Mushroom Farm

How To Start A Mushroom Farm: The Best Guide For 2022

Eshita Pathak
By Eshita Pathak 22 Min Read

The mushroom farm business has been around for many years and is one of the fastest-growing farming businesses. The business is expected to grow 10% in the next five years, and the United States is the world’s second-biggest producer. 

Mushrooms are becoming popular as a multipurpose ingredient in food and an immune booster because more individuals are cooking at home and trying new recipes. Because people want to buy local mushrooms, mushroom farms flourish worldwide, allowing customers to purchase fresh mushrooms from a local source. 

These mushroom farms produce between 20 and 200 kilograms of mushrooms per week and serve a local market. Mushroom farming has become popular as a job for small business owners in the food industry.

Mushroom growing can be a terrific way to earn a living. There’s a lot to learn, so creating a powerful mushroom-growing company strategy is critical. We’re sharing a mushroom farm business model and everything else you’ll need in this article.

Is Mushroom Farm Business Profitable?

By 2021, the mushroom farm industry was worth $50.3 billion, and the global mushroom market is expected to reach $54.9 in 2022. From 2022 to 2030, the compound annual growth rate is anticipated to be 9.7%. Source

The US is the world’s second-largest manufacturer, and Europe is the primary consumer. Europe imports almost all of its mushroom foods. The most significant expansion is forecasted for mushroom processed forms such as dried, frozen, canned, pickled, and powdered, as mushrooms have a short shelf life, from 1-3 days.

The demand for specialty mushrooms is rising. Besides food items, some areas poised to grow are mushroom supplements, fungi as food additives, ready-to-fruit blocks, myco textiles, mycoremediation, and mental health. 

Therefore, we can say that mushroom farming is one of the most profitable indoor farming businesses worldwide.

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What Are The Different Mushroom Products You Can Sell?

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Would you like to increase your mushroom farm business? To generate more sales, you should expand the range of items you provide. These items include:

1. Fresh Mushrooms: There is no need to spend time creating a value-added mushroom product like the other items on this list. Just harvest your mushrooms and package them up.

2. Dried Mushrooms: Dried mushrooms are the way to go if you have more fresh mushrooms than you can use in a given week. Because fresh mushrooms have a brief shelf life, drying them can preserve them for weeks or months. 

3. Mushroom Jerky: A specialty product, mushroom jerky is becoming increasingly popular with vegetarians as an alternative to beef jerky. Add soy sauce, vinegar, and spices to dried mushrooms to make mushroom jerky.

4. Other Mushroom Snacks: You can get creative and invent your mushroom snack varieties to sell. For example, mushroom crisps and meal replacements are great for health-conscious consumers.

5. Supplements: You can make reishi or lion’s mane mushrooms into capsules by drying and powdering them.

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6. Mushroom Kits: Selling mushroom kits allows people to enjoy seeing mushrooms grow in their own homes. In addition, your job will be more accessible, and the growing process will be shorter since you won’t have to fruit them yourself.

7. Ready-to-food Substrate: Provide other mushroom growers in your region with inoculum so that they may produce their mushrooms. If you prefer mixing and packaging inoculum over incubation and fruit production, you may turn this process into a full-fledged business. Be cautious, as you may end up with the increased competition if you decide to go down this path.

8. Mushroom Farm Tours: Many people don’t ponder where mushrooms originate. Mushroom farming is a mysterious and rare business. Visitors to your farm can see your day-to-day operations, whether they be children or adults. They may want to purchase mushrooms, kits, and other items in your gift shop.

9. Educational Workshops: You may be able to make money by giving mushroom-growing demonstrations at schools and day camps. Or a teacher may turn it into a field trip for their students.

What conditions do you need to grow mushrooms?

Each phase of mushroom development requires unique conditions. You must have an incubation room, a mixing and inoculation space, and a fruiting room to grow mushrooms. 

A mixing and inoculation space is a clean room where you can mix mushroom spawn with substrate and put it in bags. Working in this room is just as important as being comfortable. While working in this room, it should be dark with a temperature ranging from 20 to 24 C (68 to 75 F). An excess of CO2 is an added benefit. 

Mushroom spawn colonizes the entire substrate in preparation for fruiting in this room. When the mushroom grow bags are entirely occupied, they are moved to the fruiting room. There is a necessity for 80 to 90% relative humidity in the fruiting room. 

9 Important Steps To Start A Mushroom Farm Business

Follow these essential steps to start a mushroom farm business:

1. Plan your business

When you begin a small business like mushroom farming, you must have a well-crafted business plan. Develop a thorough budget; establish your business objectives and strategies, including the types of mushrooms you wish to raise and whether you aim to target domestic or foreign customers.

It would be best if you addressed the following topics in your mushroom farm business plan:

What are the start-up costs and recurring costs?

In the mushroom farm business, mushroom farming is among the most costly starter crops. The cost to get a mushroom operation off the ground varies wildly, depending on how large the process begins. To start a mushroom farm, you must invest between $3,000 and $100,000. 

