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Nursery garden business plan for starting your own business
The plant and greenhouse industry is blooming! IBIS World reports $40 billion in 2018 sales, an enormous number with plenty of room to grow. The sales figures include stock, bedding and garden plants, sod, mushrooms, flowering foliage in pots, and many other products.
Of particularly good news for the budding entrepreneur who is intending to open a new operation is the fact the average horticulture operation has higher sales than the average U.S. farm. This is an industry ripe for innovation whether through the use of technology or through creative thinking. The first step towards startup is the development of a customized, professional nursery garden business plan.
Executive Summary
2.1 The Business
People appreciate nice landscapes around homes, apartments, and commercial buildings. They want well-kept parks, nicely maintained natural preserves, and highways bordered with hardy sod and local wildflowers. As the green movement grows, there is also a demand for more products like native varieties which require less watering and care, and plants that offer other benefits like high oxygen production and soil anchoring.
2.2 Management
The business plan for plant nursery will address the ”hows and whys” of the operation. It should include all information relevant to startup that will guide decision-making, keep the company on track to fulfill its mission, and entice investors or lenders. Typical company information includes:
The experience level of the entrepreneur and other managers is critical because this is a highly specialized industry catering to well-defined markets. Whereas most consumers and commercial operations need paper, for example, the products sold by the operation are directed at a segmented market.
2.3 Customers
The overall theme of the nursery will influence the product line. Will the nursery cater to customers who want native plants to create natural ecosystems, green products suitable for particular climate zones, a variety of landscaping items, and/or indoor foliage? Will other items be offered for sale too, like flower pots, garden tools and decorations, and fertilizers?
2.4 Target of the Company
These are a few of the topics covered in the enterprise proposal. Developing the project is a critical first step towards successful startup. The process ensures the entrepreneur has carefully thought through critical details. The finished document can also be used to support requests for funding or financing from private investors, financial institutions, and government agencies.
Company Summary
3.1 Company Owning
Garden nurseries can be started in areas that are suitably zoned. The entrepreneur should demonstrate that land use regulations are researched and appropriate licenses obtained.
The entrepreneur may need funding for land purchase and building and greenhouse construction. Nurseries need an irrigation system, storage buildings, heavy equipment for moving and delivering inventory, a warehouse, sales office, and so on. How much startup capital is needed? When is the nursery expected to start making a profit after accounting for costs?
3.2 Why the Business is being started
The status of local water supplies is a critical issue. What is the source of water? Are there permit requirements? Many areas are going through a drought and installation of efficient watering systems is mandatory.
3.3 How the Business will be started
The options are unlimited and include perennial and annual flowers, shrubs, trees, sod, other products like Christmas trees, agricultural seed products, starter plants, maintenance supplies, and so on. Will plants be grown in containers or rootballed, or sold as bare root or a mixture of production methods? Will the operation deliver to the customers’ sites? If so, it is important to have the right type of delivery equipment available.
The detailed start-up requirements, start-up funding, start-up expenses, total assets, total funding required, total liabilities, total planned investment, total capital and liabilities as forecasted by experts, is given below:
| Start-up Expenses | ||
| Legal | $19 000 | |
| Consultants | $0 | |
| Insurance | $34 000 | |
| Rent | $47 000 | |
| Research and Development | $21 000 | |
| Expensed Equipment | $64 000 | |
| Signs | $3 400 | |
| TOTAL START-UP EXPENSES | $188 400 | |
| Start-up Assets | $320 000 | |
| Cash Required | $240 000 | |
| Start-up Inventory | $43 000 | |
| Other Current Assets | $13 000 | |
| Long-term Assets | $78 000 | |
| TOTAL ASSETS | $694 000 | |
| Total Requirements | $882 400 | |
| START-UP FUNDING | ||
| Start-up Expenses to Fund | $188 400 | |
| Start-up Assets to Fund | $694 000 | |
| TOTAL FUNDING REQUIRED | $882 400 | |
| Assets | ||
| Non-cash Assets from Start-up | $549 034 | |
| Cash Requirements from Start-up | $267 000 | |
| Additional Cash Raised | $22 100 | |
| Cash Balance on Starting Date | $14 560 | |
| TOTAL ASSETS | $852 694 | |
| Liabilities and Capital | ||
| Liabilities | $41 000 | |
| Current Borrowing | $0 | |
| Long-term Liabilities | $0 | |
| Accounts Payable (Outstanding Bills) | $29 000 | |
| Other Current Liabilities (interest-free) | $0 | |
| TOTAL LIABILITIES | $70 000 | |
| Capital | ||
| Planned Investment | $882 400 | |
| Investor 1 | $0 | |
| Investor 2 | $0 | |
| Other | $0 | |
| Additional Investment Requirement | $0 | |
| TOTAL PLANNED INVESTMENT | $882 400 | |
| Loss at Start-up (Start-up Expenses) | ($99 706) | |
| TOTAL CAPITAL | $782 694 | |
| TOTAL CAPITAL AND LIABILITIES | $852 694 | |
| Total Funding | $882 400 | |
Services for Customers
If you are thinking about opening a nursery, you must first decide the services which you’ll be providing. Mentioning them clearly in the form of a nursery plant business plan experts for plant nursery is preferable as it can give you an idea about the things which will be needed in starting nursery plant business.
