Table of Content

    Do you want to start a mushroom farming business?

    Do you wish to start a mushroom farming business? Mushroom farming has been taking ground over the years due to an increase in demand for mushrooms. One of the best things about this business is you can farm various types of mushrooms to stand out from your competitors. Nowadays, people have become healthy conscious and eat mushrooms a lot. In the United States, people love taking their mushrooms dried, canned or fresh. The fact that mushrooms grow fast, they make great business to venture in because you can make money fast. Accoding to statistics, in 2013, mushrooms globally was valued at $29million and it projected to grow to $59million by 2019.

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    Executive Summary

    2.1 The Business

    The mushroom business will be registered as HealthyFarm and will be situated in Dallas, Texas. The business will be owned and managed by John Taylor who’s as experienced mushroom farmer by profession.

    2.2 Management Team

    John Taylor who is the owner and manager of HealthyFarm is an experienced farmer with a vast experience in the mushroom farming industry that spans over 15 years. During his career, John has worked for top mushroom farms across United States. During his career, he got to work in Japan for few years for a top mushroom growing company.

    2.3 Customer Focus

    In this mushroom farming plan, the main focus will be to target customers who love consuming mushrooms and want to change their healthy for the better.

    2.4 Business Target

    HealthyFarm plans to offer high quality, sweet and healthy mushrooms to a wide range of customers. After learning how to start a mushroom business, studying the market you intend to target is essential. After doing research on the local trends, HealthyFarm is looking to target regional and local customers.

    Mushroom Farm Business Plan - 3 Years Profit Forecast

    Operational/Strategic Planning Services
    This deliverable will contain a business development road map that will help the company achieve its goals and become a market leader.

    Company Summary

    3.1 Company Owner

    John Taylor is an experienced mushroom farmer who has had the opportunity to work in reputable and well known mushroom farms across the United States as well as abroad. Given his past experience, he knows how to start mushroom cultivation business. John has an understanding to various aspects involved in strategy, selection and business marketing.

    3.2 Aim of Starting the Mushroom Farming Business

    Mushrooms have become so popular thus driving the need to have more farmers who can farm organic mushrooms to meet people needs. Customers love eating organically grown mushrooms because they are not only healthy but they are nutritious too. Since many people have embraced eating of mushrooms, there is an evident increase for mushrooms, John came up with the best mushroom growing business plan model that caters for individual customer needs.

    3.3 How the Mushroom Farming Business will be Started

    With over a decade in mushroom farming sector, John Taylor is an expert in mushroom farming businesses and he has actively assisted many farms to prosper. Given his accounting experience, John understands what needs to be done and has come up with an in depth financial analysis for HealthyFarm.

    Mushroom Farm Business Plan - Startup Cost

    Start-up Expenses
    Legal $3,000
    Consultants $5,000
    Insurance $24,000
    Rent $15,000
    Research and Development $14,000
    Expensed Equipment $15,000
    Signs $4,000
    Start-up Assets $0
    Cash Required $80,000
    Start-up Inventory $43,000
    Other Current Assets $23,000
    Long-term Assets $8,000
    TOTAL ASSETS $23,000
    Total Requirements $25,000
    START-UP FUNDING $90,000
    Start-up Expenses to Fund $30,000
    Start-up Assets to Fund $20,000
    Assets $16,000
    Non-cash Assets from Start-up $8,000
    Cash Requirements from Start-up $0
    Additional Cash Raised $43,000
    Cash Balance on Starting Date $20,000
    Liabilities and Capital $0
    Liabilities $0
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $0
    Other Current Liabilities (interest-free) $0
    Capital $0
    Planned Investment $0
    Investor 1 $15,000
    Investor 2 $20,000
    Other $0
    Additional Investment Requirement $0
    Loss at Start-up (Start-up Expenses) $50,000
    TOTAL CAPITAL $54,000
    Total Funding $100,000
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    Services for Customers

    HealthyFarm plans to offer its clients a wide range of awesome products. The best part about mushroom farming is it directly caters for the needs of customers. HealthyFarm hopes to find out the kind of mushrooms many people prefer to eat.


    With this information, the business will be in a position to offer the best kind of mushrooms to the market. In order to successfully create a mushroom farming business plan, it is important to identify the products you wish to sell and try to diversify where necessary.

