Mushroom Farm Business Plan Template

Mushroom Farm Business Plan Template

If you want to start a Mushroom Farm or expand your current Mushroom Farm, you need a business plan.

The following Mushroom Farm business plan template gives you the key elements to include in a winning Mushroom Farm business plan.

You can download our mushroom farm business plan template (including a full, customizable financial model) to your computer here.

 

Sample Mushroom Farm Business Plan Template

Below is a mushroom farm business plan example with each of the key sections to help you write a mushroom farm business plan for your own company.

I. Executive Summary

Business Overview

[Company Name], located in [insert location here] is a new mushroom farm providing a variety of fresh mushrooms to regional distributors. [Company Name] is headed by [Founder’s Name], an experienced farm manager.

Products

[Company Name] will sell high-quality fresh mushrooms. The products will be certified organic as fertilizers and pesticides will not be used in production.

Customer Focus

[Company Name] will primarily serve regional distributors of fresh vegetables. Some products may be sold directly to manufacturers in the local area for the production of other products from these ingredients, or to local restaurants.

These businesses typically gross $5 million to $50 million in annual revenues and source their supplies from farms within a 100-mile radius of their facilities.

Distributors and manufacturers of food products in the region see growth in interest in organic products and are in need of organic ingredients for suppliers. Consumers show increased demand for these organic products at stores, and expect fresh, local produce as ingredients at local high-end restaurants.

Management Team

[Company Name]’s most valuable asset is the expertise and experience of its founder, [Founder’s Name]. [First name] has been a farm operations manager for the past 15 years. He has spent much of his career working with Green Field Farms, where he oversaw fruit and vegetable production.

[Company name] will also employ an experienced sales manager to sell to distributors and manufacturers. This will be a skilled salesperson trained in farm sales by [Founder’s Name]. An assistant manager will manage day-to-day operations of the farm.

Success Factors

[Company Name] is uniquely qualified to succeed due to the following reasons:

• [Company Name] will fill a specific market niche in local fresh mushrooms. In addition, we have surveyed the regional distributors and received extremely positive feedback saying that they explicitly want to buy our products when launched.

• Our location is within 100-miles of numerous potential distributors and consists of two greenhouses, each with capacity to grow 10,000 pounds of mushrooms per year.

• The management team has a track record of success in the farming business.

Financial Highlights

[Company Name] is seeking a total funding of $100,000 of debt capital to open its mushroom farm. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses and working capital.

Specifically, these funds will be used as follows:

 

II. Company Overview

Who is [Company Name]?

[Company Name], located in [insert location here] is a new mushroom farm providing a variety of fresh mushrooms to regional distributors. [Company Name] is headed by [Founder’s Name], an experienced farm manager. Initially, one greenhouse will be devoted to growing white button and Portabello mushrooms, and the other greenhouse will be used for expanding into Maitake and Shiitake cultivation once the farm is well-established.

While [Founder’s Name] has been in the farming business for some time, it was in [month, year] that he decided to launch [Company Name]. Specifically, during this time, [Founder] met with a former friend and independent mushroom farm owner in South Dakota who has had tremendous success. After discussing the business at length, [Founder’s Name] clearly understood that a similar farm would enjoy significant success in his hometown.

Specifically, the customer demographics and competitive situations experienced by his friend in South Dakota were so similar to those in his hometown that he knew the business would work. After surveying the local market, [Founder’s name] established [Company Name].

[Company Name]’s History

Upon returning from South Dakota, surveying the local customer base, and finding potential land to start the mushroom farm, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].

The business is currently being run from [Founder’s Name] home property, but once the land is purchased and [Company Name]’s facilities are finalized, all operations will be run from there.

Since incorporation, the Company has achieved the following milestones:

• Found land and negotiated rate

• Developed the company’s name, logo and website located at [website]

• Determined building, equipment and fixture requirements

• Begun recruiting key employees

[Company Name]’s Products

[Founder’s Name] will be able to provide customers with the following products:

• White button mushrooms

• Crimini Mushrooms

• Portobella Mushrooms

 

III. Industry Analysis

The American commercial farming industry continues to be subsidized by the government to bolster low food prices. This is a volatile and difficult industry in the United States, with small and medium-sized farms increasingly being bought by large farms or struggling to survive on their own.

