If you are planning to write the commercial cultivation business plan on your own, then this sample commercial cultivation business plan can be great for guidance. However, if you are looking for a professional business plan writer for a business loan, SBA loan or to find out the possibility of success for your new business then let’s talk!
Executive Summary
Overview: The farm was constructed in 1974 and has changed hands multiple times and was sold to us, Mountain View Mushrooms is 2003, We are one of Millard County’s major employers and a vital part of the community’s economy. In Intermountain West, we are the leading producer and distributor of fresh mushrooms. Our farm is near Fillmore, Utah, and we export our goods to local foodservice and retail wholesalers.
Mission: Mountain View Mushrooms is dedicated to providing our clients and, by extension, the general public with the freshest, safest, and highest-quality mushrooms and mushroom products. We are committed to adopting sustainable and recyclable products and procedures in our operations wherever feasible.
Vision: Our vision is to consistently improve our operations to provide more value to our customers, better the lives of our workers and their families, contribute to our communities, generate new business possibilities, lead our industries, and change the world.
Industry Overview: The commercial mushroom cultivation market will reach USD 16.7 billion in 2020, with a CAGR of 4.0 percent from 2020 to 2025. The global mushroom cultivation market is expected to grow significantly as a result of factors such as mushroom’s numerous health benefits, rising per capita mushroom consumption, cost-effective production, increasing demand for vegan and natural foods in the diet, and an increasingly health-conscious population around the world.
Financial Overview
Financials is one of the most important sections of a commercial cultivation business plan. You can get an idea of your projected revenue, required investment amount, is the business sustainable without additional funding, etc.
Financial Highlights
| Liquidity | 2020A | 2021A | 2022F | 2023F | 2024F |
| Current ratio | 6 | 12 | 23 | 32 | 42 |
| Quick ratio | 6 | 11 | 22 | 31 | 40 |
| DSO | 8 | 8 | 8 | 8 | 8 |
| Solvency | |||||
| Interest coverage ratio | 8.2 | 11.1 | 14.2 | ||
| Debt to asset ratio | 0.01 | 0.01 | 0.2 | 0.18 | 0.16 |
| Profitability | |||||
| Gross profit margin | 51% | 51% | 53% | 53% | 53% |
| EBITDA margin | 12% | 14% | 21% | 22% | 22% |
| Return on asset | 5% | 6% | 13% | 14% | 14% |
| Return on equity | 5% | 6% | 16% | 17% | 17% |
Fund Usage
Industry Analysis
The industry analysis section of the commercial cultivation business plan will help you get better insights into competitors, market growth, and overall industry prospects. You can order a custom market research report for your commercial cultivation business.
In 2019, the button mushroom category dominated the market. The button mushroom is a popular fungus in many parts of the globe, and it may have a variety of health advantages. Almost every major mushroom-producing country, including China, Japan, the United States, the United Kingdom, Germany, and Poland, cultivates the mushroom kind commercially. During the projection period, demand for button mushrooms is expected to rise due to increased R&D on the white mushroom to discover its potential to prevent cancer and its availability at inexpensive rates compared to specific mushroom types. It produces almost 40% of the world’s output.
China was the world’s top edible mushroom grower in 2017 According to the China Business Research Institute, with an estimated annual production of 38.42 million tonnes. Around 75% of total world production was produced in this way. In addition, according to the CCCFNA Edible Mushroom Branch (2018), edible mushroom exports were USD 3.8 billion in 2018. According to a study report, mushroom farming is the country’s fifth-largest agricultural industry, with a value of USD 24.0 billion. In terms of worldwide mushroom output, Asia Pacific is the top region. China, the world’s biggest mushroom grower, has any nation’s highest per capita consumption. Mushroom consumption is expanding at a large pace in Asian nations such as Japan, India, and others, as production increases. In Asian countries, the mushroom industry has grown as a result of a rising vegan population and a drive toward more nutritious foods.
