Author: John Mason
Publisher: Landlinks Press (CSIRO) (2004)
Learn to Growing Plants and Management of Production Nurseries or Garden Centres, in this classic book from John Mason, Principal of Australian Correspondence Schools, Fellow of Parks and Leisure Australia, Fellow the Institute of Horticulture (UK). The book focuses on all elements of nursery management including site selection, selecting and managing nursery stock, propagation, equipment and structures, new plant breeding and ownership rights, management skills, lists of seeds and material suppliers etc
Chapter 1. Introduction to the nursery industry
Chapter 2. The nursery site
Chapter 3. Propagation
Chapter 4. Potting and transplanting
Chapter 5. Selection and managing nursery stock
Chapter 6. Plant breeding and ownership
Chapter 7. Pest and disease management
Chapter 8. Growing media
Chapter 9. Nursery materials and equipment
Chapter 10. Irrigation
Chapter 11. Glasshouses, shade houses and other nursery structures
Chapter 12. Management
Chapter 13. Marketing
Appendix 1 Horticulture resources and contacts
Appendix 2 Metric / Imperial conversion table
“Throughout, this book is highly practical, introducing readers to the key aspects involved in setting up and running profitable and efficient businesses.”
Sian Thomas (Australian Horticulture April 2005)
EXTRACT FROM NEW BOOK:
INTRODUCTION TO THE NURSERY INDUSTRY
The nursery industry is literally a growing industry. It produces billions of plants every year making major contributions to the forestry, vegetable, fruit, landscape, cut flower and parks industries. There will always be a demand for plants and in turn there will always be a need for nurseries.
Throughout the world, nurseries come in all types and sizes. Many are small family businesses, sometimes just a small hobby business to supplement the family’s normal source of income. At the other end of the scale are large commercial enterprises that employ dozens of people and grow millions of plants. No matter what size though, a nursery always needs good management if it is to be financially viable. This book aims to show you ways to make a difference to the financial viability, hence the success, of any nursery, irrespective of size or type.
The nursery industry is and has been a growth industry throughout the developed countries of the world for several decades, even through periods of recession. Worldwide, there is a rapidly growing demand for potted plants, with the <st1:country-region>US</st1:country-region> having the largest share of world consumption, followed by <st1:country-region>Germany</st1:country-region>, <st1:country-region>Italy</st1:country-region> and <st1:country-region>France</st1:country-region>. The main exporters of potted plants are the <st1:country-region>Netherlands</st1:country-region>, <st1:country-region>Denmark</st1:country-region> and <st1:country-region>Belgium</st1:country-region>. (Ref: The Nursery Papers, Issue no. 2001/1, NIAA, 2001)
The <st1:country-region>US</st1:country-region> is also the world’s largest producer of nursery crops. According to the US Department of Agriculture, the nursery and greenhouse industry comprises the fastest growing segment of <st1:country-region>US</st1:country-region> agriculture, with sales from those operations increasing by 43% between 1992 and 1997. (Ref: ‘About the Industry’, ANLA website)
Similar trends are occurring in other centres of production. The <st1:country-region>UK</st1:country-region> gardening industry has reported good growth over the last 10-15 years (Ref: HTA website), and in <st1:country-region>Australia</st1:country-region> the nursery industry continues to expand, albeit at a slower rate than previous years (partly attributable to restrictions on the use of domestic water in a number of states). (Ref: The Nursery Papers, Issue no. 2004/1, NGIA, 2004)
The current surge of interest in gardening is influenced by a number of factors including increased home ownership, higher disposable incomes, an ageing population, and changing life styles. Media programs have fuelled interest in ‘garden makeovers’, resulting in the growth of landscaping services, and consumer demand for instant colour, larger plants and more hard elements such as paving, outdoor furniture and water features. The demand for garden packages is a strong emerging trend.
The nature of nurseries has always been such that most commonly they have been small businesses employing fewer than five persons. This remains true in the current market, and there are good opportunities for new nurseries to establish, provided they are selective in what they grow and that they maintain adequate standards in the quality of plants they produce.
