Flowers In Their Care

Business Challenge

The craving for gardening ideas and products has never been stronger. A great garden - full of gorgeous plants and fragrant flowers - makes a home more liveable and worth much more. But have you ever wondered how the plant breeders who develop innovative, new varieties get their products to market and paid their correct royalties?

That's a business niche that Plants Management Australia has made its own over the past 19 years: licensing and marketing new plant varieties. Creating completely new business model has forced PMA's managing director, Chris Sargent, to jump some big hurdles along the way:

• Developing and protecting the integrity of a trusted brand
  
• Keeping third parties honest
  
• Building trust and loyalty among suppliers
  
• Managing the work-life balance
  
• Extending the core business to new areas

Business response

• Refashioning a business model
  
  Chris Sargent compares PMA's role for plant breeders to that of a publisher for an author. The authors are good at writing but lack the skills and resources to edit, print, market, distribute or retail their bestsellers. PMA does all that work for plant breeders. This is a relatively new business in Australia. PMA is the oldest plant management and licensing business in Australia - and it only started in 1992.
  
  Finding a way to protect and market intellectual property has been a boon for more than just PMA. When Chris Sargent took over PMA in 2001 it was dealing with two main contract growers and managing just a handful of plant varieties. Now it deals with 160 contract growers and 60 breeders worldwide. PMA manages more than 150 varieties of plants, which are sold through national distributors such as Bunnings. It earns a percentage on every potted plant sold. Sargent says: "We take plants from concept to consumer."
  
• The benefits of business awards
  
  PMA has won a swag of business awards in the past year including a prestigious Telstra award as Tasmanian Business of the Year (2011), an AMP Innovation Award, and the Australian Business Awards Best New Product award (2011) for PMA's research and development on a new daphne variety called ‘Eternal Fragrance'. It sold 60,000 units in its first year and Sargent says: "We expect to double that next year". The recognition and publicity are wonderful but Sargent says one of the main benefits of contesting an award is going through the process of analysing the business. "The initial application form for the Telstra award is about 40 pages long; once you become a finalist, Telstra provide a comprehensive business health check, which is very beneficial. It really makes you think about history, challenges and successes of the business."
  
• Keeping third parties honest
  
  PMA relies on third-party contractors to propagate, grow and retail the varieties it manages. Sargent says that a key challenge he faced in expanding the business was dealing with third parties who put their interests before PMA's. For example, a third party might contract to grow a plant and then fail to meet production timelines. Sargent discovered that some growers agreed to take on a PMA plant in order to deliberately hold back its production, enabling their competing plants to reach the market first. "We had to be much clearer in our expectations about timing, pay more frequent visits, and be explicit about what would happen if they failed to deliver - we would withdraw our product. That risk has become a powerful motivator now that PMA is so successful."
  
• To sue or not to sue?
  
  As a rights licensor and manager, PMA is responsible for protecting the intellectual property of it clients for the 20 years that they enjoy rights protection. Sargent has had several growers over the years that have retailed PMA varieties under their own name. "We could probably have sued them, but what's the ultimate cost. Suing is no one's friend." Instead PMA responded by naming and shaming the offenders. It published ads in the horticulture media name those that had been illegally retailing PMA varieties. The campaigns have a double sting of making retailers wary of the offenders. "Trust is everything in this business," says Sargent.
  
• Inspiring supplier loyalty
  
  Having a trusted brand and strong product range helps PMA to build and sustain its network of growers, retailers and overseas agents. But nothing talks so sweetly as invoices that are paid on time. Sargent says: "We make a point of paying within 30 days and not extending payments out to 60 or 90 days as many businesses do." Always paying on time says as much about a company's regard for its suppliers as its financial stability.
  
• Work-life balance
  
  Sargent travels about 10-15 days a month from his base in Hobart to growers, retailers and agents around Australia and across the globe. About 40% of PMA's revenue comes from Europe, Japan, North America, South Africa and New Zealand. He credits having "a fantastic wife who supports me" with enabling him to maintain his pace. The family moved to Tasmania (from Melbourne) seeking a better lifestyle for the family ("the technology allows you to work anywhere"). Sargent rarely works on weekends but sees no way around the heavy travel schedule until the business is bigger. "You have to build the business and the do the hard yards first. This business is about relationships and it needs me at present."
  
• Product expansion
  
  PMA specialises in designing and marketing campaigns to promote its plant breeders' products. It employs specialist graphic designers and marketers to run its web site and keep it maintained. Sargent realised an unmet need for design and promotion work among the subcontractor growers. "It's amazing but only about one-third of Australian businesses have a web site and it would be even less among horticultural people; they don't talk computer language. We realised that we have horticultural knowledge and web skills. It has been very successful with about 15 growers signed up to web design and maintenance contracts without us even advertising." Sargent says PMA will further develop this side of the business. He says: "Our business may be very different in some ways but it still relies on factors that are common to all successful companies: discipline, focus, commitment. It's the concepts and ideas that are entrepreneurial."