Opening a plant nursery can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful plant nursery.
Importantly, a critical step in starting a plant nursery is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
15 Steps To Open a Plant Nursery:
- Choose the Name for Your Plant Nursery
- Determine the Type of Plant Nursery You Will Launch
- Develop Your Plant Nursery Business Plan
- Choose the Legal Structure for Your Plant Nursery
- Secure Startup Funding for Your Plant Nursery (If Needed)
- Secure a Location for Your Business
- Register Your Plant Nursery with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Plant Nursery
- Buy or Lease the Right Plant Nursery Equipment
- Develop Your Plant Nursery Marketing Materials
- Purchase and Setup the Software Needed to Run Your Plant Nursery
- Open for Business
1. Choose the Name for Your Plant Nursery
The first step to opening a plant nursery is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your plant nursery:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your plant nursery.
2. Determine the Type of Plant Nursery You Will Launch
The next step is to determine the type of plant nursery you will launch. The four main types of plant nurseries are:
- Wholesale Nursery: A wholesale plant nursery typically sells large quantities of plants to other nurseries, re-sellers or landscapers.
- Wholesale Grower: A wholesale grower grows and sells specific types of plants in bulk directly to retailers and other buyers.
- Retail Plant Store: A retail plant store is a location where customers can come and purchase plants, flowers, and other gardening supplies.
- Mail-Order Plant Nursery: A mail-order plant nursery sells plants and other supplies to customers via mail order catalogs or online.
3. Develop Your Plant Nursery Business Plan
One of the most important steps in opening a plant nursery is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your plant nursery.
- Company Overview – this section tells the reader about the history of your plant nursery and what type of plant nursery you operate. For example, are you a wholesale nursery, a retail store, or a mail-order business?
- Industry Analysis – here you will document key information about the plant nursery industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your plant nursery? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your plant nursery make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
4. Choose the Legal Structure for Your Plant Nursery
Next you need to choose a legal structure for your plant nursery and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the owner of the plant nursery and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to open a plant nursery together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a plant nursery include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a plant nursery is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your plant nursery, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
5. Secure Startup Funding for Your Plant Nursery (If Needed)
In developing your plant nursery business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a plant nursery to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a plant nursery that they believe has high potential for growth.
6. Secure a Location for Your Business
Having the right space can be important for your plant nursery.
To find the right space, consider:
- Driving around to find the right areas while looking for “for lease” signs
- Contacting a commercial real estate agent
- Doing commercial real estate searches online
- Telling others about your needs and seeing if someone in your network has a connection that can help you find the right space
7. Register Your Plant Nursery with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
8. Open a Business Bank Account
It is important to establish a bank account in your plant nursery’s name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
9. Get a Business Credit Card
You should get a business credit card for your plant nursery to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
10. Get the Required Business Licenses and Permits
Every state, county and city has different business license and permit requirements.
Nearly all states, counties and/or cities have license requirements including:
- General Business License: getting your Articles of Incorporation as discussed above
- Sales Tax License or Seller’s Permit: for selling products
- Zoning Approval: typically at the city or county level, this provides authorization for construction or use of a building or land for a particular purpose
- Fire Department Approval: a process by which the local fire department reviews and approves the installation of a fire alarm system.
Depending on the type of plant nursery you launch, you will have to obtain the necessary state, county and/or city licenses.
11. Get Business Insurance for Your Plant Nursery
When starting a business, it’s important to protect yourself and your plant nursery with the proper business insurance.
There are a variety of different types of insurance that you may want to consider, including
General Liability Insurance: This insurance protects your business if someone is injured or their property is damaged as a result of your business operations.
Product Liability Insurance: This insurance protects you if someone is injured or their property is damaged as a result of using one of your products.
Business Owner’s Policy: This insurance combines general liability and property damage coverage into one policy.
Commercial Auto Insurance: This insurance protects your business if you use a vehicle for business purposes.
Workers’ Compensation Insurance: This insurance provides benefits to employees who are injured or become ill as a result of their job.
Other business insurance policies that you should consider for your plant nursery include:
- Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
12. Buy or Lease the Right Plant Nursery Equipment
When starting a plant nursery, there are a few essential pieces of equipment that you will need.
First, you will need a greenhouse in order to propagate plants. You may also want to invest in a cold frame to protect plants from the cold weather.
You will also need planting containers, soil mix, and plant markers.
If you plan to sell plants, you will need a cash register and signage to promote your business.
Finally, you may want to invest in equipment such as a tractor or forklift to help with moving plants and soil around your nursery.
You can lease or buy the equipment you need for your plant nursery. Talk to different vendors and compare prices before making a decision.
13. Develop Your Plant Nursery Marketing Materials
Marketing materials will be required to attract and retain customers to your plant nursery.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your plant nursery. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional plant nursery website provides potential customers with information about the products you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your plant nursery.
14. Purchase and Setup the Software Needed to Run Your Plant Nursery
There are a few different types of software that you will need to run your plant nursery.
Software for Inventory Control: A good inventory control system will help you keep track of the plants you have in stock, how many of each plant you have, and how much money you are spending on plants. This software can also help you order new plants when necessary.
Software for Accounting: You will need accounting software to manage your finances, including recording income and expenses, creating invoices and tracking payments.
