, they implemented weekly meetings, sharing details of business performance with the entire team. It became an inclusive approach where the team were informed and could input ideas.

Prepping for sale

Following two busy summers that saw a huge turnover increase as a result of COVID-19, when people “discovered” their home and gardens again, the pair agreed they’d had enough and were ready to sell. Their first (of many) conversations was with Roz, who explained the process of selling a business and the GST and tax implications. She then linked them with a business broker and, in their words, “the right broker found the right buyer”. They ran a careful interview process of the broker and obtained references before progressing.

They found the sale process quite invasive at first but dealing with a good broker made the process very tidy in the end. They advise that having trust in a broker is essential as a lot of questions get asked of you in the process. They had a strong team guiding them through their sale journey, with Roz, their lawyer and their broker, and this made all the difference.

They talked to employees as soon as they could, a step that is often missed in business sales. While apprehensive at first about doing this, on reflection it was the best thing they did. The team were initially taken aback but it allowed them to get their head around it and allowed the broker to advertise widely. Having great relationships with Roz and their lawyer meant great communication throughout the process. The other rule of thumb they applied to themselves was to ask, “If that was us buying, would we think that’s fair?”.

Some of their key learnings:

  • Plan in advance – recommend three years planning with good performance, strong systems and structure in place
  • Work closely with your accountant in advance
  • Keep your accountant and lawyer involved in the whole process
  • Inform employees as soon as you can – it allows them to time to adjust
  • Be sure you are clear on the complexities relating to GST and tax
  • Understand upfront what is included in the broker’s fee
  • Have accurate stock records and financial information before you sell
  • If your business sale also involves a lease, be mindful this can be time-consuming to finalise and be careful of terminology – utilise your lawyer to get this right
  • Create a business that allows you to holiday. This was an appealing sale point to the buyers as it gave confidence of work/life balance and that the team were capable of working independently. Often less reliance on the business owner can create more value.

Gillian and Phil sold on a high, but for their buyer, there was still room to add value. They are proud to say that the new owners have taken on a profitable business with great people and good structures around it.

If you are considering selling your business, get in touch with one of our nationwide business advisory teams early in the process to help identify a plan and actions required from the outset.

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