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Fact Sheet 660
Stanton A. Gill
Extension commercial horticultural specialist
Central Maryland Research and Education Center
David S. Ross
Extension agricultural engineer
Department of Agricultural Engineering
James C. Hanson
Extension farm management specialist
Department of Agricultural and Resource Economics
This publication provides introductory infor- skills are essential to operate an economically
mation on starting a nursery operation in the successful nursery operation.
State of Maryland. As the nursery industry has
grown in the State, so has the number of regula-
Characteristics of Maryland’s
tions that govern it. Prospective nursery owners Nursery Industry
should consider requirements concerning zon- Maryland’s nursery industry is a viable,
ing, state and county registration, and water use actively expanding section of Maryland agricul-
and runoff containment. These requirements ture. The State’s increasing urbanization has
will help determine site selection. As the nurs- stimulated the demand for landscape plant
ery industry has grown in Maryland, so has the material and the development of nurseries in all
number of regulations that govern it. This publi- 23 Maryland counties. For example, the horti-
cation provides introductory information on culture nursery industry has grown dramatically
starting a nursery operation in the State of since 1950. The number of new horticultural
Maryland. Site selection, along with office and enterprises entering the market has increased in
equipment needs and the various growing meth- past decades, but none more significant than the
ods for shade-tree production, is covered in Fact 1980’s, when a strong economy created strong
Sheet 661 Starting a Nursery Enterprise: demand for quality plant material. In 1993,
Specializing in Shade Trees. there were 456 registered plant-producing nurs-
Viewing established nurseries, a potential eries, 622 garden centers and landscape compa-
operator may get the impression that growing nies, and 518 store outlets selling plants in
and marketing plants is relatively easy. As with Maryland. In 1991, Maryland nurseries generat-
most business ventures, however, there is more ed more than $191 million in plant sales with
to it than meets the eye. Getting started in the nursery products being the leading agricultural
plant production business involves financial commodity in Maryland. More than 9,000 acres
investments; controlling risk; complying with a were in active production in Maryland in 1992.
web of county, state, and Federal regulations; The largest number of retail nurseries are
and many hours of time. Strong interest in plant concentrated in central Maryland counties
production and sound business management where the greatest amount of residential and
commercial building is taking place. In areas of ent from other nursery-producing states in that
the State where land prices are high but direct large percentages of plants that are produced in
access to customers is possible, nursery owners the State are sold within the State. Local demand
have adapted by producing high-value specialty has been so great that additional stock has been
plants or offering extra services, such as land- shipped from other states.
scape installation. Larger wholesale nurseries
tend to locate in parts of the State where farm-
Evaluating Opportunities in
land prices are lower. Nursery Production
Although individual nursery operations in the As with any business enterprise, a thorough
State range in size from 0.25 acre to 3,000 examination and evaluation of the potential
acres, the average nursery size in central market for nursery stock must be undertaken.
Maryland is 21 acres. There is a wide variety of Your local Cooperative Extension Service office
nursery operations, and several specialized pro- can provide input on what type of nursery and
duction methods are used in the State. Trees, plant varieties would be most marketable. A
shrubs, and herbaceous perennials are grown potential source of market information is the
using a variety of production methods, includ- 10-year development plan projections of county
ing field growing, container growing, high-den- planning and zoning boards. New housing
sity beds, and, in the case of aquatic plant pro- developments can influence a proposed nursery
duction, in ponds. Nursery operations can be business. Housing starts and other construction
divided into the following categories: provide important market outlets. The national
• Grower/retail nurseries are usually retail and state economies, as they prosper or decline,
outlets with some acreage for plant produc- also influence the nursery market. Wages and
tion. Retail nurseries are generally small in unemployment regulate consumer buying
size, commonly fewer than 40 acres, and power.
sell plants directly to homeowners. Federal, state, and local government policies
• Wholesale nurseries grow plants for sale to involve housing, highway construction, beauti-
other nurseries, landscape contractors, or fication, and scenic programs, all of which
retail outlets. Wholesale nurseries may also influence the demand for nursery stock. The
grow plants on a contract basis. Some State’s Wetland Protection Act has encouraged
wholesale growers produce liners or root many nurseries to grow native plants, such as
cuttings for resale. willow, sassafras, seedling red maples, and
• Landscape nurseries provide landscape ser- aquatic plants. A producer should stay informed
vices and retail sales, as well as producing of legislative action that might influence future
plants. consumer demand for plants.
