Are you about starting a mushroom farm? If YES, here is a complete sample mushroom farming business plan template & feasibility report you can use for FREE.
Okay, so we have considered all the requirements for starting a mushroom farming business. We also took it further by analyzing and drafting a sample mushroom farm marketing plan template backed up by actionable guerrilla marketing ideas for mushroom farming businesses. So let’s proceed to the business planning section.
Why Start a Mushroom Farming Business?
There are large varieties of mushrooms – over 2,000 – that can be eaten. However, out of these large numbers, only few – common button agaricus, criminis, portabellas, shiitake, oyster, wood ear, morels, chanterelles and enoki – are taken in the United States of America.
Americans like taking their mushrooms fresh, dried or canned. The good thing with growing mushrooms is the fact they grow so fast and if you are adept at selling your produce as soon as they are harvested, you are on your way to making tons of money.
However, like any other business, it would not do for you to rush into the business simply because others seem to be making tons of money from it. You would need to carry out a thorough research to determine if it would be worthwhile enough for you to go into the business. If you cannot carry out this research on your own, you might need to hire a business consultant familiar with this form of business to help you out.
One necessary document that is important for you in starting this business is a business plan. The aim of a business plan is not only for investors to see how well you intend to run the business, but it is also meant to act as a guide towards running your business with few hitches as possible. Below is a sample plan to aid you in writing and starting your own mushroom business;
A Sample Mushroom Farming Business Plan Template
- Business Overview
Mushrooms which are usually grouped as vegetables are spongy and part of a fungus fleshy. It is widely consumed due to its high medicinal and nutritional value especially as it is free from cholesterol, fat and gluten and very low in sodium. There are over 2,300 species of edible mushrooms grown and available globally.
There are basically several kinds of edible mushrooms – such as common button agaricus, criminis, portabellas, shiitake, oyster, wood ear, morels, chanterelles and enoki – in existence in the United States of America. Mushrooms in America are usually sold in two forms – fresh and processed (dried, canned, and frozen).
The most common mushrooms grown and consumed on a commercial scale in the United States of America are the button agaricus, which in 2013 contributed 36.1% towards the total mushroom market. Other mushrooms like the shiitake mushrooms are also popular mushrooms in the United States but are regarded as specialty mushrooms.
Globally, button agaricus, shiitake mushrooms and oyster mushrooms are what dominate the production and consumption markets and as at 2013, these three kinds of mushrooms accounted for 76% of the global market.
As at 2012 and 2013, mushroom production decreased while the value increased. During this period, 896 million pounds of mushrooms were produced which slightly decreased from the previously produced mushrooms between 2011 and 2012. However, the value of the crop as at 2013 went up to $1.11 billion. Also, the period saw an increase of commercial mushroom growers.
Major developing nations have begun to see an increase in the demand for mushrooms especially as income levels in countries such as Canada, Thailand, and India. Countries like China are nearly taking over the global marketplace as they are selling their mushrooms at rates lower than what can be obtained in the United States, Germany as well as France.
As at 2013, mushrooms globally were valued at over $29 million, and were projected to grow at about 9.5% in 2019 to reach a value of $50 million. The global market as at 2013 was dominated by Europe closely followed by the Asia-Pacific region.
Factors that drive the mushroom business globally are consumer shift towards nutritional foods, high demand for organic foods and development in high yield systems and the increasing power of the supermarkets.
Mushroom Farming Business Plan – Executive Summary
Mushy Forage Farms LLC is established and recognized as a major supplier of gourmet quality mushrooms in Springfield – Missouri and in the United States of America. We will grow and sell all the different kinds of mushrooms consumed in the United States of America to our variety of customers.
Our aim as a business is not only to make profit but also become a leading company that can compete favorably with other mushroom business in Missouri and also in the whole of the United States of America. To be able to effectively compete against our competitors, we intend to ensure that we hire the best professionals in the industry so as to build the perfect business structure.
Due to the fact that mushrooms are edible products, we intend to ensure that our mushrooms are grown in an environment that is conducive and hygienic. We are also growing the mushrooms organically as we intend to ensure that our mushrooms pack a high dose of nutrition.