It is important for nursery managers to be well informed about industry trends, demands and conditions. Nurseries sell living things and, like all living things, plants are subject to the influences of abnormal weather, and plagues of diseases and pests. Plants are also subject to changing fashions. A promotion on TV or in popular magazines often significantly changes the way the public spends, even if it is only a temporary change. Averaged over a period of years, the demand for different types of plants may remain stable, but over shorter periods there can be very significant changes in the demand for one type of plant or another. It is essential to stay in tune with the market place and wherever possible foresee changes in demand before they occur. Maintain contact with the magazines, professional associations and gardening experts who can tell you about what is to be promoted next, or what plants are in over supply or under supply in the near future.
The nursery industry is well represented by professional organisations dedicated to the interests of growers and retailers, and any newcomer to the industry is advised to become a member of a reputable association. Professional associations provide a wide range of opportunities including training and development, business improvement schemes, government lobbying and representation, and promotion and research.
The main professional body in <st1:country-region>Australia</st1:country-region> is the Nursery and Garden Industry Association of Australia (NGIA). In the <st1:country-region>UK</st1:country-region> the Horticultural Trades Association (HTA) includes around 1800 businesses representing garden retailers, growers, landscapers, producers and distributors of garden materials, and service providers. All the major <st1:country-region>UK</st1:country-region> ornamental plant growers are members of the HTA. The interests of US producers and retailers are represented by the American Nursery and Landscape Association (ANLA).
In addition to the national nursery organisations, there are many other professional organisations tailored to meet the needs of regional and special interest groups, such as the International Plant Propagators Society (IPPS), landscape contractors associations and organic growers (see below).
Nursery accreditation schemes are an important new development in both the production and retail sectors. The schemes operate in many countries, with the general aim being to raise the status and professionalism of the nursery industry.
The programs differ in their technical focus and assessment procedures, but all are based on the concept of independent assessment to encourage business improvement. Depending on the scheme, guidelines and independent advice may be provided to promote best management practice. Assessment procedures generally involve external and internal reviews to measure such things as product quality, safety procedures, quality of facilities, staff knowledge and training, marketing and customer service.
Many nurseries involved in accreditation programs have reported such benefits as improved nursery efficiencies, better management, enhanced professional recognition and increased profits.
The two main accreditation programs in <st1:country-region>Australia</st1:country-region> are the Nursery Industry Accreditation Scheme (NIASA) and the Australian Garden Centre Accreditation Scheme (AGCAS). The Horticultural Trades Association in the <st1:country-region>UK</st1:country-region> has developed a number of certification schemes, providing quality standards accepted across the industry.
Certified organic production is increasingly used in the nursery industry because there is a growing consumer demand for organic products. ‘Organic’ means different things to different people, but in order to be certified organic, the nursery must adhere to standards enforced by an organic certification body. While this can impose restrictions on particular aspects of management, certification is a powerful tool for a nursery manager wanting to break into the ‘organic’ market because it indicates a definable standard of production.
Organic certification operates differently in different countries, but standards are generally enforced by government, private certification agencies, or a combination of both. In <st1:country-region>Australia</st1:country-region> the major certification bodies include Biological Farmers of Australia (BFA), the National Association of Sustainable Agriculture Australia (NASAA) and Organic Growers of <st1:country-region>Australia</st1:country-region> (OGA), all accredited by the Australian Quarantine and Inspection Service (AQIS). The major certifier in <st1:country-region>Japan</st1:country-region> is JAS, accredited by the Ministry for Agriculture Forestry and Fisheries Japan (MAFF). Organic agriculture in the <st1:country-region>United Kingdom</st1:country-region> is regulated by the UK Register of Organic Food Standards. Their largest certifier is the Soil Association. Organic certification in <st1:country-region>America</st1:country-region> is regulated by the US Department of Agriculture (USDA). Quality Assurance International (QAI) is a private company that operates internationally from <st1:country-region>America</st1:country-region> and is the world’s largest certification body. The International Federation of Organic Agriculture Movements (IFOAM) is an international umbrella body for the organic industry.
Organic nursery production focuses mainly on vegetables, herbs, and fruit. Specific management changes may be necessary if you are considering a transition to organic production. Different standards may require certified organic seed, exclusion of synthetic fertilisers and biocides, and use of particular potting mixes. Some areas have established industries such as organic potting mix producers, a factor which may facilitate success.