• Garden centers provide a wide variety of Though commercial and residential building
plants, equipment, and related supplies. came to a near standstill from 1991 through
Also, garden centers may offer landscaping 1992, several Maryland garden centers reported
and other services. Many produce small modest to good sales of small caliber trees and
quantities of their own plants, but generally bedding plants. Nurseries specializing in green-
these operations purchase plants for resale house potted plants, bedding plants, and peren-
from wholesale operations. nials reported strong demand for their product
• Plant brokers solicit, take orders, sell or dis- through the recession. Many homeowners,
tribute nursery stock, or act as a salesperson though cautious about spending large amounts
for other nurseries. for landscaping, did continue to purchase plant
Nurseries in urban parts of the State are often material for improving the aesthetics of their
a hybrid of several of the categories just listed. residential landscape.
The Maryland nursery market tends to be differ- Perceptive nursery owners pick up on chang-
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ing purchasing patterns, modify their product vate a selling niche by marketing disease- and
mix, and try new marketing methods to reach insect-resistant tree cultivars among environ-
new consumers. It is generally easier to change mentally concerned customers.
tree types with container-grown trees because Small growers can also compete with large
the trees are generally grown in the container nurseries by doing something a little differently,
for 1 to 3 years. Field-grown trees, which either in marketing or production. They might
involve a long-term investment, require predict- market their nursery as a place for purchasing
ing consumer demand 5 to 7 years in advance. quality and service with a “personal touch.”
Start your business with a thorough, firsthand Some nurseries selling in the retail market are
knowledge of potential customers’ primary offering lifetime guarantees for their plants.
needs: what to grow, how many varieties to This is a marketing angle that can enable a
grow, and the desired size of plants. Buyers will grower to sell plants at a higher price.
rely on growers that can quickly fill orders, han- An advantage all Maryland nurseries have is
dle returns, and meet other needs quickly. that their plants are produced close to ready
As in other businesses, success in the nursery markets. With the increasing migration of peo-
industry depends on imagination, determination, ple into Maryland, there will be continued
and planning, as well as the proper management demand for plants. Transportation costs within
of money, labor, materials, space, and time. the State are lower than those of material
Regardless of the economic atmosphere, there shipped in from out of state. Another advantage
will always be opportunities for an entrepreneur is that with wholesale production, buyers can
with the right blend of business, marketing, and easily visit your nursery and tag plants they
horticultural skills. want instead of buying sight unseen from out-
of-state nurseries.
Competing in Nursery
Production Compliance With Federal, State,
A beginning grower must realize that large
and Local Regulations
nurseries have an advantage: economy of size. Federal Business Regulations
Because they can allocate their overhead and In forming a new nursery, legal and tax con-
fixed costs to more plants, they have a lower siderations will determine which type of busi-
cost per salable plant. Even so, small nursery ness entity you establish. You can establish your
businesses can compete in the face of this eco- nursery business as a sole proprietorship, part-
nomic disparity. For example, small nursery nership, or corporation. The Internal Revenue
operations can usually respond to local markets Service (IRS) has complete definitions for the
and switch the combination of their products various business entities. It is wise to consult an
much more rapidly than large nurseries. Small attorney or accountant to determine which legal
growers can also focus on producing better structure would work best for your nursery busi-
quality plants. With knowledge of the local mar- ness. The IRS provides a start-up tax kit called
ket, these growers can concentrate on offering “Your Business Tax Kit.” You can obtain the kit
customer convenience or varieties that are local- and any other necessary Federal tax forms or
ly popular but not being produced by larger information by calling 1-800-829-3676 or by
nurseries. This involves staying current on new visiting your local IRS center.
cultivar releases and obtaining sources before Businesses are required to obtain a Federal
other nurseries respond. Articles published in employer identification number if the business
nursery trade journals on new cultivars and is a sole proprietorship with at least one
seminars given by professional organizations employee, a partnership, or a corporation. You
are sources for information on these new or can obtain an employer identification number
rediscovered plant species. A grower can culti- by completing an application and sending it to
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your local IRS office. tact MDA, Plant Protection Section, 50 Harry
State Licensing and Regulations Truman Highway, Annapolis, MD 21401 (410-
841-5920).