The main cost is acquiring the proper infrastructure – You must have adequate ventilation, temperature control, and infrastructure outdoors. The infrastructure must include concrete floors. You will require plenty of outdoor space. 

For example, if you have a 500-square-foot growing area, you should produce 12,000 pounds of mushrooms annually. You can sell a pound of mushrooms for $6-8. 

What is the time frame before you are flush? The first year of mushroom farming yields $120,000 in income. By the third year, your business revenue should double.

A mushroom farm business has minimal ongoing expenses. Besides new growing material and spores, utilities are the only expenses.

Who is the target customer?

Restaurants that serve locally sourced foods are the ideal customers for a mushroom farm business. Regular orders provide stable income. A large supplier located in another state is unlikely to be the source of their mushrooms, given that they focus on serving locally sourced foods.

What is your pricing strategy?

To make an informed decision about pricing, you must compare the charges for similar mushrooms. You can find out the prices for comparable mushrooms by talking to other mushroom farm vendors. 

Specialty mushrooms are usually sold for $16 per pound, while oyster mushrooms are sold for $6 to $8 per pound. Other specialty mushrooms are sold for comparable wholesale prices. As a result, most customers purchase mushrooms by the pint or quarter-pound. By contrast, wholesale transactions usually take place by the pound. 

Where do you plan to sell mushrooms?

It is advised not to launch mushroom products commercially unless you know where to sell them. Besides wholesalers and retailers, reach out to restaurants and showcase your items.

How much profit can a mushroom farm make?

Selling to both wholesale and retail clients would significantly boost revenues. A business that produces 12,000 pounds of mushrooms and markets exclusively to wholesalers could make between $72,000 and $96,000 annually. Because the expenses are minimal, you would generate virtually all of the profit.

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2. Acquire the land

A compost pile should be six feet wide, six feet tall, and as long as necessary. Rain or snow might cause the pile to become compacted, which is terrible. Compaction can cause various issues, including anaerobic growth and favorable conditions for viral, bacterial, and fungal diseases. 

In short, here is the ideal setup for your mushroom farm: concrete floors outdoors covered by roofing, an indoor room with ventilation to control humidity and temperature, and hot air blown through ventilation ducts. 

It would help if you covered outdoor compost piles to prevent them from being affected by rain or snow because of the content. Consider how close the compost piles are to residential areas because they may emit odors.

3. Gain skills and experiences

Mushroom farming requires science and technology knowledge. Knowing how to grow mushrooms to operate a mushroom farm is necessary. Many organizations offer seminars and courses on growing these fungi. 

For example, Fungi for the People offers a seminar series every couple of months, and Radical Mycology offers classes in several states. In addition, Mushroom Mountain and The Mushroom Growers’ Newsletter maintain lists of upcoming conferences and training sessions. The American Mushroom Institute and the North American Mycological Association provide information and resources online.

4. Decide your Mushroom Farm’s design

The mushroom growing process occurs in two phases, each involving a different growing system. In phase one, the compost is prepared. Phase two refers to maintaining the compost in the proper condition for growth. Mushroom cultivation occurs in open-air structures with roofs. 

These are the main production designs:

Zoned: The compost is packed 6 feet high onto trays. The trays are moved to an environmentally regulated room where they are zoned.

Bulk system: You place the compost in an insulated tunnel. The tunnel has computer-controlled aeration and a perforated floor. You can move it to an environmentally controlled room when it’s ready. 

Bed or shelf: In this, you use one room for all stages.

5. Purchase the materials and equipments

You’ll need a vast range of supplies to get your mushroom farm up and run.

1. General Tools: There are a variety of tools that you may require to get the job done, including a mop and bucket, screwdrivers, electric bike timers, a humidifier, and a respirator. You can purchase all these at a local hardware store. You can also use online software to work faster and more efficiently. Online business collaboration and planning tools will help reduce the workload. 

2. Materials to make your utility, injection, and fruiting rooms: Construction materials, such as vinyl flooring or waterproof floor paint, a sink, plumbing pipe, a 45-gallon food-grade steel drum, shelves, lighting, fans, and more, are required to build your utility, injection, and fruiting rooms. You can find these items at a hardware store or builder’s shop.

3. Substrate: You must decide whether to grow on cardboard, sawdust, coffee grounds, or other substrates. Then, locate a local source for them at an economical price.

4. Mushroom spawn and grow bags: Buying mushroom spawn and grow bags locally is critical. You want to minimize the spawn’s time traveling as much as possible, particularly if you’re buying fresh spawn. Look for local suppliers first, then look countrywide if unavailable local options. You’ll end up with healthier, less stressed-out spawn that way.

5. Gypsum: The compost is mixed with gypsum to help air penetrate the pile. Usually, you’ll need 40 pounds of gypsum per ton of manure mixture to accomplish this.

6. Peat Moss: This is added as a top layer to the compost once set in place in the incubation room.

7. Supplements: It is still common for mushroom growers to add nitrogen supplements such as peanuts, cotton, and corn distillers grain to the compost. However, there are now time-released commercially made supplements available.

Other materials to start a mushroom farm may include drums, dump trucks, straw storage shed, sprayers, and plastic ropes.

