Mushroom farming business

Table of Contents

How to Start Mushroom farming business in 2021


Are you looking for a business which involves farming? Which involves farming with low investment prospects? Which involves low investment prospects with higher profit margin and massive sales turnover? Also which requires some small space and comes at lower costs?

Ever heard of mushroom? Yes, they are your way out. No, not just through your stomach but also for making everything mentioned above possible. Your very own Mushroom farming business

The global mushroom market value is expected to reach $50 billion in the next seven years due to the increasing consumption of mushrooms of various kinds for various purposes

The countries like USA, Italy, China and Netherlands are the top producers of high quality and variety of mushrooms.

Moreover, many developing countries like India are taking up initiatives to fuel the small scale industries through mushroom cultivation and farming.

You’ll be amazed to know how  a fungi like this one  could get you a business as wholesome as this. Here’s how

image 28 StartupYo
  1. Market potential and uses

Mushroom is the fleshy, spore-bearing fruiting body of a fungus, typically produced above ground, on soil or on the food source.

These are majorly used for edible consumption because of its negligible sodium and  gluten, low fat and low cholesterol content

The market potential for mushroom farming is vast because of its 20 different varieties and theup and rising demand for each of it in different aspects like in food, medicine, traditional healing etc

Moreover the potential of mushroom can be defined and elaborated for on the following basis

On the basis of types of mushrooms

  • Button
  • Cremini
  • Portobello
  • Oyster
  • King oyster
  • Chanterelle
  • Hedgehogs
  • Chicken of the wood
  • Black trumpet
  • Wood blewit
  • Morel
  • Enoki
  • Shimeji
  • Shiitake
  • Maiitake
  • Reishi
  • Lion’s mane
  • Matsutake
  • Giant puffball

Of these the most cultivated,  grown and consumed mushrooms in India are

  • Oyster  : These are grown in mothers plains
  • Buttons  : These are grown in winter
  • Straw    : These are grown in temperatures ranging from 35°C – 45°C

On the basis of it’s form available

  • Canned mushrooms
  • Dried mushrooms
  • Frozen mushrooms
  • Pickled mushrooms
  • Powdered mushrooms
  • Mushroom sauces

On the basis of uses of mushrooms

  • For its medicinal properties
  • For its physchoactivse properties
  • It’s extensive use in cooking of various cuisines, sauces, toppings etc
  • Used in dyeing wool
  • Used in certain biological remediation techniques

Process of mushroom farming

  • Composting
  • Spawning
  • Casing
  • Pinning
  • Harvesting
  1. License required

The licenses required to run a mushroom farming business are

  • FSSAI registration and licence
  • GST registration
  • Trade license
  • FSSAI registration and licence
  • GST registration
  • Trade license
  • Fill the form below if you need any help starting this business, we will reach you and assist you regarding this business

  1. Investment required

The investment required to set up a mushroom farming business would be

Content Amount  
Total investment ₹ 100000  
Cost of labours ₹ 30000  
Depreciation 12% – 18%  
Other charges ₹10000  
  1. Profits made

The profit made from mushroom farming business is ₹ 100000-₹ 500000.

If, on  the basis of 3000 kg being produced and sold @₹100/kg: 300000

Subsidies and loans for mushroom farming

  • Extended loans by NABARD
  • 20% subsidy by the National horticulture board
  • The Rashtriya krishi vikas Yojana provides a subsidy of ₹80000
  • Target consumers

The target consumers for your mushroom farming business are as follows:

  • Restaurants/cafés : The restaurants make use of mushroom to cater to the organic and vegan eating needs of consumers in multi cuisine dishes like Thai, Chinese, continental etc
  • Pizza spaces: The pizza spaces like Pizza Hut, dominos etc require mushrooms as dried or frozen to use them as toppings
  • Pharmaceutical industries: These make use of the extract of mushrooms including glycoproteins, proteoglycans and polysaccharides for adjacent cancer treatments
  • Aid in psychological disorders: The mushroom chemical psilocybe cubensis is used as a healer to help people suffering from psychological disorders like OCD, anxiety and sleep disorders etc
  • Retail stores: The retail stores stock up on mushrooms as dried, organically plucked, frozen, in the form of churned sauces, powders etc for meeting the needs of vegan,  diet and health conscious consumers
  • Super markets: The supermarkets stock up not only on the processed forms of mushrooms but also in different varieties which can be used for gardening, cooking ( Italian, Mexican,  continental and American cuisines) by the consumers
  • Farmer’s market: The consumers who have a knack, habit  and prefer to eat organically grown  mushrooms visit farmer’s market which has freshly picked mushrooms
  • Area required

The area required to set up a mushroom farming business is 100-500 sq ft

  • Raw materials required

The raw materials required to run this business are as follows

  • Straw with paddy fields
  • Poultry manure
  • Urea
  • Sunflower cake
  • Wheat bran
  • Gypsum
  • Casing soil
  • Machinery required

The machinery required to set up this mushroom farming business is as follows:

  • Pew-wet heat turner
  • Compost turner
  • Pile forming case
  • Front end loader
  • Oscillating head filling machine
  • Spawn dosing machine
  • Hopper regulator
  • Bag filling machine
  1. Manpower required

The manpower required for running your mushroom farming business is

  • 3 skilled workers
  • 3 unskilled workers

    Moreover, ample training must be provided to these workers in terms of the following:

  • Equipment usage
  • Machine handling
  • Safety precautions
  • Business model and growth

The business model of a mushroom farming business can be defined using these four variants

  1. Value proposition: The value which a mushroom farming business is likely to get to you is
  • Low investment, easily available farming raw materials, lower space requirement
  • Wider target audience and consumer market segments because of innumerable variety and forms of mushrooms used
  1. Target consumers: The target consumers for your mushroom farming business are:
  • Retail stores
  • Supermarket stores
  • Pharmaceutical industries
  • Restaurants
  • Cafés
  • Farmer’s market
  1. Competitor review: The competitors to your mushroom farming business are as follows:
  • Shakti industries
  • Indus mushrooms
  • Mahagro India
  1. Marketing strategy: The marketing strategy that can be implemented by your mushroom farming business is as follows:
  • Through sample propositions to restaurants and cafés
  • By advertising about the R&D claims justifying the quality of mushrooms and their cultivation processes
  • By ensuring bulk and cash discounts etc to retail stores and supermarkets
  • By putting up stalls in weekly organic farmer’s market etc


The mushroom farming business has witnessed and has the potential of the following growth prospects:

  • The global mushroom cultivation is expected to grow at a CAGR of 4.0% between 2020-2025
  • The market value of the cultivated  mushrooms is expected to account for $16.7 billion by the end of 2020
  • Moreover the increasing health consciousness among consumers and shift to a vegan consumption has increased the demand for mushrooms because of its low calorie and cholesterol nutrients
  • Profit margin

The mushroom farming business is likely to yield a profit margin of 12%-15%

  • Suggestions

A mushroom in variety has 20 of those but this business opportunity is one of its kind. So, if you hadn’t made your mind you could now

  • Firstly, because of the simple farming techniques and processes, minimal land and capital requirement the mushroom farming business is a very cost-efficient business
  • Secondly, the market for your organically produced mushrooms is vast from being used by households as an intermediary for cooking to being used at pharmaceutical labs for medical reasons
  • Lastly, the growing applications of mushrooms and the extended efforts of the Indian government you could also capture the global market
  • Contact details

For technical knows and hows, contact

Name – StartupYo

Contact – +91 8886666821

Email –

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