Business registration. For either a sole pro-
Home improvement license. The Maryland
prietorship or general partnership that uses a
Home Improvement Commission regulates the
business name, the business is required to regis-
licensing of anyone involved in the home
ter a trade name with the Maryland Department
improvement business. A nursery operation
of Assessments and Taxation. To protect a sole
must obtain a home improvement license if it
proprietorship or general partnership from con-
fusion with other companies who may have the includes a landscape installation division that
same name, the State recommends that all busi- does residential landscaping. The Maryland
nesses apply to register their business name Home Improvement Commission is located at
with the State. Contact the Department of 501 St. Paul Place, Baltimore, MD 21202-2272
Assessments and Taxation to conduct a name (410-333-6309).
search for your business (410-225-1330). For a To obtain a home improvement license you
limited partnership or corporation, you must will be required to fill out an application form
register with the State through the Department and take a written exam. There is an examina-
of Assessments and Taxation, 301 Preston tion fee, and tests are offered at several loca-
Street, Baltimore, MD 21201. tions throughout Maryland. All applicants for a
Plant dealer’s license. A Maryland plant home improvement contractor’s license must
dealer’s license is required for all businesses submit a certificate of liability insurance of at
that purchase, collect, or acquire nursery stock least $50,000, and a yearly fee is required.
for sale, distribution, or installation. The Pesticide regulation. Nurseries are required
Maryland Department of Agriculture (MDA) to control plant pests that attack nursery stock
Plant Protection Section is responsible for regis- that will be sold to the public. The control of
tering and inspecting all nurseries operating in pests will generally require pesticide applica-
the State. Under the regulations, a nursery is tions. The MDA Office of Plant Industries and
defined as an operation producing nursery stock Pest Management is in charge of enforcing reg-
for distribution, exchange, or sale. To be certi- ulations on pesticide use in Maryland. The
fied, applicants must do the following: office is located at 50 Harry S. Truman
• Submit an application to MDA on forms Highway, Annapolis, MD 21401 (410-841-
provided by the department. 5710). Applicants are required to take and pass
• Furnish an affidavit attesting to the number a written exam on pesticide safety and handling
of acres, or partial acre, devoted to the to receive a pesticide applicator’s license.
production or maintenance of nursery There are two study manuals to help you pre-
stock. pare for this test. One is called the “Core
• Pay an annual fee as specified by MDA. Manual.” The second is entitled the “Orna-
• Provide access for the inspection of all mental and Turf Manual.” A copy of each is
nursery stock. available to nursery operators. You can request
• Follow appropriate cultural practices (keep a copy from the Cooperative Extension Service
plants and materials easily accessible) so office in the county in which you will be operat-
that an adequate inspection of the nursery ing your nursery. The private applicator’s pesti-
stock can be made. cide exam is given at various times during the
• Provide a suitable means of identifying year at several locations throughout the State.
similar blocks of nursery. You can obtain a schedule of test dates and loca-
• Keep the nursery free of plant pests. tions from the local Cooperative Extension
• Furnish a list of suppliers of nursery stock. Service office or MDA, Pesticide Regulation
For a copy of the forms you need to file, con- Section.
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Nurseries can use pesticides more efficiently 631-3000). For a small fee, they will send a
and reduce the use of cover sprays for nursery copy of the regulations on underground storage
pests through the use of integrated pest manage- tanks. If you are considering above-ground fuel
ment (IPM). Contact a local Cooperative storage tanks, there is a general oil operation
Extension Service office for information about permit that is issued for small operations. If you
IPM and on availability of local IPM indepen- store more than 10,000 gallons, you must obtain
dent field scouts. an oil operator permit. Contact the Maryland
If you have a pesticide storage building on Department of Environment, Above-Ground
your nursery, contact your local fire department Storage Tank Division at the same address and
and provide them with information on the loca- telephone as above. In maintaining fuel storage
tion of and what pesticides are stored in the tanks, you are required to contact the State Fire
building. In case of a fire, this will aid them in Marshall or Fire Protection Office, depending
dealing with a possible emergency situation. on which has jurisdiction in your area. To con-
Contact MDA, Office of Plant Industries and tact the State Fire Marshall, call 410-486-3101.
