Episode Description
Are you wondering what the upsides and downsides of starting a microgreens business are? In this episode I take a deeper look at the positive and unfortunately some negative aspects of owning your own microgreens business.
If you’re still on the fence as to whether or not to start a microgreens business, this episode will give you some more information to help you make up your mind.
Leave me a voice message here https://www.speakpipe.com/Microgreensentrepreneur about anything you need help with regarding growing microgreens or a microgreens business, or if you have a topic you’d like me to discuss on a future episode, I’d love to hear that too.
Website: https://microgreensentrepreneur.com
Seed Density Calculator: https://microgreensentrepreneur.com/seedcalculator
Episode Transcript
Microgreens Entrepreneur Episode 3: The pros and cons of starting a microgreens business
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[0:10] You’re listening to The Microgreens Entrepreneur Podcast, where the aim is to help you start, grow, and improve any microgreens business. I’m your host, Brian, owner of a microgreens business that I operate out of my own home. Stay tuned and welcome along.
[0:30] Hello, there. How are you? I hope you’re keeping very well, and you’re having a good week wherever you are. It’s a beautiful day here in the Republic of Ireland. I hope it’s as nice where you are. On today’s episode, we’re going to be discussing the pros and cons of starting a microgreens business.
[0:44] Last week, I asked the question: Can you start a microgreens business? Today, we’re going to go a little bit deeper into actually starting a microgreens business and seeing what are the upsides and what are the downsides, the pros and cons. By the end of the episode, you’ll have more of an idea whether or not it’s something that you want to look into.
[1:01] Starting a microgreens business is a great opportunity, but it’s no different than any other business. There are going to be positives and negatives to it, and we’re going to jump into it now and take a look at them. We’re going to start off with the pros.
[1:12] Pro #1: The first pro is that it’s a growing industry. I was doing a bit of research before making the episode this morning, and I came across an article from the Global Wellness Institute, and it said that the global wellness economy is now worth over 4.5 trillion dollars a year. The healthy food element to that is 708 billion dollars, and it’s been growing year on year for a while now.
[1:38] The positive thing is that microgreens fall into that health food produce category. It’s well known that some microgreens like broccoli and kale have over 40 times the nutrient density as their fully-grown counterpart.
[1:48] Over the last few years, there’s been a big change over to a clean eating trend. Everybody is into eating clean now and trying to be as healthy as possible. Everybody has a fitness tracker now, so health is a huge thing now, and microgreens is a part of that.
[2:04] Pro #2 is the entry cost to starting a microgreens business. Starting a microgreens business has a relatively low entry cost compared to a lot of other businesses, and that’s going to be very appealing to a lot of people. I would think that the majority of people that want to start a microgreens business are going to be able to get enough money to start one.
[2:22] You can start very, very small. You can literally start trying to sell to one restaurant. Then, when you make a sale there, any money that you get from that sale, you put it back into buying more stuff for your business, and you keep putting any money that you make back into the business and scaling it up.
[2:38] Pro #3: It doesn’t take a lot of space to start a microgreens business. I’m going to use my own self as an example. I grow out of an 8 x 8-foot spare bedroom, and I grow a lot of microgreens in that space. The good thing about microgreens is that you grow them on shelves, and you use vertical space. So, even if you have a couple of spare square meters in a room, you have the space to start a microgreens business.
[3:01] Pro #4: The next pro is that growing microgreens is actually pretty easy. Once you get over that initial learning curve and figure out all the different intricacies of the different microgreens, it becomes a lot easier then.
[3:12] You’re probably going to be growing the same microgreens every week. You’ll figure out what the market wants. You’ll see trends and what customers are buying in the shops. Chefs are usually going to buy the same microgreens off you every week.
[3:25] So, more than likely, you’ll get into the rhythm of growing the same microgreens every week, the same amounts of microgreens every week, and you’ll get to know all the little finer details of each microgreen. You’ll eventually become an expert, and it’s easy then.
[3:38] The next pro is the fast turnaround time from the point where you sow your microgreens to the point where you’re getting paid for your microgreens. The majority of microgreens take one to two weeks to grow, and normally, you’re going to get paid every week by the restaurants that you go to. Some restaurants pay you cash on delivery, or else, some restaurants might pay you at the end of the month.