With advances in technology, commercial mushroom cultivation has become both simple and effective. Farms, oriental gardens, and other agricultural areas may all be used. Restaurants, families, and other business establishments overwhelmingly choose mushrooms. The worldwide mushroom farming industry is expanding with the increased demand for mushrooms. The expansion of the worldwide mushroom cultivation market is fueled by an increase in public awareness about health problems and organic goods. Changes also aid the market’s development in lifestyle. However, a change in mushroom output might stifle market expansion. The expansion of distribution channels and online platforms, on the other hand, may provide a chance to promote worldwide market development.
While working on the industry analysis section of the commercial cultivation business plan make sure that you add a significant number of stats to support your claims and use proper referencing so that your lender can validate the data.
Monaghan Mushrooms (Ireland), Walsh Mushrooms Group (Ireland), Mycelia (Belgium), South Mill Mushrooms Sales (US), Smithy Mushrooms Ltd. (UK), Rheinische Pilz Zentrale GmbH (Germany), Italian (Italy), Mushroom SAS (Italy), Hirano Mushroom LLC (Kosovo), Fujishukin Co. Ltd. (Japan), and Fujishukin (Japan). These market’s key players are concentrating on expanding their footprint via mergers and acquisitions, new product launches, and partnerships. These businesses are well-established in Asia Pacific, Europe, and North America. They have substrate production facilities as well as robust distribution networks in these areas.
With the rise in mushroom demand, the worldwide mushroom farming industry is expanding. Increased awareness of health concerns and organic goods are driving the worldwide mushroom farming industry forward. Lifestyle changes are also assisting the market’s expansion. However, a change in mushroom production might stifle market development. On the other hand, the growth of distribution channels and online platforms may provide a chance to promote worldwide market development.
Agriculture is the study of soil, plants, woods, cattle, crops, and their production science. Agriculture’s history spans thousands of years and is shaped by a variety of climates, civilizations, and technology. The USDA, gives a variety of agricultural-related programs and services. Grants and loans, as well as disaster relief and insurance schemes, are among these programs. Restoration and conservation, ecosystem markets, water resources, and wildfire prevention are all part of conservation efforts.
The US Department of Agriculture’s Food and Nutrition Programs include SAAP, which offers low-income families benefits such as food assistance for people transitioning off welfare. WIC is another well-known USDA program. Its goal is to give states federal funds for food and nutrition education. The program also provides health care referrals for low-income pregnant and postpartum mothers, as well as at-risk children. The Child Nutrition Program has proposed guidelines that would make more fruits, veggies, and low-fat milk available in school meals. There has also been an initiative to limit salt and fat in school meals. All of these policies were put in place to improve children’s health in the United States. Food security, importing and exporting products, as well as education and research are all significant activities and services offered by the Department of Agriculture. Animal health, biotechnology, energy, environment and natural resources, food safety, homeland security, plant health, and rural and community development are the other issues covered in our publications.
Commercial cultivation, often known as commercial agriculture or agribusiness, is a cropping technique in which crops and animals are cultivated for the purpose of selling them on the market to gain money. Large-scale crops are cultivated on big farms employing modern technology, equipment, irrigation systems, and chemical fertilizers in this style of agriculture. Commercial cultivation/agriculture is characterized by the employment of large quantities of contemporary inputs for increased output, such as high yielding varieties, fertilizers, insecticides, herbicides, weed killers, and so on.
According to a new US Department of Agriculture prediction, farm revenue in the United States will grow considerably in what has been a challenging year for American farmers. The primary culprit is federal funding.
The COVID-19 epidemic is raging, and export markets have been hampered due to low agricultural commodity prices. Despite this, the agriculture sector in the United States is likely to earn more money this year than last year, due in part to a massive 107 percent rise in direct government subsidies.
Marketing Plan
A key part of the marketing plan in a commercial cultivation business plan is the marketing budget. The growth in the number of customers is proportional to the budget and dependent on the CAC.
Signage: Make wide and readable signage of Mountain View Mushrooms. It makes it easy for buyers to see it, especially when driving.
Direct marketing: Sell products of Mountain View Mushrooms directly to an end-user to make a better profit.
Website: Make a website for consumers to be aware of the product and contact information and how to purchase it.
Social Media: Consistent posting to social media platforms can attract prospective buyers for Mountain View Mushrooms products.
