Growing microgreens can be a lucrative business model, if planned and executed properly. It’s not a secret anymore that popularity of microgreens is growing exponentially. As the demand is growing for microgreens, the supply is still not that well versed with the demand. That’s the main cause of pretty high rates of microgreens, at this point of time.
We are going to discuss about growing microgreens for profit in detail. Starting a microgreens business requires very minimal investment and time. You can start from just a $100 and the business would only require a couple of hours of your time. You can easily make $500 – $1000 per month, with just 10-20 trays.
Though, it’s not that simple. There are many factors which can make or break your business like climate, location, seed selection, quality control, crop diseases, poor finance management, etc. There are obviously some challenges of growing microgreens, but still it’s not that difficult if everything is planned properly and thoughtfully.
What are microgreens?
Microgreens are plants which are harvested just after sprouting and before they become baby plants. As they are harvested at such an early stage, they are very small in size and packed with nutrients. They are used in most high end restaurants for garnishing and enhancing the presentation of their dishes.
2019 is the perfect time to start growing microgreens. The popularity for natural and organic products is growing rapidly. More and more people are interested in organic and Non-GMO products. Microgreens is a perfect fit for those kind of people. Earlier, microgreen growers were only selling to high end chefs, but now you can also sell to locals who are health conscious of strongly involved in natural and organic stuff.
Is growing microgreens a viable business model?
Growing microgreens can be very lucrative for some and a really bad business for others. The overall success of business depends on many factors like location, your gardening skills, selling skills, the number of restaurants in your area, etc.
But if we just look at the basic economics of the business, then is it viable from that view point?
For deciding the viability of the business, there are two main factors we need to look at – Profitability and Sustainable over a long period of time. Here the business is quite profitable (as I’ve shown below in detail, the total finances of the business), and microgreens are not going to go anywhere in near future, instead the popularity and demand is increasing day by day.
Sourcing seeds and equipment is quite easy and you can get it anywhere in the USA. Growing also requires moderate skills only. Storing and packaging is also very easy. The only part that will require a little bit of flair, is selling them. Though the demand is there, and you can sell them to small and medium restaurants at first before going after the big guns.
What are the total costs of growing microgreens professionally?
The total cost will decrease as you scale up your growing quantity, just like any other business. The equipment, growing process, selling, etc. will remain the same, you just need to scale everything.
First let’s take a look at all the costs briefly.
- Tray – $20 – You’ll need to buy 10 trays at $2 per each.
- Lighting – $50 – You’ll just need one T5 growing light for growing 10 trays at once. You’ll need one light for every ten trays.
- Seeds – $5 Approximately per oz. There are hundreds of seeds available at different price point. The quantity we need to sow per tray vary vastly. On an average you’ll need 1 oz seeds per tray and the average cost of seeds is around $5 per oz, so the overall cost per tray for seeds will be $5.
- Growing mats – $2 per mat. I am a big proponent of growing microgreens without soil, and using growing mats as a growing medium. Using them it will be very easy to grow without mess. You’ll need 1 mat per tray and it will cost you $2 per mat, so the overall cost per tray will be $2.
- Packaging – $0.50 per box. You can get a bundle of 50 or 100 boxes online from Amazon, they are very cheap.
So, these are the total major costs associated with the business.
How much revenue will the business generate?
I am just going to give you a ballpark estimate. Because there are so many factors that can affect the revenue of the business like the seeds you are growing, the restaurants you are selling to, your selling skills, your network, your gardening skills, etc.
The main factor or the number is yield per tray. How many ounces are we able to grow per tray, is the main thing we are concerned about here. The average rate of microgreens in the market is around $2 per oz. And the average yield rate is around 10 oz. So, you can expect easily $20 per tray in revenue, if you are able to sell them quickly. As the price will decrease each passing day, and also the shelf life is 2-3 days only.
How much will I be able to make per month from 10 trays?
The investment you need for 10 trays for the whole month is as follows –
- Trays – $20
- Light – $50
- Seeds – $150 – Assuming that we are able to grow three times a month, $5 per tray – each batch costs us $50 and we are planting it three times – $50*3 – $150.
- Growing Mats – $60 – It’s the same as seeds. At $2 per mat, each batch costs us $20, and for growing three times per month – $20*3 – $60.
- Packaging – $15 – The cost of one box is $0.5, 10 trays will cost us – $5 and doing that three times it will cost $15.Hence the total cost is $295 for growing 10 trays, including fixed costs.
The revenue generated from 10 trays, by growing them three times a month is around $600. Assuming that we are able to sell all our stock at $20/tray, you can make $600 easily. That’s over a 100% return on investment. And it’s a very easily scalable business model.
This, was the birds eye view of the business model and the financial economics of growing microgreens professionally.
Significant factors to keep in mind that can make or break your microgreens business
Here I’ve listed down some factors that you are extremely crucial to look out for before starting the business. Overlooking these factors or starting the business without giving them proper thought might result in a bad business decision.
- Location – It is one of the most important things you need to look for before starting your business. Both, your growing and selling is highly corelated with the location you are in. The place to sell microgreens is in a city where there are lot of medium and high-end restaurants and a good amount of health-conscious public.
And the place where you are going to grow microgreens is also important. Though, you can grow microgreens indoors and the growing process is not much affected by the weather and climate, but still you can have better growth if you are growing in a favorable location.
Do you have enough time for the business? It might not seem like a crucial deal breaker, but trust me sometimes it can be the thing that can lead to an unsuccessful startup. Some of you might already have a full-time job or are studying full time, and you might not have the time required to devote the business.
Running a small microgreens business, would require around one to two hours daily. You’ll need to handle the growing process, on daily basis. Planting new trays, harvesting, watering and auditing will require some time.
