How to Start a Mushroom Growing Business: What I've Learned Building Out Grow LLC

Starting a mushroom growing business isn't as complicated as most people think, but there are definitely some things I wish I'd known when I started Out Grow over 15 years ago. After helping hundreds of customers start their own mushroom businesses and building mine from a small operation to supplying over 300 different mushroom cultures, I've learned what actually works and what doesn't.

The mushroom business has been incredibly rewarding for me, both financially and personally. There's something deeply satisfying about helping people grow their own food while building a sustainable business. But let me be upfront - it's not a get-rich-quick scheme, and there are some real challenges you need to understand before diving in.

By Mike Wiberg, Master Gardener & Founder of Out Grow

Why I'm Sharing This (And Why You Should Listen)

I started growing mushrooms 20 years ago as a hobby, and about 15 years ago I turned it into Out Grow because I kept having people ask me where to get quality supplies and spawn. What started as selling a few substrate blocks to neighbors has grown into a business that ships mushroom supplies nationwide.

I'm not going to sugarcoat this - I've seen a lot of people get excited about starting a mushroom business, then give up after a few months when reality hits. But I've also seen people build really successful operations by understanding what they're getting into and starting smart.

The Reality of the Mushroom Business Today

The mushroom market has changed dramatically since I started. Twenty years ago, you could barely find shiitake mushrooms in most grocery stores. Now, people are asking for lion's mane, maitake, and varieties I'd never heard of when I started.

This growth is both good and challenging for new businesses. On the positive side, there's genuine demand for locally grown, fresh mushrooms. Restaurants are always looking for reliable suppliers, and farmers markets have customers willing to pay premium prices for quality mushrooms.

The challenge is that it's no longer a completely wide-open market. You'll have competition, and customers have higher expectations than they used to. They know what good mushrooms should look like and taste like.

Start Small and Prove Your Market First

The biggest mistake I see new mushroom businesses make is trying to start too big. Someone gets excited, rents a warehouse, buys thousands of dollars of equipment, then realizes they don't actually have customers lined up.

Start small. Really small. Begin by growing mushrooms for yourself and your family. Give some away to friends and neighbors. Take a few pounds to your local farmers market and see how they sell. This teaches you the growing process and gives you real feedback from potential customers.

I started Out Grow by selling substrate blocks from my garage. I didn't quit my day job or take out loans. I just slowly built up customers and reinvested the profits back into better equipment and more inventory. It took about three years before I was making enough to consider it a real business.

Choose Your Mushroom Varieties Strategically

Not all mushrooms are equal when it comes to building a business. Some are much easier to grow consistently, some have better profit margins, and some have more reliable market demand.

Oyster mushrooms are fantastic for beginners because they're forgiving, grow fast, and most people like them. They're also one of the most profitable mushrooms per pound of substrate. I always recommend people start here.

Shiitake mushrooms are probably the best long-term business mushroom. They have excellent shelf life, consistent demand, and you can charge premium prices. The downside is they take longer to grow and are a bit more finicky about conditions.

Lion's mane is interesting because it's unique enough that you might be the only supplier in your area, but the market is still pretty small. Great as a specialty product, but don't build your whole business around it.

Button and cremini mushrooms are tough for small operations because you're competing with large commercial farms that can produce them much cheaper than you can.

My advice is to start with oyster mushrooms to learn the process, then add shiitake as your main business mushroom. Once you're established, you can experiment with specialty varieties.

Understanding Your Real Costs

Let me give you some real numbers based on my experience and what I see from successful customers.

Initial setup costs for a small commercial operation:

• Growing space setup (shelving, environmental controls): $2,000-5,000
• Basic equipment (sterilizer, tools, containers): $1,000-2,000
• Initial substrate and spawn inventory: $500-1,000
• Packaging and marketing materials: $300-500

So you're looking at about $4,000-8,000 to get started properly. You can start smaller, but below that range you're probably not going to be able to produce enough volume to make real money.

Ongoing monthly costs:

• Substrate materials: $200-500 depending on volume
• Spawn: $100-300
• Utilities (heating, cooling, electricity): $150-400
• Packaging: $50-150
• Miscellaneous (fuel, repairs, etc.): $100-200

Your total monthly operating costs will probably run $600-1,500 for a small operation producing 100-300 pounds per month.

Realistic Income Expectations

This is where I need to be really honest with you. Most small mushroom businesses are not going to make anyone rich. But they can provide decent supplemental income or even a modest full-time living if you do it right.

Farmers market pricing (what I see in my area):

• Oyster mushrooms: $6-8 per pound
• Shiitake: $12-16 per pound
• Specialty varieties: $15-25 per pound

Restaurant pricing is typically 20-30% lower than farmers market, but you can sell larger volumes with less time investment.

A small operation producing 200 pounds per month (which is achievable after your first year) might generate $1,500-2,500 in gross revenue. After expenses, you might net $500-1,200 per month. That's not enough to live on for most people, but it's meaningful supplemental income.

To make this a full-time living, you probably need to be producing 500+ pounds per month consistently, which requires a much larger setup and significant time investment.

Location and Infrastructure Reality Check

You don't need a fancy facility to grow mushrooms commercially, but you do need the right space. I've seen successful operations in basements, garages, spare bedrooms, and simple pole barns.

What you actually need:

• Temperature control (heating and cooling capability)
• Humidity control (usually just misting systems)
• Good ventilation and air circulation
• Clean, pest-free environment
• Easy access for moving materials and products

What you don't need:

• Expensive commercial buildings
• Laboratory-grade clean rooms
• Complicated automation systems

I know one successful grower who operates out of his basement and supplies three restaurants consistently. I know another who built a simple pole barn for under $8,000 and produces enough for multiple farmers markets.