Note
We know it’s confusing to decide which sort of plants and products to showcase, so that everyone can find the things of their interest. Therefore, we’re providing here a sample business plan for plant nursery of a startup, Flora Mart, so that you can get idea about services which can prove profitable these days.
Services listed in nursery plant business plan of Flora Mart are as:
- Bedding Plants: Flora mart will keep seasonal bedding plants by amassing different colored flowers and leaves to create visually appealing flower beds.
- General Vegetation: We’ll be selling seedlings of general indoor and outdoor plants such as spider plant, Dracaena, Jade plant, African Violet, Boston Fern etc.
- Seeds: We’ll keep seeds of all almost types of carnivorous plants, vegetables, fruits, and flowers.
- Landscaping Services: We’ll be providing professional gardeners to set up lawn and vegetation according to customer’s land and space.
- Garden Accessories: We will be keeping all the things that one can need in landscaping and gardening such as water sprinkler, pressure sprayer, seedling trays, lawn mowers, hand diggers, electric dust blowers, hydroponic trays, soils, grass patches, organic & inorganic fertilizers, plastic and sand-made pots of every size and shapes, hanging plant containers and garden stones.
- Purchasing through App & Delivery Services: Customers can also avail our services by making a purchase using our app and get it delivered to their door.
Marketing Analysis of business for plant nursery
Landlord Business Plan Writing
4.1 Market Trends
In other words, the entrepreneur who wants to start a commercial nursery or greenhouse has many options. The key is to develop an operation capable of generating revenue year round for maximum profitability. For example, the owner could sell spring, summer, and fall flowers and shrubs, pumpkins and fall varieties in October, and Christmas trees in December. These are the types of topics covered in the business plan for plant nurseries.
4.2 Marketing Segmentation
Just owning a nursery isn’t sufficient to generate desired profits. To be successful, you must have to analyze your target customers before you actually start your business for plant nurseries. It can help you in devising policies and in adorning your place.
Also your plant nursery requirements can vary according to your target market. For instance, if you aim at targeting companies then it’ll be good to create a fine reception space and keeping formal and eye-refreshing indoor plants.
Target groups of Flora Mart are given here:
The detailed marketing segmentation of our target audience is as follows:
4.2.1 Home Owners: The first group of our customers will be the people living in our city, Seattle. This group of general population is expected to purchase our products, seeds, and seedlings as well to avail our gardening services to adorn their in and outdoor space with natural beauty.
4.2.2 Institutes: The second category includes research and educational institutes who can buy our plants and will also avail our landscaping services to create refreshing view in their departments.
4.2.3 Companies: Our third target category includes companies and offices who always leave a big space for a beautiful lawn and eye-catching entrance. They are expected to make big purchases with us.
4.2.4 Event Organizers: Our last category to target will be the event organizers in restaurants or in homes. For beautifying space naturally for parties, weddings and other events they’ll be needing our plant beds, prepared grass patches, and our landscaping services.
The detailed market analysis of our potential customers is given in the following table:
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Home Owners | 35% | 29 985 | 33 096 | 38 028 | 43 064 | 47 392 | 9% |
| Institutes | 27% | 23 131 | 25 531 | 29 336 | 33 221 | 36 560 | 8% |
| Companies | 27% | 23 131 | 25 531 | 29 336 | 33 221 | 36 560 | 8% |
| Event Organizers | 11% | 9 424 | 10 402 | 11 952 | 13 534 | 14 895 | 13% |
| Total | 100% | 85 670 | 94 560 | 108 650 | 123 040 | 135 406 | 11% |
4.3 Business Target
Defining measurable, realistic and achievable goals before starting a business plan for plant nurseries can keep you working in a high spirit. Assessing your performance after the time you had set to achieve your goals can also help in bettering the coordination among you and you employees.