TYPES OF NURSERIES
In the past, nurseries were involved in almost all aspects of the production and culture of plants. They grew a wide variety of plants, and they sold them both wholesale and retail, as well as supplying a wide range of allied products and services. Today all but the largest nurseries tend to specialise.
Nurseries can be non-private (for example, run by government, community or conservation groups) or private businesses. Private nurseries can be individually owned partnerships (perhaps owned by a husband and wife or two friends), or corporate, such as a company, where they have a legal identity of their own.
Nurseries can be classified in many different ways. For example:
- according to what they grow - such as natives, exotics, seedlings, cottage garden plants, bonsai or bulbs;
- how they grow it - such as in-ground production or in containers;
- even the size of plants they produce - such as tubestock, small pots/containers, or advanced stock.
Nurseries which try to do everything rarely succeed. New nurseries should consider the following options carefully and define the scope of their operation to fit their resources, skills and knowledge.
There are three main types of nurseries: production, growing-on and retail.
Production nurseries, also known as propagation or wholesale nurseries, propagate plants and either sell them direct to retail outlets, landscapers and council parks departments, or wholesale them to growing-on nurseries. Success of production nurseries is affected by:
- Innovation – supplying new varieties to the market or developing new ways of growing and presenting existing varieties allows the grower to develop new markets.
- Specialisation – growing fewer lines in larger quantities allows the grower to improve efficiencies in the nursery.
- Forecasting trends and meeting market demands – knowing what plants customers want, or are likely to want, and growing them in sufficient quantities allows the grower to meet consumers’ requirements, and through doing this, maintaining customer loyalty.
Growing-on nurseries buy bulk quantities of seedlings or small plants from propagators. At the time of purchase, the plants are growing in plugs, trays or tubes; the plants are then potted into larger containers and grown on for a period of time, adding value to the nursery’s original purchase.
In addition to increasing the plants’ size, specialised growing techniques, such as topiary, may be used to add value to the plant during the growing-on phase.
The most critical aspect of production in growing-on nurseries is developing a quality product for the retail market. At the time of resale, every plant must be at its peak, displaying healthy, vigorous and sturdy growth. The plant must presented appropriately, in a clean, attractive pot, with fresh potting mix (no weeds or residues on the surface) and appropriate support (small stake or trellis) if necessary. Labels must also be supplied (but not attached).
Retail nurseries buy plants from production/propagation nurseries and resell them at a profit. ‘Greenlife’ (the term used by the industry distinguish plants from other nursery products) sold by the retail sector include seedlings, bulbs, containerised and bare-rooted plants and trees. In addition garden centres sell associated products such as dry goods (pots, packaged potting mixes, fertilisers, sprays) and bulk landscaping materials.
There is an increasing emphasis on the supply of ‘lifestyle products and services’ in retail outlets, such as outdoor furniture, gift lines, display gardens, cafés and landscaping services.
WHAT TO GROW
It has often been said that the downfall of a nursery manager is "He/she is too much of a plant collector and not enough of a businessperson". Most people who work with plants love plants, and it is very easy to be tempted and grow the types of plants which you love most. This is often the nursery manager's 'Achilles heel'! It is essential to choose what you grow carefully. It is pointless growing lots of plants if there is no demand for them.
Some plant varieties require more space than others. Sprawling climbers or ground covers can take up a lot of room, while tall slender trees can take less. Slow growing plants don't have to be sold as soon as they are good enough for sale, but fast growing plants deteriorate fast so must be sold quickly, unless you have the resources to continually keep potting them up into larger containers.
Some of the main choices are:
- Trees and shrubs – climbers, conifers, deciduous plants, groundcovers, fruit trees and vines, native trees and shrubs, exotic trees and shrubs;
- Bedding plants - annual flower and vegetable seedlings;
- Potted colour;
- Foliage plants – indoor foliage and flowering plants, hanging baskets, palms and ferns;
- Perennials and cottage plants;
- Bulbs and tubers;
- Water plants;
You may choose to have a general nursery, growing or selling a wide range of plant types; to choose a theme, such as bonsai or cottage gardens; or to concentrate on a specific type or variety of plant, such as carnations, fuchsias, roses or geraniums.
