How to Start and Succeed with Microgreens Business Plan

Microgreens are tiny, nutrient-dense greens that are harvested when they are only a few inches tall. They are commonly used as a garnish or as a base for salads and sandwiches. Due to their high nutritional value and delicate flavor, microgreens have become increasingly popular in recent years, leading to a growing demand for them in both the culinary and health industries. Starting a microgreens business can be profitable and fulfilling but requires careful planning and attention to detail.

How to Start and Succeed with Microgreens Business Plan

According to industry estimates, the global microgreens market is projected to grow at a CAGR of 7.8% between 2020 and 2025, reaching $1.3 billion by 2025. With this growth and demand, there is a huge opportunity for entrepreneurs to start and succeed in the microgreens business. To do so, it is important to conduct thorough market research, determine a viable business model, select the right microgreens varieties, set up your growing operation, and market and sell your microgreens effectively.

How to Start and Succeed with Microgreens Business Plan

What are Microgreens?

Microgreens are small vegetable greens harvested within 14 days of seed germination. They are found to be 40 times more nutritious than mature vegetables and have become increasingly popular in the culinary and health industries. Microgreens are easy to grow and can be profitable, making them an attractive option for those interested in starting a microgreens business.

Microgreens have a concentrated nutrient level up to 40 times higher than the normal size. Cheers commonly use them to add an aromatic flavor to their dishes and decorate and dress food. Microgreens are also becoming popular among health-conscious people due to their claimed healthcare benefits. Starting a microgreens business can be life-transforming, allowing entrepreneurs to quit their jobs and live life to the fullest. Microgreens can be grown in a little space and have the potential to help entrepreneurs make good money.

Benefits of Starting a Microgreens Business

  1. Requires small space: Microgreens can be grown in a small space such as a balcony, a small room, or even a kitchen. This makes it a feasible option for people who need access to a large outdoor space.
  2. Requires low investment: Microgreens require minimal investment, making them an attractive option for people who want to start a business without spending much money. The initial investment includes seeds, growing media, and trays, which are affordable.
  3. Short crop cycle: Microgreens have a short crop cycle of around two weeks. This means you can harvest and sell them quickly, yielding a quicker return on investment.
  4. Can be grown all year long: Microgreens can be grown all year indoors, regardless of the weather conditions. This means you can have a steady supply of microgreens throughout the year, ensuring a consistent flow of income.
Microgreens Industry Size and Growth
  • The US vegetable growing business is worth $19.2 billion and has decreased slightly over the past few years.
  • By 2028, the world market for microgreens is forecast to grow by 60.6%.
  • In 2021, there were 46,411 vegetable farms in the United States.
  • In the US vegetable growing industry in 2021, there were 124,265 jobs.
  • A CAGR of 7.5% is expected for the microgreens market over the next few years.
  • In 2021, North America had the biggest market share, and the US was a big part of that.
  • Rise in adoption of indoor farming, particularly in major greenhouses.
  • Increased knowledge and acceptance of high-tech farming techniques like hydroponics, aeroponics, and aquaponics are anticipated to promote the expansion of the microgreens market.
  • The growing health consciousness of consumers has led to increased demand for nutrient-dense foods.
  • Popular microgreens include arugula, broccoli, beets, kale, collards, radish, red cabbage, sunflowers, wheatgrass, and pea shoots.
  • Microgreens are used in various cuisines and drinks and are high in antioxidants, vitamins, minerals, and fiber.
  • The cosmetics industry also drives new growth in the microgreens segment.
  • Hydroponics and vertical farming are some of the important microgreens farming methods.

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Microgreens Business
Microgreens Industry Segmentation
  • Segmented by type, farming, growth medium, distribution channel, and geography.
  • Types include broccoli, lettuce and chicory, arugula, basil, fennel, carrots, sunflower, radish, peas, and others.
  • Farming methods include indoor, vertical, commercial greenhouses, and other farming methods.
  • Growth mediums include coconut coir, peat moss, soil, tissue paper, and other growth mediums.
  • Distribution channels include hypermarkets/supermarkets, restaurants, and other distribution channels.
  • Geographical regions include North America, Europe, Asia-Pacific, South America, and Middle East & Africa.