Business Targets set by Flora Mart are:
- To earn net profit margin of $20k per month by the end of the first year
- To maintain an average client rating score of 4.5 out of 5 at the end of first year
- To increase our sales by 20% every 2 months
4.4 Product Pricing
Our prices will be just comparable with the other business for plant nurseries running in our vicinity. However, we’ve priced our gardening services a little bit higher because we’ll hire highly experienced staff for it.
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Plant Nursery Marketing Strategy
5.1 Competitive Analysis
Before you think about how to start a business plan for plant nurseries, you must first research what your competitors are doing. Only in that case, you’ll be able to do something different.
To take a lead upon its competitors, Flora Mart will introduce app and delivery system so that customers can choose the plants while sitting at their location and get it delivered in almost no time. Secondly, Flora mart will be providing landscaping services for events and ceremonies which no one in the vicinity is providing. Lastly, the business will ensure exceptional customer service – valuing the client’s satisfaction more than anything else.
5.2 Sales Strategy
The business strategy services you’ll be adopting in order to sell your services must also be covered in your business plan for plant nurseries.
We’re listing some effective measures from sample garden center business plan of Flora Mart which will be taken to bring the target customers to its site.
- Company’s services will be advertised in magazines and local newspaper
- Strong presence on the web and social media will be ensured
- On every shopping above $80, free delivery within 10km distance will be provided
- 20% discount will be offered on our landscaping services for the first two months
5.3 Sales Forecast
Our sales are forecasted in the following column charts:
The detailed information about sales forecast is given in the following table:
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Bedding Plants, Seeds & General Vegetation | 2 340 | 2 450 | 2 590 |
| Landscaping Services | 630 | 680 | 760 |
| Garden Accessories | 610 | 656 | 765 |
| Delivery through App | 434 | 510 | 610 |
| TOTAL UNIT SALES | 4 014 | 4 296 | 4 725 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Bedding Plants, Seeds & General Vegetation | $135,00 | $141,75 | $148,84 |
| Landscaping Services | $310,00 | $325,50 | $341,78 |
| Garden Accessories | $490,00 | $514,50 | $540,23 |
| Delivery through App | $305,00 | $320,25 | $336,26 |
| Sales | |||
| Bedding Plants, Seeds & General Vegetation | $315 900,00 | $347 287,50 | $385 489,13 |
| Landscaping Services | $195 300,00 | $221 340,00 | $259 749,00 |
| Garden Accessories | $298 900,00 | $337 512,00 | $413 272,13 |
| Delivery through App | $132 370,00 | $163 327,50 | $205 120,13 |
| TOTAL SALES | $942 470,00 | $1 069 467,00 | $1 263 630,38 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Bedding Plants, Seeds & General Vegetation | $95,00 | $99,75 | $104,74 |
| Landscaping Services | $210,00 | $220,50 | $231,53 |
| Garden Accessories | $367,00 | $385,35 | $404,62 |
| Delivery through App | $230,00 | $241,50 | $253,58 |
| Direct Cost of Sales | |||
| Bedding Plants, Seeds & General Vegetation | $222 300,00 | $244 387,50 | $271 270,13 |
| Landscaping Services | $132 300,00 | $149 940,00 | $175 959,00 |
| Garden Accessories | $223 870,00 | $252 789,60 | $309 532,39 |
| Delivery through App | $99 820,00 | $123 165,00 | $154 680,75 |
| Subtotal Direct Cost of Sales | $678 290,00 | $770 282,10 | $911 442,26 |
5.4 Sales Monthly
5.5 Sales Yearly
Personnel plan
Before starting a plant starting a nursery business plan it’s essential to create an effective personnel plan to ensure that you’ll be hiring the right persons while paying them a fair amount. Because it is something that can affect your starting a nursery business plan in the long run.
The personnel plan developed by Denzel Sean, the owner of Flora Mart, is given in this starting a nursery business plan.
