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Business Plan Samples | 28 June, 2021

Mushroom Farm Business Plan Sample

Are you considering opening a mushroom farm? Today, more than ever people are incorporating mushrooms into their diet. The following mushroom farm business plan sample will provide insight on what it takes to create a blueprint for your mushroom farm’s future success.


1.0 Executive Summary

Sample Mushroom Farm Corp. (The Company) is on a mission to provide Western Canada with the best speciality, organic mushrooms available on the market. In doing so, Canadians won’t have to experience the cost and environmental impact of importing produce from the US or abroad.
Sample Mushroom Farm grows organic, specialty mushrooms (including Golden Oyster, Blue Oyster, Lions Mane, and Shitake) in their over 45,000 sq ft indoor growing area. They produce fresh mushrooms for Western Canada and beyond, year round.
The company’s goal is to become the most trusted specialty mushroom farm in Western Canada. To do this and keep up with increasing consumer and distributor demand, the company needs to hire 50 Temporary Foreign Workers (TFWs) to support the company’s growing and harvesting demands. The success and growth of the company depends on finding qualified farm workers to meet growing, and fulfillment needs.
With the recent government stimulus programs for unemployed Canadians, many are choosing not to reenter the workforce, and thus the company is struggling to find local farm workers to meet the company’s current, and future needs. This is why Sample Mushroom Farms is seeking an LMIA; to attract and hire TFWs.
The company will be targeting four different customers: restaurants, wholesalers, direct-to-customer via the Amazon Marketplace, and direct-to-customer via farmers markets when possible. To reach each of these customers, the website will be kept up-to-date and the company’s social media channels will be used to build relationships, strengthen the brand, and engage with customers.
The global COVID-19 pandemic changed the world. Although, on the positive side, it’s given Canadians an excellent reminder of the importance of their health and wellness, including eating healthier, local foods. British Columbia accounts for 39% of all commercially grown mushrooms in Canada, and Kelowna, BC is one of the most sought-after regions in the province. For this reason, Sample Mushroom Farms has specifically chosen Kelowna, BC as a home for its operations.


1.1 Financial Overview



Figure 1 – Sales Summary



Figure 2 – Gross Revenues & Pre-Tax Income


2.0 Business Overview


Sample Mushroom Farm is in business to help increase the health of Canadians through access to sustainable, fresh, and organic specialty mushrooms grown without pesticides. This journey started in 2010 as the Peele Family began to grow mushrooms at a small scale for family and friends. At the start of the COVID-19 pandemic, there was an opportunity to expand the company’s operations and discover new and effective forms of mushroom farming. Today Sample Mushroom Farms is the largest commercial mushroom farm in the region.
Sample Mushroom Farms is based in Kelowna, BC; one of the biggest produce-growing regions in Canada. With over 45,000 sq ft of indoor growing space, the farm produces over 50 metric tons of organic produce year-round. The company prides itself on producing high-quality specialty mushrooms including Golden Oyster, Blue Oyster, Lions Mane, and Shitake.
To harvest the mushrooms, 50 farm workers are required every year, and projections indicate that this requirement will nearly double in the next 2 years. Without these workers, the company can not maintain the rigorous harvest and distribution schedule. With a shortage of local workers applying for these positions, Sample Mushroom Farm is applying for a LMIA to support efforts to attract and retain TFWs for the business.
Prior to COVID-19, the company’s owner ran a small-scale mushroom farm, mainly for friends and family. As the demand for fresh local produce increased dramatically during the first year of the pandemic, he began installing additional vertical growing racks to increase production by 40% since January 2020.


2.1 Industry Overview


In 2019, Canadian farmers produced over 145.63 metric tons of fresh and processed mushrooms. On average the Canadian Mushroom Farming industry is growing by about 20% per year. British Columbia is one of the top mushroom growing regions in the country (BC accounts for 39% of all commercially grown mushrooms in Canada), which is why Sample Mushroom Farm has set up operations in Kelowna, BC.
“The industry has also benefited from increased demand from downstream industries such as vegetable processors, wholesalers and grocery stores. Market forces have increased the prices of the industry’s crops, which has further fomented the industry’s expansion.” – Canada Industry (NAICS Report 11120CA)
The market for mushrooms, especially organic speciality mushrooms, has grown in recent years as Canadians are adopting healthier lifestyles. 50% of Canadians actively include vegetables in their diet 51.28 thousand metric tons of fresh, Canadian-grown mushrooms were exported from Canada in 2019. It was only 19.85 thousand metric tons in 2009. The price of mushrooms sold from BC farmers historically exceeds the global average mushroom cost.
“The industry’s performance is dependent on consumption trends and the price of its products. The export market has grown as a result of favourable exchange rates with the United States and stronger supply chains, which have opened new revenue streams to many operators. The depreciation of the loonie has put upward pressure on vegetable prices as imports became more expensive and exports expanded. Technological developments have improved the efficiency of farms, which is highlighted by the improvement of average yields of a majority of the industry’s crops.”
– Canada Industry (NAICS Report 11120CA)