HOW TO GROW
Plants can be grown in the ground or in containers. Plants grown in the ground are dug up when they are to be sold, or transplanted and grown on in containers before being sold. Plants grown in containers may be sold in the same containers or may be potted up prior to sale. Container growing uses mainly imported soil mixes (growing media). In-ground growing can take more space, might require a little more labour in some respects than container growing, and does require the nursery to be sited on suitable soil.
Comparison of container versus in-ground nursery production
a. Plant can be transported and sold in their containers, with little disturbance to the plant;
a. Plants must be lifted from the ground and packaged in a way that minimises damage to the plant;
b. Containers can be readily moved if necessary during production;
b. In-ground stock difficult to move during production;
c. Soil/growing media for plants must be brought in (imported) into the nursery;
c. Plants are generally lifted and sold bare-rooted; soil remains and can be re-used/cultivated;
d. Soils/growing media are readily sterilised in small batches to reduce pest and disease problems;
d. Harder to control pest and disease problems;
e. Rootstocks are harder to quickly bud or graft;
e. Easier to bud/graft rootstocks in-ground as the rootstock will not move too much during grafting for the roots secure the plant;
f. Plants have root balls restricted by size and shape of container;
f. Plants grown in-ground have greater opportunities for root zone development;
g. Careful watering is critical due to restricted/limited amounts of growing media for plants roots.
g. Watering is less critical due to greater opportunities for root zone development and lower water from soil.
A nursery must set and adhere to certain standards if it is going to operate profitably. These standards can be broken down into three main groups:
1. Cost efficiency standards
2. Quality standards
3. Size standards
Cost of production
There must be a sound relationship between the cost of production and the sales price. Both of these monetary figures must be constantly monitored and maintained at an acceptable level to ensure any business remains profitable. It is important to remember that a good nursery manager must not only be capable of producing and/or maintaining good quality plants and allied products, he/she must also be able to sell them profitably.
Cost of Production + Profit = Sales Price
If the cost of production becomes too high, then profit will decrease. In such a situation, the sales price must be increased, otherwise the profit figure can become a negative amount (ie. you might be losing money rather than making money). In order to control your cost effectiveness, you must understand and control all of those factors which influence the cost of production. You may also need to make adjustments to your sales price figure in order to maintain an acceptable profit.
Cost of production is influenced by the following factors:
- Cost of site – lease/rent value or purchase costs
- Cost of site services – power, gas, water, etc
- Cost of materials – soil, pots, fertilisers, etc
- Cost of unsold plants – a certain proportion of stock may be lost, may die, or may just become unsaleable. Some nurseries budget much as 30% of stock being thrown away)
- Labour costs – including your own time as well as employee hours, as well as holiday pay, superannuation requirements, health cover, etc
- Advertising/promotion – printing, advertising in magazines, etc.
- Selling costs – transportation, invoicing, etc.
- Taxation - Don't forget Payroll tax, income tax, etc.
This figure should be over and above money which you earn as wages. If you are only working for wages (with no profit), then you would be better putting your money into some different form of investment and going to work for someone else. Profit should be greater than the interest rate which you could get by investing your money elsewhere. Profit should normally be at least 15-20%. If the nursery is only small, then the profit margin should be larger. If the nursery is large, then the profit per plant can be kept lower. Profit in this situation comes through quantity of sales.
The figure which a plant is sold for can vary considerably. Retail price is normally about twice the wholesale price. This being the case, the wholesaler depends upon selling in large numbers in order to maintain profitability. Wholesale price varies considerably. Generally speaking, this figure is largely affected by:
- The reliability of the nursery supply. If the wholesaler is well established and known to be a reliable source of plants, they can then demand a higher price.
- Quality of plants offered. Higher prices are only paid for top quality stock.
Some factors affecting quality:
- General plant health - Does the plant show evidence of pest or disease damage, dead leaves, burned leaves, markings on stems, lack of vigour?
- Hardness or softness of plant tissue - Has the plant been hardened off, or will it be susceptible to fertiliser burn, frost, wind, sun, etc?
- Uniformity - Is plant presentation consistent? Plants of a particular variety should be in the same sized pot, the same colour pot, and have the same type of label. The plants should all be of similar shape and size.
- Labelling - Are plants correctly and clearly labelled? Picture labels are preferred to printed labels without a picture. Tie-on labels may be preferred to stick-in (soil) labels because they cannot be removed easily and put with a different plant. Stick-in labels are, however, generally quicker to place in position than tie-on labels. Hand written labels do not generally provide as much information as commercially printed ones, and the writing often fades or runs making them hard to read.
