The plant nursery industry hit a benchmark of $10,224.59 million in 2022. With a compound annual growth rate (CAGR) of 11.9% evaluated from 2022 to 2028, now is a great time to dip your toe in the water.

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You may have noticed the empty storefronts and vacant lots around your neighborhood and wondered if a plant nursery could thrive there. The good news is that starting a plant nursery business doesn’t require huge upfront costs or investments. With some key planning around inventory, staffing, and marketing, you can launch and grow a successful nursery.

This guide explains how to start a plant nursery. It offers insight into topics such as registering an EIN, obtaining business insurance, forming a legal business entity as an LLC, and more. Here’s everything to know about retail nurseries.

1. Conduct Plant Nursery Market Research

Market research is essential to opening wholesale nurseries, small nurseries, or really any sort of floral business. It provides details about where to purchase plants, top tools to grow plants, the best platforms to sell plants, and information on your target market.

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Some details you’ll learn through market research among successful nurseries include:

• The top revenue-driving customer segment is homeowners enhancing their home’s curb appeal with plants, trees, and flowers.
• The housing market boom has led to more existing home sales, driving further growth for plant nurseries as new homeowners invest in landscaping.
• While demand is consistent across regions, you’ll want to research state-specific trends and customer demographics to select an optimal location.
• The southern Atlantic region has the most nursery stock in production according to the USDA, pointing to higher business costs but also more customers.
• Research zoning laws, weather patterns, competitive saturation, and population data for your shortlist of locales.
• Focus your initial inventory on the most popular flowers and plants in your area based on regional climate and buyer preferences. You can further specialize over time in native plants, roses, trees, etc.
• Connect with your state’s nursery association such as the Washington State Nursery & Landscape Association for insights on key growth areas and inventory guidance.
• Trade shows like Cultivate also help you spot emerging plant trends.

Leveraging this industry analysis and customizing for your locale sets you up for success – now it’s time to put down roots and start growing your plant nursery!

2. Analyze the Competition

Starting a plant nursery requires careful analysis of your brick-and-mortar and online competition. Understanding the competition helps you understand the local market and what it takes to build a successful plant nursery.

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Some ways to learn about local competitors include:

• Walk through nurseries within a 20-mile radius of your potential location to gauge product selection, pricing, promotions, store design, and customer service.
• Take photos for later reference, jot down notes, and consider posing as a mystery shopper.
• Look up each location’s website and social media presence as you visit in person, taking note of followers and engagement.
• Review sites like Yelp to see customer commentary about competitors, including areas needing improvement you can capitalize on and strengths to emulate or outperform.
• Search for media coverage of local nurseries as well to spot inventory uniqueness, events, community involvement, and any recognition that builds customer trust.
• Look for clues on sourcing special or exotic plants and trees that set them apart.
• Many nurseries now offer e-commerce for remote buying and pickup/delivery.
• Review photos, product descriptions, shipping costs, delivery timelines, prices, and digital presence for these e-tailers who may steal local customers.
• Compile your competitive research into a grid detailing location, website, social following, product range, pricing, events/services, strengths, weaknesses, and any gaps you could fill with your differentiated offerings.
• Use this intel to shape your business plan around ideal inventory, events/services, community involvement opportunities, and leveraging digital channels to stand out.

This 360-degree view arms you with everything needed to grow a thriving plant nursery in your area. Now it’s time to dig in and nurture your competitive advantage!

3. Costs to Start a Plant Nursery Business

Launching a profitable plant nursery requires careful planning and analysis of both initial start-up costs as well as ongoing operating expenses. Understanding realistic budgets in the planning phase sets your business up for financial viability down the line. Let’s explore typical costs to factor into your nursery’s forecasts.

