How to Start a Plant Nursery

Outdoor living spaces are just as important to most people as indoor spaces. Plants and flowers of all types can make those outdoor spaces look and smell amazing. For some, going to the local plant nursery to pick out goodies to enhance their landscaping is a ritual every spring. 

Our love of everything green is why the US nursery and garden center industry is valued at an astounding $42 billion. You could start your own plant nursery, even in your backyard, and get a share of that market.

Starting a plant nursery will have challenges, and will require hard work, time, and knowledge. This step-by-step guide has all the information you need to start growing your way to entrepreneurial success.

Step 1: Decide if the Business Is Right for You

Pros and cons

Starting a plant nursery has pros and cons that you should consider before deciding if it’s right for you.

Plant nursery industry trends

The nursery and garden store industry includes large garden centers as well as farm supply companies.

Industry size and growth

• Industry size and past growth – Market analyst IBISWorld values the US nursery and garden store industry at $42 billion in 2021, with an average annual growth of 2% since 2017.((https://www.ibisworld.com/industry-statistics/market-size/nursery-garden-stores-united-states/)) The plant and flower growing industry alone was valued at over $15 billion in 2020, an increase of over 7% from the previous year, according to market analyst Statista.((https://www.statista.com/statistics/1174498/plant-and-flower-growing-industry-market-size-us/))
• Growth forecast – Higher consumer spending on home improvements presents growth opportunities for the nursery and garden stores industry, according to IBISWorld.((https://www.ibisworld.com/united-states/market-research-reports/nursery-garden-stores-industry/))
• Number of businesses – There are almost 19,000 nursery and garden stores in the US.((https://www.ibisworld.com/industry-statistics/number-of-businesses/nursery-garden-stores-united-states/))
• Number of people employed – Close to 145,000 people are employed in nursery and garden stores.((https://www.ibisworld.com/industry-statistics/employment/nursery-garden-stores-united-states/)) 

Trends and challenges

Some trends in the nursery industry include:

• The housing market affects the nursery industry since when people buy new homes they often invest in landscaping. Home sales are projected to be up almost 7% in 2022, according to Realtor.com, which is positive news for the nursery industry.
• Home gardening television shows have increased the popularity of landscaping, propelling the growth of the industry.

Some challenges also exist in the industry which include:

• Competition for US nurseries comes from cheaper imported plants. 
• The industry is affected by factors such as climate issues and infectious plant diseases.

How much does it cost to start a plant nursery business?

Startup costs range from about $2,000 to $100,000 or more. The low end represents starting a backyard nursery that sells plants to garden centers. You could also sell your plants to customers if you set up a small farm stand. The high end includes the cost of a down payment to buy or build a greenhouse and storefront. 

You’ll need a handful of items to successfully launch your plant nursery business. Here’s a list to get you started:

• Weed mats
• Pots
• Hose
• Fertilizer
• Shovels, trowels, pruners

How much can you earn from a plant nursery business?

Profit margins will be high for a backyard nursery, around 95%, even selling plants at wholesale prices to retail garden centers. The price you charge will vary based on the type of plants you grow but should average about $7. Your volume of sales will depend on the amount of space you have for growing, and how much space the type of plants you grow require.

In your first year or two, you could grow and sell 10,000 plants. That would mean $70,000 in revenue and over $65,000 in profit, assuming that 95% margin. As your brand gains recognition, you could purchase a greenhouse and storefront and hire staff, reducing your profit margin to around 40%. If you produce and sell 100,000 plants per year and sell them at retail prices that average $10, your expected annual revenue would be $1,000,000, and you would make about $400,000.

What barriers to entry are there?

There are a few barriers to entry for a plant nursery. Your biggest challenges will be:

• You either need to have enough land for growing, or spend a chunk of money on a greenhouse and storefront
• The climate where you live may make your business seasonal
• You need extensive knowledge about how to plant and grow various species

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Step 2: Hone Your Idea

Now that you know what’s involved in starting a plant nursery, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research plant nurseries in your area to examine their products, price points, and customer reviews or what sells best. You’re looking for a market gap to fill. For instance, maybe the local market is missing a plant nursery that offers varietal ground cover plants.

You might consider targeting a niche market by specializing in a certain aspect of your industry such as shrubbery.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your products or services

You should decide first whether to specialize in certain types of plants or grow a wide variety. Your space should be a consideration since certain types of plants will require more space. Also consider how long it takes plants to grow. The faster they grow, the faster you can sell them. 

How much should you charge for plants?

Your prices will be dependent on the market for each specific type of plant. If you are selling to garden stores, your prices will be wholesale prices the stores are willing to pay. Your target profit margin should be high, around 95%.

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price point. Remember, the price you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will likely be either be homeowners or garden center managers. Either way, you can likely find those groups on Facebook or LinkedIn. 

Where? Choose your plant nursery location

If you are starting a backyard plant nursery, you’ll be running your business from home. If you are going to open a garden store, you’ll need a space with a greenhouse and a storefront.

When choosing a location for your plant nursery, here are the factors to consider:

1. Proximity to Target Market – Choose a location close to your primary customers to minimize transportation costs and ensure fresh plant delivery.
2. Soil Quality – Ensure the soil at the chosen location is fertile, well-draining, and free from diseases or pests, to support healthy plant growth.
3. Access to Water – The nursery should be near a reliable water source, as regular and quality watering is vital for plant growth and health.
4. Sunlight Exposure – Select a site with adequate sunlight since most plants require sunlight for photosynthesis and optimal growth.
5. Protection from Extreme Elements – Choose a location that can be easily protected from harsh weather conditions, such as heavy winds or frost, to prevent plant damage.
6. Ease of Access for Transport – Consider road connectivity and transport logistics to facilitate easy shipping of plants and receipt of supplies.
7. Room for Expansion – Opt for a location with extra land or space, allowing for future expansion of the nursery as your business grows.
8. Local Regulations and Zoning Laws – Ensure the chosen location adheres to local zoning laws and regulations related to land use, water rights, and business operations.

