RECOMMENDED: Find the perfect business for you with our Business Ideas Tool.
Growing plants hydroponically eliminates the need for soil, so it can be done anywhere. Many gardeners are getting into this form of gardening to grow plants they otherwise wouldn’t be able to. In order to grow plants hydroponically, gardeners need specialized equipment and supplies. Hydroponics stores sell the specialized equipment and supplies that hydroponic gardeners need.
According to IBISWorld, the hydroponics growing equipment stores industry has an annual revenue of $654 million and has been growing hat a rate of over 8 percent. There aren’t any companies with a dominant market share, leaving plenty of opportunities for new businesses.
Who is this business right for?
Anyone who enjoys growing plants and talking with people may enjoy running a hydroponics store business. Having a passion for gardening makes selling hydroponics equipment more rewarding. Customers often are looking for advice on or have questions about hydroponics, which is why being a good people person is important.
What happens during a typical day at a hydroponics store?
Running a hydroponics store business mainly involves helping customers, selling equipment and supplies, and reordering inventory as necessary. In between customers, business owners or staff spend time straightening inventory, restocking items, cleaning, and tending to any plants a store has growing.
What is the target market?
A hydroponics store business’ ideal customers are avid gardeners who want to grow plants indoors and without soil. Passionate gardeners will likely want to grow many plants and, therefore, need lots of equipment and supplies.
How does a hydroponics store make money?
A hydroponics store business makes money by selling hydroponics equipment, supplies, and nutrients. Equipment sales can be for large sums, while supplies and nutrients can provide recurring sales.
What is the growth potential for a hydroponics store?
A hydroponics store business may be a small, local store, or it can have several locations throughout a region. The Grow Show in Ann Arbor, Michigan and Grass Valley HydroGarden in Grass Valley, California are a couple examples of local hydroponics stores. GreenCoast Hydroponics has several locations on the West Coast.
What are some skills and experiences that will help you build a successful hydroponics store?
In order to successfully sell hydroponics equipment and supplies, it’s necessary to know how to use them. Gaebler notes that most business owners grow into owning a hydroponics store, starting to grow plants hydroponically as a part-time hobby first.
Business owners who want don’t have experience with hydroponics can take courses on the subject. The Institute of Culinary Education, The University of Arizona and other schools offer courses and workshops on various aspects of hydroponics. Alternatively, ACS Distance Education has an online Certificate in Hydroponics.
In addition to taking courses, it’s also wise to have a couple books on hand as references. Hydroponics: The Complete Guide to Hydroponics for Beginners and Hydroponics: Gardening at Home Without a Garden are just two of many titles that cover topics in hydroponics.
What are the costs involved in opening a hydroponics store?
The startup expenses for a hydroponics store business are sizable. Business owners must pay for:
- Storefront; Leasing costs will likely total several thousand dollars per month.
- POS system; This cost can be as low as a per-swipe fee with a mobile phone card reader, to thousands of dollars for a more traditional system. You may be able to finance these costs monthly.
- Inventory; This will likely be one of your biggest costs. You will need to stock your store with enough equipment for customers to start their hydroponic gardens. You may be able to offset these costs by ordering your items via drop-shipping. This way, you only pay for what you need as you need it.
- Store sign; These costs are highly variable.
Alternatively, you may choose to open a franchise. A franchise with weGrow, for example, will cost an initial franchise fee of $40,000 and require $150,000 in liquid capital.
Inventory costs alone can be significant, for businesses need a variety of complex equipment to sell. Customers may be looking for grow tunnels, greenhouses, climate control systems and irrigation equipment.
Those who open an independent store might be able to reduce their capital requirements slightly, but all of the initial expenses still aren’t cheap.
What are the steps to start a hydroponics store?
Once you're ready to start your hydroponics store, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:
- Plan your business. A clear plan is essential for success as an entrepreneur. A few important topics to consider are your initial costs, your target market, and how long it will take you to break even.
- Form a legal entity. Establishing a legal business entity prevents you from being personally liable if your hydroponics store is sued.
- Register for taxes. You will need to register for a variety of state and federal taxes before you can open for business.
- Open a business bank account. A dedicated checking account for your hydroponics store keeps your finances organized and makes your business appear more professional to your customers.
- 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.
- 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.
- 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.
- 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.
- Establish a 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.
Select your state below for an in-depth guide on completing each of these steps in your home state.
Where can I 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.
Recommended: Fizzle.co offers video courses and a supportive online community of like-minded entrepreneurs. Try one month membership for for free.
What are some insider tips for jump starting a hydroponics store?
A new hydroponics store business may not have everything that customers want in stock. Offering to place special orders at no additional cost -- or even at a discount -- could help prevent customers from going to other stores. Even if little profit is made on a special order, developing a reputation as a business that will place such orders will keep customers returning for specialized service. These customers will likely also purchase other supplies and nutrients that are in stock -- ones that do provide a profit.
How to promote & market a hydroponics store
Promotional efforts for a hydroponics store business should focus on making inroads into the local gardening community. This can be done by:
- attending seminars put on by other gardeners
- volunteering at a local community garden
- stopping to talk with people who are outside gardening
The more a business owner interacts with local gardeners, the better they’ll be able to share information about their store. Even if a conversation with one gardener doesn’t lead to a sale, that gardener likely knows someone else who is or might be interested in hydroponics.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
In order to succeed, hydroponics store businesses must find a way to set themselves apart from online stores. Instead of competing on price alone, business owners can add value for their customer by sharing their knowledge (which is why it’s so important to know how to grow plants hydroponically). Business owners can share their knowledge formally, through workshops and classes, or informally by talking with customers who come in.
How and when to build a team
Most hydroponics stores start out with a small staff, sometimes just the business owner. Hiring at least one or two people as early as possible, though, is important for a business’ sustained growth. Without a staff of at least a couple people, business owners can’t take a day off for vacation or illness. They also aren’t able to spend as much time sharing their knowledge through workshops or classes.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a hydroponics 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, check out our informative guide, Sales Tax for Small Businesses.
For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Certificate of Occupancy
A hydroponic store operating out of a physical location 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 hydroponic store location:
- 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 hydroponics store.
- 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 hydroponic store location:
- 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 hydroponic store will be in compliance and able to obtain a CO.
How much can you charge customers?
The cost of hydroponics equipment and supplies varies a lot. A bottle of nutrients might sell for just a couple dollars, while a complete advanced climate control system might be over $1,000. Instructables reports that a basic multi-plant kit might cost $185, while a single pot may sell for $50.
What are the ongoing expenses for a hydroponics store?
A hydroponics store business’ ongoing expenses are sizable but manageable. Rent is one of the main costs, but this can be kept low by choosing an inexpensive location. Most gardeners who need hydroponics equipment are willing to drive to a specialty store, so it’s possible to choose a location that’s in a lower-rent district. Other ongoing costs include utilities, purchasing additional inventory, insurance and employees’ salaries.
How much profit can a hydroponics store make?
A hydroponics store business can bring in six- and seven-figure sums annually. For example Seattle Hydro Spot was bringing in about $1 million annually before it was purchased by a competitor.
Because the ongoing expenses of a store are significant, profits can be much lower than revenue. A business owner who is able to run an efficient operation will still be able to realize solid returns on their investment, though.
How can you make your business more profitable?
A hydroponics store business can increase its revenue by manufacturing and branding its own equipment. This requires in-depth knowledge about hydroponics, but business owners who have this knowledge will be able to reduce their cost of goods -- and, thus, increase their profits.