Start-Up Costs

Before even buying your first seed, significant upfront investments build out your nursery’s physical structure and acquire the prerequisite inventory:

• Land Purchase/Lease – Leasing cropland or pastureland averages approximately $135 per acre annually. For a small operation, plan for 1-5 acres, translating to $3,500 – $15,000+ to buy or $135 – $675 per year to lease.
• Greenhouses – Typical per-square-foot costs range from $3-$8 according to industry reports, meaning a 1,000 sq. foot building would carry $3,000 – $8,000 in materials and labor. Glass covering pushes the price tag higher than plastic polymer options.
• Inventory – Perennials run around $2 – $8 per plant, shrubs $10 – $50, and trees nearing $100 or beyond depending on maturity and type. For a diverse starter crop of 500 plants, budget $2,500 – $5,000.
• Supplies – Outfitting your operation with propagation trays, pruning shears, fertilizers, carts, shade cloths, and other necessities results in upfront yet recurring expenses as items wear out. Expect approx. $3,000 initially.
• Permits/Licensing – Budget $500 – $1,500 covering these permits/licenses. Additionally, selling nursery stock requires a state nursery license costing ~$250 per year.

Ongoing Costs

Once built and planted, continuous costs keep your nursery growing season after season:

• Labor – Average hourly wages for nursery workers come in at around $12.20 according to a recent Bureau of Labor Statistics. For 3 full-time staff working 40-hour weeks year-round, plan for $175,000+ in annual compensation costs.
• Inventory – To keep showrooms stocked as plants sell, expect to reinvest 10-30% of sales revenue back into new inventory every year. Local conditions and best-sellers shift this fluctuating expenditure.
• Facilities – Electricity, irrigation infrastructure upkeep, equipment maintenance, and insurance premiums stack up in

Plant nurseries can be fairly expensive based on what you want in the beginning but it’s a more accessible business than some others in the agricultural space, such as cattle farms or hemp farms.

4. Form a Legal Business Entity

Deciding on the right legal structure establishes your nursery’s framework for liability protections, taxes, and operational flexibility. Weighing options like sole proprietorships, partnerships, corporations and LLCs (limited liability companies) allows customizing to your specific gardening venture. Let’s dig into key considerations for plant nurseries to inform your entity choice.

Sole Proprietorship

Sole proprietors report business income/losses on personal returns, avoiding corporate taxes. This simplicity suits nurseries with one owner decentralizing control. However, founders assume unlimited financial liability, placing personal assets at risk. Sole proprietors also struggle to attract investors to scale.

Partnership

General or limited partnerships enable multiple owners to combine resources and expertise under a shared business vision. This joint accountability and tax pass-through approach works for small nurseries, yet unlimited liability gives some partners pause. Disagreements can also muddy decision-making compared to central ownership models.

Corporation

Establishing a C corporation creates a distinct legal entity protecting owners’ assets if the company faces lawsuits or debts. Many nurseries, however, are small “pass-through” entities where corporate taxes apply on company earnings, then shareholders also owe taxes on distributed dividends. This double taxation hinders bootstrapped operations.

Limited Liability Company (LLC)

For most plant nurseries, forming an LLC blending aspects of partnerships, corporations, and sole proprietors proves the best option. LLCs limit founders’ financial liabilities without double taxation. You get flexibility around management structure and equity sharing attractive to partners and investors.

5. Register Your Business For Taxes

With your LLC formed, next up is obtaining an Employer Identification Number (EIN) from the IRS to identify your nursery for federal tax purposes. This unique nine-digit number functions like a business equivalent to your SSN.

Thankfully securing an EIN takes just minutes online. Simply navigate to the IRS EIN Assistant site and select “View Additional Types” under “Apply Online Now”. Choose “View Additional Types including Non-Profit/Tax-Exempt Organizations and Agriculture (Farmers/Ranchers)” and then select “Nursery” from the business category dropdown.

Answer eligibility questions like ownership structure and address details. Specify whether you need the EIN solely for federal taxes or also require state tax ID numbers used in California, Kentucky, New Jersey, and a few other locales. These state tax IDs support reseller permits, sales tax exemptions, and employer registrations.

Upon submitting your EIN application, an IRS representative connects via video conference to verify your identity and ownership documents. Once approved, your EIN appears immediately onscreen for downloading/printing alongside the next steps for reporting payroll taxes, income, expenses, etc.

If only need a federal EIN, the online process takes less than 15 minutes with no fees. For those needing integrated state tax IDs, some states charge nominal admin fees around $20-$30.

