Microgreens Business… Is It ACTUALLY PROFITABLE??
Interested in whether you can start a microgreens business and actually make money from it? By the end of this post, you will know exactly how much profit you can make from each tray of microgreens and how long it will take for you to make your money back on a microgreens rack system.
As a commercial grower, it's very important for me to understand the financial numbers behind my business. I have a very detailed spreadsheet I put together that lets me know exactly what my costs and revenues are. I'll tell you right now that the profit margins on microgreens are very good and I wouldn't be doing this after three years if it wasn't profitable. I'm happy, I love what I do, and I'm able to support myself doing this business full-time, which is something I feel very proud about. Whether you're looking to do this full-time like myself, or simply want to try it as a side hustle, I'm going to take you step-by-step to show you exactly how much profit you can make growing microgreens.
I started my microgreens business back in 2016 from my parents' basement and was net positive after only nine months. Two years after that, I had a six-figure business bringing in over $100,000 of revenue every year. Keep in mind that this revenue is not all profit… There are a ton of expenses that go along with any business, and every business will be different because of the specific business model put in place. For instance, I deliver for free, so if another microgreens farmer doesn't, they avoid that cost. Then there's all the different microgreens varieties you can grow that all have different profit margins because of their varying seed cost, and sale price. And don’t forget all the different types of customers you can sell to which have their own differences… Direct to consumer home delivery, health food stores and juice bars, restaurants, distributors, etc. Instead of focusing on the details and nuances that will be different from business to business, let's instead focus on the profit margins that can be generated from one tray. This way you will have a better understanding of the general numbers that microgreens can generate.
Below, you can see some of the costs and revenues for pea and radish microgreens. You'll be able to see that the numbers vary slightly - this is because of differences in seed cost, seed density, yield, how long it takes for that crop to grow, and how long they will be under lights. In order to determine the total profit/tray we first need to find out what the total costs are to make that tray and how much revenue we will receive upon harvesting and selling the tray.
For a tray of microgreens, the inputs (or costs) associated with a tray, are soil, seeds, electricity while they're under lights, as well as the total amount of labor that it takes to make the tray and move it all the way through the process until it's ready for harvest. As you can see above, I added all these costs for pea and radish, resulting in the total cost/tray. $3.73 for pea and $3.17 for radish. Now to calculate the revenue, we take the total yield for each tray and multiply it by the price per ounce, resulting in the total revenue/tray. Profit is simply the total revenue minus the total costs. You can see that the profit that you will make per tray is right around $15. Keep in mind $15 is actually a very conservative number, especially for these two varieties. You can easily bring in $20 - $30 per tray by increasing yields and/or prices. For the sakes of this example, we'll say that the average profit per tray for microgreens is a conservative $15.
If you can grow 20 trays on one rack every week, that's $300 a week in profit! After adding a few more racks, you will be generating plenty of profit for yourself, but let's take a look at how long it will take to get your money back on one of these rack systems. For all the materials needed (rack, lights, trays, timer, etc) it comes to about $450. If it only costs $450 for the full microgreens setup, and you're generating $300 of profit every week with it, you're payback period for one rack (at full production) is only a week and a half!
So yes, microgreens are very profitable, and you can start a successful side hustle or even a full-time business growing and selling microgreens like I have… AS LONG AS YOU’RE WILLING TO PUT IN THE WORK!
Now you know exactly how much profit you could make off of a tray of microgreens, but I'm sure you'll need some assistance as you learn and grow. Join my Microgreens Support Group on Facebook to become part of my community and learn even more about growing microgreens and microgreens business.
Link to this video: https://youtu.be/-MrqZE0TNWk