The key is starting with what you can afford and upgrading as your business grows and generates revenue.

Finding and Keeping Customers

This is honestly the hardest part of the mushroom business, and it's where most people struggle. Growing mushrooms is actually pretty straightforward once you learn the process. Finding people to buy them consistently is the real challenge.

Start with farmers markets if you have good ones in your area. It's the best way to build a customer base and get direct feedback. Plus, you can charge premium prices and build relationships with customers who will seek you out.

Restaurants are great long-term customers but they're harder to break into. Start small - approach cafes and smaller restaurants first. Bring samples, be flexible on pricing initially, and be incredibly reliable once you get an account.

Don't ignore individual customers. Some of my best customers buy 5-10 pounds per month for their families. Those relationships can be very profitable and reliable.

Build an email list from day one. Collect contact information from everyone who buys from you. When you have new varieties or seasonal specials, you want to be able to reach your customers directly.

The Seasonal Reality

Mushroom demand and growing conditions both vary significantly with the seasons, and you need to plan for this.

Spring and fall are usually your best seasons for both growing and sales. Natural humidity is higher, temperatures are moderate, and people are thinking about fresh, local foods.

Summer can be challenging because it's harder to keep growing areas cool, and farmers market attendance often drops in extreme heat. But restaurant demand stays steady.

Winter varies by location, but generally demand is lower and heating costs can eat into profits. Some growers take a break during the slowest months.

Plan your business around these seasonal patterns rather than expecting consistent year-round demand.

Common Mistakes That Kill Mushroom Businesses

After watching hundreds of people try to start mushroom businesses, I can predict the mistakes most will make:

Starting too big, too fast. People get excited and invest more money than they can afford to lose. Start small and grow gradually.

Underestimating the time investment. Mushrooms need daily attention during fruiting. You can't just set them up and check back in a week.

Poor quality control. One batch of bad mushrooms can ruin your reputation with a restaurant or at farmers market. Consistency is everything.

Not understanding food safety regulations. Depending on your state and how you're selling, you may need permits, inspections, or certifications. Research this before you start.

Competing on price instead of quality. You can't compete with large commercial operations on price. Focus on freshness, unique varieties, and personal service.

Legal and Regulatory Considerations

This varies dramatically by state and how you plan to sell, but here are the basics you need to research:

Cottage food laws may apply if you're selling direct to consumers. Some states are very permissive, others require commercial kitchen facilities.

Business licensing is usually required regardless of size. Check with your county and state.

Food safety certifications may be required, especially if you're selling to restaurants.

Insurance is often overlooked but important. Product liability and general business insurance are worth considering once you're selling regularly.

Don't let these requirements scare you off, but don't ignore them either. I've seen businesses get shut down for not having proper permits.

The Path Forward: My Recommendations

If you're serious about starting a mushroom business, here's the path I'd recommend based on what I've seen work:

Month 1-3: Start growing mushrooms for yourself. Master the basics of oyster and shiitake cultivation. Keep detailed records of costs and yields.

Month 4-6: Start selling small amounts at farmers markets or to friends. Focus on learning what customers want and building growing consistency.

Month 7-12: If sales are going well, gradually increase production. Add new varieties based on customer feedback. Start approaching restaurants with samples.

Year 2: Decide if you want to keep this as a side business or try to grow it larger. This is when you might invest in better equipment or larger growing space.

The key is to grow gradually and let customer demand pull you forward rather than trying to push product into a market that might not exist.

My Final Thoughts on the Mushroom Business

Starting a mushroom growing business has been one of the most rewarding things I've done. It's allowed me to work with something I'm passionate about, help people grow their own food, and build a sustainable business that's grown steadily for 15 years.

But it's not easy money, and it's not for everyone. It requires consistent daily work, attention to detail, and a lot of patience while building your customer base. Most successful mushroom businesses I know took 2-3 years to really get established.

If you love growing things, enjoy working with your hands, and don't mind the daily commitment, it can be incredibly fulfilling. Just go into it with realistic expectations and start small.

The mushroom industry needs more small, quality producers. There's definitely room for new businesses, but success comes from understanding your market, focusing on quality, and building relationships with customers who value what you're doing.

Good luck with your mushroom business journey. Take it one step at a time, and don't be afraid to reach out to other growers for advice. Most of us are happy to help newcomers who are serious about doing things right.

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Mike Wiberg has been growing mushrooms for 20 years and founded Out Grow over 15 years ago. Out Grow supplies mushroom spawn, substrates, and equipment to growers across the country and has helped hundreds of people start their own mushroom businesses.

Frequently Asked Questions

How much revenue can a small mushroom farm generate per month?

A small operation producing around 200 lbs monthly can gross $1,500–2,500, with a net income of about $500–1,200 after expenses.

What infrastructure do I need to start a mushroom farm?

Essential requirements include temperature and humidity control, good ventilation, a clean environment, and a space for processing and growing—basement, garage, or simple barn setups work well.

What mushrooms should I grow to maximize sales?

Oyster mushrooms ($6–8/lb), shiitake ($12–16/lb), and specialty varieties ($15–25/lb) are profitable, with oyster and shiitake being the most demand-friendly.

How do I find consistent buyers for my mushrooms?

Sales channels like farmers markets and local restaurants are effective. Collect customer info to build an email list and boost repeat sales.

Does mushroom farming operate year-round?

Demand and production peak during spring and fall. Summer can be challenging due to heat, while winter may require environmental control strategies.

How long does it take to build a successful mushroom business?

Most successful small-scale operations take 2–3 years to establish dependable production, reliable markets, and profitability.