Because we know how important our employees are to the growth of the organization, we intend to ensure that we create a conducive environment for them to work and also provide welfare packages that are aimed at ensuring that their productivity rate is increased.
Because the demand for mushrooms is increasing as more people are recognizing its importance, we have carefully chosen our channels of distribution that would ensure that our mushrooms reach all our existing customers and open opportunities to reaching potential customers.
One of our strongest factors at Mushy Forage Farms LLC apart from producing and selling organic mushrooms is the excellent customer care we provide to our customers which has led to a high retention rate for us and an overall healthy bottom line for our business.
Our proficient uses of the internet to intensify awareness about our business and the products and services we offer are part of the sustainable practices that is obtainable at Mushy Forage Farms LLC.
Mushy Forage Farms LLC is owned and run by Lisa Shaw. Lisa has a B. Sc in Food Technology and started growing mushrooms as a hobby before turning it into a business. She is bringing in her wealth of experience into the business.
- Our Products and Services
We intend to grow and sell all the kinds of mushroom that is being consumed in America. Mushy Forage Farms LLC is an establishment that will ensure that all our mushrooms are sold via our different outlets and even directly from the farm.
Because we know how important it is to ensure that our business remains afloat, we intend to ensure that we create multiple sources of income that is in line with our corporate culture as well as business’ goals and objectives. We however would like to stress that all the routes we would take to make profit would be legal and within the permissible laws of the United States of America.
Some of the products and services we intend to engage in are:
- Fresh mushrooms such as common button agaricus, criminis, portabellas, shiitake, oysters, medicinal reishi, lions mane, wood ear, enoki and maitake
- Processed mushrooms (dried, canned, frozen)
- Offer consultancy and advisory services
- Sell eBooks for intending new farmers
- Give trainings
Our Vision Statement
Our vision is to be a major supplier of quality gourmet mushrooms in Springfield – Missouri and be recognized throughout the United States of America.
- Our Mission Statement
To achieve our set vision, we intend to practice sustainable farming practices by growing our edible gourmet mushrooms in a controlled environment and using organic substrates as much as we can.
- Our Business Structure
Having a business structure is very important as it will help the business follow the vision which it has determined for itself. At Mushy Mushrooms Forage, we have perfected the plans that will ensure that we get it right by employing only the best and competent hands to come and work in our firm to enable us attain the goals and objectives which we have set for ourselves.
Because we have a vision of ourselves becoming the brand leader in this industry, we knew we had to get all the right things done, from carrying out a feasibility study about the business, to writing a business plan that helped us determine the right capital that would be needed to start our business and creating roles and responsibilities so that we could employ just the right employees for our mushroom business.
Asides the fact that we intend to sell our mushrooms fresh and processed, there are other services that we would be offering as well to boost our earnings and so these services will need competent hands to ensure that all our operations run smoothly at Mushy Forage Farms.
Listed below is the business structure we intend to use in building our mushroom business;
- Chief Executive Officer
- Mushroom Farm Manager
- Purchasing Manager
- Administrative Manager
- Sales and Marketing Team
- Store Manager
- Front Desk Officer
- Delivery Driver
Roles and Responsibilities
Chief Executive Officer
- Responsible for the overall direction of the company
- Networks with other mushroom businesses and high powered clients on behalf of the company
- Oversees the management staff so as to increase their effectiveness.
