[ecoscapes]

I found a garden center for sale and I am wondering if anyone has taken the leap from a landscaping company to a garden center/ nursery? It seems to be pretty well priced I guess and I think it could really compliment my landscaping business!

[trees]

It CAN be a good thing, but...

Garden Centers are a whole different animal and come with their own set of frustrations. You'd better be prepared to put in long hours (retail hours, ugh! -- including weekends, even Sundays during peak season at least) learn a LOT about merchandising, re-learn everything you know about ordering (not just temperate plants, but tropicals, mulches, pots, yard art, tools, etc.), an entirely different type of advertising. You'll need to drop a whole lot into upgrading the place (new signage, benches, displays, etc.), hire a whole new batch of employees and insurance. Also, it will probably make you rethink your overhead numbers and possibly your entire pricing scheme for landscaping.

Also, location is everything with a garden center. If it's not in a prime location, you'll have to spend a lot of effor to make it into a destination, which takes a tremendous amount of time, money and creative help.

It's a whole lot of work, but can be a good thing. Just make sure you know what you're getting into first. Due dilligence is certainly called for when considering this kind of purchase. If it's good, it could be really good. If not... it could cause your whole operation to go belly-up.

[Dale Wiley]

Also, it will probably make you rethink your overhead numbers and possibly your entire pricing scheme for landscaping.

It has no relationship to landscaping what so ever.

Retail garden centers are a RETAIL business, where you purchase goods, mark them up and resell them to the public. They are RETAIL sales.

Landscaping is the process of buying hours from employees adding value with company assets and selling them to the consumer. Plants sales are one small portion of landscaping.

In our area, Pacific Northwest, the big boxes have significantly impacted the smaller retail garden centers. The models that are working as far as retail garden centers are multi million dollar facilities VERY well located in affluent areas. Outside of those parameters, the independents are dying off fast.

Be very careful....

[Inspired]

There is a garden center here in Phoenix that has competed successfully with the Home Centers. They specialize in installing the plant and tree material they sell. Small jobs by landscape construction standards but they have found a way to make them profitable, very profitable. They put together small plant and tree packages and advertise heavily in the newspaper. The crews install 3 to 6 packages in a day depending on the size. The locations don't matter as much because no one else here really specializes in small installs like that. If I can find one of their ads I'll post it.

They have grown from one location to maybe 12 locations valley wide in about 5 years. They now buy out nurseries and small garden centers that are dieing off because of the Home Depots, etc.

[Inspired]

Ok, so 9 locations in Phoenix. The link is below.

BTW. I don't believe they really are a grower. Unless something has changed over there. I suppose they could have purchase a farm at some point. They have specialized in distressed nursery stock for years.

They talk a lot about quality and service, too. However they really specialize in a low price. The designs are only for placement of the plant and tree package they have sold you, nothing more.

They don't do anything else either. Just sell the stock and plant it in your yard at a good price. No irrigation (very important here), no lighting, no grading, no masonry, no maintnance.

moonvalleynursery

[trees]

It has no relationship to landscaping what so ever.

Actually it does.

What I mean by this is not that it will affect how you look at protecting your margins. You'll still be looking at costs vs. profit, for sure. That part remains the same.

What it DOES affect is how you present your proposals to people. If proposals are itemized, you can bet that your clients will be walking around the garden center comparing what's on their quote to retail pricing. In retail, the markup on the plant is where the profit comes from, in landscaping, it's all about time. How you marry the two of those on a landscape quote is where you'll have to adjust your bid process, not how you look at your bottom line.

And certainly how you allocate overhead will be changed. What percent of rent, etc. goes to be recovered in retail pricing? What percent needs to be recovered by landscaping?

It's a total adjustment of your business model & you'll have to have new systems in place to account for this.

[jon korevec]

We have a company down here that has done this. The compete with the big guy's by having the "wholesale" market pretty much cornered. Almost every landscape contractor in town by some of thier material through them. Yes they are open to the public they print out retail prices in a little pamphlet once a month or so. The do a fair amount of growing of thier own, but still take delivery's from all over the south east.
Yes they are open six days a week, but they take REAL vacations about 5 times a year so they seem VERY happy!
It can work.

[Dale Wiley]

And certainly how you allocate overhead will be changed. What percent of rent, etc. goes to be recovered in retail pricing? What percent needs to be recovered by landscaping?

I respectfully disagree here Jess. Mixing the cost accounting between a retail business and a service / construction business will not yield an accurate picture of cost allocation, and will not allocate overhead correctly. They are two totally different business models, and I have yet to see or hear of one who did it successfully on a CONTINUAL & SUSTAINABLE basis.