Some countries, including the <st1:country-region>US</st1:country-region>, have established standards for the sale of nursery stock, including container sizes. In other countries the system is not so formal, but there are unwritten standards which are generally adhered to. Plants presented in the wrong type of container are usually more difficult to sell. For example, containerised plants are generally grown in rigid plastic pots. Plastic bags are less expensive and some growers use them for growing-on in production nurseries to keep costs down, but they are rarely used for selling plants in retail nurseries.
Certain types of plants are generally sold in certain sized pots. Most trees and shrubs for the home garden are sold in 125 mm (6 inch) or 200 mm (8 inch) (pots. Herbs and indoor plants are usually sold in smaller plastic pots (75 or 100 mm). Seedling vegetables and flowers are sold in plastic punnets. Advanced plants are sold in 10 litre (2 gallon) plastic buckets. Seedling-grown plants for use as farm trees or for large-scale revegetation are often sold in 50 mm (2 inch) tubes. Deciduous trees and roses are sold bare rooted over winter.
STARTING OUT AS A NURSERY PRODUCER
New nurseries, like many other small businesses, often fail because they haven't been properly planned. Nurseries can be started with minimal cash investment, but the size of the operation must be geared to the amount of cash invested. If the initial investment is small, then the nursery should be small and grow slowly. Even if a sizeable investment is made initially, it is wise to retain up to one third of the cash available to carry the business for the first couple of years. Nursery profits can fluctuate greatly from year to year. If the first year is a bad season because of pests, diseases, bad weather or poor sales, a reserve of cash may be necessary to carry the nursery through to the second year.
A new nursery manager is usually limited by lack of skills, poor knowledge of the market, and small reserves of money available to develop the operation. It is possible to start a profitable part-time nursery in the backyard. This type of operation will provide a supplement to a normal income, and at the same time, allow you to learn from your experiences. A serious business venture is quite different: you don't have the time to learn by making mistakes!.
New nurserypersons should avoid growing the more difficult plants. These plants often require more time and sophisticated equipment to grow them. This means that they are more expensive to deal with. Plants which require a greater length of time to bring to a saleable size should also be avoided until the nursery is generating enough sales to provide a sufficient income to keep the nursery profitable while the plants are growing.
New nurserypersons are advised to produce plants in the standard packaging (e.g. 125 mm plastic pots). You know that the product will usually be saleable in this packaging!
New nurserypersons are also advised to start with high-demand plants. Low shrubs, ground covers and potted or instant colour are generally in higher demand in urban areas than large shrubs and trees. The highest demand for large shrubs and trees is in the rural community. A plant with a flower on it is almost always more saleable.
Revamping an existing nursery
There is always room for improvement, even in the best run nursery. A good nursery manager will keep an open mind, will continually review the way things are done in the nursery industry, and look for better, more up- to-date and more profitable ways of doing things.
Tasks such as the following should be tended to continually:
- Looking for better prices for materials (eg. pots, labels, stakes, potting media etc).
- Reducing the numbers grown of some plants and increasing the numbers grown of others in response to changes in consumer demand.
- Upgrading equipment.
- Staff training.
- Refining propagation methods for each plant variety that you grow.
- Analysing the success of marketing (e.g. compiling statistics on the response to promotions, the sales achieved from month to month, etc).
- Calculating and analysing the profit and adjusting prices accordingly.
- Attending industry seminars and keeping in touch with current research, trends and developments in the industry. Use the internet as a research tool and join professional associations involved in industry development.
If you are not doing these things, maybe you should start.
Organisation is the key
You can increase profitability a great deal by simply organising and planning what you do in a nursery. Planning should be an ongoing process, not something you start then finish and forget about once a nursery has commenced operations. There are basic questions which should be asked over and over as you constantly review what you nursery is producing or selling, how you are producing or obtaining those products, and how you market your products. When planning, consider how to achieve the following goals.
Reduce wasted time
Keep asking yourself: "Can I get the same work done in less time if I do things differently?" In some cases, mechanisation of tasks may save considerable time and labour. In other cases, simply rearranging the placement of propagating and potting-up benches will speed up the flow of plants and materials into and out of propagation areas.