6. Setup Your Accounting

With your nursery underway, properly tracking finances and taxes becomes essential for profitability and IRS compliance. Implementing small business accounting best practices from the start prevents headaches down the road as your customer base blooms.

Open a Business Bank Account

Start by separating personal and business finances. Open a dedicated business checking account ensuring all nursery income flows through this account, retaining paperwork for deposits. Likewise, pay all nursery expenses via the business account. Comingling finances triggers tax nightmares.

Accounting Software

Leverage streamlined accounting software like QuickBooks to categorize income and costs. Connect bank/credit card accounts for automated data syncing. QuickBooks helps track plant inventory, sales, payroll, and fixed and variable expenses in easy-to-reference financial reports complying with IRS rules. Plans start around $25/month with discounts for annual subscriptions.

Hire an Accountant

Consider retaining an accountant to handle payroll, taxes, financial statements, and balancing your books. Expect fees between $200 and $800 monthly depending on the level of involvement. At minimum enlist help preparing year-end nursery profit/loss statements and tax documents.

Rates often range from $500 – $2,500 annually but prevent mistakes raising IRS red flags. Having auditor-ready books also proves useful when applying for small business loans to grow your budding operation.

7. Obtain Licenses and Permits

With your LLC formed and finances set up, securing requisite licenses and permits lets you operate fully above board as an accredited plant nursery business. Find federal license information through the U.S. Small Business Administration. The SBA also offers a local search tool for state and city requirements.

For starters, the National Pollutant Discharge Elimination System (NPDES) program mandates permits for monitoring water use/runoff around your nursery. Monitor discharge from greenhouse irrigation and chemicals like fertilizers and pesticides entering storm drains or local watersheds. General NPDES Permits for pesticide applications cost $500 initially with $250 annual renewals depending on nursery size and impact.

Nearly every state also oversees specialized nursery registrations and certifications beyond sales tax licensing. For instance in Oregon, complete a Certified Nursery License through the Oregon Department of Agriculture for just $260 annually. This demonstrates compliance with quarantine and growing standards for nursery stock bought/sold across state lines.

Some counties also require Agricultural Operation Registration linking your nursery business details to land-use codes and water regulations. For example, Santa Barbara County charges around $200 to register and then $50 for annual renewals.

Additionally, many locations enforce Clean Air Act compliance via Air Quality Permits regulating greenhouse smokestack emissions from natural gas heaters. Expect one-time application fees of up to $5,000+ covering onsite inspections and equipment assessments before approval.

Finally, confirm local building permits, fire codes, and zoning laws for any greenhouse construction, particularly involving electrical, lighting, ventilation, or temperature control infrastructure on commercial nursery properties.

8. Get Business Insurance

Business insurance shields your nursery from unforeseen costs stemming from property damage, customer injuries, employee incidents, and other liabilities that could otherwise bankrupt your growing operation.

Without coverage, severe weather destroying greenhouses or spoiling inventory plants could cost tens if not hundreds of thousands in repairs and replacement vegetation. Customer injuries from tripping over hoses or getting struck by falling pottery generate towering medical bills and lawsuit settlements without protection. Even a workplace injury to one of your groundskeepers brings major financial risk.

Start shopping for customized policies after officially registering your nursery’s EIN. Coverage areas to evaluate include:

• General Liability – Protects against customer bodily injury or property damage claims on your premises with $1 million minimum limits. Costs approximately $600 annually.
• Product Liability – Covers damages or harm stemming from selling mislabeled plants, toxic fertilizers, etc. Adds 10-15% onto premiums.
• Property – Reimburses cost to repair/replace inventory, structures, and nursery equipment after incidents like fires, frozen pipe leaks, or theft. Typically runs $500+ annually pending property value.
• Workers Compensation – Federally mandated for businesses with employees, this covers lost wages, medical care, etc for workplace injuries. Varies widely based on state, payroll size, and job duties but expect a minimum of $1,500 per year.

Package policies with higher deductibles help cut down on premiums initially. An independent insurance broker also tailors protection across multiple carriers. Investing in adequate coverage gives added peace of mind so you can focus on raising your healthy nursery.