2.2 Mission Statement


To provide Western Canada with the best speciality, organic mushrooms available on market, so Canadians don’t have to worry about the cost and environmental impact of importing produce from the US or abroad.


2.3 Vision Statement


To live in a healthier, happier country where everyone has access to fresh, local produce and specialty mushrooms that have been sustainably grown and harvested.


2.4 Goals and Objectives


Key business goals:
● Earning the reputation of the most trusted local producer of speciality mushrooms in Western Canada
● Develop strong partnerships with local produce distributors in Western Canada
● Support and promote healthy eating in the community
Key business objectives:
● Hire 50 temporary foreign workers in 2021/2022 to support the necessary, rigorous harvest and distribution schedules.
● Achieve sales of $4,500,000 in Year 1, $6,210,000 in Year 2 and $7,957,500 in Year 3 respectively
● Have Sample Mushroom Farms products in 37 stores by the end of 2022.


2.5 Key Success Factors


People: The company will employ farm workers and senior staff who believe in the business and are invested in seeing it succeed. Without the 50 farm workers, the business can’t keep up with the harvest schedule. Sample Mushroom Farm’s senior management is ready to guide the company to profitability and growth as they have over 25 combined years of experience in the agriculture industry.
Operations: The company’s management and sales teams will form the business partnerships needed to grow and scale the business. Business partnerships in the Greater Vancouver Regional District will be the priority, then the company will expand into the rest of BC, Western Canada, Canada, and eventually into the Pacific Northwest of the United States.
Innovation: The company will continually monitor new and emerging technology and processes and adopt new ones that will make the farm more efficient and produce higher quality mushrooms. This will help the company manage spending and costs, and the savings can be passed onto customers or reinvested back into the business to increase efficiencies and sustainability or add additional mushroom varieties to the inventory.
Finances: From a financial standpoint, the company will be focused on maintaining adequate cash on hand. Considering the capital intensity of the mushroom farming industry it will be senior management’s focus to preserve a healthy cash balance at all times. Secondly, the fact that Sample Mushroom Farms is currently operating without a bank loan demonstrates the financial responsibility of its management team. The company will continue to demonstrate a disciplined financial approach into the future.


2.6 Staffing


Sample Mushroom Farms is currently seeking to hire 50 Temporary Foreign Workers through the LMIA program. The salary for each of these farm workers is $28,275 per year. These workers are essential to year-round harvesting operations. Without them the company cannot meet the strict harvest cycles to deliver fresh produce to Canadians.
Projected annual growth over the next three years indicates the company will need to have the following amount of workers per year:
1. 50 workers
2. 150 workers
3. 200 workers

Mushroom Farmer – Job Description
● Hand harvest mushrooms
● Pick row and mushrooms crops
● Perform tasks related to picking, such as sorting and packing mushrooms
● Weighing and constructing boxes
● Loading/unloading crates, pallets, and farm supplies for transport
● Sanitizing picking tools, racks and packaging areas
In addition, as demand for produce increases, Sample Mushroom Farms will need to hire additional team members for sales, administration, and potential delivery over the coming years.


2.7 Management Team


Sample Mushroom Farm Corp. has the following permanent management staff:
● President ($52,000 per year)
● Operations Manager ($42,500 per year)
● Supervisor ($35,100 per year)
Company Director, Daniel Peele has a 12 year background in agriculture, and challenges his entire team to produce the best organic mushrooms available. He regularly studies mushroom farming practices and technology so the business can adapt and grow as new technology and practices emerge.


