I don't know about the zoning codes in OH. but the first thing I'd do is make sure you can have a Nursery at your location (contact your local city zoning dept.). If you can't, think of calling it Community Service Ag.. Get the Business License weather you sell anything or not, you'll save yourself allot of headaches down the road. Think about it for a second... "How can you deduct a business expense if there is no legal business?" Set up your chart of accounts and open a business checking account, personally I wouldn't mix personal expenses with the business.. And to answer your question... YES,, everything you spend is of course a business expense, expect to show a loss your first year or three or several..LOL
And why pay an accountant ?? We use Quickbooks Pro 07 and have our CPA sign off at year end.. the real point is Use your "home accountant" if you trust them..
Think big (if you want to),, but Keep It Simple, or Small until you go through the several dozen changes most do finding there "niche"

If you already have an accountant you trust, ask them these questions. If they can come up with the answer right away then they probably know what they're talking about--if they're just guessing, then you should find someone else for the business stuff. Quickbooks is great, but I think you have to have an idea in the first place what to do? Depending on how big your operation will be, and the structure of your company (corporation, llc, sole-proprietor, etc.), you might want some professional advice/help with the initial set up and what the tax implications are for the different types.

Turtleman, There's a difference between a business license and the Nursery License. The Nursery License minutia probably varies by state, but its purpose is to regulate the sale of plants. If Bunky is just building stock then i don't see why a license is necessary yet. But call your department of agriculture and say that you are planning to start a nursery, and at what stage do they recommend you apply for your license (then you won't get in trouble if you needed one already!). You should familiarise yourself with the regulations your state has so you are prepared ahead of time; for instance, my state wants me to keep a list of where plants came from, so if there are any diseases or pests we can trace it back to a source. If this is required of you as well, then you'd need to start noting things like this now.

Contact your local office of the SBA (Small Business Administration) and see what classes they offer in setting up/starting a small business. If you've not done this before, there is LOTS you will need to learn regarding recordkeeping, licensing, what is a deductable expense and what is not and other legalities. A local Hort school should offer similar classes.

You can't deduct business expenses if you don't have a business, so establishing the structure of the business (as explained above), registering it with whatever municipal office oversees that in your area and obtaining a business license is the first order of business. A sole proprietorship is the easiest to manage for a small operation and the taxes are filed as part of your personal return. I agree that software like Quickbooks Pro is more than adequate for this purpose, but most qualified accountants that do tax preparation will be able to help you as well. It's not all that complicated. I keep all the records and prepare a simple income statement on my sole proprietorship and my accountant transfers all that to Schedule C of my tax return as well as calculating the depreciation of equipment and the write-off on my home office.

The most important thing is to keep meticulous records. Not only will that help you come tax time but it will assist in the development and growth of your business.

As rachel said, there is a difference between the Nursery Lic. (Dept of AG) and the local city business lic.
The Dept of AG will issue a license to you regardless of your city business license, but if your not zoned right the city won't issue a license to you, then the issue is a mute point, I'd suggest getting the City license first.
I know of one man local here that has a small lot and was growing specialty plants, went through the whole business set up, got the Dept of AG certs, he was up and running after a year, doing good I thought in his sales.. I don't know what happened to cause notice to his local City, but he didn't get his business license... Sad point was, he wasn't zoned for the business he was running, so the city wanted him to stop business,, then they did an audit of him for back sales tax's (that he wasn't collecting) Sad story but after another year of dealing with his City for zoning variances and a bill for the past due sales tax.. he's still in business
Save yourself the pain.. get all the certs you'll need, theres good advise posted in the reply's here
Best of Wishes
:)

I would think you would want to get your licence before you actually start selling. Then you could buy wholesale plants and supplies, which would more than make up for the cost of a licence. Mine was only about $45.00. The wholesalers in my area require a licence and some sell only to landcape and nursery businesses.

OK, here's my take on it. As said, check first to see if there are zoning restrictions. Then if you have the green light, put some thought into what you will need in the way of structures. Think codes again. Water sourcing and Electricals, again think codes. Still want the business? Hopefully you have put some major thought into what the market looks like out there and whether you'll be selling plants at your residence.

Next step is contacting your insurance companies. I would not let one person step foot into my business property unless I had that paper saying you'd be covered.

Next step is the business license, and yes, don't make the mistake of not keeping records of every purchase and sale, and collecting the appropriate taxes.

In Ohio, the Dept of Ag asks you let them know a year in advance if you want a nursery license. They are great and will bend over backwards if you don't have that kind of lead time, but it wouldn't hurt to call them, tell them your plans, and have them send you the literature laying out exactly what your obligations are for the type of stock you want to sell.

I worked inside the industry several years before I struck out on my own, so I had the dirty on who the best suppliers were, and what kind of nursery equipment and structures I needed. I also had an inkling of what is expected from a customer and who to target with sales.

Agribusiness leaves a lot of attorneys and accountants clueless. It's an whole other ballgame than straight retail sales or manufacturing. There are all sorts of little things you need to know about what is/is not personal property versus real estate. What can be claimed. How tools and structures are amortised. Our accountant, luckily, is comfortable with it. As the others, to save major moolah, and since I am crunching numbers continually with the business, I do all the tax work and just bring him the crunched numbers for his perusal.

There are all sorts of filings and forms you'll have to fill out, like unclaimed funds, alien worker information, year end inventories, yadayadayada. It's danged scary at first when you're so ignorant you don't know what questions to ask, or whether you've covered all your bases. But, it all falls into place and most of the agencies involved are more than willing to help you with answers.

I took two small business courses, and frankly, their focus was on theory and sales, and they hedged all over the place with specific questions, especially legal ones. LIkewise the score programs. Didn't help one bit. Your county extension often has an advisor for the economic end of agribusiness. Ours does and that's what he's (she's) there for. Use them.

I agree with the others. The first place to start is to make sure your zoning will allow you a business in your home.
Luckily in my case, we were already zoned variety business being so close to the highway.
Second, after you get the ok to open a business in your location-- go ahead and get your nursery dealers license and apply for your federal id number and your state resale (sales tax) license. Because you will need the nursery dealers license to get supplies cheaper. You will need the federal id number to get credit established and for making your business legitimate. and unfortunately for tax reasons!
You will need a state sales tax number to be able to make purchases that you are using in direct production without paying sales tax on them, or reselling.
I bought a book on amazon.com about cash flow accounting and it helped me set up a filing system and etc for my business and helped me make sense of some of the taxes, it's called "the small business survival guide". It's not specific to greenhouse business, but it helped me a lot nonetheless. Also getting one of the schedule f "farm" forms helps you set up your expenses in the right folder.
Keep records on every cent you spend, because start up expenses are deductible, even the above mentioned books.
Good luck and expect to feel a little lost the first couple of years...
Sandy @ Northern Tropics, Muncie, IN
(not too far away from Ohio)

Sole proprietorships do not need to get a Federal ID number. You can operate under your social.

Hello All I am new to this and I have many questions. I want to start a Daylilly Farm in Western Pennsylvania I am zoned agricultural am I considered a farm? Do I need a Nursery Licence? Thanks for your help :)

Two local resources you should check out:

1- Pennsylvania Landscape & Nursery Assn - they can walk you through all the industry-specific legal and regulatory issues, and will be a first step in networking to help move your product

2- the SBA offers great services through the Small Business Development Center. Even in rural areas, they often have an outreach office (typically at a community college) staffed one day a week. You will get the most incredible level of help you could imagine, and they can also refer you to professionals you'll need to work with and to a group like SCORE that provides mentoring for startups from established business owners.

Hope that helps. Where in western PA? My extended family is all in Elk County.