9. Create an Office Space

While much of your nursery operation stays outdoors nurturing inventory, securing some indoor administrative space proves essential for daily planning, meetings, and avoiding distractions. Weigh options like home offices, retail spaces, or coworking sites to best suit your budget.

Home Office

Launching from a spare bedroom or basement keeps costs minimal – often $100-200 for a desk and office basics. Home offices also enable proximity for popping back to quickly answer emails between tending plants outside. Just beware of distractions from kids, pets, or housework that hamper productivity. Ensure your homeowner’s insurance covers business use of the space.

Coworking Space

Shared coworking spaces like WeWork provide office amenities with more professional meeting space for sales calls and investor meetings. Open desk memberships start around $300 monthly and private offices from $600 per month.

Coworking also brings networking opportunities with other small business owners. Just confirm coworking locations comply with all insurance/zoning requirements for plant-related businesses.

Commercial Office

Renting modest commercial office space enables the most flexibility for your administrative needs. Expect to pay $20+ per square foot in most markets, making this better for established nurseries. Commercial offices also give dedicated room for clerks handling paperwork and sales calls. Weigh lengthy leases against more flexibility offered by monthly coworking space memberships.

10. Source Your Equipment

A thriving plant nursery needs more than just seedlings and sprouts – the right equipment also proves essential. Whether buying new or used, or temporarily renting, numerous options exist for outfitting your operation without breaking the bank.

Buying New

While buying shiny new gear seems attractive when launching, premium prices strain startup budgets. Still, some key equipment merits new investments for durability like commercial steel greenhouse frameworks from manufacturers like Rough Brothers averaging $15-$25 per square foot.

Buying Used

Gently used equipment offers major savings for many non-structural elements like watering cans, hauling carts, generators, or propagation lighting rigs. Scout deals on Facebook Marketplace and Craigslist for local deals. Budget about 50-75% less than new equivalents. Verify desired supply volumes before acquiring to confirm capacity.

Renting

Rent specialized soil aerators, debris removal tools, commercial wood chippers, and other seasonal use equipment as needed. Weekly rental rates around $100-500 per unit prove cheaper than buying outright. Useful for supplementary projects without adding permanent toolshed clutter.

Leasing

Lease-to-own financing spreads equipment costs over monthly payments rather than huge upfront payouts. This helps launch nurseries access essentials like solar panels, expensive irrigation infrastructure, and greenhouse environmental controls while slowly building ownership equity. Just confirm all maintenance requirements and buyout terms before signing longer-term agreements spanning years.

11. Establish Your Brand Assets

Cultivating a recognizable brand helps your nursery blossom amid fierce competition. Defining visual identities, contact tools and digital properties sets the foundation for marketing everything your operation grows.

Getting a Business Phone Number

Centralize calls via a dedicated business phone number instead of relying on personal mobiles. Services like RingCentral offer toll-free and local number options with professional voicemail greetings starting at $30 monthly. Automatic call routing also forwards calls seamlessly when out of the office tending to gardens.

Creating a Logo and Brand Assets

A polished logo encapsulates your nursery’s personality while making memorable first impressions on social channels and signage. Looka’s logo generator crafts custom icons, monograms, and other designs tailored to gardening for $20.

From your logo, create complementary letterheads, color palettes, and fonts for websites, business cards, and brochures. Matching assets establish visual continuity. Opt for earthy green, floral color pops mirroring the vibrancy of your botanical wares.

Business Cards and Signage

Business cards offer portable opportunities to spread brand familiarity during industry events, deliveries, or client meetings. VistaPrint’s budget 500 card order costs under $20.

Window signage and custom metal/wood plaques also make retail nursery storefronts shine. Promote grand openings, and seasonal sales and highlight your brand for drive-by visibility that establishes community trust.

Purchasing a Domain Name

Your domain becomes the digital “storefront” for customers discovering your website. The .com version of your nursery’s name proves important for SEO and memorability. Use domain sites like Namecheap for affordability at under $15 annually.

Building a Website

While beginners can launch sites via Wix’s drag-and-drop builder for free, hiring web developers on Fiverr costs only $5+ per basic informational page if seeking premium plant e-commerce functionality.