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3.0 Products and Services

Sample Mushroom Farm’s availability of mushroom’s will evolve as the market’s needs change. Currently the company’s main mushroom varieties include:
● Oyster Mushrooms: These are a type of edible fungi and one of the most widely consumed mushrooms in the world. They get their name from their oyster-shaped cap and very short, or completely absent stem. They’re similar in colour to raw oysters, with a light grey or greyish brown color.
● Lion’s Mane: Also known as Hericium Erinaceus, these mushrooms are wide, globe-shaped with long shappy spines. These are common for eating or taking in the form of supplements. Research suggests they can help reduce inflammation and improve cognitive and heart health. Health food stores sell Lion’s Mane in extract and supplement form.
● Golden Oyster: These bright yellow mushrooms have a more complex and aromatic flavour than pearl oysters. Their aroma can be similar to the fruity scent of aged red wine and are velvety, crisp, and chewy. Golden Oysters are small-to-medium in size (2-6 cm) and attached to a short or nonexistent stem. The thin, dry, smooth caps are daffodil yellow, semi-circular, and look like small petals clusters layered in a small bouquet. Underneath the caps there are many soft, short, white gills that connect to the ivory stem.
● Shiitake Mushrooms: These fungi range in color from light to dark brown. Their cream-coloured flesh is firm, and the fibrous stem is slightly chewy inside.
In the coming seasons the following varieties will be added:
● White (large and medium)
● White Button
● Crimini (large, button, and mature)
Sample Mushroom Farms also plans to add the following pre-packaged mushrooms:
● White/Crimini, whole
● White/Crimini, sliced
● White, sliced
● Portabella (x-large, large, medium, small, random, stemless)
● Oyster, Shiitake bulk
● Wild Mix, whole (Crimini, Port, Shiitake, Oyster, Enoki)
● Portabella, whole
● Portabella, sliced
● Baby Bellas, whole
● Oyster, whole
● Shiitake, whole
● Shiitake, sliced
● Enoki, white


4.0 Operations


Sample Mushroom Farmhas 45,000 sq ft of indoor growing area in a prime location within the agricultural region of Kelowna, BC.


4.1 Equipment


To protect the mushroom harvest from the effects of nature, the company’s facility has set up indoor, vertical farming. This allows us to grow up to 75% more produce in a controlled environment while minimizing the unpredictable effects of adverse weather conditions on the crop.


4.2 Inventory


Sample Mushroom Farms will grow specialty mushrooms in vertical farming shelves. With staggered seeding, growing, and harvesting windows, this will ensure year-round mushroom supply.


5.0 Market Overview


The retail cost of mushrooms remained relatively stable through 2015-2019. In the second half of 2020, in the midst of the global COVID-19 pandemic, the average retail price of mushrooms increased, selling for an average of $8.73 – $9.49 per kilogram.
January and February 2021 have already shown the highest average retail rates for these months in the past 6 years ($9.42 and $9.02 respectively). This trend is expected to continue to either match or exceed 2020 retail averages.
One of the main factors that affects pricing of Canadian produce, including mushrooms, is the Consumer Price Index for Food. In 2020, the price index rose 2.5% to 154. With the low oil prices, the depressed Canadian dollar it’s becoming more expensive to import produce into Canada so the country will be looking for locally sourced produce in coming years.
With increased costs, and COVID-19 related supply chain shortages and delays, it’s expected that the Consumer Price Index for Food will continue to rise in 2021. If it continues on its projected trend, it’s expected to reach 167 by 2025.

Consumer Trends
● Per capita disposable income is expected to grow approximately 0.6% over the five years to 2026. As consumers get access to additional disposable income, they can afford to purchase more organic and local produce.
● Canadians are becoming more health-conscious and are adopting healthier overall eating habits due to availability of fresh, organic produce.
Farming Trends
● Farms have seen increased success in distributing their produce at local farmers markets and through direct supply with restaurants.
● Farms are relying on manual labour to produce the highest quality produce.
● With borders beginning to open and bans on international travel expected to soon be lifted, it will be easier to attract temporary foreign workers to Canada to help on mushroom farms.
● Emerging technological developments are creating opportunities to boost crop yields through vertical farming.



Figure 3 – Vertical Mushroom Farm


5.1 Competition

Asia Pacific Farm
3577 268 St.
Aldergrove, BC V4W 3G8
Phone: (604) 856-8558



Avina Mushrooms
28265 58 Ave.
Abbotsford, BC V4X 2E8
Phone: (604) 856-9833



Highline Mushrooms
3392 224 St.
Langley City, BC V2Z 2G8
Phone: (604) 534-0278



Let's Get Started!


