Oyster Mushroom Farming – Profitable Business Plan

mushroom farming business

The initiative of growing mushroom as a business came from the fact that mushrooms are the most wanted vegetables for vegans who wish to consume protein in a large quantity. Mushroom production started in Europe and other Asian countries due to the demand for it in the industry of food. Food items have added mushroom in all their dishes making it more popular and a mandatory ingredient in cooking. With this, the scope for mushroom farming business has increased. All you need is profitable business plan and investment to start your mushroom farming business. Here in this article, you will how to start mushroom farming and how to make profit out of this. You will learn about Oyster Mushroom, which is a common edible mushroom. It was first cultivated in Germany and is now grown commercially around the world for food.

Business Opportunities

The mushrooms produced are not restricted to one target place or a country. Since it includes a number of variety in it, countries which do not have specific variety will import it from the other. Here, there is no statement which says mushroom cannot be grown wherever cultivated. Yes it can be grown, but the cost will be high if there is no natural environment supporting it. This gives chances for you to export your mushroom to countries who do not have the varieties. You can also sell in local market. Apart from selling and exporting mushrooms, you can also go for spawn production and substrate formation.

  • Spawn Production – If your investment is less then you can choose to produce spawn alone. Spawn in mushroom farming is like a seed used to initiate a plant’s growth. Some small scale industries will not waste their time on production of spawn. This is to save their time and the labor count. Use such opportunities to generate income by supplying spawn for their production.
  • Substrate Formation – Substrate is the medium on which the mushrooms grow. Opportunities created by small scale industries here in mushroom farming is the outsourcing for assistance in substrate formation. You, as a service provider can start this by producing perfect substrates for each type of mushroom and thus this service will earn you profits.

Oyster Mushroom and its Demand

People always try to use the most unique product of the market and this is irrespective of what kind of product it is. Having this, oyster mushrooms are now gaining more importance leaving back the usual button mushrooms. The demand thus makes it favorable for new business starters. And also, growing them would not require much of science and technology.

Oyster Mushroom Farming in a Small Scale

Mushrooms do not require land or soil in acres for them to grow. This is the one of the major reasons why people choose to invest money in mushroom farming. A very small place which is not open to direct sunlight is more than enough to carry out this business. Humidity and a place free from heavy heat conditions will be suitable. A place near kitchen garden or an extra room which has proper ventilation can be productively used.

Requirements in Mushroom Farming

Substrate- Substrate is the medium on which the mushrooms grow. So, it is important to choose the right one. Basically,  substrates for small scale industries can be prepared on your own. It is better to avoid the purchase of substrate from outside sellers. For oyster mushrooms, hay will be a perfect substrate.

Spawn- Spawn is the base for growth, so the selection of it should match the requirements of the mushroom to be grown. Decide the amount of spawn required and procure it before starting the production process. Use grains or wood pellets as spawn since they meet the budget of a low investment business.

Containers and buckets– Containers can be purchased or even selected from the unused tubs at home. If not tubs, you can make use of bags which are not toxic. Make sure that you don’t use different types of containers or bags since they might not reveal the proper records of growth if studied.

Spray bottle– In order to keep the mushrooms moist, spray mist whenever it becomes dry. This will keep the setup humid and thus enhances the growth to some extent.

Step by Step Process Involved in Mushroom Farming

  • Select the area to place the containers with substrate and spawn. Cover the room or place with tent or any other sheet to make the place suitable for growth.
  • Now, mix the substrate with spawn in a correct proportion. Prepare the container to load the mixture in it. Once mixing is done, fill the container with the mix.
  • After loading it, spray little amount of water. Monitor the setup as and when you have time to check of the procedures done are working or not.
  • The process comes to an end when the farm starts flushing in 3 weeks. Harvest them and the use it for the desired purpose.
  • Repeat the process by the same steps. You will find a change on the form of increase in production.