Mushroom Farm Manager
- Responsible for growing the mushrooms
- Checks the mushrooms daily for defective ones
- Harvests the mushrooms when it is time
- Responsible for purchasing all the raw materials needed by the business
- Sources for reliable vendors and distributors for the company
- Keeps an accurate database of all purchases and vendors
- Ensures that the business runs smoothly with as less hitches as possible
- Ensures that employees have great welfare packages and better working environments
- Assigns and delegates tasks to employees and ensures that they are carried out accordingly
Sales and Marketing Team
- Responsible for drafting marketing strategies and policies that will bring in sales for the company
- Continually research on target markets so as to identify new market opportunities for the company
- Engages in mushroom retailing to customers
- Ensures that the store is kept clean and well ventilated at all times
- Checks level of inventory so as to know when to replenish stock
- Keeps accurate report of all stocks in the store
Front Desk Officer
- Is responsible for picking customer calls and taking down order requests or receiving complaints
- Receives customers on behalf of staff and direct them to the appropriate quarters
- Keeps an accurate database of customers for future profiling purposes
- Is responsible for all accurate financial records carried out by the business
- Ensures availability of cash for running operations and ensures that proper records are kept
- Carry out end of month reconciliation between the cash book and bank statement
- Delivers mushrooms to various accurate destinations using reliable routes
- Carry out light repair on delivery vehicle as well as regular maintenance as well
- Keeps an accurate logbook of distances travelled and also obeys all state and traffic laws
- Ensure the farm and the entire premises are kept clean at all times
- Ensures that the restroom for customers and employees are kept neat at all times
- Ensures that cleaning supplies are always in stock
Mushroom Farming Business Plan – SWOT Analysis
Because we know that it takes serious work before a business can become a leader in the industry, we have conducted a SWOT (Strength, Weakness, Opportunities, Threat) analysis so that we could effectively draft a strategy that will not only allow us compete favorably with our competitors in the marketplace but also ensure that our business stands out and is unique from that of our competitors.
In carrying out a SWOT analysis on our mushroom business, we intend to look internally at our strengths and weaknesses and externally at the opportunities and threats that are available to us here in Missouri and the whole of the United States of America.
Due to the fact that we wanted to have the best analysis, we hired a reputable business consultant here in Springfield – Missouri to help us determine if the odds were against us and if the business was worthwhile for us to go into. The results were favorable as the strengths and opportunities available to us far outweighed the threats and weaknesses we had or were likely to encounter.
Below is a preview of the SWOT analysis that was conducted on behalf of Mushy Forage Farms LLC;
The strength of our business lies in the fact that we would be growing various kinds of edible mushrooms to be able to reach a wide number of customers here in Springfield –Missouri and also in the whole of the United States of America. We have a huge mushroom farm that is able to meet with the demands of our customers and have structures in place to meet with increasing demands.
Asides, offering fresh and processed mushrooms to our various customers, we will also offer training to intending mushroom farmers as well as consultancy services as well. Also, we have carefully chosen and perfected all our channels of distributions, so that our mushrooms can conveniently reach all our customers.
Because we know how important customers are to a business, we are offering an excellent customer service that will attend to the needs of our customers by attending to their requests, enquiries and orders and promptly resolving any complaints.
The mushroom business isn’t new, which means that there are other established mushroom businesses in and around our location in Springfield – Missouri. While this might be termed a weakness, we have however put strategies in place to ensure that we create the right awareness with potential customers and also ensure that our mushrooms are of the highest quality, as this we believe will effectively combat the other competitors.
Because mushrooms are a healthy meal for everyone, there are loads of opportunities that abound in this field, from those who are looking to start this business and need guidance. Also, because we are always on the lookout for new innovations and technologies in this field, we would be the perfect consultants for those who are new in the business and are looking for better ways to grow their business.
Every business faces threats every now and then and we acknowledge that we are going to face threats likely in the arrival of new competitors to our same location. The threat brought by this action can be curbed as we have strategies in place to combat any new strong competitor’s arrival.
Mushroom Farming Business Plan – MARKET ANALYSIS
- Market Trends
The mushroom market which has grown tremendously and is expected to continue is majorly drive by Americans love for consuming food that is healthy. Also, other trends include, increase in the processed food consumption and the ease of growing mushrooms.
This does not however mean that it is all rosy for the mushroom farmers as the limited shelf life of mushrooms is a serious hindrance to the business. The mushroom market is filled with intense competitors – small, medium and large scale – who apply various strategies to attract potential customers while also aiming to retain their own customers as well.
Another trend is the fact that mushrooms have multi-functional benefits especially as they are rich in proteins and have low or no fat and cholesterol. These nutritional values have nearly equated mushrooms as super foods. Also, mushrooms have been widely adopted by most growers in the United States, with most selling their products in the farmer’s market.