Pest Management Division (address previously Beginning in November, 1993, vapor recovery
listed) or your county Cooperative Extension is required for gas storage tanks with a volume
Service for specific construction recommenda- greater than 250 gallons. Call the Vapor
tions for buildings used for pesticide storage. Recovery Division at 410-631-3000 for more
Topsoil and composted material regula- information.
tion. A nursery selling topsoil, composted Trucking regulations. As a nursery opera-
materials, or fertilizers must be regulated and tor, you will likely be operating large trucks if
inspected by the MDA’s State Chemist’s Office. you plan to ship your nursery stock to cus-
A distributor must register each brand and grade tomers. The Maryland Department of
of fertilizer and each product name of soil con- Transportation (MDOT) publishes a handbook
ditioner before distributing it in the State. Each entitled “Trucking in Maryland––A Handbook.”
person who registers any commercial fertilizer This book should help you determine whether
or soil conditioner in the State is required to fur- you need to obtain a commercial driver ’s
nish this office with a semiannual written state- license and what inspection requirements will
ment of the tonnage of each grade of commer- be enforced in operating a commercial truck in
cial fertilizer or each soil conditioner distributed Maryland. Call MDOT at 410-333-1215 or 1-
in the State. There is an annual registration and 800-543-4564 to request a copy.
inspection fee. Call the office of the Maryland A commercial motor vehicle driver must
State Chemist for a copy of the regulations and apply for a license at a Motor Vehicles Admin-
schedule of fees (410-841-2721). istration office. There are three commercial
Fuel storage regulations. In a nursery oper- classes: Class “A” for trucks with a gross vehi-
ation, it is often convenient to maintain fuel cle weight (GVW) of 26,001 pounds or more
storage tanks for operating backhoes, tractors, with air brakes; class “B” for trucks or buses
and other heavy equipment used in production with a GVW of 26,001 pounds or more; class
and maintenance. If you construct a greenhouse “C” for trucks or buses with a GVW less than
that needs to be heated, then you will most like- 26,001 pounds.
ly be using a fuel storage tank. Additional permits. The Maryland State
In Maryland, there are separate regulations Soil Conservation Committee, MDA, has pub-
for above- and below-ground storage tanks. If lished a pamphlet entitled “A Farmer’s Guide to
you are considering underground storage tanks, Permits.” You can obtain a copy by writing to
contact the Department of the Environment, MSSCC, MDA, 50 Harry S. Truman Parkway,
Underground Storage Tank Division, 2500 Annapolis, MD 21401. This booklet covers
Broening Highway, Baltimore, MD 21224 (410- requirements for water appropriation and use
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permits, pond approval, nontidal wetlands layout, number of employees, and hours of
approval, tidal wetlands permits, pesticide deal- operation. If the area you plan to establish your
er permits, and special critical area requirements. nursery in requires a special permit, the cooper-
The Landscape Contractor’s Association ation of the neighbors will be essential. Check
(LCA) published a reference book in 1992 enti- also with the county as to whether you will need
tled Guide to Business Licenses, Permits, and to obtain a business license.
Regulations for Maryland, Washington, DC,
and Virginia. This book contains information Other Considerations
for landscape companies starting a business. Water Use Regulations
Much of the information is applicable to nursery
A number of local, state, or Federal regula-
operators planning to open a business in
tions can apply to the use of water in Maryland.
Maryland. Contact the LCA, 9053 Shady Grove
This section should alert you to regulations that
Court, Gaithersburg, MD 20877 (301-948-0810)
might apply to you. Check with the agencies
to obtain the reference manual.
listed here and with other county agencies to
County Zoning Regulations learn of specific current details.
Zoning ordinances vary among counties and A Water Appropriation and Use Permit is
restrict the type of businesses permitted to oper- required if you plan to withdraw more than
ate in a given location. Before selecting the site 10,000 gallons of water a day (based on an
for a nursery, check with the county government annual average withdrawal) from surface or
or with the county Cooperative Extension underground waters for agricultural activities.