The main thing, that will take the majority of your time in this business is marketing and making deliveries. You’ll need to visit four to five new restaurants on a daily basis to advertise your microgreens, you can give them samples for free. And also, you’ll need to do deliveries in the morning on a daily basis.
Consider the time you have to put in the business first, and then start it. Suppose you are not able to put in time, that think of hiring some one for maybe deliveries or growing. Doing this you won’t get overwhelmed by the humongous list of tasks you need to complete in a short span of time.
These were the factors you need to consider before starting. Also think of the microgreens you are going to grow – are they in demand in your area or not?
But also, don’t overthink everything, just keep it simple. Always remember that the mixture of honesty, hard work and time is pure money.
The Anatomy of Microgreens Business
There are two main parts of this business, and to be successful you need to be an ace in both these parts.
Recently I was watching Narcos:Mexico and the story of the series is somewhat relevant to this topic. Felix and Rafa, two brothers created a business worth tens of billions of dollars, instead of selling microgreens they were selling weed. Rafa handled the growing and Felix handled the selling. By dividing certain tasks in business and specializing in what you are good at, anybody can do wonders. Though, I am not at all appraising what those guys did. What we can learn from those people is the business strategy, so that we can apply it to ours.
Growing Microgreens – Does it requires special skills?
Growing microgreens is not that difficult, and you don’t require any special skills to start growing. It’s actually very simple. You just need to invest a small amount of time to ensure that you are growing the right microgreens at the right place.
Demand of the crop and the effect of the weather, these are the only two things that you need to consider before selecting which microgreens to grow. Unless you are in the Antarctica or Death valley, you can grow pretty much any microgreens indoors, as they are not affected by the weather that much.
The only thing that’s left is to see what’s in demand in your local area or the restaurants in the city which you are targeting.
After selecting the microgreens, the next part is to setup your growing station and start growing. Here’s an in-depth guide on how to grow microgreens without soil and indoors.
Selling Microgreens – How to start?
From where I come from, my thought process is that – selling is the most important part of the business. If you can master this, you can get success in any business. And for the microgreens business selling or marketing is as important if not more as growing them.
There are three to four channels in which the majority of the microgreens are currently being sold.
- High end restaurants – The best place to sell, as you’ll receive consistent demand and they will usually pay more if they like your quality.
The best strategy for this channel is to create a list of 25-30 restaurants you want to target in your city. Then every day visit five of them at non rush hours and have a good conversation with the chefs and give them a 250 grams sample. Now after a couple of days pay them another visit or call them and ask for their feedback about the quality, and also gently ask them if they are interested in ordering them as well.
Every week make a goal of visiting at least 25 restaurants and if you can convert at least 10% that is 2-3 restaurants in to your customers, then in just a couple of months you can have 15-20 paying customers.
On an average restaurants will order around $100 per week, so in a couple of months if you do the marketing consistently and properly you can make around $6000 to $8000 per month in revenue.
Direct to consumers – As the healthy lifestyle phenomenon is growing, more and more people are now eating microgreens and hence the demand is booming.
- Selling in farmers market
- Catering Companies
While starting just focus on one single channel until you start making a couple of grands from that channel. Afterwards you can start adding new channels. Majority of the people starting will select the high end restaurants to sell, as the demand is huge, and so is the competition over there. So, if you have good contacts with some catering companies, you might as well just focus on that.
The overall thought process while selecting the best selling channel for your microgreens business should be avoiding the competition as much as possible and also utilizing your own unique advantages like contacts, experience in online selling, branding skills, etc. Any skill you have that can differentiate your business can be a crucial point in your success.
FAQ – Frequently Asked Questions About Microgreens Business
I’ve tried my best to come to cover most of the frequently asked questions about microgreens business, still if you have any other questions feel free to ask in the comments section below this article and I’ll answer it right away.
How much money do I need to start this business?
You can start with less than $100. But I recommend starting with around $300 and plant 10 trays on the first go, as you’ll learn what’s working and what’s not working as fast as possible and from there you can grow what’s working best for you.
How much money can I make from this business?
For starters you can easily make $500 – $1000 just by selling to 2-3 restaurants with 10-12 trays. And if you really want to scale this business, the sky is the limit. In three to four months you can scale it up to $10,000 per month by selling to 20-25 restaurants with 150-160 trays.
Is this business seasonal?
No, not at all. Growing microgreens is not seasonal at all. As they are extremely easy to grow indoors, you can grow them all year round. And the demand is also stable all year round.
Do I need a team or can I start this business alone?
If you are just starting out, you don’t need to hire anyone right now. But as you grow the business, you can start hiring people or even think about building teams that can handle your growing station, marketing, deliveries, harvesting, etc.
For how much price should I sell my microgreens?
You can price the microgreens as per the demand, quality and your production volume. On an average the price of the microgreens is around $2 per oz. If you selling some hybrid or rare microgreens it
This article was just a brief overview of how the microgreens business works and how you can bootstrap it. Starting a microgreens business is not that difficult, but sustaining it is.
Growing and maintaining your microgreens requires moderate skills, with a little bit of time and experience you can produce high quality microgreens on a consistent basis. But selling them is not that easy. But there’s a plenty of smart people out there who are excellent at selling, if you are not sales person, just hire one.
Microgreens can be grown all year round indoors, and its quite a lucrative business. For starters, making $1000 per month is in around 2-3 months is possible, you just need to put in 2 hours a day of work on a consistent basis – That’s the only requirement.
Just remember this quote by Benjamin Franklin – Energy and persistence conquer all things.
If you have any questions regarding your microgreens business or if you are just starting out and have some queries or you have some constructive criticism, then feel free to share it in the comments section below. I’ll get back to you right away.