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How to Start a Profitable Mushroom Farming Business

A mushroom farming business can be a rewarding and environmentally friendly venture. This low-cost farming venture can be a means of big profit in just a few weeks. Here in this article, we have provided a complete beginner’s guide to starting a mushroom farm from home or commercially.

A person who has a little bit of idea in the science & technology of mushroom growing and has their own building for having the farm – mushroom business will be the perfect option for him to start. The cultivation of mushrooms is an art and requires both study and experience.

Is Mushroom Farming Profitable?

The sale of mushrooms has grown hugely in the last few years. In the United States, the turnover of mushroom-related items reached $45 billion. Industry experts predict an annual growth rate of 9.5% in the 20210-2028 period. Pennsylvania produces the largest share of mushrooms in the US.

The mushroom farming business is also evolving fast. The demand for specialty mushrooms is on the rise. Some of the areas other than food items that are poised to grow are the following:

  • Mushroom supplements
  • Fungi as food additives
  • Ready-to-fruit blocks
  • Textiles
  • Mycoremediation
  • Mental health

So, we can conclude that the mushroom farming business is surely one of the most profitable indoor farming businesses in the world.

Here are the 18 Steps to Start Mushroom Farming

1. Decide Whether the Mushroom Farming Business is Right For You

Mushroom farming suits best people who enjoy gardening, growing plants, and taking a keen interest in agricultural activities. Since you plan to launch a business, communication abilities will be an added advantage in networking with sellers and buyers.

An individual who has worked before on a mushroom farm can start his own mushroom farming business. Otherwise, it is always better to have technical training in mushroom farming to gain expertise.

Also, Read: Most Profitable Livestock Farming Business Ideas 

2. Choose the Type/Variety For Mushroom Farming

Different types of mushrooms have different production costs and it is important to decide on a budget depending on the amount of money available and the long-term investment benefit.

Broadly, there are three types of mushrooms that are cultured. They are Button Mushroom, Oyster Mushroom, and Paddy Straw Mushroom.

A good variety to start mushroom farming with is the Oyster mushroom. Other profitable and easy-to-grow varieties are Shiitake, Lions Mane, White Button, and Portobello.

3. Environment For Mushroom Farming

In a mushroom farming business consider the environment for mushroom production. Different varieties require a different kind of environment. For example, the oyster mushroom has some basic environmental requirements like a temperature of 15 to 20°c, a humidity of 80 to 90%, good ventilation, light, and sanitation.

4. Get Spawn For Mushroom Farming

You will need to have spawned to start the culture. You can produce your own spawn by using a sterile culture or you can buy ready-to-inoculate spawns from the suppliers. Producing spawns can be cheaper in the long run, because the startup cost will be high in this case.

5. Prepare Substrate For Mushroom Farming

Mushrooms can be cultivated on a large number of agro-waste having cellulose and lignin that helps in more enzyme production of cellulose that is correlated with more yield. You can use straw of paddy, wheat, and ragi, stalk and leaves of maize millets and cotton, sugarcane bagasse, sawdust, jute and cotton waste, dried grasses, used tea leaf waste, etc.

You can also use some industrial waste like paper mill sludge, coffee byproducts, tobacco waste, etc. Some of the popular methods of substrate preparation are steam pasteurization, hot water treatment, fermentation of composting, and chemical sterilization.

Some of the popular methods of substrate preparation are steam pasteurization, hot water treatment, fermentation of composting, and chemical sterilization.

6. Pack the Bags/ Boxes/ Trays For Mushroom Farming

The bag-making process normally involves composting the substrate, filling the bags with composted material, spawning, and then incubating till the maturity stage.

7. Incubation For Mushrooms 

Arrange the spawned bags/ boxes/ trays in a dark cropping room on a raised platform to stop any threats of natural light from getting into the room. Keep the growing area at a specific temperature that depends on the variety.

8. Fruiting in Mushroom Farming

While various species require different temperature regimes all require high humidity of 70-80% during fruiting. Frequent spraying of water is necessary for the cropping room depending upon the environmental humidity.

9. Protection Measures in Storing Mushrooms 

The mushroom is suspected of attacks by flies’ springtails and mites. The crop is prone to fungal disease and also can have the diseases of yellow blotch, brown spot, etc you will need to have some specific control measures according to the attacks.

10. Mushroom Farming Harvesting & Storage

The right shape for harvesting can be judged by the shape and size of the fruit body. The mushroom should be harvested before the spore releases. It is advisable to pick the mushrooms at one time from a cube.

There are two types of storage involved in mushroom processing- long-term and short-term. Freshly harvested mushrooms can be stored at low temperatures (0-5°c) for a maximum of two weeks. Dried mushrooms with 2-4% moisture, can be stored for 3-4 months in sealed pouches without any change in taste.

You may also like: Start a Profitable Papad Making Business

11. Write a Mushroom Farming Business Plan

Starting a small business like mushroom farming requires a specific business plan. Work out a detailed budget; write out a clear strategy and objectives for your business, what will be the variety you want to grow, and what will be your target market domestic or export?