Service office to find out if nursery operations Users of less than 10,000 gallons per day may
are a “permitted use” or will require a “special want to establish a claim on water by getting a
exception.” In most Maryland counties, nursery permit. Applications may be available in county
production is considered an agricultural pursuit Extension Service offices, or contact the Water
and is a permitted use in areas designated for Rights Division, Water Resources Administra-
agricultural production. In other counties, nurs- tion, Maryland Department of Natural Re-
eries, garden centers, and landscape companies sources (DNR), Tawes State Office Building,
are considered businesses that need a special Annapolis, MD 21401 (410-974-3675).
exception. Each county in the State has a zoning A permit is needed to drill a well. Well
board that sets the restrictions for that particular drillers are acquainted with these requirements
county. and should have knowledge of water yields in
If you need to obtain a special exception, the local area.
check with your the county Cooperative Ex- State approval is required for all ponds
tension Service office to find out what the aver- planned in Maryland. A U.S. Army Corps of
age cost of obtaining one has been for other Engineers 404 Permit and Water Quality Cert-
growers in the county. In urban areas, it may ification may also be required. If certain condi-
take up to 1.5 years to obtain a special excep- tions are met, the pond may, however, be
tion and legal costs may exceed $20,000. In exempt from state approval but will need to be
special exception cases, the adjoining neighbors approved by the local Soil Conservation District
have a strong influence on how successful you (SCD). Consult the local SCD or U.S. Depart-
will be in obtaining the exception permit. When ment of Agriculture Soil Conservation Service
looking at a location for your nursery, keep zon- (USDA/SCS) office for assistance. The issuing
ing at the forefront of your thoughts. You may agency at the state level is the Dam Safety Div-
wish to get to know the adjoining landowners ision, Water Resources Administration, DNR.
and find out their feelings about your nursery Water can be used from streams and rivers by
plans. Be prepared to supply the neighbors with adjacent property owners, but other persons
details on the size of your operation, physical located up- and downstream are also entitled to
6
water rights. The City of Baltimore has certain References
watershed rights given to it by the State on areas
near its water supplies. Gill, S.A. 1989. Central Maryland Hort-
Permits may be required for construction near iculture Survey Report. Special report. Coop-
waterways (Waterway Construction Permit) or erative Extension Service, Central Maryland
in nontidal or tidal wetlands. Check with the Research and Education Center; Ellicott City.
local SCD or contact either the Nontidal Maryland Department of Agriculture. 1993.
Wetlands Division, E-2, of DNR or the Tidal 1992-93 Directory of Certified Nurseries,
Wetlands Division of DNR for current, specific Licensed Plant Dealers, and Licensed Plant
requirements. Although most of these affect Brokers. Maryland Department of Agriculture;
construction activities, some water source Annapolis, Maryland.
development or drainage plans may be affected. Maryland Department of Agriculture. 1993.
These regulations may change, so be sure to get Maryland Agriculture Statistical Service
current requirements. Summary for 1992. Maryland Department of
Business Insurance Agriculture; Annapolis, Maryland.
All nurseries are subject to laws governing
negligence. Consider obtaining property insur-
ance, business liability insurance, and casualty
insurance. Be sure to obtain property insurance
that covers your tractors, loaders, tree spades,
and other mobile equipment. Your nursery busi-
ness needs should be assessed by an insurance
agent.
Summary
The nursery industry in Maryland is diverse,
but nurseries have the common goal of produc-
ing plant material for improving the environ-
ment surrounding homes, public buildings, and
commercial sites. Environmental concerns of
the public will continue to generate demand for
trees, shrubs, aquatic plants, and herbaceous
perennials. The nursery business is a highly
competitive agricultural pursuit, but there will Manuscript reviewed by
always be a place for enthusiastic, well-orga- Dr. David Clement, Coordinator of Extension Home and
nized individuals who can find a niche market Garden Information Center
for plants. This introductory publication should Dr. Tom Blessington, Regional Extension Specialist,
help you to understand some of the considera- Central Maryland Research and Education Center
tions and regulations that must be dealt with in Mr. Charles Staines, Plant Protection Section, Maryland
establishing a nursery in Maryland. Department of Agriculture
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