Software for Customer Relationship Management (CRM): A CRM system will help you keep track of customer data, including contact information, purchase history and preferences. This information can help you personalize customer service and marketing efforts.
Research the software that best suits your needs, purchase it, and set it up.
15. Open for Business
You are now ready to open your plant nursery. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.
How to Finish Your Plant Nursery Business Plan in 1 Day!
Don’t you wish there was a faster, easier way to finish your Plant Nursery business plan?
With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!
Click here to finish your Plant Nursery business plan today.
How to Open a Plant Nursery FAQs
Is it hard to open a plant nursery?
No, it's not hard to open a plant nursery. You will need some basic equipment and supplies, plus the necessary licenses and permits. You will also need to develop marketing materials to promote your business.
However, if you follow the steps above, you should be able to open your plant nursery without too much difficulty.
How can I open a plant nursery with no experience?
Starting a plant nursery can be a lucrative business, but it does require some planning and effort. If you have no experience in the horticulture industry, there are a few things you can do to increase your chances of success.
First, research the industry and learn as much as you can about running a plant nursery. Second, find an experienced mentor who can guide you through the process. Third, start small and gradually expand your business as you gain more experience.
What type of plant nursery is most profitable?
The profitability of a plant nursery will vary depending on your skills, experience, and resources. However, some of the most profitable plant nurseries specialize in rare and exotic plants, herbs, or organic products.
By specializing in these types of products, you can charge higher prices for your plants, as well as build a more loyal customer base. Additionally, you can offer additional services such as plant consultations to further increase your profits.
How much does it cost to open a plant nursery?
Opening a plant nursery can be a lucrative business, but it does require some planning and effort. The start up costs range between $500 and $10,000 depending on the size of your plant nursery.
The costs associated with opening a plant nursery can include purchasing supplies, renting or leasing space, obtaining licenses and permits, hiring staff, and marketing materials. Additionally, you may need to purchase specialized equipment such as greenhouses or irrigation systems.
What are the ongoing expenses for a plant nursery?
The ongoing expenses for a plant nursery can vary depending on the size and scope of your business. The average range is between $500 and $2,000 per month.
Common expenses include staff wages, supplies, utilities, advertising, and insurance. You may also need to invest in additional equipment or materials depending on the products you offer. Additionally, you should factor in how much money you'll need to invest each month in order to maintain your plants, flowers, and other products.
Overall, it's important to plan out your expenses before you open a plant nursery so you can budget accordingly and ensure that your business is profitable. This will help you stay in the black and make sure that your plant nursery continues to thrive.
How does a plant nursery make money?
A plant nursery typically makes money by selling plants, trees, and other horticultural products to consumers or businesses. They may also offer additional services, such as landscape design, plant consultation, or installation services.
Additionally, a plant nursery can make money by growing and selling plants to other nurseries or garden centers. This can be a lucrative business, but it requires a lot of space and capital investment.
Finally, a plant nursery can make money by exporting plants to other countries. This can be a difficult process, but it can be very profitable if done correctly.
Is owning a plant nursery profitable?
Yes, owning a plant nursery can be very profitable.
The profitability of a plant nursery will vary depending on the specific industry, geographical location, and other factors. However, there are a few things you can do to increase the chances of your plant nursery being profitable.
Some of the key things you can do to make your plant nursery more profitable include:
- Narrowing your focus to a specific niche market.
- Offering add-on services that complement your main offering.
- Optimizing your website for SEO to increase online visibility.
- Creating a unique selling proposition.
- Investing in training in order to keep up with industry trends, and increase your knowledge about your niche market.
- Providing outstanding client service
Why do plant nurseries fail?
There are a number of reasons why plant nurseries can fail, but the most common ones include:
- Not doing enough market research to understand the needs of their target market.
- Focusing on the wrong niche market or not targeting a niche market at all.
- Offering low-quality products and services that do not meet the expectations of clients.
- Not investing in marketing and advertising to attract new clients.
- Lacking a clear unique selling proposition (USP).
- Not treating each client relationship as a partnership.
- Having high operating costs that are not sustainable in the long run.
One of the main reasons that plant nurseries fail is a lack of planning. This can include not having a detailed business plan, not doing research on the industry, and not targeting the right customers.
Another reason is a lack of marketing and sales skills. This can include not creating a sales process and not have a clear and strong value proposition.
The last main reason is a lack of financial management skills. This can include not having a realistic budget, not tracking expenses, and not investing in the business.
Who are key players in the plant nursery market?
The plant nursery market is made up of a variety of different players, including small businesses, large enterprises, and even individuals.
Some of the key players in the market include:
- Altman Plants
- Tropical Plant Nursery
- GreenFuse Botanicals
- Perennial Plant Nursery
- Plant Professionals Inc.
However, there are many other players in your specific target market, and it is important to research the market to identify the key players that may have the most direct influence on the success of your business.
How much should I charge for my plant nursery products?
Plant nursery fees can vary depending on the type of plant nursery products being offered.
However, some common plant nursery fees include:
- Aloes and succulents - $1 - $3 per plant
- Tropical plants - $3 - $5 per plant
- Perennials - $4 - $7 per plant
- Cactus - $4 - $7 per plant
The best way to determine the right fee for your plant nursery products is to research the rates of similar businesses in your industry, and to also consider the value that you will be providing to the client.