Buying a Plant Nursery Business for Sale: Checklist

Buying a running nursery can save you two or three seasons. Mother plants are already established, the land is laid out, and there are customers: landscapers, dealers, farmers and buyers for government plantation drives. The catch is that a nursery is mostly living stock and relationships, and both are harder to check than machinery. This checklist covers what to look at before you sign.

Nurseries rarely change hands through one central marketplace. Look across several channels at once:

• Business-for-sale portals and online classifieds, under agriculture, horticulture or land listings.
• Local nurserymen's associations, whose members often know who is retiring or scaling down.
• Contacts at the district or state horticulture department, who see which nurseries are active.
• Agri-input dealers (seed, pots, cocopeat, fertiliser), who notice when a regular customer stops ordering.
• Word of mouth among landscapers and other nursery owners in the cluster.

Many good nurseries are never formally listed. A polite enquiry to an owner whose children don't want to continue can open a deal that no portal shows.

Land, lease and water

• Land title or lease: who owns it, how many years are left on the lease, and whether it can be assigned to you. A nursery on a lease with two years left is worth far less than one on owned land.
• Land use: confirm the land can be used for a nursery and any sales outlet on it.
• Water: borewell permissions, yield in summer, quality (salinity matters for many crops), and any shared water arrangements with neighbours.

Licences, registrations and NHB recognition

• State nursery registration or licence, where your state has one. Only some states have a Fruit Nursery (Regulation) Act; others have a registration system or none. Check with your state horticulture department whether it transfers to a new owner.
• NHB recognition, if the seller claims it. NHB recognises each premises separately and for specific crops, and recognition is valid for a set period with renewal and annual surveillance. Ask for the certificate, its expiry and crops, and confirm directly with NHB what happens on a change of ownership.
• Shops & Establishment registration for a sales outlet, GST registration and Udyam registration: these are usually in the seller’s name and you will normally register afresh.
• A seed-dealer licence, if the business sells seed packets.

Stock and mother plants

• Do a live count of saleable plants by crop, variety and age, walking every bed and polyhouse. Do not accept a number from a register alone.
• Grade the condition: healthy and saleable, needs hardening, overgrown or root-bound, diseased.
• Mother plants: where they came from, their age, whether varieties are true to type, and any records of the original source.
• Pots, trays, media and chemicals in store, with expiry dates where relevant.

Customers, revenue and people

• Customer contracts and standing orders from landscapers, dealers or institutions, and whether they will continue under a new owner.
• Seasonality: month-by-month sales for at least two years. Many nurseries earn most of their money around the monsoon planting season and run lean the rest of the year.
• Outstanding dues from customers (credit sales) and dues to vendors.
• Staff: who has the grafting or propagation skill, their terms, and whether they will stay.

Equipment and structures

• Polyhouses, shade-net houses, mist chambers and hardening areas: age, condition of film and nets, repair needs.
• Irrigation lines, pumps, tray seeders, vehicles and their papers.
• Any structure built with a subsidy: check for conditions attached to it before buying.

There is no single formula. Most buyers and sellers look at three things together and argue towards a price:

1. Assets: land (or the value of the remaining lease), structures, irrigation and equipment, at their realistic current value rather than original cost.
2. Inventory: saleable plants at a conservative wholesale price, not retail. Discount stock that is overgrown, out of season or hard to move.
3. Earnings: what the business reliably earns in a normal year after paying the owner a fair wage. A steady customer base and good records justify paying more for earnings; patchy records justify paying less.

• No sales records, or records that do not match bank deposits.
• Stock that is mostly overgrown or root-bound, which suggests sales have slowed.
• A lease that cannot be transferred, or a landlord who has not been told.
• Claimed NHB recognition or a state licence that cannot be produced or has lapsed.
• Mother plants with no known source, or varieties that are not true to type.
• Large unpaid vendor bills or a few customers who owe most of the money.
• Key staff leaving with the seller.

Most nurseries that close do so for a handful of reasons, often together:

• Cash flow: inputs and labour are paid for months before plants sell, and credit sales stretch it further.
• Seasonality: a weak monsoon season or a missed government plantation order can wipe out the year.
• Unsold stock: plants raised without firm demand become overgrown and lose value.
• Poor records: the owner does not know which crops make money, what stock is really on hand, or who owes what.

The fixes are not glamorous: sow against confirmed or forecast demand, chase credit dues, clear ageing stock early at a lower price, and keep a record of every batch, sale and purchase.

1. Decide early whether you want to sell the running business or close and sell assets. A running nursery usually fetches more.
2. Get your records in order: sales, purchases, stock by batch, customer dues.
3. Tell long-standing customers and staff at the right time, so the business still has value on handover.
4. Stop sowing crops that will not be ready before the handover, and clear old stock.
5. Settle what you can with vendors and the landlord, and check licence and registration transfer rules with the relevant authorities.