The major challenge to the mushroom business has always been the limited shelf life but even that would soon change as there are several improving technologies, innovations as well as researches being constantly carried out to ensure that more people can have their mushrooms stay in their homes longer as well as more farmers storing their harvested mushrooms without worrying due to spoilage.
- Our Target Market
Mushrooms are a favorite of many homes in the United States of America, and so we know that we have a huge target market available to buy our mushrooms. However, because we do not want to be limited by our idea of target market, we have also decided to carry out an in depth research into what to expect from our target market.
This would also help us to be able to draft effective strategies to conquer these target markets in and around Springfield – Missouri and also in all other locations where we intend for our mushrooms to be sold at. The market research was done with the aid of a farm business consultant who has vast experience in the mushroom market, leading us to identify the markets that would patronize our products.
Asides selling mushrooms in retail, we also intend to sell them wholesale to the following groups of people;
- Local health food stores
- Farmers’ markets
- Restaurants (Regular and oriental)
- Factory cafeterias
- College cafeterias
- Produce places
- Caterers and catering services
- Food coops
- Health spas
Our Competitive Advantage
Our vision of establishing Mushy Forage Farms LLC is so as to meet the needs of mushroom loving customers by growing all the different mushrooms consumed in America and also to become the leading mushroom business not only in Springfield – Missouri but in the whole of the United States of America as well.
However to attain our vision we would need to have competitive advantage so as to compete favorably with already established mushroom farms while remaining proactive in competing against new mushroom farms that would spring up.
Our major competitive advantage is in ensuring that we have hired and competent hands on board to ensure that work on our farm goes on smoothly. Our hired employees will work in an environment that is conducive so as to ensure that they attain a high level of productivity. Also, we intend to have welfare packages in place that will show our employees that we care about their welfare.
Customers are the most important reasons a business succeeds, especially loyal customers. We intend to have an excellent customer service where all the enquiries, complaints and orders will be promptly attended to. We also intend to have an incentive referral program for our loyal customers and even our first timers, this will ensure that our customers retain their loyalty to our brand, thereby giving us the competitive advantage we would need to become industry leaders.
Because we know hoe internet inclined the world has become, we intend to push our business via the internet as well, by ensuring we build a user friendly website where all our products and services will be displayed. We will ensure we hire the best web consultant to deploy Search Engine Optimization (SEO) for our website so that our website will appear amongst top leads, for users searching for mushroom businesses. Also, we intend to remain active through our social media platforms such as Facebook, Instagram and Twitter.
Mushroom Farming Business Plan – SALES AND MARKETING STRATEGY
- Sources of Income
Mushy Forage Farms LLC has been established with the intention of making profit through growing and selling of mushrooms in Missouri and in the United States of America. We intend to grow and sell different kinds of mushrooms, such as Shiitake, Oysters, Medicinal Reishi, Lions mane and maitake, so as to be able to take a large share of the market.
We at Mushy Forage Farms LLC intend to generate income for our business from different sources such as;
- Different kinds of fresh mushrooms such as common button agaricus, criminis, portabellas, shiitake, oysters, medicinal reishi, lions mane, wood ear, enoki and maitake
- Processed mushrooms (frozen, dried, canned)
- Offer consultancy and advisory services
- Sell eBooks for intending new farmers
- Give trainings
Due to the fact that mushrooms have zero cholesterol or fat in it, most people have incorporated into their diets, which means there will always be a demand for mushrooms in America and even globally.
Our intention of growing all the kinds of mushroom consumed in the United States of America is enough to not only solidify our position as a leading brand in the business but also means that we would meet our sales target within a year of growing and running the business.
We carried out a critical evaluation of our target market via the help of a hired business consultant and we were able to effectively gather facts in the industry that not only analyzed our chances of success but also showed how we intend to make our revenue and profit generation possible in Springfield – Missouri and in the United States of America.
The table below shows the sales projection for Mushy Forage Farms LLC conducted on our behalf by our sales consultant, which took various factors such as location and type of business into cognizance:
- First Fiscal Year-: $60,000
- Second Fiscal Year-: $150,000
- Third Fiscal Year-: $300,000
N.B: It should be noted that the sales projection were conducted with several other factors in mind such as that the demand for mushrooms remains stable or increases, and also that there was no downturn in the economy, and that our strategic location would remain the same. This means that if conditions change, the sales projection might increase or decrease.