However, for mushroom production, trends are positive. Globally, mushroom sales are projected to increase 6.5% per year over the next five years and were estimated at $58.8 billion last year, according to research firm IMARC. This sector is said to represent 3% of overall food and beverage sales. Global demand for organic foods increases by over $5 billion per year.

The mushroom farming industry is involved in cultivating a range of mushroom varieties including White Button, Crimini, Portabello, Oyster, and more. Many businesses focus on only producing a few popular varieties, while some produce a broad range of varieties in order to hedge against price changes or demand in any one variety.

Trends in the industry include the following:

• Dietary preferences are shifting toward vegan foods, and mushrooms are recognized as a nutritious meat alternative, providing protein, vitamins, and minerals.

• Mushrooms are noted for their environmental benefits, and their cultivation is more sustainable than meat.

• Mushrooms are known as a superfood, providing health benefits such as boosted immunity, increased energy, enhanced mood, and more.

• Non-food uses of mushrooms include such innovations as biodegradable building materials, and environmental remediation. Further, the pharmaceutical benefits of mushrooms are well documented, and are being further studied.

 

IV. Customer Analysis

Demographic Profile of Target Market

[Company Name] will primarily serve regional distributors of fresh produce. Some products may be sold directly to manufacturers in the local area as inputs for the production of other goods.

These businesses typically gross from $5 million to $50 million in annual revenues and source their supplies from within a 100-mile radius of their facilities.

Distributors and manufacturers of food products in the region see growth in interest in meat alternative products and are in need of ingredients for suppliers. Consumers show increased demand for these products at stores.

Customer Segmentation

The Company will primarily target the following two customer segments:

1. Regional Produce Distributors: Produce distributors source fresh mushrooms from cultivators, and sell them to food manufacturers who process, package and sell the products.

2. Restaurants: High-end restaurants and farm-to-table chefs work directly with local farms to source the freshest mushrooms, and the widest variety.
3. End Consumers: Consumers are increasingly interested in purchasing mushrooms directly from cultivators, because this provides access to a greater variety of mushrooms than they might otherwise find at the grocery store.

 

V. Competitive Analysis

Direct & Indirect Competitors

The following two mushroom farms operate within a 100-mile radius of [Company Name]. These, and other smaller mushroom farms like them, are the direct competitors of the business.

Potter Farm

Potter Farm is a fourth-generation family-run mushroom farm which produces common and specialty mushrooms for national distributors. They operate a 1000 acre farm, producing a high volume of goods.

However, Potter Farm does not offer Maitake mushrooms, which are among the most desirable of the exotic mushrooms.

Reynolds Mushrooms

Reynolds Mushrooms is a small, ten-year old farm which produces a limited variety of edible mushrooms. They sell all of their products at farmer’s markets and directly to restaurants. This distribution strategy requires Reynolds Mushrooms to have skilled customer service and sales employees, as well as facilities for packaging.

Because Reynolds avoids selling through distributors, its brand has limited reach. In addition, they do not offer any exotic mushrooms. They also have a high-cost structure because of their small scale and operations.

Competitive Advantage

[Company Name] enjoys several advantages over its competitors. These advantages include:

• Client-oriented service: [Company Name] will have a full-time sales manager to keep in contact with customers and answer their everyday questions. [Founder’s Name] realizes the importance of accessibility to customers and will instruct the sales manager to proactively solicit feedback from customers.

• Management: [Founder’s Name] has been extremely successful working in the farming business and will be able to use his previous experience to assure clients of the care that [Company Name] will take to cultivate the best mushrooms. His unique qualifications will serve customers in a much more sophisticated manner than [Company Name’s] competitors.

• Product Line: By offering common and exotic varieties, [Company Name] will seek to hedge against price volatility in any one of the varieties it grows.

 

VI. Marketing Plan

You can download our mushroom farm business plan template (including a full, customizable financial model) to your computer here.

[Company Name] will use several strategies to promote its name and develop its brand. By using an integrated marketing strategy, [Company Name] will win customers and develop consistent revenue streams.