Step 3: Brainstorm a Plant Nursery Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “nursery” or “plant nursery”, boosts SEO
• Name should allow for expansion, for ex: “Jim’s Nursery” over “Jim’s Shrubs”
• Avoid location-based names that might hinder future expansion
• Use online tools like the Step by Step Business Name Generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Plant Nursery Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

• Executive Summary: A concise summary outlining the key elements of the plant nursery business, including its mission, goals, and financial projections.
• Business Overview: An overview detailing the nature of the plant nursery business, its mission, vision, and the specific products it intends to offer.
• Product and Services: Clear description of the variety of plants and services the nursery will provide, emphasizing unique offerings or specialty items.
• Market Analysis: Thorough examination of the target market, including demographics, trends, and potential customer needs for plant-related products.
• Competitive Analysis: Evaluation of competitors in the plant nursery industry, highlighting strengths and weaknesses to inform the business’s competitive strategy.
• Sales and Marketing: Detailed plan outlining how the nursery will attract and retain customers, including pricing strategies, promotions, and marketing channels.
• Management Team: Introduction to the key individuals who will lead and manage the plant nursery, emphasizing relevant experience and skills.
• Operations Plan: A comprehensive outline of the day-to-day operations, including sourcing plants, managing inventory, and ensuring quality control.
• Financial Plan: A detailed financial forecast, including startup costs, revenue projections, and a break-even analysis, providing a clear picture of the business’s financial viability.
• Appendix: Additional supporting documents and information, such as resumes of key team members, market research data, or any other relevant details that enhance the business plan.

If you’ve never created a business plan yourself before, it can be an intimidating task. Consider hiring an experienced business plan writer to create a professional business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to plant nurseries. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your plant nursery will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have. 

Form Your LLC

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Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist, and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Starting a backyard nursery shouldn’t require any financing, but if you want to open a garden center with a greenhouse, a bank loan will probably be your best option. Friends and family might also be a good possibility. 

Step 8: Apply for Plant Nursery Business Licenses and Permits

Starting a plant nursery business requires obtaining a number of licenses and permits from local, state, and federal governments. Federal regulations, licenses, and permits associated with starting your business include doing business as, health license and permit from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level licenses and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. You could also check this SBA guide for your state’s requirements. 

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

For peace of mind and to save time, we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state, and provide them to you to make sure you’re fully compliant.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account. Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your plant nursery business as a sole proprietorship. 

Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You can use industry-specific software, such as epicor, acctivate, or Planting Nursery, to manage your plantings, inventory, billing, purchasing, and staff. 

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

Marketing

Starting a plant nursery is an exciting venture, and successful marketing is key to growing your business. Beyond the basics of websites and networking, here are some practical marketing strategies to help your plant nursery thrive.

1. Local Partnerships: Collaborate with local businesses, such as landscapers, garden centers, and home improvement stores, to cross-promote your plants and expand your customer base.
2. Educational Workshops: Host workshops on gardening, plant care, and landscaping to engage the community and position your nursery as a knowledgeable resource, fostering customer loyalty.
3. Seasonal Promotions: Create seasonal promotions and discounts to attract customers during peak planting times and encourage repeat business throughout the year.
4. Community Events Sponsorship: Sponsor local events or community festivals to increase brand visibility, enhance community relationships, and draw attention to your nursery.
5. Loyalty Programs: Implement a loyalty program offering discounts or freebies for repeat customers, encouraging customer retention and word-of-mouth referrals.
6. Social Media Engagement: Utilize social media platforms to showcase your plants, share gardening tips, and engage with your audience, building a loyal online community.
7. Demo Gardens: Establish demo gardens at your nursery to allow customers to see mature plants in a natural setting, inspiring them to make purchases and providing practical ideas for their own gardens.
8. Email Marketing: Build an email subscriber list to share newsletters, exclusive promotions, and gardening advice directly with your audience, keeping your nursery top-of-mind.
9. Customized Plant Bundles: Offer curated plant bundles for specific gardening needs, making it easier for customers to create cohesive and attractive landscapes.
10. Customer Testimonials: Showcase success stories and testimonials from satisfied customers, instilling confidence in your nursery’s quality and expertise.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your plant nursery meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your plant nursery business could be:

• Organically grown plants to beautify your lawn
• Varietal ground covers to accent your yard
• Lovingly homegrown flowers to brighten your curb appeal

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a plant nursery business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in plant nurseries for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in plant nurseries. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small with a backyard nursery, you may not need any employees. But if you purchase a greenhouse and store you will likely need workers to fill various roles. Potential positions for a plant nursery business would include:

• Gardeners – plant and care for plants
• Store Clerks – make sales, customer service
• General Manager – order supplies, staff management, accounting
• Marketing Lead – SEO strategies, social media, other marketing

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Plant Nursery – Start Making Money!

If you have a love of gardening, starting your own plant nursery will be a great way to do what you love and make a healthy profit at the same time. Plant nurseries are a $42 billion industry and can be very lucrative ventures. 

You can start in your own backyard with just a few tools and your green thumb, and eventually purchase your own greenhouse and storefront. Now that you know what’s involved in starting a plant nursery, you’re ready to start your entrepreneurial journey and plant your way to success!