The topics that must be addressed in your business plan for your home-based or small mushroom-farming business are the following:

  • What are the start-up cost and recurring costs?
  • Your Target Customers
  • Pricing Strategy
  • Procurement of spores and other raw materials
  • How much profit you are expecting?
  • Where do you plan to sell mushrooms?

12. Mushroom Farming Business Costs

The cost of starting a mushroom-producing unit is not much. An area of 300-500 sq. ft is enough to produce more than 10,000 pounds of mushrooms. The cost of starting a mushroom farming business is expected to be in the range of $2500 to $10,000 depending on the size and production output.

The other costs include LED fluorescent lamps for warming, mushroom spores, casing soil, manure, polythene bags, wooden shelves, and the initial construction expenses for setting up the rooms. So, anyone can start a mushroom farming business by investing a few thousand dollars.

13. Fix the Pricing & Estimate the Profit Returns

A proper pricing strategy will play a critical role in the profitability of the business. The best way before deciding on prices is to collect the prices of similar items being sold by existing mushroom sellers from the market.

For example, in the United States, you will find good quality specialty mushrooms in the range of $15 to $20 for each pound. For Oyster mushrooms, it is less and is around $5 to $10.

14. Name Your Business

Choosing a catchy and relatable name for your mushroom business is essential. The name must address the customers in clarity for the kind of products you are selling.

Learn More: How to Name Your Business? Step-By-Step Guidelines

15. Register your Mushroom Business

Registering your business is a must if someone is planning to run a hassle-free legally compliant company. Every country and state offers different business structures. Select the one that suits you the most.

For example, in the United States, broadly there are three structures popular for small businesses. They are proprietorship, partnership, and limited liability companies. Forming an LLC protects you in protecting your personal assets in case the company is sued for financial disputes.

16. Licenses & Permits

Again requirement of licenses will depend on where you are planning to open the business unit. In the United States, there are several state and federal taxes you need to procure before launching the business. For taxes, you must apply for EIN(Employer Identification Number) here in the US.

17. Where to Sell Mushrooms

Unless you have a clear idea of where to sell the mushroom products, it is advised not to launch them commercially. Other than wholesalers and retailers, reach out to restaurants and showcase your products.

Restaurants are good consumers for purchasing bulk mushrooms. Nowadays, having a website is a must for businesses. It not only enhances your brand but also creates a new avenue of sales.

18. Have a Marketing Plan

All said and done, unless you can promote and sell the mushroom produce it is almost impossible to build a successful mushroom farm. Hence, creating an effective marketing plan is essential.

In the present day, an online presence is a must for any business. Create a website and create a business page on social platforms like Facebook. Keep posting the latest events and latest mushroom products on social media pages.

In addition, reach out to local retailers, distributors, local restaurants, and grocery stores and sell your mushrooms.


The high-quality commercial cultivation of mushrooms is a very profitable proposition as it is in good domestic demand in most countries across the world. You can go for local market penetration by making available your product to the retailer and vegetable shops. Also, you can go for an export option. The export market is mainly the USA, with some quantities going to the UAE, Russia, Germany, Switzerland, the UK, and other countries.

Frequently Asked Questions on Mushroom Farming

What are the types of mushrooms suitable for farming?

Common mushroom varieties for farming include white button mushrooms, oyster mushrooms, shiitake mushrooms, and portobello mushrooms, among others.

How much space is needed for mushroom cultivation?

Mushroom farming can be done in a relatively small space. A small room or shed can suffice for growing mushrooms on a small scale, while larger operations may require dedicated facilities.

What kind of substrate is used for mushroom cultivation?

The substrate (growing medium) depends on the mushroom variety. Common substrates include straw, wood chips, composted manure, and sawdust.

Do I need special equipment for mushroom farming?

Basic equipment includes containers or trays for growing, a temperature-controlled environment, and a humidifier. More advanced setups may require specialized sterilization equipment.

How do I prevent contamination in mushroom cultivation?

Maintaining a sterile environment is crucial. This involves using clean equipment, proper sterilization techniques, and controlling access to the growing area.

What are common pests and diseases in mushroom farming?

Common issues include green mold, cobweb mold, and mites. Regular monitoring and hygiene practices can help prevent these problems.

How long does it take to grow mushrooms from start to harvest?

The time frame varies by mushroom type but generally ranges from a few weeks to a few months. White button mushrooms, for example, can be ready for harvest in about 3-4 weeks.

Can I sell my mushrooms locally?

Yes, selling locally at farmers’ markets, to restaurants, or through community-supported agriculture (CSA) programs is a common practice for mushroom farmers.

Is mushroom farming profitable?

Mushroom farming can be profitable due to the high demand for fresh and specialty mushrooms. However, profitability depends on factors like scale, market demand, and cost management.

Are there any organic or certification requirements for mushroom farming?

Organic certification is possible for mushroom farms that adhere to organic growing practices. Certification requirements vary by region and certifying agency.

How can I expand my mushroom farming business?

Expansion can involve increasing production capacity, diversifying mushroom varieties, or exploring new markets. A well-thought-out business plan is essential for growth.

What are the environmental benefits of mushroom farming?

Mushroom cultivation can recycle agricultural waste products, such as straw or sawdust, into a valuable food source. Additionally, mushrooms require less water and land compared to some other crops.