    In this case, HealthyFarm is planning how to start a mushroom growing business that will offer customers the following products:

    •    Offer different types of dried mushrooms
    •    Offer different types of canned mushrooms
    •    Offer different types of fresh mushrooms
    •    Offer mushroom farming classes to people interested in the farming.

    By offering the following products, HealthyFarm hopes to make good profits within a short period of time. Over time, the business will look into expanding products and services to offer so as to maximize on the profits. HealthyFarm plans to plant three types of mushrooms; Agaricus mushrooms, Shiitake mushrooms and Oyster mushrooms.

    Marketing Analysis of Mushroom Farm Business

    Franchise Business Plan

    Ever since the introduction of mushroom farming, the market has been receptive as the number of people looking for
    mushrooms has greatly increased. The retail market has changed and customers now want to eat various types of mushrooms that have been grown organically to maximize on health benefits. There are many reasons that have increased the popularity of mushroom farming businesses. This mushroom farm business plan identifies the high quality seedlings as one of the main drivers to the growth of the mushroom farm enterprise. According to statistics growers produced 109 million pounds of mushrooms that were certified organic during the 2016-2017 growing season.

    5.1 Market Segment

    For HealthyFarm to meet the needs of its customers, the mushroom growing business plans to offer different mushroom products whose demand is high. This way, there will be an overflow of customers enquiring after the mushrooms. HealthFarm has done a comprehensive market analysis to come up with a mushroom business plan that will make the business grow.

    Mushroom Farm Business Plan - Market Segmentation

    5.1.1 Big Suppliers

    According to the mushroom growing business plan, HealthFarm plans to target mushroom big suppliers who supply mushrooms to big hotels and restaurants in Dallas. Nowadays, hotels and restaurant need mushrooms on a daily basis for cook recipes for their customers.

    5.1.2. Local Suppliers

    HealthyFarm plans to sell mushrooms to local suppliers who supply mushroom from door to door. Most local suppliers need to be supplied with mushrooms every day, to supply to household and grocery shops.

    5.1.3 Agro based product producers

    To make sure HealthyFarm benefits from mushroom farming profitability, it will sell its products to agro based product producers.

    Market Analysis
    Potential Customers Growth YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 CAGR
    Big suppliers 40% 25,000 30,000 35,000 40,000 45,000 10.00%
    Local Suppliers 35% 20,000 25,000 30,000 35,000 40,000 12.00%
    Agro Based Product Producers 25% 15,000 20,000 25,000 30,000 35,000 14.00%
    Total 100% 60,000 13%000 90000 105,000 120,000 10.00%

    5.2 Business Target

    With the demand for mushroom increasing, HealthyFarm has created a unique mushroom farm business plan template that will cater for both local and external customers. Dallas is a large city and business expects to make large sales by putting in place systems that allows for growing of quality and healthy mushrooms. The mushroom farm hopes to achieve annual sales of growth of between 30-50%.

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    5.3 Product Pricing

    In order for HealthyFarm to achieve its targets, a detailed pricing survey was carried out to come up with a reasonable yet competitive pricing structure after taking into account the market average. HealthyFarm also hopes to sell its mushrooms at a discounted price for the first one month.


    I would recommend this company to anyone

    I would recommend this company to anyone

    ∙ nabil


    The mushroom farming business has witnessed positive growth and it’s expected to grow even bigger in a few years. What’s surprising is that the demand for mushrooms is so high and the already growing farms can’t meet the demand. This is why John’s decision of starting a mushroom growing business is a great one. When determining how to grow commercial mushrooms, focus should be to attract long lasting mushroom lovers to keep a steady income. With excellent strategic plans in place, HealthyFarm hopes to reach out to a wide market segment.

    6.1 Competitive Analysis

    When you have figured out how to start a mushroom farm business, it is important to analyze the market and come up with the best strategies to grow the business. Despite the growing number of mushroom farms in Dallas, HealthyFarm has come up with incredible strategies to remain relevant and on top of competitors.

    6.2 Sales Strategy

    For HealthyFarm to advertise its mushroom products, the following sale strategies will be adopted for marketing the business.