As your nursery grows, ensure branding keeps pace through scalable logos, contact tools, and an online home spreading your roots far and wide.

12. Join Associations and Groups

Expanding your professional network with fellow green thumbs unlocks invaluable mentorship, troubleshooting advice, and industry secrets as you grow your nursery. Tap local associations, trade events, and online communities to plant seeds for long-term support.

Local Associations

State-level nursery and landscape associations like the Florida Nursery, Growers and Landscape Association, and Oregon Association of Nurseries provide critical networking. Browse educational conferences, certification courses, and member directories to discover mentors. Annual dues average $500.

Local Meetups

Attend home and garden shows like the Northwest Flower and Garden Festival or Santa Rosa Harvest Fair to connect in person with other nurseries and suppliers. Chat up stall neighbors while scouting displays for inventory inspiration. Use Meetup to find more informal plant swaps and garden tours as well.

Facebook Groups

Thousands of niche Facebook communities create space for troubleshooting, advice, and inspiration between events. For instance, the Greenhouse Tech Team and Greenhouses & Gardens groups share thousands of collective years of growing plants. Post questions to tap collective wisdom on boosting your yields and operations.

13. How to Market a Plant Nursery Business

Effective marketing helps your nursery business bloom year-round by raising awareness and attracting new customers. Leveraging digital channels, community events and customer referrals keeps your operation top of mind across every season.

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Referral Rewards

Promoting any small business presents challenges, but luckily plant lovers boast one of the most enthusiastic customer bases who readily share brands they love. Satisfied shoppers proudly showcasing their gardens make exceptional brand advocates. Offer referral rewards like 10% off their next purchase for every new customer they bring your way. Word of mouth goes far.

Digital Marketing

You can also foster digital growth through:

• Google Ads – Target local searches for terms like “flower nursery” and “landscaping plants”. Expect to pay $2+ per click.
• Facebook/Instagram Ads – Create beautiful social campaigns showcasing inventory. Focus ad sets on gardeners within a 25-mile radius.
• YouTube Channel – Publish weekly vlogs sharing planting tips and virtual nursery tours to build subscribers over time.
• Blogging – Craft SEO-optimized blogs around topics like “Best Shade Perennials” for site traffic.
• Email Newsletters – Send monthly availability updates, specials, and growing advice to contacts.

Traditional Marketing

Don’t overlook traditional approaches either:

• Direct Mailers – Distribute catalogs and fliers to local homes highlighting seasonal plants. Expect at least $0.50 per piece.
• Flyers – Place eye-catching promotional flyers on community boards at local garden centers and hardware stores.
• Radio Spots – 15-second radio ads on local gardening shows raise awareness affordably.
• Billboards – While pricier, roadside digital boards attract drive-by notice.

Track impression volumes, clicks, and conversion rates across efforts to refine your marketing mix over time. As your most successful channels take root, increase spending to accelerate nursery growth. Leverage any built-in audiences and prosecutorial knowledge to establish your nursery as the foremost regional authority.

14. Focus on the Customer

While lush gardens begin from tiny seeds, thriving plant nurseries stem from cultivated customer relationships nurtured through exceptional service. How you make shoppers feel while browsing inventory directly impacts sales and referrals.

Create a welcoming retail environment for self-service shoppers to dig through your diverse plant offerings. Greet everyone who enters and offer personalized guidance identifying specimens suiting their landscaping vision or gardening skill level.

Make suggestions for outdoor layouts and complementary plantings to express expertise. Share tips on proper sunlight, watering needs, and blooming timelines to set expectations.

When customers require special ordering for rare finds, expedite requests promptly and update timelines transparently to exceed expectations. Follow up post-purchase to ensure desired growth while troubleshooting any issues that arise.

Leverage your customer’s passion for gardening to request social shares when seedlings mature into jaw-dropping garden focal points. Enable people to easily tag your brand across platforms when posting plant pictures.

Providing exceptional assistance through every stage of the customer lifecycle – from initial questions to years of accumulated growth – roots your nursery in community hearts and wallets for the long haul.