5.2 Competitive Advantage


Sample Mushroom Farms stands out from the competition in three main areas: 1. Indoor-vertical farming ensures that adverse weather conditions don’t affect crop yields.
2. The facility grows only 100% organic and sustainable specialty mushrooms. 3. Sample Mushroom Farms is dedicated to not only selling mushrooms, but to supporting the healthy eating habits of Canadians.


5.3 Risk Analysis


One of the biggest risks to this business is finding qualified farm help, which is proving difficult to find locally in BC. Qualified farm workers are an essential part of any farming business. It’s a struggle the entire Canadian farming industry is facing since the COVID-19 pandemic:
“The supply for certain industry products may decrease due to the employment effects caused by the coronavirus. Since operators heavily rely on temporary foreign workers (TFW) during harvesting times, a decrease in these seasonal workers will likely result in less products being harvested. This outcome of fewer TFW is a direct consequence of travel restrictions, employee health concerns and bountiful government benefits in response to the pandemic. Travel restrictions and employee health concerns will relate to TFW not wanting or being able to go to farms and help out with the seasonal harvest. In addition, due to the Canada Emergency Response Benefit (CERB), workers that originally helped out operators are now choosing to stay home since they are receiving $2,000 per month from government benefits, which is greater than what they would have received harvesting vegetables. The shortage of temporary employment is expected to cause a decrease in what operators will be able to harvest and sell.” – Canada Industry (NAICS Report 11120CA)
Sample Mushroom Farms is dependent on hiring 50 TFW this year and if not, the company’s solvency and future are at risk. As a year-round farm, the company is currently seeking a Labour Market Impact Assessment (LMIA) for approval to hire 50 TFW to help produce specialty mushrooms.


6.0 Sales and Marketing Plan


Sample Mushroom Farms has several target customers including:

Direct to restaurant: Restaurants are looking to support local (and Canadian) produce in their restaurants. From their perspective, offering fresh, local produce makes them increasingly more attractive to potential customers. Selling specialty mushrooms to local restaurants with standing weekly or bi-weekly orders will
become an excellent source of recurring, predictable revenue for the business.

Produce wholesalers: Selling directly to produce wholesalers is a great way to make larger-revenue sales. By creating the right partnerships with wholesalers, this can become a great source of recurring, predictable revenue for the business.

Direct-to-Consumer (Amazon): Amazon is the leading e-commerce store in Canada. Creating an account to sell mushrooms and products on Amazon, allows us to sell directly to consumers. Sample Mushroom Farm Farm’s packaging and order fulfillment will meet the stringent requirements for selling ready-to-eat produce through their platform.

Direct-to-Consumer (Farmers Markets): As farmers markets begin to reopen following COVID-19 restrictions, the company can sell produce directly to consumers through this channel. In the near future, the company will also explore the option of selling through distributors at markets.


6.1 Key Channels


The website will be the primary hub of the company’s online presence. It’s where the most current information about the company will be made available to the public. In the future, Sample Mushroom Farms plans to explore the opportunity to sell mushrooms to consumers and wholesale through this website.

Social Media:
Social media presents the best and most cost-effective way to promote the company’s products, strengthen the business brand, and communicate healthy lifestyle messages and education to Canadians. The social media messaging will be focused primarily on value- or educational-based content. While the social media accounts will be used to share the occasional promotional posts, the primary goal of using social media is to build the brand and engage with customers and wholesalers.

Sales Representatives:
Our Sales Representatives will grow revenues in three areas: farmers markets, wholesalers and restaurants. While Sample Mushroom Farm understands the value of digital marketing, the company also realizes the importance of Sales Reps. This channel will build relationships on the ground, and compensate our Sales Representatives on a commission basis.


6.2 SWOT Analysis


Figure 4 – Happy East Farm – SWOT Analysis


7.0 Financial Plan



Figure 5 – Gross Revenues & EBITDA


7.1 Startup Expenses


Figure 6 – Startup Expenses


7.2 Corporate Tax



Figure 7 – Projected Corporate Tax Contributions

7.3 Income Statements











7.4 Cash Flow Statement


7.5 Balance Sheet


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