How to Start a Microgreen Business

Starting a microgreen business is easy and profitable. By investing only four hours a week, anyone can grow and sell microgreens with a profit as high as $50 a pound. There is no need for major training or a degree, and the process is simple enough for almost anyone to be successful.

Steps to Start a Microgreen Business
  1. Get the necessary supplies.
  2. Learn the process through a book or webinar.
  3. Dedicate four hours a week to growing and selling microgreens.
  4. Harvest the first crop within two weeks for sale.
  5. With each successful crop, the opportunities to make sales will grow.
  6. The size of the business is up to the individual.

What Are the Best Plants to Grow as Microgreens?

Microgreens are a popular and profitable crop, and various plants can be grown as microgreens. Among the best plants to grow as microgreens are mint, tomatoes, sunflowers, basil, sunflowers, radishes etc. are easy to grow and add vibrant color to any dish. Tomatoes are also popular microgreens and can be grown year-round.

Basil and mint are great for adding flavor to salads and sandwiches. Sunflowers are nutrient-dense and add a unique flavor to dishes. Radishes are fast-growing and have a spicy taste, while potatoes are a versatile and popular choice. Finally, spinach is a highly nutritious microgreen that can be used in various dishes.

Selecting the Right Microgreens Varieties

  1. Choose plants that are easy to grow: Select microgreens varieties that are low maintenance and require minimal care. Examples include radishes, mustard, and sunflowers.
  2. Consider taste and appearance: Choose a unique flavor and attractive microgreens varieties. This will help your product stand out in the market. Examples include beet, kale, and pea shoots.
  3. Look for high-yield varieties: Opt for microgreens varieties that produce a high yield in a short amount of time. Examples include basil, cilantro, and arugula.
  4. Check for disease resistance: Selecting microgreens varieties resistant to diseases and pests is important. This will help reduce the risk of crop failure. Examples include broccoli, cabbage, and chard.

Setting Up Your Microgreens Operation

  1. Choosing a suitable location: Microgreens can be grown indoors or outdoors, depending on your preference and available space. You must set up a growing area with adequate lighting and ventilation to grow them indoors. If you grow them outdoors, select a location with appropriate sunlight and temperature conditions.
  2. Selecting the right equipment: You must invest in basic equipment, including trays, soil, seeds, and a watering system. Depending on your setup, you may also need to purchase grow lights, fans, and other accessories.
  3. Deciding on your crops: There are many different types of microgreens, each with a flavor profile and nutritional benefits. Some popular options include kale, arugula, radish, and broccoli. Consider your target market and their preferences when selecting your crops.
  4. Establishing a growing schedule: Microgreens can be grown year-round, but you’ll need to establish a growing schedule to ensure a steady supply of fresh products. Depending on the crop, you can expect to harvest your microgreens within 7-14 days of planting.

Marketing and Selling Your Microgreens

Marketing and selling microgreens involve identifying potential customers and creating an effective distribution channel to reach them. The most common options are hypermarkets or supermarkets, restaurants, and other distribution channels. Hypermarkets/supermarkets are an excellent option for selling microgreens. You can approach them directly or work with a distributor. They usually prefer a consistent supply of high-quality products.

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Microgreens Management

Hence, it’s essential to establish a good relationship with the buyers and provide a consistent and reliable supply of fresh microgreens. Restaurants are another excellent option for selling microgreens. They value fresh, high-quality, locally-sourced produce to add flavor and texture to their dishes. To get started, you can approach the chefs or owners of local restaurants and offer to supply them with your microgreens.

Build a good relationship with the chefs and consistently supply high-quality microgreens. Other distribution channels, such as farmers’ markets, online stores, and home delivery services, can also be explored. Farmers’ markets are a great way to showcase your microgreens to the local community and create brand awareness. Online stores and home delivery services are convenient options for customers who prefer to shop from the comfort of their homes.

Create a Microgreens Business Plan

A microgreens business plan ensures that your business has a solid foundation and can succeed in a competitive market. The plan should contain an executive summary, business overview, detailed product and service description, market and competitive analysis, sales and marketing strategies, management team details, an operations plan, and a financial plan.

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Business Plan
  • The executive summary should provide a complete and brief overview of the business plan, while the business overview should outline the company’s vision, mission, ownership, and corporate goals. 
  • The product and services section should provide a detailed description of what your business will offer. The market analysis should assess market trends, including demand and growth prospects variations, and conduct a SWOT analysis. 
  • The competitive analysis should assess the main competitors, analyze their strengths and weaknesses, and list the advantages of your services.
  • The sales and marketing section should outline your company’s unique selling propositions (USPs) and develop sales, marketing, and promotional strategies. 
  • The management team section should provide an overview of the management team, including their roles and professional backgrounds, along with a corporate hierarchy. 
  • The operations plan should include details on procurement, office location, key assets and equipment, and other logistical details. 
  • Finally, the financial plan should cover three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.
  • An appendix can be included to provide any additional financial or business-related documents. Creating a thorough and detailed business plan can increase your chances of success and help you obtain funding from investors or lenders.

Cost to Start a Microgreens Business

  1. Setting up a business name and corporation
  2. Business licenses and permits
  3. Insurance
  4. Business cards and brochures
  5. Website setup
  6. Seeds
  7. Trays and growing mats
  8. Grow lights
Start-up CostsBallpark RangeAverage
Setting up a business name and corporation$140 – $210$175
Business licenses and permits$110 – $320$215
Insurance$120 – $300$210
Business cards and brochures$220 – $320$270
Website setup$1,100 – $3,300$2,200
Seeds$80 – $120$100
Trays, growing mats$110 – $200$155
Grow lights$100 – $230$165
Total$2,080 – $4,020$3,400

Therefore, the estimated average cost of starting a microgreens business would be around $3,400, with a total cost ranging from $2,080 to $4,020 depending on various factors such as the cost of website setup, licenses and permits, and insurance.

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Microgreens

Profits from a Microgreens Business

Profits from a microgreens business can be quite lucrative, especially if you can sell many trays each month. Most microgreens take about two to three weeks to grow, so you should get an average of 1.5 to 2.0 growth per tray per month. About 90% of what you sell will be a profit. Based on the estimated revenue and profit margins mentioned earlier, a microgreens business could generate around $30,000 to $130,000 annually, depending on the number of trays produced and sold. Here’s a breakdown of how the profits could potentially look like for a microgreens business:

  • Selling 150-170 trays per month: This could result in annual revenue of $36,000-$38,500 and a profit of over $30,000, assuming a 90% profit margin.
  • Selling 300-325 trays per month could result in annual revenue of $72,000-$81,250 and a profit of over $60,000.
  • Selling 450-500 trays per month could result in annual revenue of $108,000-$125,000 and a profit of over $90,000.
  • Selling 600-650 trays per month could result in annual revenue of $144,000-$162,500 and a profit of over $120,000.

It’s essential to remember that these are just estimates, and the actual profits will depend on various factors, such as the cost of supplies, equipment, labor, market demand, and competition.

Future Opportunities and Challenges in Microgreens Businesses

  • One opportunity for these businesses is the rising demand for fresh and nutritious foods like microgreens as consumers prioritize health and wellness. 
  • In addition, technology advancements in automation, data analytics, and logistics are expected to play a crucial role in the growth and expansion of the industry. 
  • There is also a growing demand for microgreens worldwide, allowing wholesale microgreens businesses to expand their operations globally and experience significant growth.
  • However, with the industry’s growth comes increasing competition among growers and distributors, making it essential for wholesale microgreens businesses to differentiate themselves from competitors by offering unique, excellent customer service and efficient logistics. 
  • Another challenge is labor costs, which remain significant even as the industry becomes more automated. Businesses must still invest in skilled labor to manage and maintain their growing facilities.
  • The demand for microgreens will continue growing as consumers prioritize health and wellness. Technology advancements will significantly affect the industry’s growth and expansion, particularly in automation, data analytics, and logistics.

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Microgreens Tray

Conclusion

Starting and succeeding in a microgreens business requires careful planning, hard work, and dedication. By following a step-by-step guide that includes market research, business planning, and operations management, entrepreneurs can turn their passion for healthy, fresh produce into a profitable and sustainable business.

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