Leverage Broadcasting: Advertise on television and radio for non-social media users such as older members of the society to know about the Mountain View Mushrooms.
Organogram:
Financial Plan
This section of the commercial cultivation business plan helps your lender figure out whether you will be able to pay off the loan, whether the business is sustainable, what are the growth prospects, etc.
Earnings:
Break-Even Analysis:
Income Statement:
| 2020A | 2021A | 2022F | 2023F | 2024F | |
| ANNUAL REVENUE | |||||
| Item 1 | 9,217 | 59,117 | 175,410 | 415,277 | 781,357 |
| Item 2 | 34,701 | 222,558 | 660,368 | 1,563,394 | 2,941,580 |
| Item 3 | 4,067 | 19,561 | 46,432 | 78,519 | 114,905 |
| Total annual revenue | 47,985 | 301,236 | 882,211 | 2,057,189 | 3,837,842 |
| % increase | 528% | 193% | 133% | 87% | |
| COST of REVENUE | |||||
| Item 1 | 360 | 2,259 | 6,617 | 15,429 | 28,784 |
| Item 2 | 480 | 3,012 | 8,822 | 20,572 | 38,378 |
| Item 3 | 52,000 | 65,000 | 78,000 | 91,000 | 104,000 |
| Item 4 | 720 | 3,615 | 8,822 | 16,458 | 23,027 |
| Item 5 | 140,000 | 336,000 | 560,000 | 840,000 | 1,120,000 |
| Item 6 | 60,000 | 144,000 | 240,000 | 360,000 | 480,000 |
| Item 7 | 32,000 | 61,333 | 85,533 | 112,153 | 141,435 |
| Total Cost of Revenue | 285,560 | 615,220 | 987,794 | 1,455,612 | 1,935,625 |
| as % of revenue | 595% | 204% | 112% | 71% | 50% |
| Gross Profit | -237,575 | -313,984 | -105,583 | 601,578 | 1,902,218 |
| SELLING & ADMIN EXPENSES | |||||
| Item 1 | 28,000 | 96,800 | 154,880 | 175,692 | 193,261 |
| Item 2 | 75,000 | 105,000 | 120,000 | 120,000 | 120,000 |
| Item 3 | 36,000 | 96,000 | 108,000 | 120,000 | 120,000 |
| Item 4 | 8,000 | 12,000 | 12,000 | 12,000 | 12,000 |
| Item 5 | 3,839 | 18,074 | 44,111 | 61,716 | 115,135 |
| Item 6 | 3,359 | 12,049 | 26,466 | 41,144 | 76,757 |
| Item 7 | 5,600 | 10,000 | 12,904 | 15,034 | 17,376 |
| Item 8 | 6,667 | 14,000 | 22,067 | 30,940 | 40,701 |
| Total selling & admin expenses | 166,464 | 363,924 | 500,428 | 576,525 | 695,230 |
| as % of revenue | 347% | 121% | 57% | 28% | 18% |
| Net profit | -404,039 | -677,907 | -606,011 | 25,052 | 1,206,987 |
| Accumulated net profit | -404,039 | -1,081,947 | -1,687,957 | -1,662,905 | -455,918 |
Cash Flow Statement:
| 2020A | 2021A | 2022F | 2023F | 2024F | |
| CASH FLOW from OPERATING ACTIVITIES | |||||
| Net profit before tax | -$404,039 | -$677,907 | -$606,011 | $25,052 | $1,206,987 |
| Depreciation | $44,267 | $85,333 | $120,504 | $158,127 | $199,512 |
| Payables | |||||
| Item 1 | $4,333 | $5,417 | $6,500 | $7,583 | $8,667 |
| Item 2 | $11,667 | $28,000 | $46,667 | $70,000 | $93,333 |
| Item 3 | $6,250 | $8,750 | $10,000 | $10,000 | $10,000 |
| Item 4 | $3,000 | $8,000 | $9,000 | $10,000 | $10,000 |
| Item 5 | $667 | $1,000 | $1,000 | $1,000 | $1,000 |
| Total payables | $25,917 | $51,167 | $73,167 | $98,583 | $123,000 |
| change in payables | $25,917 | $25,250 | $22,000 | $25,417 | $24,417 |
