How to Start a Profitable Mushroom Farming Business

Want to start a mushroom farming business? If so, this article will guide you through all the important steps that are needed to run a profitable mushroom company with licenses, machines, and much more.

Mushroom is nowadays one of the most popular horticultural cash crops. It is also a widely consumed food item nowadays. They are rich in minerals and vitamins and very low in fat and sugar. Additionally, the productivity of mushrooms is higher than any crop. Apart from fresh selling, you can sell the processed mushroom for a longer period of time.

Any individual can start a mushroom farming business on a small and medium scale basis. The business demands moderate capital investment and ensures very remunerative profits.

Here are the 10 Steps to Start Mushroom Farming Business

1. Create a Business Plan

You must have a business plan or project report in hand before initiating the business. it is advisable to craft a specific business according to your investment capacity and business size. Additionally, do study the local market first to gain information about the product and market demand.

There are different types of mushrooms available in the market. Some of the popular ones are button mushrooms, oyster mushrooms, straw mushrooms, milky mushrooms, and shiitake mushrooms.

After deciding on the product, determine the plant and machinery investment. Additionally, calculate the raw material cost, utility investment, and marketing expenses. Prepare a marketing and product promotion strategy for your products.

2. Business Compliance

Processed or canned mushrooms are edible products. Therefore, the business demands specific licenses and permissions from several Govt. agencies. However, it hugely depends on the location where you are starting the unit.

GST registration is a must to start a mushroom processing company in India in the present day.

In addition, if you are targeting the export market, then it demands an export-import license. And if you want to export the products to European countries, then you must obtain the ISO 9000/IS 14000 Certification.

In India, you will need to first register your business. Additionally, you will need to have the FSSAI license. Additionally, check the upcoming tax liabilities related to this business.

3. Name Your Business

It is important to select a catchy name for your mushroom business. An attractive and relatable name will enhance the brand image of your mushroom company.

4. Location For Mushroom Processing

In starting this business, you will need to secure a location. Generally, a 1000 Sq Ft space is sufficient for a small-scale operation. Additionally, you will need to check the availability of utilities like water, electricity, and labor.

However, the most important consideration is the availability of raw materials. You must establish the unit nearby the mushroom growers.

5. Raw  Materials

The most crucial raw material is good quality fresh mushrooms. Generally, the shelf life of fresh mushrooms is a few hours. Therefore, the location has to be very close to the cultivation area.

In addition, you must arrange the prior arrangements with some cultivators for the regular supply of mushroom spawns. Future planning may include mushroom cultivation for captive consumption. Other required raw materials are salt and citric acid that require in small quantities.

6. Drying Processes for Mushroom Farming

There are various methods of drying mushrooms. Some of the widely used ones are listed below:

a) Freeze Drying

In this technology, the most superior method is the Vacuum freeze-drying system. Generally, the sublimation process helps to evaporate the water from the ice phase to vapor at low temperatures. Therefore, it produces the dried product close to the fresh product and quick rehydration. However, the main limitation of this system is the high energy cost. Therefore, you can use this process for high-value products like mushrooms only.

b) Vacuum Drying

In this process, heat-sensitive products are dried under a vacuum at low temperatures. The product is superior to air-drying and sun-drying. This method is widely practiced due to its fair product quality and economics.

c) Microwave drying

This is the latest system emerging in dehydration. In this process, you can get superior product quality similar to freeze-drying. In addition, the cost of microwave drying is lower than that of freeze drying.

d) Hot air drying

This system is simply hot air circulation over the product. In addition, you can control the temperature for evaporation so that water is gently evaporated as it reaches the surface by osmosis.

e) Sun-drying

This is an age-old traditional drying system. Here, you can use solar energy at a low cost. This takes the longest time and the risk of product deterioration during drying is high. Sanitary methods have been developed and in some cases, solar heat is utilized by using solar cells/MS plates, and the air is circulated in closed chambers by a fan. Improvements in this system will further reduce energy costs.

Also Read: Money Making Agriculture Business Ideas

7. Buy Mushroom Processing Machine

According to the drying and processing method, you will need to procure the machinery for your unit. The list includes:

  • Baby Boiler
  • Tray type dehydrator
  • Can Seamer
  • Can reforming with rubber rollers
  • Exhaust box
  • Steam Jacketed kettles
  • Weighing Scales
  • Lab equipment

8. Mushroom Processing Technology

First of all, procuring the right manufacturing technology is an important aspect of this business. You must obtain the technology from the Govt. agencies. Here we put a brief detail of the manufacturing process for your ready reference.

The next step is to wash the fresh mushrooms in cold water and then blanch them in boiling water for around 3-4 minutes. Then, dehydrate them in a drier and pack them. It is advisable to pre-treat fresh mushrooms in a solution containing brine to prevent discoloration.

Additionally, packing is very critical as the formation of moisture contaminates mushrooms very quickly. Hence you can use plain cans and brine of 2% salt and 0.2% citric acid for packing. The cans are exhausted at 19O C for 7-8 minutes, sealed, and processed under pressure for around half an hour.

Generally, the yield of the final product depends on the quality of the dryer, the manufacturing process employed, the moisture content in fresh mushrooms, and the moisture required in the final products. However, you can expect an average yield of 25%.

Fresh mushroom is a highly perishable item. Therefore, it demands commercial processing and packaging for enhancing shelf life.

9. Arrange Funds

There will be a need for arranging funds to start and run a mushroom processing business. Other than your own fund, you can approach funds from banks and other lending financial companies. Also do not forget to apply for a credit card to meet daily short-term expenses.

10. Promote Your Mushroom Processing Business

Marketing and promotions are important for the overall success of any business. Therefore, according to your marketing plan, you must promote your product and business. It is advisable to establish a local distribution network. Make sure, your product is available in the stores where customers can buy the product.

At present, it is almost mandatory for any business to go online. Create a website for your mushroom farming company and promote it through social media platforms.

Additionally, concentrate on institutional sales also. Generally, B2B selling ensures a good volume in this type of business. In addition, you must promote your mushroom processing business in the international market also.

Frequently Asked Questions

Is Mushroom Farming Profitable?

Mushrooms are very popular in almost all countries across the globe. The demand for organically grown mushrooms is increasing very fast.

Mushrooms are a rich source of nutrients such as vitamins, selenium, and potassium. They are fat-free, cholesterol-free, and very low in sodium and gluten content. The market for mushrooms is projected to grow significantly in most regions of the world in the next five years.

However, there are several factors for growth. The list includes a rise in the consumption of processed food and growing awareness about health and wellness. Also, R&D and innovations to enhance the applicability and continuously improving technologies to increase their shelf-life are projected to drive this market. Star hotels, exclusive restaurants, and certain caterers are the bulk consumers and a firm tie-up for regular supply with some of them is advisable.

How Much Does it Cost to Start a Mushroom Farming Business?

The startup investment of starting a mushroom farming business depends on a wide range of factors.  The major factors are production capacity, type of mushrooms, equipment, and space rent. On average, the cost of starting a small mushroom farming business in India will be around Rs 2 Lacs to Rs. 5 Lacs.