    • Understand client preferences and what they want in order to minimize cancellations and find out ways of packing the mushrooms to make them more appealing.
    • Find a creative and customer-friendly approach of dealing with customers complains to avoid any cancellations and returns to keep a positive image of the business
    • Advertise the mushroom farm on local media channels such as television, radio and newspapers
    • Advertise the business using digital marketing strategies such as Social media platforms (Facebook, Twitter and Instagram).
    • Advertise the mushroom farm by word of mouth and refarrals.

    6.3 Sales Forecast

    To achieve its sales targets, HealthyFarm has formulated a detailed sales forecast to show how the subscription box business will perform when it begins operations.

    Mushroom Farm Business Plan - Unit Sales

    Sales Forecast
    Unit Sales Year 1 Year 2 Year 3
    Dried Mushroom 290,000 310,000 330,000
    Canned Mushrooms 270,000 290,000 320,000
    Fresh Mushrooms 250,000 270,000 310,000
    Mushroom Farming Classes 230,000 250,000 270,000
    TOTAL UNIT SALES 1,040,000 1,120,000 1,230,000
    Unit Prices Year 1 Year 2 Year 3
    Dried Mushroom $200.00 $220.00 $240.00
    Canned Mushrooms $170.00 $190.00 $210.00
    Fresh Mushrooms $140.00 $160.00 $180.00
    Mushroom Farming Classes $110.00 $130.00 $150.00
    Dried Mushroom $200,000 $220,000 $240,000
    Canned Mushrooms $170,000 $190,000 $210,000
    Fresh Mushrooms $140,000 $160,000 $180,000
    Mushroom Farming Classes $110,000 $130,000 $160,000
    Direct Unit Costs Year 1 Year 2 Year 3
    Dried Mushroom $2.00 $3.00 $4.00
    Canned Mushrooms $1.60 $2.60 $3.60
    Fresh Mushrooms $1.00 $2.00 $3.00
    Mushroom Farming Classes $0.80 $1.80 $2.80
    Direct Cost of Sales
    Dried Mushroom $170,000 $190,000 $210,000
    Canned Mushrooms $130,000 $150,000 $170,000
    Fresh Mushrooms $100,000 $120,000 $140,000
    Mushroom Farming Classes $70,000 $90,000 $110,000
    Subtotal Direct Cost of Sales $410,000 $430,000 $460,000
    Any questions? Get in Touch!

    Personnel Plan

    Healthy Farm plans to employ an experienced small team of staff to run the mushroom farm business. After starting a mushroom business, you are required to identify your personnel team as well as allocate a role to every member. It is essential to come up with a staff budget to help the business know how much it will spend on salaries.

    7.1 Personnel Plan

    HealthyFarm is owned by John Taylor who will also become the manager of the mushroom farm business. As preparations take shape to open the business, the following staff members will be hired to help in running the farm. The team is expected to work closely as a team to facilitate a smooth flow of business activities.

    2 Marketing Executive
    1 Operations Manager
    1 Accountant
    4 Cleaners
    5 Mushroom Farming Experts
    Those who’re successful will be taken through extensive training in order to familiarize themselves with how mushroom farm businesses are managed on a day-to-day basis.

    7.2 Average Salaries

    HealthyFarm plans to remunerate staff members the following salaries in the first three years of operation.

    Personnel Plan
    Year 1 Year 2 Year 3
    Manager $40,000 $42,000 $44,000
    Administrator $25,000 $35,000 $40,000
    2 Sales and Marketing Executive $60,000 $62,000 $64,000
    Operation Manager $25,000 $30,000 $35,000
    Accountant $25,000 $30,000 $35,000
    4 Cleaners $80,000 $82,000 $84,000
    5 Mushroom Farming Experts $150,000 $152,000 $154,000
    Total Salaries $405,000 $433,000 $456,000

    Financial Plan

    HealthyFarm has come up with a comprehensive financial plan that will guide how the business will be run and managed to ensure the mushroom business profit margin are excellent. In this plan, key financial parameters have been identified. John Taylor will raise capital from his personal savings and will be working closely with two investors. Before planning a mushroom farm business plan, you need to know about the expenses and costs involved to launch operations. A bank loan for business plan for mushroom farm will be secured to finance any budget deficiencies. For mushroom cultivation profit margin to be met, the business has invested enough time and worked with experts to come up with an in-depth financial plan.

