Mushroom Farming Business Plan

Financial Considerations

PATILAD (Mushroom Farm) seeks N 1.5 million in long-term financing to cover start-up costs, equipment, building expenses, and working capital. Funding for the launch of the business is provided primarily by equity from the owner and investors. 

The business will reach positive cash flow in its 10th month of operation, allowing for expedited repayment of its loan obligations, as well as for dividends to be paid to the owners.  Estimated first-year revenue is N 19,100,000 with a gross margin of N8,750,000 in the 1^st year of operation.

INTRODUCTION

PATILAD an agro-allied farm that is into mushroom farming, compost making, earthworm farm, vegetable farm, and with futuristic plans of extending its variety of agro-allied product for local and international market. Mushroom is the fleshy fungus which is parasitic in nature i.e. they depend on other plants for the food source. Mushrooms can be cultivated with low cost and lowland, therefore the majority of manufacturers are turning towards mushroom cultivation. Mushrooms are distinct due to their nutritional properties. Mushrooms can be broadly classified as edible and non-edible mushrooms which are mainly toxic. Mushrooms market is likely to experience tremendous growth over the period of years owing to rise in food and medical industry.

Surging use of mushrooms as ingredients in various food products fuels the mushroom market growth. Mushroom possess various nutritional properties such as low fat and low cholesterol which is utilized as prominent food for the patients suffering from high cholesterol and obesity. This factor, in turn, stimulates the growth of the market. However, the low shelf life of the mushrooms increases the preservation cost of the manufacturers which may hinder the growth of the market. Nevertheless, escalating food chain and food markets in the developing countries coupled with ongoing research for untapped uses of mushrooms are likely to open new opportunities for the mushroom market in the coming years.

The mushrooms market can be segmented on the basis of type into the milky mushroom, button, shiitake, oyster, paddy mushroom, winter mushrooms and reishi mushroom among others. Button mushroom was the leading segment of the market in 2015 owing to high demand from the end users due to its organic properties and easy availability. Fresh and processed mushrooms are utilized in the food industry for manufacturing of numerous food products. The food industry, medical and direct consumption are the some of the end users of the mushroom market. Among all, food industry dominated the mushroom market due to the diverse use of mushrooms in food products. Medical segment is likely to experience a high growth in the forecast period owing to high medical properties of mushrooms.

The mushroom has become a very viable market and this became so obvious when the news about its health benefit and market demand for it became popular in Nigeria in 2010.

PATILAD is in the market entry stage having gone through extensive training and mentorship, with its’ pilot stage conducted in local markets in Mowe, Ibafo, Wawa, Ojodu and once enough funding has been accessed we will extend to online stores like Supermart, Kongafoodstore, Jumia, Jiji and also start our exportation procedures.

PATILAD farms have not secured NAFDAC yet so cannot sell its mushroom yet in physical megastores, but we are currently working on it regardless of the bottlenecks many agencies like these create in Nigeria. The demand though high, our capacity can only cater for 5okg per month. This is way below the market demand which from our finding and sales experience reveals that we are not supplying 1% of its local need much more the international demand which is over 500% of what entire mushroom farms in Nigeria can offer.

PATILAD farms went after the market before creating a product because we wanted to be sure there was enough and consistent increase in demand in the mushroom local and international market. We discovered that though many international farms have made amazing progress especially technologically like in China, India, Pakistan, USA, Germany, the peculiarity of these regions cannot afford them some mushroom species that Nigerian climate can easily make available.

Vision

Our vision is to be the largest local producer and exporter of the choicest variety of mushroom species in Nigeria.

Mission

Our mission is to produce at commercial quantity edible/medicinal mushroom and maintaining a consistent supply for the much-demanded product.

To raise and train more mushroom farmers who will be our co-partners in reaching our goal volumes.

Objectives:

Increase the number of customers and volume purchased from PATILAD Mushroom by 200% over the next two years.

-To establish a solid relationship with bulk purchasers or dealers (of our mushrooms)

-To achieve a net profit in year one, increasing in year two, by curtailing costs and meeting sales goals

-To provide quality sales service and products at fair and best possible prices.

– To be the supplier of mushrooms to online food stores in Nigeria by aggressively producing and buying from other farmers we will be training

The Value Proposition: