Start a plant nursery by following these 10 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 guide to starting your plant nursery. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Check out our How to Start a Business page.
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 much can you charge customers?
- 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 plant nursery?
Location will significantly affect your start-up costs as you need a decent amount of land, and an urban site will be priced significantly higher than an existing rural farm. Greenhouses can cost anywhere from $30,000 to $100,000 depending on size, whether or not it will be heated, require electricity and how you have it plumbed. Your retail storefront will require another $50,000 investment minimum and your start-up plants, soil, and supplies will run you another $10,000 to $50,000. It is a labor intensive start-up, and payroll should be part of your initial business plan.
What are the ongoing expenses for a plant nursery?
Payroll, water, chemicals, and inventory are your largest expenses. When scouting locations, you may wish to investigate the use of private wells versus municipal water supplies to lower operating costs.
Who is the target market?
Depending on your locale, you may want to target landscapers who maintain elite properties indoors and outdoors for the wealthy homeowner. Municipalities will purchase large amounts of trees and plants on an annual basis. If you are situated in a suburban setting with high foot traffic, you may cater more to the homeowner who wants to develop their own vegetable plot or flowering landscaping.
How does a plant nursery make money?
While specialty plants such as orchids or rare trees and shrubs may be sold for a much higher price than a flat of tomato plants, a profitable nursery makes its money by selling large quantities of familiar, hardy, easy-to-grow plants. Perennials, common trees such as maple and pine, and landscaping hedges require little attention to grow. This means that they will not take many of your resources to care for, and they are more likely to be purchased by your customers. Having enough product and satisfactory customer service will encourage your clients to return.
How much can you charge customers?
Plants are sold from $1 per pot to several hundred dollars for unique and exotic specimens of trees. Prices can be adjusted upward in wealthier neighborhoods.
How much profit can a plant nursery make?
Your profit will depend on scale and location. Successful nurseries can see an annual cash flow anywhere from $40,000 to $625,000.
How can you make your business more profitable?
Determine which plants are in the greatest demand and focus on providing enough of them to fulfill your customers' needs. Follow that up by introducing species that have a low wholesale purchase price and require the least amount of attention to attain their retail size in order to maximize return on your investment.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Plant Nursery Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your plant nursery is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
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.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
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 plant nursery. 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.
In addition, certain local licensing or regulatory requirements may apply.
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.
Labor safety requirements
It is important to comply with all Occupational Safety and Health Administration requirements.
Certificate of Occupancy
Businesses 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 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 plant nursery 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 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 plant nursery business will be in compliance and able to obtain a CO.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
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.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
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How to promote & market a plant nursery
Check out your region for flower and garden shows. Create a stunning display and work the crowd for the weekend. For routine marketing, direct mail flyers promoting the next season's available plants work as great reminders. In order to establish a new relationship with a commercial landscaper, you may wish to offer samples so the quality of your plant can be experienced in a real application.
How to keep customers coming back
Marketing pushes must be timed with the seasons. While holidays are great for selling a rose bush, your large customers are planning their purchases a month before they are planting a new garden. Personal contact with your larger companies help to keep your phone number at the top of their contact list. Homeowners look for specials in early spring and fall. Having the flowers, soil, and conditioners they are seeking in stock will help to build repeat business as they can rely on you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A Plant Nursery 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?
This business is best suited for someone who enjoys learning about and practicing the cultivation of plants. Nursery owners should also like sharing this knowledge with others. The right person for the job will also have solid business skills, an appreciation for the agricultural life, and a real interest in providing information and support for their local gardeners.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a plant nursery?
As the owner/operator of a plant nursery, you need to be prepared to:
- Care for a wide variety of plants in various stages of growth
- Work a farmer's schedule from dawn to dusk
- Maintain large greenhouses or acres of irrigated growing flats
- Apply herbicides/pesticides to control disease and pests
- Determine which and how many plants of each variety should be grown to meet demand without waste
- Maintain retail storefront for sales to local gardeners
- Carry out basic accounting/money handling
- Maintain sufficient staff to care for plants and customers
- Establish relationships with wholesalers to both buy and sell product
- Provide information and support for your local customers
What are some skills and experiences that will help you build a successful plant nursery?
You need an excellent understanding of maintaining commercial greenhouses and supporting healthy plants. You should also have solid understanding of accounting and retail business practices that can help you decipher fluctuations in supply and demand in order to maintain profits through changes in the economy and customer base. An ability to build positive business relationships will also aid your growth in the business.
What is the growth potential for a plant nursery?
Through aggressive networking and the building of a large customer base of wealthy commercial clients, a plant nursery can continue to expand its operation as long as there is additional acreage to cultivate or build additional greenhouses on. Popular nurseries often open multiple locations in a region when they've achieved positive name recognition among landscaping and construction companies.
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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 plant nursery?
Do your demographic research before breaking ground on a new nursery. If you don't know if your potential customers are going to buy a thousand trees or a thousand pots of pansies, you will waste time and money growing plants that nobody is going to buy. Reach out to gardening clubs, growers associations, and commercial clients to develop a plan for your first three harvests. If you live in the north, you need to start planning your growing season right after the New Year in order to grab advanced sales when the planting season begins.
How and when to build a team
You will need your staff as soon as you start receiving seed, soil, and pots. Most of the labor involved in a nursery is in the growing of the plants, not the selling. Emptying your storefront is really the easy part. You will want to hire individuals who are willing to get dirty, do lots of heavy lifting, love working with the earth, and are interested in building relationships with your customers.
Read our plant nursery hiring guide to learn about the different roles a plant nursery typically fills, how much to budget for employee salaries, and how to build your team exactly how you want it.