6.1 Company Staff
- 2 Accountants to maintain financial records
- 1 Web Developer to run company’s app and websites
- 2 Drivers for providing Home Delivery
- 4 Gardeners to cultivate plants
- 1 Horticulturist to supervise hard-to-grow plants
- 1 Landscaping Expert to set up lawn design ideas
- 1 Sales Executives to market and to find new ventures
- 3 Assistants to do day-to-day tasks
- 3 Cleaners to clean the facility
- 1 Receptionist
6.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Accountants | $23 500 | $24 205 | $24 931 |
| Web Developer | $20 000 | $20 600 | $21 218 |
| Drivers | $25 600 | $26 368 | $27 159 |
| Gardeners | $34 000 | $35 020 | $36 071 |
| Horticulturist | $14 000 | $14 420 | $14 853 |
| Landscaping Expert | $12 000 | $12 360 | $12 731 |
| Sales Executives | $23 000 | $23 690 | $24 401 |
| Assistants/Receptionist | $19 000 | $19 570 | $20 157 |
| Cleaners | $18 000 | $18 540 | $19 096 |
| Total Salaries | $189 100 | $194 773 | $200 616 |
Financial Plan
The last step in making an effective nursery project plan is to make a detailed fianancial plan listing accurate statistics of your investments, expenses, and expected profit margins. For the sake of completeness its good to include at least 3 year forecast in your nursery business model. Your plan should cover details of how you’ll be managing your financial goals and increments in your employee’s salaries within the expected profits. It should also give a clear idea of amount that you can need to increase your product line. Moreover, the strategy to be followed if you fail to generate enough revenue for your starting a nursery business plan must also be included in the financial plan.
7.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 9,95% | 10,10% | 10,23% |
| Long-term Interest Rate | 9,20% | 9,34% | 9,85% |
| Tax Rate | 20,40% | 22,10% | 23,60% |
| Other | 0 | 0 | 0 |
7.2 Brake-even Analysis
| Break-Even Analysis | ||
| Monthly Units Break-even | 7600 | |
| Monthly Revenue Break-even | $122 000 | |
| Assumptions: | ||
| Average Per-Unit Revenue | $186,00 | |
| Average Per-Unit Variable Cost | $1,01 | |
| Estimated Monthly Fixed Cost | $167 000 | |
7.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $942 470 | $1 069 467 | $1 263 630 |
| Direct Cost of Sales | $678 290 | $770 282 | $911 442 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $678 290 | $770 282 | $911 442 |
| Gross Profit | $264 180 | $299 185 | $352 188 |
| Gross Margin % | 28,03% | 27,98% | 27,87% |
| Expenses | |||
| Payroll | $189 100 | $194 773 | $200 616 |
| Sales and Marketing and Other Expenses | $1 670 | $1 720 | $1 760 |
| Depreciation | $1 900 | $1 940 | $2 050 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $3 600 | $3 700 | $3 965 |
| Insurance | $1 670 | $1 750 | $1 855 |
| Rent | $6 000 | $6 540 | $6 895 |
| Payroll Taxes | $31 240 | $34 010 | $36 050 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $235 180 | $244 433 | $253 191 |
| Profit Before Interest and Taxes | $29 000 | $54 752 | $98 997 |
| EBITDA | $30 900 | $56 692 | $101 047 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | ($5 800) | ($10 950) | ($19 799) |
| Net Profit | $23 200 | $43 802 | $79 198 |
| Net Profit/Sales | 2,46% | 4,10% | 6,27% |
7.3.1 Profit Monthly
7.3.2 Profit Yearly
7.3.3 Gross Margin Monthly
7.3.4 Gross Margin Yearly
7.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $36 500 | $38 000 | $41 000 |
| Cash from Receivables | $6 000 | $6 400 | $7 200 |
| SUBTOTAL CASH FROM OPERATIONS | $48 900 | $50 450 | $54 630 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $48 900 | $50 450 | $54 630 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $19 840 | $19 940 | $21 450 |