The [Company Name] Brand

The [Company name] brand will focus on the Company’s unique value proposition:

• A variety of high-quality, fresh mushrooms

• Service built on long-term relationships

Promotions Strategy

Targeted Cold Calls

[Company Name] will initially invest significant time and energy into contacting potential customers via telephone and then by visiting their facilities. In order to improve the effectiveness of this phase of the marketing strategy, a highly-focused call list will be used; targeting distributors and manufacturers with an expressed interest in fresh mushrooms. As this is a very time-consuming process, it will primarily be used during the startup phase to build an initial customer base.

Industry Events

By attending regional farming conferences, association meetings, and symposia, [Company Name] will network with industry leaders, and seek referrals to potential customers. [Founder’s Name] will often attend with the company sales manager, but both may attend separately in the future as they gain experience in this networking.

Internet

[Company Name] will invest resources in two forms of geographically-focused internet promotion—organic search engine optimization and pay-per-click advertising. The Company will develop its website in such a manner as to direct as much traffic from search engines as possible. Additionally, it will use highly-focused, specific keywords to draw traffic to its website, where potential clients will find a content-rich site that presents [Company Name] as the trustworthy, high quality mushroom cultivator that it is.

Pricing Strategy

[Company Name]’s pricing will be competitive compared with Potter Farm. Pricing will be about 50% lower than retail prices to allow for wholesalers and retailers to earn their margins.
 

VII. Operations

[Company Name] will carry out its sales operations through phone calls and visits to customer offices. The sales manager will increasingly direct sales activities, although [Founder’s Name] will be heavily involved at first.

The assistant manager will run the day-to-day operations of the farm, including scheduling and assigning the work of farm hands, sourcing and purchasing spores/spawn and substrate, keeping the company’s books, maintaining legal licenses, handling insurance and ensuring that the company meets government regulations. He will contact specialists for equipment repairs when needed.

Inoculation and harvesting work by the farm hands will be from sunrise to sunset. Work will include preparing substrate for inoculation, tending to growing conditions, harvesting, and packaging mushrooms.

Milestones

[Company Name]’s long term goal is to become the highest quality mushroom cultivator in the [region] area. We seek to do this by ensuring customer satisfaction and developing a loyal and successful clientele.

The following are a series of steps that will lead to this long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:

 

VIII. Management Team

[Company Name]’s most valuable asset is the expertise and experience of its founder, [Founder’s Name]. [First name] has been a farm operations manager for the past 15 years. He has spent much of his career working with Green Field Farms, where he oversaw fruit and vegetable production.

[First name] is intimately familiar with the operational requirements of a commercial farm. Further, he has benefitted from the mentorship of the top mushroom producer in the US.

[Company name] will also employ an assistant manager to manage operations. This will be an experienced operations manager who will be trained in farm operations by [Founder’s Name]. Furthermore, a sales manager will be hired to focus on marketing, sales, and customer service to distributors as manufacturers for [Company Name] products. These two individuals will either have undergraduate business degrees or years of relevant operations or sales experience.

Hiring Plan

In order to launch the business we will also hire the following additional employee:

• Farm Hand: (1 full-time to start) Additional farm hands will be hired if capacity increases or if another farm is started.

The hiring process will be managed by the assistant manager who will be directly responsible for the farm hand, with oversight and approval by [Founder’s Name]. This individual must be in top physical condition, have experience in physical labor, and have great mechanical facility and care for the quality of his work and products.

The assistant manager and [Founder’s Name] will provide back-up support for the farm hand in the busiest times and when he is out sick or on vacation.
 

IX. Financial Plan

Revenue and Cost Drivers

[Company Name]’s revenues will come from the sale of the mushrooms it grows. The major costs for the company will be the cost of land upkeep, labor and equipment. Furthermore, the costs of the mortgage and its interest for the land will be significant.

The major cost drivers for the company’s operation will consist of:

• Salaries

• Mortgage

• Marketing expenses (associations, events, internet marketing).

Capital Requirements and Use of Funds

[Company Name] is seeking a total funding of $100,000 of debt capital to open its mushroom farm. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses and working capital.

Specifically, these funds will be used as follows:

• Build-out of greenhouses and equipment purchases: $50,000

• Property down payment: $20,000

• Working capital: $30,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even

Key Assumptions

5 Year Annual Income Statement

5 Year Annual Balance Sheet

5 Year Annual Cash Flow Statement