Industry sector:

Plant nursery: Cash sales


'Cash sales' means all income from your main business activity which is received at the time of sale. While some of your customers may pay you in cash, remember that Cash sales can also include:

  • debit and credit card payments
  • gift vouchers
  • cheques
  • bank transfers (perhaps from large wholesale customers) and payments through online payment services like PayPal

To prepare your cash flow, you need to estimate how much income you will receive over the next 12 months, including VAT. To do this you will need to work out how many plants you are likely to sell, at what price and when you will receive the money.

There are a number of things to consider when you make your estimates.

Type of business

  • who will your customers be - other nurseries, the amenity sector, garden centres, DIY multiples and other retail outlets, landscape gardeners, property developers and so on
  • will you supply members of the public
  • where will your nursery be
  • how much land will you require
  • will you need glasshouses and poly tunnels
  • will you offer a mail order or internet ordering service

Think too about what your opening hours will be if you intend to sell things to members of the public. Depending on the size of your premises, you may be regulated by Sunday trading laws, unless you're located in Scotland.

Your plant ranges

Give some thought to the range of plants you will produce. Things to take into account include:

  • your own interest, skills and expertise
  • your cultivation methods. For example, will you use traditional growing media or experiment with hydroponic techniques - that is, growing plants in water to which nutrients are added
  • your location - a more gentle climate and a longer growing season in the south and west of the country than in the north and Scotland will affect the type of plants that you can grow
  • your soil type and its pH (acidity or alkalinity)
  • your target market. For example you might decide to specialise in plants such as alpines, or herbs or more unusual cottage garden plants that are hard to find in the garden centre chains
  • fashion trends - for example consumer demand for different varieties (such as exotics) comes and goes. How will you keep up with this?

Will you operate as a plant breeder, propagating from mature parent plants, or will you buy in mini plants from specialist nurseries to grow on and sell. Maybe you will specialise in developing and trialing new strains and varieties.

Your services

It is important that, as well as supplying first class, vigourous plants, you also add value to your sales. For example you might supply your stock in innovative packaging to prevent plants from drying out, or in biodegradable pots that can be planted straight into the ground. You might provide point of sale material for your retailer customers and so on.

Pricing

  • what will be your pricing policy (don't forget, you must be able to cover your costs, overheads and drawings)
  • how often will you review your prices
  • will you offer credit
  • will you offer pre-season and volume discounts
  • will you charge the same price to trade customers and to members of the public (if you sell to them)
  • will you make a delivery charge

Your staff

Will you be able to find experienced and knowledgeable staff locally. Ideally employees should like working with plants and be prepared to work long hours if necessary, sometimes in adverse weather conditions. You will need to consider ways in which to ensure that your plants remain healthy, disease free and vigourous, not only to minimise wastage but also to make sure your customers order from you year-after-year.

To help with your decisions, click on the checkpoints for guidance. Once you have worked out a Cash sales figure add it to the relevant field in your cash flow forecast.