Sell them in the local market or your neighbours since it is purely small scale. Don’t invest time on marketing and promotion as they may increase the initial capital investment. Make it available to the market by spending moderate amounts for packing and transport.

Large Scale Mushroom Production – Business Plan

For production in large scale, you will require a lot of elements apart from the basics. Make sure that your capital investment will be sufficient enough to meet all the needs of the firm. Like huge investment, production will also be huge.


Land– Acres or land will be required to carry out the business for higher quantities of production. Select the land and prepare it for the process. A tent covering an area of land can be used, but remember that this will not allow the use of high tech machines or technologically sound techniques of farming. But, using a building will be suitable for growing it with more new techniques.

Substrate– Use of substrate is a must in mushroom farming irrespective of the size of the industry. But, purchasing these substrate by yourself is not a productive idea. This will add more costs to your production. So it is better to start your own house for production or preparation of substrate. As already mentioned, hay can be chosen as the substrate and can be prepared by pasteurization method. Heat a massive vessel full of water till the boiling point. Now immerse the substrate into the boiling water and the hay should be packed inside a mesh or any other netted material. Hay should be shredded before immersing it into the heating vessel. After immersing, cool it down to normal temperature and let it dry. The process will approximately take 2 hours of time. After pasteurizing, the substrate is ready to be mixed with the selected spawn.

Spawn– Spawn should be a broken down substance and should be perfectly suitable for the selected species of mushroom. Instead of just spreading it on the substrate it is better to mix it with the pasteurized substrate. This will catalyse the growth and the production rate will also be high.

Machines– Harvesting cannot be done if the number of mushrooms produced are more. Thus, use of technologically sound machines is required and this will also enable you to have a faster production without lagging in between due to manual work.

Water– To keep the setup at the right state, it is necessary to spray water at regular intervals. Remember, you are not pouring water here and the activity is just spraying it at a very minimal quantity.

Containers or racks – This is a decision which purely depends on your layout and ideas on preparing the setup. You can choose any type of container which is able to accept the the conditions of growth.

Staff – The need of staff is due to the existence of manual work even after the installing various machines. Though machines do all sorts of work, certain processes need human presence and thus your industry should have enough labourers.

After keeping them ready, start the production process. The process is similar to the process mentioned in small scale industry. Difference is seen only in the type of method used for production. Since your industry is with a higher investment compared to small scale, you can adopt expensive techniques which will promote the production process.


Packaging here should be given importance since the industry’s name and brand should reach people. Eliminating the competitors will be an easy task if the package is well planned. A well planned packaging method will reduce the costs for advertisement and will increase the survival time of the mushrooms in it. Carry out a research before you step in to the selection phase of packaging. Analyse clearly and conclude with an idea which is more economic and suitable to your area.

Selling the Produced Mushrooms

You can sell them anywhere you need if you have arrived to the end of the production process. Choose the most profitable medium of selling and make it popular in that place. This will enable you to attain a stable position in the market and will generate more customers in the future.

Oyster mushrooms are white in colour at the bottom and with this you can check for the quality while producing them. Filter the best quality mushrooms while packing so that you don’t compromise on the taste of the mushrooms. Sell them online or to restaurants on a regular basis. Find a stable place to deliver your mushrooms to avoid unfavorable conditions of having the stock without selling.

Produce according to the demand and make sure that you don’t produce more. The act of producing extra quantities will ultimately lead to a huge loss since these mushrooms are perishable and cannot stored for months like other products.

Training on Mushroom Farming

Some of you might not be confident about starting a business without actual study about it. You can choose to go for training programs organized by many institutions. This will give you enough knowledge on how to initiate it. Trial classes will give you experience in growing mushrooms and will eliminate most of the errors made by starters.

How to Increase Profits?