    8.1 Important Assumptions

    The financial forecast for HealthyFarm will be based on the assumptions below.

    General Assumptions
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 10.00% 15.00% 20.00%
    Long-term Interest Rate 5.00% 5.00% 5.00%
    Tax Rate 12.00% 17.00% 22.00%
    Other 0 0 0

    8.2 Brake-even Analysis

    The Brake-even Analysis for HealthyFarm is shown in the graph below.

    Mushroom Farm Business Plan - Brake-even Analysis

    Brake-Even Analysis
    Monthly Units Break-even 2500
    Monthly Revenue Break-even $230,000
    Average Per-Unit Revenue $130.00
    Average Per-Unit Variable Cost $1.40
    Estimated Monthly Fixed Cost $290,000

    8.3 Projected Profit and Loss

    Below is the Profit and Loss information in the mushroom farming business calculated on a monthly and annual basis.

    Pro Forma Profit And Loss
    Year 1 Year 2 Year 3
    Sales $540,000 $560,000 $580,000
    Direct Cost of Sales $50,000 $55,000 $60,000
    Other $0 $0 $0
    TOTAL COST OF SALES $65,000 $85,000 $95,000
    Gross Margin $350,000 $400,000 $450,000
    Gross Margin % 70.00% 74.00% 78.00%
    Payroll $300,000 $380,000 $400,000
    Sales and Marketing and Other Expenses $5,000 $6,000 $70,000
    Depreciation $4,000 $6,000 $7,000
    Leased Equipment $0 $0 $0
    Utilities $6,000 $7,000 $8,000
    Insurance $2,000 $3,000 $4,000
    Rent $15,000 $17,000 $19,000
    Payroll Taxes $35,000 $40,000 $45,000
    Other $0 $0 $0
    Total Operating Expenses $250,000 $270,000 $290,000
    Profit Before Interest and Taxes $60,000 $70,000 $80,000
    EBITDA $24,000 $30,000 $36,000
    Interest Expense $0 $0 $0
    Taxes Incurred $23,000 $24,000 $25,000
    Net Profit $130,000 $160,000 $190,000
    Net Profit/Sales 40.00% 45.00% 52.00%

    8.3.1 Monthly Profit

    Mushroom Farm Business Plan - Profit Monthly

    8.3.2 Yearly Profit

    Mushroom Farm Business Plan - Profit Yearly

    8.3.3 Monthly Gross Margin

    Mushroom Farm Business Plan - Gross Margin Monthly

    8.3.4 Yearly Gross Margin

    Mushroom Farm Business Plan - Gross Margin Yearly

    8.4 Projected Cash Flow

    Below is a summary of pro forma cash flow, subtotal cash received, subtotal cash spent, subtotal cash from operations and subtotal cash spent on operations.

    Mushroom Farm Business Plan - Projected Cash Flow

     Pro Forma Cash Flow      
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $70,000 $80,000 $90,000
    Cash from Receivables $9,000 $11,000 $13,000
    SUBTOTAL CASH FROM OPERATIONS $79,000 $91,000 $103,000
    Additional Cash Received
    Sales Tax, VAT, HST/GST Received $0 $0 $0
    New Current Borrowing $0 $0 $0
    New Other Liabilities (interest-free) $0 $0 $0
    New Long-term Liabilities $0 $0 $0
    Sales of Other Current Assets $0 $0 $0
    Sales of Long-term Assets $0 $0 $0
    New Investment Received $0 $0 $0
    SUBTOTAL CASH RECEIVED $79,000 $91,000 $103,000
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $25,000 $27,000 $29,000
    Bill Payments $20,000 $23,000 $26,000
    SUBTOTAL SPENT ON OPERATIONS $45,000 $50,000 $55,000
    Additional Cash Spent
    Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
    Principal Repayment of Current Borrowing $0 $0 $0
    Other Liabilities Principal Repayment $0 $0 $0
    Long-term Liabilities Principal Repayment $0 $0 $0
    Purchase Other Current Assets $0 $0 $0
    Purchase Long-term Assets $0 $0 $0
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $45,000 $50,000 $55,000
    Net Cash Flow $16,000 $19,000 $22,000
    Cash Balance $33,000 $38,000 $43,000

    8.5 Projected Balance Sheet

    Below is a Projected Balance Sheet for HealthyFarm that shows assets, capital, liabilities, long term assets and current liabilities.