6. Choose the type of mushroom

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Choosing a budget depends on the amount of money available, and the long-term investment benefits of cultivating different kinds of mushrooms are crucial. 

The most common mushroom species cultivated are Button Mushrooms, Oyster Mushrooms, and Paddy Straw Mushrooms. Shiitake, Lions Mane, White Button, and Portobello are also profitable and simple-to-grow mushrooms.

Oyster mushrooms are much sought after by restaurants because of their unique taste. Growers benefit the most from using Shiitake mushrooms, the most extensively used dry form of the mushroom. 

Crimini and Portobello mushrooms are also highly valued by restaurants.

7. Choose the cultivation method

You can produce mushrooms both indoors and outdoors.

1. Indoor Cultivation Method

A wide range of commitment and knowledge are required for indoor cultivation. To sterilize the medium, you put it in a large drum to kill bacteria and mold. After the substrate has been sterilized for 20 hours, you cool it down to room temperature, which may take a few days. The room must be sterile, so you must use a flow hood that blows air through a HEPA filter.

It would help if you introduced mushroom mycelium into the sterile substrate to begin the process. After the mycelium consumes the substrate, you need to mix the grain into the substrate to speed up the mushroom growth process. The mycelium consumes the substrate after two weeks. After two weeks, the inoculated bags are ready to grow mushrooms.

You must puncture a tiny hole on each bag’s face to allow fresh air and moisture to reach the mycelium and substrate. The mushroom will then grow. After one week, you will be capable of harvesting a beautiful bunch of fresh mushrooms from each bag.

2. Log Cultivation Method

Growing mushrooms outdoors using logs is a very time-consuming and labor-intensive process. You must purchase mushroom spores and sawdust from a tree company to begin. 

It would help if you inoculated the logs at the beginning of the mushroom-growing season. Then the logs will grow mushrooms in cold weather when it rains hard then shines. After a few months, the mushrooms will be ready to be sold in stores and eaten at home.

8. Grow your mushrooms

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Here is a simple procedure for growing mushrooms.

1. Produce or buy sprawn

Prepared spores are known as mycelium. The gills beneath the mushroom cap produce spores. Creating spawn is the process of germinating the spores. A mushroom mycelium-enriched grain or seed is referred to as spawn. Because mushroom spores tend to be unreliable, large-scale mushroom farmers usually purchase spawn rather than producing their own.

2. Get your substrate ready

You will require a substrate like wood chips or straw to serve as the base for your mushroom farm. It will kill off most other fungus or mold spores that may contaminate your mushroom bags. You should chop your straw or other substrates into small pieces, moisten them, and heat them in boiling water for at least 30 minutes to pasteurize them.

3. Pack the substrate and spawn into grow bags

Make sure your bag is half full with substrate before sprinkling spawn over it. Repeat this process until the bag is almost complete, then tie it shut.

4. Incubate your bags

Place your bags into an incubation room. Make sure to cover up any cracks around windows or doors so that light cannot get in. Be sure your bags are fully colonized with white mycelium; they are ready to fruit once that occurs. 

5. Fruit your mushroom bags

Once fully colonized, transfer your loads to a fruiting room. You may wish to dunk the bags in a big tub of icy water for a few hours before bringing them to the fruiting room to give them a jolt. After you hang your bags in the fruiting room, cut spaces where the mushrooms can attach and grow outward. They will be ready for harvest in 18-22 days.

6. Harvest your mushrooms

Oyster mushrooms and other species are best harvested when their caps have begun to open. Gathering mushrooms at the right time is essential to prevent them from growing too large. You should check on your mushrooms twice daily when you suspect they will be ready to harvest. 

If you harvest them too late, your mushroom room will become covered in spores; if you harvest them too early, your mushrooms won’t have grown to their maximum size. 

Now you can sell your fresh mushrooms.

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9. Market your mushroom farm business

Even though building a successful mushroom farm is nearly impossible without being able to promote and sell mushroom produce, it is essential to develop a strong marketing strategy. Therefore, establishing an online presence is crucial. Create a website and set up a business page on social networks like Facebook. Post the latest mushroom products and events on your social media accounts regularly. 

In addition, contact local retailers, distributors, local eateries, and supermarkets and offer your mushrooms. You can take help from online marketing tools and social media tools for small businesses that help to promote and grow your business.


Having a mushroom business can be both rewarding and lucrative. Remember, you don’t want to dive in without thinking about the consequences. A business plan and an in-depth evaluation are critical. Determine who your consumers will be, what mushrooms will sell best in your region, and your expenses. To manage the entire process of mushroom farming, you can take help from the different process management tools available online.

You may provide your product to local shops and vegetable stores, or you may choose to export it. Hopefully, this guide on starting a mushroom farm business answers most of your questions.

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Posted by Eshita Pathak
Eshita is an innovator, entrepreneur, and relentless optimist. She's passionate about leveraging her experience and knowledge to create valuable businesses. Her expertise lies in business formation, operation, finance, and management. With a strong command of business and management principles, she has a proven track record of leading others. She believes there is no failure, only feedback, and she's always looking for ways to grow and improve.
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