- Marketing Strategy and Sales Strategy
Marketing ensures that your business, its products and services gets noticed by existing and potential customers. No matter how wonderful a business idea is, without plans and strategies set to successfully market the business, it is likely to fail. Marketing involves going out and spreading the word about your products and services.
In successfully marketing your product, you would need to ensure that your products and or services are well packaged, branded and of the highest quality. This would then determine what price you would set for the product and or service after considering all the costs incurred to produce and deliver.
This is where the purchasing, accounting, producing and marketing team all work together to ensure that the appropriate prices are set so that it becomes affordable to the customer whilst also not causing the company any loss.
In ensuring that our products and services reach as many of our target market as possible, we will ensure that we sell our products directly to the public via farmers’ market and special food festivals. Our products can also be sold via wholesalers and through our official website online. All our channels of distribution will be carefully chosen so that we can effectively penetrate the market.
Our marketing and sales team has been fully empowered to ensure that our corporate sales and marketing goals are fully achieved. Most of the strategies that would be used by our marketing team are those that will take cognizance of our overall organizational objectives.
Mushy Forage Farms LLC will ensure that they use the following strategies below to effectively market our different kinds of mushrooms to our different customers;
- Creating a website and ensuring that our products and services offered are prominently displayed
- Using social media platforms such as Facebook, Instagram to effectively market our goods
- Sending out weekly or monthly newsletters to existing and potential customers about mushrooms and its benefits
- Networking with other mushroom farmers to ensure that Mushy Forage Farms LLC is well known
- Distribute flyers in strategic locations
- Advertise our mushroom business via television, radio and newspapers
- Engage in word of mouth marketing
- Reward our customers with incentives if they refer customers to us
- Sponsor relevant activities and events in the local community
- Use letter drops and mail outs to effectively promote our mushroom business
Mushroom Farming Business Plan – Publicity and Advertising Strategy
Every business needs a bit of publicity and advertising to survive, and the mushroom business is no different. Our aim at Mushy Forage Farms LLC as a standard company is to ensure that we can favorably compete with other leading mushroom farms in Missouri and the whole of United States by ensuring that we draft strategies that will publicize and advertise our mushroom business.
Because we know how beneficial it would be for our mushroom business when we publicize and advertise rightly, we have hired an online publicity consultant to help draft publicity and advertising strategies that we ensure that we sell our mushrooms to all nooks and crannies in other cities of the United States of America asides from Missouri.
It would be noteworthy to state that not only are we carrying out publicity to increase our brand awareness and encourage more patronage from our customers but also to ensure that we communicate the message of our brand effectively. Some of the platforms we intend to use in publicizing and advertising our mushroom farm business include;
- Creating a unique website and making sure that we engage our customers vigorously through our webpage
- Participating in all food festivals and trade fairs for networking purposes
- Placing adverts in local newspapers, food and lifestyle magazines as well as on radio and television stations
- Distribute our unique fliers in various strategic locations
- Make use of our social media platforms lime Instagram and Facebook to promote our different kinds of mushrooms and the business in overall.
- Participate in community programs and relevant events
- Install billboards in various strategies and conspicuous locations all around Springfield – Missouri
Our Pricing Strategy
Setting a price for any product depends on what was used in procuring and packaging the product, and also what was spent to make the product including the labour used. While it might not be so easy to set a price on services, physical goods are usually easy to set a price for. Pricing is very important as you must ensure that it will be affordable to your customers but not also make your company worse off, profits wise.
The prices for our mushrooms will totally depend on the kind of mushrooms as some breed demand more attention than others. We would also cut down costs where necessary so that we do not fix an unnecessary cost into our final price. This means that we would be fair to our customers and ourselves as regarding the price we would set for our mushrooms.
- Payment Options
We at Mushy Forage Farm LLC know how important it is for our customers to have an easy payment option and not be unduly stressed when intending to make payments. We are also aware that because people are different, there are preferences for different payment options that would suit their tastes and lifestyle.