  • Adopt methods which will increase production. Search for new methods in your locality so that you don’t have to invest more to install them. Clearly study about the method to avoid wrong procedure being done.
  • Mushrooms require a particular temperature to grow. Thus, fix them accordingly to avoid mismatch between the needs of the mushrooms and your setup conditions. Oyster mushroom requires an optimum temperature of 22-26 degree Celsius.
  • Utilize the space at its maximum. This will lead to enormous amounts of production since every single unit of the place is productively used. Stack them in a vertical setup to save space and to reduce maintenance costs.
  • Use manure to speed up the growth process if needed. Fast growth will reduce the break in between production.
  • Sell them at a reasonable price to capture the market. Once you are fixed as a qualified producer, an increase in your price will not matter to your customers.
  • Have your production house at a location where markets are easily accessible. This is to reduce your transport costs.
  • Avoid middlemen in your business to enjoy more profits. Giving it at a lower price to the middlemen will reduce your margin. Involve the direct supply of mushrooms to your customers.
  • Install all the required amenities in your place itself. Do not outsource things in case of a large scale business. Have your own production methods and preparation techniques.
  • Choose a right packaging method, but not an expensive one. Since these are perishable items, use and throw packs are more than enough. Don’t spend more on fancy items which will increase your cost of production.


On considering all the above, oyster mushroom farming stays as one among the businesses which will be a life saver for people who are waiting to use their money in a profitable way. Production of mushroom every three weeks shows the early income generation feature of mushroom farming. Small scale or large scale, care management values the most to predict the results of the farm.


1. What are oyster mushrooms and how are they grown?

Oyster mushrooms are a type of edible fungi, typically found in the wild growing on decayed wood. They can also be cultivated on a range of substrates, including straw, coffee grounds, and lumber waste.

2. What is the best time of year to start an oyster mushroom farming business?

There is no definitive answer to this question as it will vary depending on the climate and location where the oyster mushroom farming business is based. However, it is generally recommended to start an oyster mushroom farming business in the spring or summer months when the weather is warmer and the days are longer.

3. What are the initial start-up costs for an oyster mushroom farming business?

The initial start-up costs for an oyster mushroom farming business can vary depending on the size and scope of the operation. However, some of the common start-up costs may include the purchase of oyster mushroom spores or spawn, the construction of grow rooms or facilities, and the purchase of necessary equipment and supplies.

4. What is the average yield of oyster mushrooms per square foot?

There is no definitive answer to this question as it can vary greatly depending on the conditions they are grown in, but a rough estimate would be around 1-2 pounds per square foot.

5. What are the markets for oyster mushrooms?

The markets for oyster mushrooms can vary depending on the region. They are often found in grocery stores, as well as farmers markets and specialty stores.

6. How do you price oyster mushrooms?

There is no definitive answer to this question as the price of oyster mushrooms can vary depending on a number of factors, including the type of oyster mushroom, the quantity, the quality, the region, and the time of year. Generally speaking, oyster mushrooms can range in price from $5 to $30 per pound.

7. How do you promote and market oyster mushrooms?

Some ways to market and promote oyster mushrooms would be to host educational events about them, create informative blog posts or social media posts about their benefits and how to cook with them, or partner with local businesses and restaurants to feature them in dishes. Additionally, selling them at farmers markets or through community-supported agriculture programs can help to get them into the hands of consumers.

8. What are the challenges of oyster mushroom farming?

Oyster mushroom farming can be challenging due to the possibility of contamination from other mushrooms, as well as the need for a sterile environment. Oyster mushroom farmers must also be aware of the possibility of predators, such as slugs and mice, which can damage the crop.

9. What are the opportunities for oyster mushroom farmers?

The opportunities for oyster mushroom farmers are quite good, as the demand for oyster mushrooms is growing rapidly. The main opportunity lies in the fact that oyster mushrooms are a healthy and delicious addition to many dishes, and they are also easy to grow. This means that there is a large potential market for oyster mushrooms, and farmers who are able to meet this demand can be quite successful.

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