[4:02] The majority of grocery stores will pay you each month. If you go to a farmer’s market and you’re selling to the public, you’re getting paid instantly on the spot. Or if you have a home delivery service, you can decide whether you want to get paid on the spot, or you want to get paid every month. So, it’s a business where there’s good cash flow.
[4:16] This definitely isn’t the same with all farming businesses. When I was in college, we visited a strawberry farm, and that farmer only got paid once per year by his supplier. So, the way that worked for him, he supplied the grocery store with strawberries all year, and then at the end of the year, when the grocery store made its money, he got paid. He had been doing this for years and years, so he was used to it. He had the cash built up that he was able to sustain that until he got paid every year.
[4:43] But that’s a business that has a high-barrier entry. You need a lot of money to get started in something like that. You need to put a huge investment in at the start and be able to sustain not getting paid by your supplier for a long time. Thankfully, growing microgreens isn’t like that.
[4:57] Pro #5: Another pro, and this is something that I actually hadn’t thought about until recently is that as well as being able to scale up easily, you can also scale down a microgreens business easily, too. With everything that’s going on in the world at the moment with the coronavirus, I’ve had to scale back my business slightly because all of the restaurants around here are fully closed.
[5:16] I’m actually selling more in the grocery stores than I was before, but overall, business is down. But the good thing is that I’ve been able to scale back my business very easily.
[5:25] The restaurants closed here pretty much instantly, and obviously, I would have had a lot of stuff already planted for the weeks ahead. But after those first couple of weeks, and I stopped planting for the weeks to come, my costs were a lot lower, and I was able to save that money.
[5:41] Now, I’m just looking at some of the small farms around here, and their main business avenue is to restaurants, and they would have their crops in the grounds since the start of the year, and there’s no way of stopping that now. They need to be harvested now or pretty soon. I’m not too sure. I’m not an expert in that element, but they have produce that they’re not going to be able to sell to anybody.
[6:01] Luckily, with microgreens, if the market does dry up like that for some kind of a reason, you can quit your losses, and you stop and then pick up again when things get better again.
[6:10] Pro #6: The last pro that I’m going to talk about, and this is probably the one that everybody wants to hear, is that the profit margins are very good on microgreens. The costs are pretty low, so what you need to buy to actually grow the microgreens is very low. But what you also have to take into consideration is the time that it takes you to do all the work to grow the microgreens.
[6:31] When we’re looking at profit margins, usually we’re adding up all our costs like seed, soil, electricity costs, etc. We’re minusing that from what we’re actually getting for our product. So, with microgreens, your costs are going to be a lot less than what you receive for your product.
[6:50] So, in theory, your profit margin is very high, but one thing that we can’t forget is the time that we put into growing the microgreens. Time is your most precious resource, and you really have to value it, and it is a thing. It’s part of the sale. It goes into what is made up of making microgreens. A part of your time went into that.
[7:08] But of all the resources that it takes to grow microgreens like seed, soil, water, electricity, we can get a lot more of them, but we can’t get more time. Time is the one thing that we can’t get back, and we can’t get more of. So, you need to think of that as a thing and a thing that has value.
[7:24] I’m going to be doing a future episode that’s solely on the profit margin of microgreens and how much you should charge for your microgreens. There are some of the pros of having a microgreens business. Now, I may have forgotten something or may have left something out. If there is something that you think I should have mentioned, you can look to the show notes there, and there’s a way to contact me, and I’d love to hear from you.
[7:43] Now, unfortunately, with pros, there are always going to be some cons, and we have to mention them as well, and let’s get into that now.
[7:50] Con #1: The first con of having a microgreens business and one you should definitely know from the start is that it’s not a get rich scheme. If you look at YouTube, and I think that everybody who grows microgreens looks at YouTube, the most popular videos on YouTube about microgreens are the ones that people are talking about the amount of money you can make.
[8:09] Yeah, you can definitely make a lot of money growing microgreens, but you have to know that along the way, it’s a lot of hard work, dedication, and you need consistency, and you need to show up every day and do the work that it takes to have that business.