| Bill Payments | $13 450 | $14 325 | $15 630 |
| SUBTOTAL SPENT ON OPERATIONS | $34 560 | $36 755 | $38 910 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $34 560 | $36 755 | $38 910 |
| Net Cash Flow | $13 000 | $14 500 | $16 400 |
| Cash Balance | $22 000 | $23 500 | $24 900 |
7.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $174 320 | $182 000 | $193 500 |
| Accounts Receivable | $11 980 | $12 870 | $13 690 |
| Inventory | $12 340 | $13 430 | $14 560 |
| Other Current Assets | $1 150 | $1 300 | $1 580 |
| TOTAL CURRENT ASSETS | $148 650 | $156 950 | $185 600 |
| Long-term Assets | |||
| Long-term Assets | $10 000 | $10 000 | $10 000 |
| Accumulated Depreciation | $11 800 | $12 340 | $13 245 |
| TOTAL LONG-TERM ASSETS | $990 | $776 | $788 |
| TOTAL ASSETS | $180 510 | $230 000 | $245 940 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $8 825 | $9 856 | $10 340 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $8 825 | $9 856 | $10 340 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $8 825 | $9 856 | $10 340 |
| Paid-in Capital | $23 495 | $28 560 | $35 560 |
| Retained Earnings | $51 930 | $57 630 | $64 453 |
| Earnings | $87 640 | $93 450 | $119 600 |
| TOTAL CAPITAL | $182 500 | $227 690 | $250 864 |
| TOTAL LIABILITIES AND CAPITAL | $186 500 | $246 543 | $263 422 |
| Net Worth | $177 400 | $204 344 | $218 500 |
7.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 4,12% | 4,53% | 5,03% | 5,11% |
| Percent of Total Assets | ||||
| Accounts Receivable | 5,23% | 5,75% | 6,38% | 6,49% |
| Inventory | 1,89% | 2,08% | 2,31% | 2,35% |
| Other Current Assets | 1,72% | 1,89% | 2,10% | 2,13% |
| Total Current Assets | 129,00% | 141,90% | 157,38% | 160,09% |
| Long-term Assets | -8,90% | -9,79% | -10,86% | -11,04% |
| TOTAL ASSETS | 93,00% | 102,30% | 113,46% | 115,41% |
| Current Liabilities | 4,70% | 5,17% | 5,73% | 5,83% |
| Long-term Liabilities | 0,00% | 0,00% | 0,00% | 23,00% |
| Total Liabilities | 4,71% | 5,18% | 5,75% | 5,85% |
| NET WORTH | 94,03% | 103,43% | 114,72% | 116,69% |
| Percent of Sales | ||||
| Sales | 94,30% | 103,73% | 115,05% | 117,03% |
| Gross Margin | 91,20% | 100,32% | 111,26% | 0,00% |
| Selling, General & Administrative Expenses | 70,50% | 77,55% | 86,01% | 87,49% |
| Advertising Expenses | 1,92% | 2,11% | 2,34% | 2,38% |
| Profit Before Interest and Taxes | 20,41% | 22,45% | 24,90% | 2,30% |
| Main Ratios | ||||
| Current | 20,13 | 22,10% | 23,56% | 1,20% |
| Quick | 23,33 | 25,10% | 26,10% | 0,71% |
| Total Debt to Total Assets | 1,98% | 0,58% | 0,23% | 63,00% |
| Pre-tax Return on Net Worth | 63,45% | 69,80% | 77,41% | 4,02% |
| Pre-tax Return on Assets | 61,22% | 67,34% | 74,69% | 6,10% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 17,90% | 19,69% | 21,84% | NA |
| Return on Equity | 45,60% | 50,16% | 55,63% | NA |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 4,3 | 4,30% | 4,30% | NA |
| Collection Days | 87,56 | 91,00% | 94,00% | NA |
| Inventory Turnover | 18,01 | 22,00% | 23,10% | NA |
| Accounts Payable Turnover | 12,74 | 13,40% | 14,90% | NA |
| Payment Days | 23 | 23 | 23 | NA |
| Total Asset Turnover | 1,34 | 1,21 | 1,11 | NA |
| Debt Ratios | ||||
| Debt to Net Worth | 0 | -0,01% | 0,00% | NA |
| Current Liab. to Liab. | 1 | 1 | 1 | NA |
| Liquidity Ratios | ||||
| Net Working Capital | $165 780 | $171 000 | $202 100 | NA |
| Interest Coverage | 0 | 0 | 0 | NA |
| Additional Ratios | ||||
| Assets to Sales | 0,398 | 0,44 | 0,53 | NA |
| Current Debt/Total Assets | 4% | 3% | 3% | NA |
| Acid Test | 21,67 | 23,48 | 26,74 | NA |
| Sales/Net Worth | 1,47 | 1,2 | 0,78 | NA |
| Dividend Payout | 0 | 0 | 0 | NA |
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