In view of this, here are the payment options available to our customers;
- Cash payment
- Payment via credit card
- Payment via Point of Sale (POS) Machine
- Payment via check
- Payment via online transfer
The above available payment options were carefully selected and in collaboration with our bank which have a trusted platform where we are sure of as few hitches as possible during transactions.
- Start – Up Expenditure (Budget)
Starting a mushroom farm business requires capital just like any other business. In all start-ups, the bulk of the capital is always used on mostly the overhead costs and partly the operating costs. The bulk of capital generated for our mushroom business will be used to buy the spawn and substrate we will need to start the business as well as pay salaries of employees and utility bills as well.
The key areas where we will expect to spend our start-up capital on are;
- Total Fees for registering the business in the United States of America – $700
- Fees for obtaining several licenses and permits required to run the business – $500
- Cost of hiring business consultants and marketing analysts – $2,000
- Cost of start-up inventory (spawn, substrate, growing bags, packaging materials) – $5,000
- Cost of store equipment (racks, bin, shelves) – $2,000
- Insurance coverage (produce insurance, general liability, workers’ compensation) – $1,500
- Operational costs for the first three months (utility bills, employees salaries) – $10,000
- Purchase of fairly used vehicle – $5,000
- Other start-up expenses (stationeries, furniture, computer, phone, printer) – $1,500
- Marketing expenses for at least six months including promotion expenses for opening ceremony of Mushy Forage Farms LLC – $2,000
- Cost of launching an official website – $300
- Cost of hosting the opening party – $2,000
- Miscellaneous – $3,000
From the accurate estimation above, we would need an amount of $35,500to be able to successfully start a mushroom business that would not only become profitable but compete favorably with other established mushroom businesses out there.
Generating Funding / Startup Capital for Mushy Forage Mushroom LLC Farming Business
Mushy Forage Farms LLC is a business owned by Lisa Shaw – a married woman and a mother of one. Growing mushrooms and farming in general has always been Lisa’s passion till she decided to turn it into a full-time business. Due to her passion for mushrooms, she doesn’t intend to bring in any external investors whilst generating funds for her mushroom business. Due to this fact she is just sticking to three sources of generating capital.
Listed below are the three options she is using to generate her start-up capital:
- Generate part of the capital from personal savings
- Seek for soft loan from family members and friends
- Apply to the bank for a loan
N.B: From personal savings we were able to generate $10,000. From family members and friends, we were able to generate $5,500. We sought for a loan of $20,000 from the bank, and after fulfilling all requirements, we are due to get the money into our account within the week, which would then ensure we start the business in earnest.
Mushroom Farming Business Plan – Sustainability and Expansion Strategy
The major aim of any business is to make profit. However, the aim of this profit making for most companies is to ensure that the life cycle of the business is sustained for a long time to come. For a business to make profit, several factors have to be in place and this includes; competence of the employees, increase in customer retention, excellent customer care and intensive publicity and advertisement.
One of our major goals is to hire competent employees that will not only have vast experience in the field needed to grow the company, but will also believe in the vision of the company and aim to actualize this vision by carrying out their various roles and responsibilities perfectly.
We also intend to ensure that our employees work in a conducive environment, and our strategic location has ensure that there is ease in accessing the farm. Our employees should also be able to effectively communicate the brand for all our customers – existing and potential.
Knowing how important it is for our employees to remain happy thereby increasing their productivity, we intend to have enviable welfare packages in place for all our employees and also have fringe benefits and promotion structures in place to reward all our hardworking employees.
We will also ensure that our management staff benefit from our profits. We also intend to constantly train our employees so that they will remain updated on new innovations and technologies needed to make growing and selling mushrooms easier.
All these put in place will ensure that we attain our sustainability and expansion dreams while also achieving our goals and objectives of becoming industry leaders.
Check List / Milestone
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Conducting Feasibility Studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Opening party / launching party planning: In Progress
- Establishing business relationship with vendors – wholesale suppliers / merchants: In Progress
- Purchase of trucks: Completed