I operate a wholesale nursery that sells plants to my landscape business and to other wholesale buyers. The nursery is production agriculture and its cost structure, overhead allocation and income structure has no relationship to how we run the landscape business.

It may work in a short term basis, but it is not an accurate way to mix 2 business models in a comprehensive income mix.

[dan deutekom]

I have to agree with Dale on this. I used to manage a large landscape company that had a wholesale division, landscape division and maintenance division. Even though we would share resources they where cost-ed to each division in appropriate amounts. (In fact each division was legally a separate company with the vehicles leased from a leasing company owned by the same man and the facilities rented to the company by his real estate division.) We were responsible for our department and it's budgets and pricing.

This setup limited liabilities if there was a downturn in one of the divisions and I assume there were tax advantages as well. I have to admit that it did increase the paper work but this company has been successful for over 40 years now and is still going strong.

[PSUscaper]

I would have to say you need to look at nothing but numbers on this venture, and not the 'abstract' ideas of how a garden center will benefit you.

I think a business planner, accountant, etc. would be your first people to ask, not us, as we know nothing about you business and can't help much.

Around me, the garden center market is being overloaded. It seems everyone has opened one up, and with all the big box stores, competition is becoming fierce. Speciality growers are doing ok, meaning people who grow and sell perennials, specific materials, etc. But once you move into the the 'general' selling of common stuff, its a dime a dozen around here.

I would have to first suggest finding either a proven way to grow your own (which, is for all matter, a whole differen't business than just a garden center) or a very long list of suppliers who can provide quality materials at a cost that allow you to mark up and make the profit that you will need to have.

I think it can compliment your exis. biz, but at the same time, but could be a crucial blow to the company if not done properly. With the way the economy is and with the overly flooded market in my area, I know I would be very weary of making a move at the current time, but your area may be different.

[LandArts]

I bet most garden centers make big money three or four months of the year and struggle to break even the rest of the time.

[mdvaden]

They are related if you do it right.

How many of you are familiar with Seven Dees of Portland, Oregon area?

Anyway, people go to the nursery to purchase some things. But when the big design and install itch comes around, that's who they go to for landscape work.

They have two or more divisions.

Also, employees can float from division to division.

When winter installs get slow, they can move a few employees indoors to sell Christmas trees, ornaments, wreathes and Poinsettias.

That lowers the lay-off rate a little.

I'd love to have a retail nursery myself, but I'd rather build on one that exists than start from scratch.

[oakleaf]

Amen to MDVaden.
We built our garden centre as our first business, by hand and it nearly killed us. Thankfully my brother and I were 20 and 22 respectfully so could physically cope - but never again. If you can afford it and the numbers make sense - buy would be my choice.

Re: Retail/landscape just mentionned:
True - they are different models and we run them as two different sets of financial accounts. In the end its only the accounting that matters right? So having a clear picture of where you are making profit/losses is critical to survival and to well informed development.
Even if you do this correctly though, it still becomes complex when you also have landscape and the retail site starts becoming your work feed...

Anyway - yes its a killer for time, and you need to have much more of a true vocation than with landscping which can be run more as a "business" in the technical sense. (I can avoid getting flogged for saying that as I am both!). But I for one would not be without it.

You have your plants available, you can boost clents' confidence with the state of your site (ours is ridiculously immaculate for that very reason), along with a whole set of other edge benefits such as preparing of plants and equipment etc. etc.

[oakleaf]

Originally posted by LandArts
I bet most garden centers make big money three or four months of the year and struggle to break even the rest of the time.

Yes - its true December/Jan are really not good for us and I think that as a stand alone we would be losing money in those days in our current state if this were the case. However for 10 months a year we make a healthy profit, but due mainly to our highly aggressive attitude to overheads at the retail site. Since labour is so expensive here everything we do is organised to maximise sales and look of the garden centre without making it stupidly high maintenance.

However.. were we stand alone we would adapt and change... but we aren't. And interestingly, running landscape and retail businesses in parallel under our supervision umbrella, they have developed a strangely well adapted symbiotic relationship.
In March Arpil on-wards the landscape side is fed tons of work by the retail site (I mean really crazy amounts...) then in winter when our contracts flow through yet the retail dries, the landscape repays this debt by continuing to draw on plant and product stocks in reasonable volume.

We still keep very careful track on where we are making money, but they are so far developed in this way now that I fear separation would be impossible.

[NCSULandscaper]

the two business go together very well, we have a landscape install division, very very small maintenance division, and now getting into the wholesale/retail supplies as well, we grow alot of our own material and sell back to the business along with other local companies and the public by appointment only. Im having alot of fun with the supply business. Its a very good way to float around money and help out on the tax situation