Reduce wasted facilities and equipment
Keep asking yourself: "Can I do the same work just as well (or nearly as well) without the expense of that extra equipment?" You should only buy extra equipment because it will lead to extra profit. It's a trap to buy equipment because everyone else does, without giving serious consideration to how it will affect your profitability. It is sometimes more cost effective to hire some types of equipment, particularly equipment that, while necessary to the nursery's operation, is only used infrequently. When hiring equipment, however, make sure it is readily available when you will require it.
Reduce wasted materials
Be self critical. It is easy for expenses to increase because potting mix gets spilt on the floor; because you buy too many labels and pots which can degrade or break down over time, or get damaged if stored incorrectly; or because you fertilize or spray more often than is necessary. You should predetermine what you need and buy that quantity, with perhaps a little extra in case of losses due to accidents or sudden extra demand for products. It is a mistake to just keep buying materials when you need them, without having earlier calculated what your requirements should have been. REMEMBER money spent on excess materials that sit there doing nothing except take up valuable space is a wasted asset that can be readily used elsewhere and more profitably in the nursery’s operation.
Make the most efficient use of labour
This is particularly important if you are employing staff, but also applies to getting the most from your own labour. It is important to plan ahead what tasks each worker will be undertaking the next day, week, or even further ahead. This both staff and employers know what has to be done rather than continually wasting time trying to sort out what they are supposed to be doing. It is important also to have suitably trained staff and the right mix of staff. There is little point in having, for example, staff busily propagating plants, if you don't have the support staff available to care for those plants once propagated, or to do the marketing and transporting.
If you decide that growing or selling plants is for you, and you are ready to consider opportunities, use the following questions to help you assess the likelihood of success for each different opportunity.
- Is there a market in my community for this kind of business? Will people buy my product or service, and are there enough buyers to sustain this business in this area?
- How much money would it take to start the nursery? Will I be able to borrow that much money? How much will it cost me in the long run?
- How many hours a week is it likely to take to run the nursery? Am I willing to commit that much time?
- What are the particular risks associated with this nursery? What is the rate of business failure? Why have similar businesses failed, and how can I overcome these risks?
- Does my background prepare me to run this kind of nursery? Do most people who own this kind of nursery have more or different experience or knowledge than I do? What do I need to learn, and am I willing or able to learn it quickly?
- How much money could I make running this business? What is my lowest likely net profit? Is this sufficient to meet my needs, and when can I expect to make this?
Launching a new business, introducing a product or service, and buying advertising are so expensive that misjudgements can mean disaster for an entrepreneur. Market research can avoid costly errors by telling you what people want to buy, and how they want it presented to them.
Regardless of how great you think your product/service is, it is virtually impossible to sell any product or service that people do not want. On the other hand, it is very easy to sell people what they do want. That is the whole point of market research: to find out what people want so you can provide it for them. To be successful, a business owner must know the business’s market; who are its customers and potential customers; and how they perceive the business’s products and services.
Market research is the way to obtain, analyse, and interpret the information necessary for making marketing decisions. It provides the timely information you need to:
- reduce your risks
- identify and profit from opportunities
- improve existing products
- plan and refine advertising campaigns
- spot problems and potential problems
- evaluate alternatives.
Fortunately, market research does not have to be expensive. Although large corporations often spend millions of dollars for market research, an entrepreneur can accomplish much for very little money. Initially you need to determine such things as whether there is a market for your product or service, how that market can be reached, who your competitors are, and the current condition of your industry or field and its future outlook.
Key market research questions
Who will buy your products and/or services?
Customers are the most important element of any business. Successful marketing depends on reaching customers most efficiently. This is done best by targeting your market carefully. Target-marketing means using your marketing resources more like a rifle than a shotgun, going after only those customers most likely to want your product or service. The more clearly you identify your potential customers, the more likely your efforts are to be successful.
What do they want?
When entrepreneurs say that "everyone" is a potential customer for their product, it usually means they have not really targeted their market. This can lead to wasting huge amounts of money on inappropriate and ineffective marketing. The more you know about who you are trying to reach, the more efficiently you'll be able to market to them. In addition to knowing who your customers are, you'll need to know how many of them there are, where they are, what their wants and needs are, and what will attract them.