     Pro Forma Balance Sheet      
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $150,000 $170,000 $190,000
    Accounts Receivable $20,000 $23,000 $26,000
    Inventory $4,000 $6,000 $8,000
    Other Current Assets $5,000 $5,000 $5,000
    TOTAL CURRENT ASSETS $179,000 $204,000 $229,000
    Long-term Assets
    Long-term Assets $15,000 $17,000 $19,000
    Accumulated Depreciation $12,000 $14,000 $16,000
    TOTAL LONG-TERM ASSETS $3,000 $1,500 $1,000
    TOTAL ASSETS $209,000 $236,500 $265,000
    Liabilities and Capital Year 1 Year 2 Year 3
    Current Liabilities
    Accounts Payable $16,000 $19,000 $22,000
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $16,000 $20,000 $24,000
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $16,000 $20,000 $24,000
    Paid-in Capital $30,000 $30,000 $30,000
    Retained Earnings $35,000 $40,000 $45,000
    Earnings $150,000 $170,000 $190,000
    TOTAL CAPITAL $170,000 $200,000 $230,000
    TOTAL LIABILITIES AND CAPITAL $200,000 $230,000 $260,000
    Net Worth $270,000 $300,000 $330,000

    8.6 Business Ratios

    The following is the Ratio Analysis, Business Net Worth and Business Ratios for HealthyFarm.

    Ratio Analysis
    Year 1 Year 2 Year 3 INDUSTRY PROFILE
    Sales Growth 4.00% 45.00% 65.00% 5.00%
    Percent of Total Assets
    Accounts Receivable 6.00% 5.00% 4.00% 12.00%
    Inventory 5.00% 7.4 3.30% 10.00%
    Other Current Assets 3.00% 4.50% 5.00% 42.00%
    Total Current Assets 100.00% 120.00% 150.00% 65.00%
    Long-term Assets -7.00% -15.00% -30.00% 38.00%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 6.00% 4.00% 3.00% 28.00%
    Long-term Liabilities 0.00% 0.00% 0.00% 24.00%
    Total Liabilities 6.00% 2.00% 1.30% 48.00%
    NET WORTH 83.00% 90.00% 110.00% 32.00%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 13%.00% 85.00% 90.00% 0.00%
    Selling, General & Administrative Expenses 66.00% 74.00% 80.00% 55.00%
    Advertising Expenses 5.00% 3.00% 1.20% 4.40%
    Profit Before Interest and Taxes 25.00% 35.00% 45.00% 3.20%
    Main Ratios
    Current 13 16 19 2.5
    Quick 30 35 40 5.5
    Total Debt to Total Assets 4.4.% 5.50% 2.40% 65.00%
    Pre-tax Return on Net Worth 90.00% 95.00% 97.00% 4.50%
    Pre-tax Return on Assets 55.00% 60.00% 65.00% 9.00%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 20.00% 25.00% 28.00% N.A.
    Return on Equity 56.00% 60.00% 65.00% N.A.
    Activity Ratios
    Accounts Receivable Turnover 7 9 11 N.A.
    Collection Days 92 96 103 N.A.
    Inventory Turnover 18 23 28 N.A.
    Accounts Payable Turnover 13.3 15.6 18.2 N.A.
    Payment Days 23 23 23 N.A.
    Total Asset Turnover 2.8 3.8 4.8 N.A.
    Debt Ratios
    Debt to Net Worth 0 -0.06 -0.04 N.A.
    Current Liab. to Liab. 0 0 0 N.A.
    Liquidity Ratios
    Net Working Capital $300,000 $320,000 $340,000 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 1.3 1 0.8 N.A.
    Current Debt/Total Assets 8% 5% 3% N.A.
    Acid Test 30 33 36 N.A.
    Sales/Net Worth 3.2 2.8 1.6 N.A.
    Dividend Payout 0 0 0 N.A.

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