Start a greenhouse business by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your greenhouse business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a greenhouse business?
Money must be spent on the construction or rental of the greenhouse, as well as inventory, irrigation, fertilizer, fans and hoses, benches and tables, cash registers, insurance, and employee wages.
What are the ongoing expenses for a greenhouse business?
You can purchase property for your greenhouse, or rent an existing building. Such a space will likely cost a significant sum of money. Expect to pay upwards of a couple hundred thousand dollars to purchase the amount of land necessary for an expansive greenhouse. If you rent such a space, it will likely cost several thousand dollars per month, simply because an abundance of space is required to develop and present your inventory.
You will have to purchase all sorts of plants, flowers, produce, seeds, and other items relating to gardening and landscaping. Expect to spend $5,000-$10,000 or more in initial inventory, and at least $500-$1,000 each month in recurring inventory costs. The exact figure hinges on the size of your greenhouse.
Utilities, including water and electric, will likely cost several hundred dollars per month. Budget in at least a couple hundred dollars per month for marketing costs. Employees will require wages of at least $10 per hour, which could certainly be higher in some areas. If you eventually hire marketing and accounting professionals, they will likely command yearly salaries of $35,000-$50,000.
Who is the target market?
The ideal customer is a business owner who requires a diverse array of flowers and plants. Examples include farmers, nursery owners, grocers, florists, etc. Greenhouse business owners also prefer to sell to homeowners who have green thumbs. The aim is to sell a wide array of inventory to each customer in order to maintain a consistent flow of flowers, plants, produce and other vegetables so inventory stays as fresh as possible.
How does a greenhouse business make money?
Greenhouse businesses make money by selling plants, flowers, produce, and other gardening and landscaping items to customers.
How much can you charge customers?
The prices of greenhouse products vary by plant quality, desirability, lifespan, and a number of other factors. Plants, flowers, and produce can be sold for amounts ranging from a couple dollars, to $100 and more. Seeds typically cost between 75 cents and a few dollars per packet. Gardening and landscaping supplies typically run between $5 and $50.
How much profit can a greenhouse business make?
A greenhouse can make a tidy profit in its initial years, especially if located in an area where people have a passion for gardening, greenery, and nature. It is not out of the question for a greenhouse to generate a profit of $50,000-$100,000 per year. If the greenhouse owner expands operations and opens additional locations, profits can reach several hundred thousand dollars or more per year.
How can you make your business more profitable?
A greenhouse owner can sell items related to gardening and landscaping such as hand trowels, sprinklers, gardening gloves, hoes, shovels, shears, loppers, pitchforks, tillers, cultivators, soil, mulch, peat moss, etc. Additional profit can be obtained by selling vegetable and/or flower seeds. Some greenhouse owners make extra money by charging for deliveries.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your greenhouse business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a greenhouse business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Certificate of Occupancy
Businesses operating out of a physical location, like a greenhouse, typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws, and government regulations have been met.
- If you plan to lease a greenhouse:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a greenhouse business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a greenhouse:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your greenhouse business will be in compliance and able to obtain a CO.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a greenhouse business
Advertise your greenhouse business in a number of different mediums, from local papers to radio spots, billboards, local TV commercials, and beyond. It will also help to have an intuitive website that showcases your extensive inventory. Invest in a search engine optimization (SEO) campaign to increase traffic to your website, blog, and social media platforms.
It is critically important that you establish your greenhouse as a legitimate brand that is worthy of customer trust and loyalty. Please your initial customers and they will spread the word about your greenhouse to friends, family, and coworkers. This is the best form of marketing: completely free and highly effective.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
The best way to attract and retain customers is to develop a sterling reputation within the community. If your inventory is top-notch, your prices are competitive and your team is friendly, locals will show up in droves. It is imperative that your plants and flowers stand the test of time. If they perish in the days following purchase, customers will spread the word throughout the community that your products are low-quality and not worth purchasing.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Greenhouse Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
If you have a “green thumb”, this is the ideal business. You should have an in-depth knowledge of flowers, plants, vegetables, seeds, and gardening equipment. Furthermore, you should have a passion for cultivating everything green. The best greenhouse business owners understand the intricacies of growing plants, flowers, produce, and just about everything else that comes out of the ground.
What happens during a typical day at a greenhouse business?
Greenhouse business owners enjoy diverse workdays with a plethora of activities. They do everything from ordering inventory to situating products for display, advertising the business, directing staff, assisting customers, establishing relationships with vendors, assessing profit margins, and beyond.
What are some skills and experiences that will help you build a successful greenhouse business?
A genuine interest in the growing process is critically important to the success of your greenhouse business. You should understand the merits of specific plants, flowers, and produce. You should also be able to answer questions about the growing process, and how to properly care for greenery. It also helps to have marketing savviness. If you can advertise your greenhouse business in a low-cost manner, you will enjoy a steady stream of customers.
What is the growth potential for a greenhouse business?
The growth potential for this business hinges on the number of interested customers in the greenhouse's locale. A greenhouse situated in an upscale suburb will likely grow quickly, as will one in a rural area that can be accessed by a large number of people without a lengthy commute. It is possible to grow a small greenhouse business into an enterprise with numerous locations in less than five years. If your greenhouse business generates a considerable profit, you can regionalize the business and expand across a portion of your state, or even open new locations in other states.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a greenhouse business?
Presentation is essential to success. The placement of your inventory matters a great deal. Customers are swayed by the aesthetics of your plants, so sweat the small stuff when considering how to best present your inventory. It will also help to hire knowledgeable staff who can educate interested parties about the nuances and merits of specific items.
Be sure to reach out to your local zoning authority to find out the specific rules governing greenhouses in the area. Opt for a location that has plenty of parking. It is also prudent to select land that has a reliable water supply, high-quality soil, allows for run-off, provides unfettered access to utilities and sources of shade. Conduct research on the optimal growing conditions, soil types, planting times, run-off requirements and so on. Research the merits of solar greenhouses to boot. Though all greenhouses collect energy from the sun, certain types are better at collecting and storing this energy than others.
It is worth noting that greenhouse owners who sell organic produce must keep their land free of pesticides for a minimum of three consecutive years, so find out how your land was used in the past if you wish to offer organics. It is also necessary to certify your produce. Finally, make sure your greenhouse has sufficient windows to improve ventilation during hot summer months.
How and when to build a team
A greenhouse owner will likely require employees from the start. It is not typically possible for one person to do all of the work. Employees are necessary to work the cash register, water plants, replenish stock, provide customer service, order inventory, market the business, and handle accounting. Though the business owner can initially handle some of these responsibilities, it will be necessary to delegate work as the business grows.
Read our greenhouse business hiring guide to learn about the different roles a greenhouse business typically fills, how much to budget for employee salaries, and how to build your team exactly how you want it.