[8:22] Having any type of business takes massive action to get started. If starting a business was easy, everybody would do it. Just for an example, on the day that I’m harvesting and delivering microgreens, I’m up at 3:30 in the morning. I’m doing all the harvesting, and I’m packaging. Then I’m working, and then I’m making all the deliveries that evening.
[8:40] So, that’s a full day gone doing all that work. But to me, it doesn’t really feel like hard work because I enjoy business. I enjoy growing a business, and it’s actually fun for me. So, you’re going to need a mentality like that. If you just find that it’s hard work and you don’t want to do it, it’s not going to work for you.
[8:57] Con #2: The next con is that it’s going to take up a lot of your time. I mentioned in the last episode that time was a factor that you needed to take into account, and for some people, it’s just not going to be possible to get the time to do it. Everybody has different things going on, and some people just won’t be able to commit the time that’s needed to start a business.
[9:16] Especially at the very start, it takes a lot of time to get used to doing the tasks before you get quick at it. I know from my own experience I actually kept a journal of every task I was doing and the time it took to do each task.
[9:31] If I look back to the very start, it says that it took me 25 minutes to plant one tray of microgreens. Now, that is a huge amount of time. I don’t know what I was doing for 25 minutes. Now, it probably takes me three to four minutes to do a tray, but at the start, it is going to take you time to get used to doing all the tasks. You should be starting small and maybe only doing a couple of trays. So, the quicker you get at doing the work, the more you’ll be able to do with a certain period of time.
[9:58] Con #3: The next con is that you’re going to have to learn how to deal with rejection. You’re going to be trying to sell your microgreens to different chefs, and restaurants, and the public, and get them into grocery stores. Obviously, not all of them are going to want to take your product. So, you need to get a bit of a thick skin and take rejection and just move on. It’s a number’s game. The more places you try, the more places you’re going to get your product into.
[10:22] Con #4: The last con that I have for you is that it’s going to be very hard for you to take a holiday when you first start growing microgreens. When you first get a restaurant’s business or a couple of restaurants’ businesses, you’re going to be on a schedule that you’re going to have to deliver microgreens to them, probably every week. Every week is the norm for the restaurants that I deliver to. And you’re going to have to be consistent with that.
[10:44] At the start, when you’re only growing a few trays, there are going to be a couple of days during the week where you’re probably not going to have to do anything, but when you start to scale up, and you’re growing a lot, there’s probably something to do every day. There could be some planting, watering, harvesting. It depends on the scale of your business.
[10:59] So, when you’re wanting to take a holiday from your business, you’re going to have to get a family member or a friend, or you’re going to have to employ somebody that is going to run your business for you when you’re gone. Otherwise, you’re going to have to take a break from growing, and you’re going to have to inform all your customers that you’re not going to be delivering for a little while.
[11:16] And it’s something to note that, let’s say, for example, you take one week off from your microgreens business with nobody doing anything. There’s going to be an impact there for a couple of weeks to come. In that week that you were supposed to be there with your business, you would have obviously had to be planting for one or two weeks ahead, and that’s not going to be done. So, it’s not just going to impact the week that you’re not there. There’s going to be an impact for the next couple of weeks after that, as well, until you get back on track.
[11:44] There are all the cons that I have for you. Again, if you think that I forgot any or left any out, contact me and let me know. Personally, I think the pros outweigh the cons, and any business that you start is going to have ups and downs, and pros and cons, and they’re all going to require a lot of work, and microgreens is no different to that.
[12:01] So, I would encourage anybody who is thinking about starting a microgreens business to do it. But I also wanted to make you aware that it’s not all plain sailing. So, that brings us along to the end of the episode. Thank you very much for sticking with me till the end. I hope you might have found something interesting there or found it helpful.
[12:18] I want to let you know that I’ve added something cool to the show notes. It’s a SpeakPipe link where you can click the link, press a button, and you can speak directly into your microphone, so you can send me a message if there’s any topic you want me to cover on the podcast, or if there are any questions you’d like me to answer, they’ll come straight to me.
[12:36] You can also check out my website, microgreensentrepreneur.com as well. So, look, thanks very much for listening. I hope you have a good week, and I’ll catch you on the next episode.
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