Verdant Fungi Farms Business Plan — How a Mushroom Farm Makes Money

Output is shelf area multiplied by crops a year multiplied by yield, less what contamination destroys. Every lever in the plan sits in that equation.

How a Mushroom Farm Makes Money

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3.1 The four terms
3.2 What is grown and never sold
3.3 The economics of a growing room

3.1 The four terms

Term	Year 1	Year 2	Year 3	Year 4	Year 5	What drives it
Growing area, m²	840	1 120	1 680	1 680	1 680	Rooms built and shelved; the only term that requires capital
Yield per m² per crop, kg	21.0	24.0	26.0	27.5	28.5	Compost quality, casing management, environmental control, picking discipline
Crops per room per year	5.4	6.0	6.4	6.6	6.7	Cycle discipline — cook-out, fill, spawn run, casing and pinning executed on schedule
Crop retained	79%	84%	87%	88%	89%	After contamination losses and mushrooms not sold inside shelf life
Grown, kg	95 256	161 280	279 552	304 920	320 796	The product of the first three terms
Button sold, kg	75 614	134 882	241 721	267 978	284 963	Grown, less what is lost

Figure 8. The three terms that require no additional capital after Year 3.

The third term deserves emphasis because it is the least visible. A room that completes 6.7 crops a year rather than 5.4 produces a quarter more mushrooms from the same capital, the same shelving and the same climate plant. The difference is entirely a matter of turnaround discipline between crops — how quickly a room is emptied, cooked out, cleaned and refilled. It is the mushroom equivalent of an aircraft turnaround, and it is worth more than any yield improvement available from better compost.

3.2 What is grown and never sold

Figure 9. Grown against sold — what contamination and shelf life take.

kg	Year 1	Year 2	Year 3	Year 4	Year 5
Grown	95 256	161 280	279 552	304 920	320 796
Lost to contamination	(15 241)	(18 547)	(23 762)	(21 344)	(19 248)
Harvested but not sold in shelf life	(4 401)	(7 850)	(14 068)	(15 597)	(16 585)
Button sold	75 614	134 882	241 721	267 978	284 963
Crop retained	79%	84%	87%	88%	89%

In Year 1 the farm grows 95 256 kilograms and sells 75 614 — nearly 20 tonnes lost. By Year 5 it grows 320 796 and sells 284 963. The compost was bought, the room was heated and the labour was paid before any of that was lost, which is why both loss terms sit in the contribution line rather than in a provision below it.

3.3 The economics of a growing room

Figure 11. Output and revenue per growing room.

	Year 1	Year 2	Year 3	Year 4	Year 5
Growing rooms	3	4	6	6	6
Shelved area per room, m²	280	280	280	280	280
Tonnes sold per room	27.2	37.3	44.1	49.7	53.2
Revenue per room, R	1 519 667	2 117 750	2 476 333	2 826 333	3 044 667
Revenue per m² of shelved area, R	5 427	7 563	8 844	10 094	10 874
Contribution per m², R	2 861	4 373	5 271	6 203	6 788

Revenue per square metre of shelved area rises from R5 427 in Year 1 to R10 874 by Year 5, and contribution per square metre from R2 861 to R6 788. A grown room costs roughly R1.83 million including its share of climate plant, so at maturity each room returns R3.04 million of revenue and R1.90 million of contribution a year against that capital. The arithmetic is attractive at maturity and unforgiving during the ramp, which is the whole shape of this investment.

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