| Receivables | |||||
| Item 1 | $320 | $1,506 | $3,676 | $5,143 | $9,595 |
| Item 2 | $360 | $1,807 | $4,411 | $8,229 | $11,514 |
| Total receivables | $680 | $3,314 | $8,087 | $13,372 | $21,108 |
| change in receivables | -$680 | -$2,634 | -$4,773 | -$5,285 | -$7,736 |
| Net cash flow from operating activities | -$334,536 | -$569,958 | -$468,280 | $203,311 | $1,423,180 |
| CASH FLOW from INVESTING ACTIVITIES | |||||
| Item 1 | $16,000 | $13,200 | $14,520 | $15,972 | $17,569 |
| Item 2 | $20,000 | $22,000 | $24,200 | $26,620 | $29,282 |
| Item 3 | $28,000 | $22,000 | $14,520 | $10,648 | $11,713 |
| Item 4 | $96,000 | $88,000 | $72,600 | $79,860 | $87,846 |
| Item 5 | $20,000 | $22,000 | $24,200 | $26,620 | $29,282 |
| Net cash flow/ (outflow) from investing activities | -$180,000 | -$167,200 | -$150,040 | -$159,720 | -$175,692 |
| CASH FLOW from FINANCING ACTIVITIES | |||||
| Equity | $400,000 | $440,000 | $484,000 | $532,400 | $585,640 |
| Net cash flow from financing activities | $400,000 | $440,000 | $484,000 | $532,400 | $585,640 |
| Net (decrease)/ increase in cash/ cash equivalents | -$114,536 | -$297,158 | -$134,320 | $575,991 | $1,833,128 |
| Cash and cash equivalents at the beginning of the year | – | -$114,536 | -$411,693 | -$546,014 | $29,978 |
| Cash & cash equivalents at the end of the year | -$114,536 | -$411,693 | -$546,014 | $29,978 | $1,863,105 |
Balance Sheet:
| 2020A | 2021A | 2022F | 2023F | 2024F | |
| NON-CURRENT ASSETS | |||||
| Item 1 | $16,000 | $29,200 | $43,720 | $59,692 | $77,261 |
| Item 2 | $20,000 | $42,000 | $66,200 | $92,820 | $122,102 |
| Item 3 | $28,000 | $50,000 | $64,520 | $75,168 | $86,881 |
| Item 4 | $96,000 | $184,000 | $256,600 | $336,460 | $424,306 |
| Item 5 | $20,000 | $42,000 | $66,200 | $92,820 | $122,102 |
| Total | $180,000 | $347,200 | $497,240 | $656,960 | $832,652 |
| Accumulated depreciation | $44,267 | $129,600 | $250,104 | $408,231 | $607,743 |
| Net non-current assets | $135,733 | $217,600 | $247,136 | $248,729 | $224,909 |
| CURRENT ASSETS | |||||
| Cash | -$114,536 | -$411,693 | -$546,014 | $29,978 | $1,863,105 |
| Accounts receivables | $680 | $3,314 | $8,087 | $13,372 | $21,108 |
| Total current assets | -$113,856 | -$408,380 | -$537,927 | $43,349 | $1,884,214 |
| Total Assets | $21,878 | -$190,780 | -$290,791 | $292,078 | $2,109,122 |
| LIABILITIES | |||||
| Account payables | $25,917 | $51,167 | $73,167 | $98,583 | $123,000 |
| Total liabilities | $25,917 | $51,167 | $73,167 | $98,583 | $123,000 |
| EQUITIES | |||||
| Owner’s equity | $400,000 | $840,000 | $1,324,000 | $1,856,400 | $2,442,040 |
| Accumulated net profit | -$404,039 | -$1,081,947 | -$1,687,957 | -$1,662,905 | -$455,918 |
| Total equities | -$4,039 | -$241,947 | -$363,957 | $193,495 | $1,986,122 |
| Total liabilities & equities | $21,878 | -$190,780 | -$290,791 | $292,078 | $2,109,122 |