How to Start a Plant Nursery

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Quick Reference

Are you an avid gardener who loves to make beautiful things grow? If you have some land, a plant nursery could be a great business opportunity for you.  You could do what you love and make a good living.

Business Overview

A plant nursery grows seedlings or saplings of various trees and plants until they are at the stage where they can be sold to be transplanted directly into a yard or garden.  Most nurseries offer a variety of types of plants, while some specialize in certain plants, trees, shrubs, ornamental grasses, herbs, or flowers.  Species usually depend on the local climate.

Industry Summary

According to IBIS World, the Nursery and Garden Store industry in the U.S. is $42.4 billion as of 2021 and is expected to increase 2.6% during the year.  It has increased 1.2% per year on average for the last five years. The largest market for the industry is people aged 50 and older, and that population is increasing.

Industry Trends

Rising per capita disposable income and increased spending on home improvements are expected to drive the industry’s growth, as well as the rising older population.  The industry is sensitive to economic fluctuations, so during economic downturns, the industry suffers.

Target Market

Your target market will be consumers with yards or gardens or wholesale accounts like landscape contractors, retail garden centers, other growers, and municipalities.

Skills, Experience, and Education Useful in Running a Plant Nursery

There are several specific skills that you will need to open a plant nursery.

  • Experience.  Experience in growing plants and extensive knowledge about the types and care of plants is essential.
  • Business knowledge and experience.  You will need to have at least some basic knowledge of marketing, finance/accounting, and human resources.
  • People skills. You’ll need to build rapport with your customers so that you retain them as customers and keep them coming back.

Costs to Start a Plant Nursery

Here are the typical costs of supplies and equipment you’ll need when you open a plant nursery, and this assumes that you already own sufficient land.

  • Greenhouse $30,000 – $100,000 +
  • A storefront for your greenhouse $5,000 – $50,000 depending on the size
  • Equipment such as wheelbarrow, shovels, pruners, etc. – $500+
  • Initial inventory such as plants, fertilizer, pots, equipment $10,000 – $30,000 +

Steps to Starting a Plant Nursery

Step 1: Write your Business Plan

After coming up with the idea, the next step in starting your plant nursery should be to write a plant nursery business plan.  The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate exactly what your startup expenses will be and what your ongoing expenses will be.

Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you think through all the aspects of the business and then serves as a guide as you begin.

Related:
How to write a business plan
Free sample business plans

Step 2: Name the Business

Finding the perfect plant nursery name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name.  Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.

Step 3: Form a Business Entity

A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include a sole proprietorship, partnership, corporation, and Limited Liability Company (LLC).  Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

RelatedComparison of Business Entities

Step 4: Select your Location

You need a location with enough space to have your greenhouse and store, preferably in a convenient location with high visibility.

The soil type of your location will also need to be considered depending on the types of plants being grown.

Related: Choosing a business location

Step 5: Apply for Business Licenses and Permits

Depending on the state, a plant nursery may need agriculture licensing with their Department of Agriculture. This department will make random inspections and search for things like invasive species and pests.

In addition, there will be general business licenses and registrations such as a sales tax permit and an Employer Identification Number.  

Related: Common business licenses, permits, and registrations by state

Step 6: Find Financing

Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a plant nursery is another.  In order to get a loan, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.

Related: Finding the money to start a business

Step 7: Open a Business Bank Account

Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.

Step 8: Get your Marketing Plan in Place

You will want to determine if you can be competitive in the market.  This is especially important if you are starting with a limited selection of plants or flowers.

Common marketing techniques for a plant nursery include social media marketing on Facebook and Pinterest and online advertising. Developing a website can be a significant expense, but it can also give your plant nursery greater visibility online.

Related: Low-cost ideas to market a new business

Step 9: Get Insurance

A plant nursery needs several types of insurance for full coverage:

General liability insurance can help protect you from third-party claims of bodily injury and property damage.

Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.

Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.

Insurance policies will vary. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.

Related: Common types of insurance a business may need

Step 10: Hiring Employees

You may need employees to help you run your plant nursery.  Make sure that you select people with appropriate experience and training.

In addition to labor costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.

Related: Hiring your first employee

Step 11: Set up an Accounting System

Setting up an accounting system for your plant nursery is critical to the long-term success of your business.

Staying on top of taxes keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up accounting for your business

How Much Can You Potentially Make Owning a Plant Nursery?

Your revenue will depend on the size of your nursery.  If you are successful, you could earn revenue of $75,000 – $600,000 per year.

Things to Consider Before Starting a Plant Nursery

Running a plant nursery or any business will have its challenges.  You need to be prepared and make sure that you know what you’re getting into.

While it may sound like an easy way to make money, it’s not. Nursery owners face several challenges outside of the normal marketing of a business as they face challenges and risks to their product, such as floods, ice, drought, plant diseases, and insects.

A plant nursery can be an excellent source of additional income. You can get started with a small backyard nursery and specialize in a unique and high-value variety of plants.  Some species of plants, like certain varieties of Japanese maples and Boxwood, can bring in a lot of revenue from a small space.

In most locations, your business will be seasonal, so you will need to plan for slow times of the year.

It will also take time to start making money because you will have to grow enough plants to a sellable stage. Depending on the plants that are being grown, expect between two to four years before becoming profitable.

Talk to other growers for tips on starting a business and do your homework to determine costs.  Research other plant nurseries to see what they offer and what prices they charge.

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