What Is the Fair Market Value of a Nursery or Garden Center?

By Gene Redlin Many in the nursery trade find themselves facing a transition they never quite planned for. After years—or generations—of growing beautiful plants, serving loyal customers, and keeping the green side up, the biggest sale of all starts to appear on the horizon. And this time, it’s not a truckload of liners or balled maples—it’s the business itself. Over time, a nursery becomes more than an enterprise. It’s acres of soil that feel like old friends, equipment that’s been patched and repainted a dozen times, customers who’ve become part of the family, and a crew that knows how to pot, pull, and prune without a word spoken. It’s a living organism, and it has value. The hard question is: how much? Understanding Fair Market Value (Without Needing a CPA) “Fair Market Value” sounds like something you’d find buried in an IRS publication, but it’s really just common sense. It’s the price where a willing buyer and a willing seller, both reasonably informed and not desperate, shake hands and say, “That seems fair.” No tricks, no pressure—just a deal that makes sense for both sides. In other words, a nursery is worth what a buyer is willing to pay and what an owner is willing to accept. Everything else is theory. How Buyers Think (and Why It Matters) Someone with decent financial sense can earn 8–10% on their money these days without ever touching a shovel. That’s a passive investment—put in a million, collect $80–100K a year, and sleep fine at night. Owning and operating a nursery, however, isn’t passive. It’s weather, labor, fuel, pests, and a thousand small battles that never show up in a prospectus. Because of that, buyers expect a higher return—often 20% or more—to justify the risk. So if a business sells for a million dollars, the buyer will expect around $200,000 in annual cash flow to make the deal work. The Heart of Value: Show Me the Earnings Buyers aren’t paying for what might be—they’re paying for what is. The center of every valuation is a clear picture of what the business actually earns. That’s where EBITDA comes in: Earnings Before Interest, Taxes, Depreciation, and Amortization. Translated: the real cash the business generates before the accountants start sharpening their pencils. That’s the number buyers care about because it shows what the business can produce in their hands, not just on paper. If a nursery reliably generates $200,000 in earnings, and buyers in the market are paying about five times that, it’s roughly a million-dollar business. Higher risk pulls that multiple down; stability pushes it up. And while “potential” sounds promising, it rarely changes the math—buyers pay for proven performance, not wishful thinking. What About the Assets? It’s tempting to believe that the sum of the parts—the land, the inventory, the equipment—adds up to more than the business itself. But in reality, all those pieces are part of the same machine. The enterprise is worth what it can produce, not what it cost to assemble. If the underlying assets outweigh the business’s ability to earn, that’s a signal the model is upside down. Selling assets piecemeal may make more sense than trying to find a buyer for the going concern. And liquidation value can be a cold splash of water: land brings what land brings; inventory moves at dimes on the dollar; equipment fetches what the auction site says it will. When the skid steers loaders start rolling onto flatbeds, it’s no longer a nursery—it’s a liquidation. One seasoned grower once argued that his place was worth twice what the market would pay. He pointed to the value of his stock, his tractors, his pots—everything except his profits. I told him, gently, that unless something changed, he’d likely pass with his boots still muddy and his heirs would sell the pieces for pennies while they priced their next boat. The Emotional Toll Beyond the numbers, selling a nursery carries a deep emotional weight. For many families, it’s not just a business—it’s a legacy, built by a father, a grandfather, or a lifetime of shared effort. Deciding to sell can feel like betraying the past, even when the head knows it’s time. Family partnerships often make it harder. One sibling may want to keep things running “as Dad would have wanted,” while another quietly wonders if it’s time to move on. The operator—the one still at the helm—ends up caught between loyalty and reality. And unless the offer is sky-high, it’s easier to keep working, keep drawing a salary, and keep postponing the decision. But time is an unforgiving negotiator. The longer the wait, the harder it becomes. Health changes, accidents happen, and sometimes the decision gets made for us. One day the question isn’t “Should we sell?” but “What will the heirs do now?” And too often, they’d rather call an auctioneer than a buyer. When to Start The best time to plan an exit is five years before it’s needed. That gives time to prepare records, clean up the books, address weak spots, and position the business attractively. From first conversation to final closing, it’s rarely less than 18 months and often closer to three years. Selling a nursery isn’t a weekend chore—it’s a process. And like pruning or propagation, it goes better with experience and good timing. The Last Harvest For many growers, selling the business is the last great harvest—the moment when decades of sweat and patience finally translate into financial security and new opportunities. It doesn’t have to be a sad ending; it can be a transition into something lighter, freer, and more rewarding. Every nursery has its season. The key is to finish strong, with dignity and with value. There are experienced hands who do this work every day, helping owners capture what they’ve built and turn it into the next chapter of life. And when it’s done right, it’s not just a sale—it’s a legacy completed. “Gene Redlin is a consultant specializing in valuations and transitions for nurseries and garden centers across the U.S.”