MUSHROOM BUSINESS PROPOSAL

Submitted by: Eleonor Z. De Guzman

Submitted to: Engr. Enrico Manalo

 Introduction
Mushrooms is a palatable food accepted by people as daily diet and alternative to meat
and fish, also it is a vegetarian diet but give nutrition of non- veg such as some essential
amino acids, vitamins and minerals. Mushroom is significant not just from dietary and
therapeutic perspective but also from selling out. It requires little space or land, and
subsequently, it is vital for landless minimal landholders. Mushroom production has
massive potential as an income-generating strategy. It develops independent of
daylight, feeds on natural matter, and doesn’t need fruitful soil. Notwithstanding the
floor, air space is additionally used, bringing about higher efficiency. Food items have
added mushroom in all their dishes making it more popular and mandatory ingredient
in cooking. Nowadays, people are fond of consuming mushroom in different ways like
curry, snacks, soup, salad, mixed with rice and pickle etc.

Vision Statement
To become the customers first choice is supplying mushroom in Batangas City and
nearby province in 5 years’ time
To achieve my set vision, I intent to practice sustainable farming practices by growing
our edible mushroom in a control environment using organic substrate as much as I
can.

Mission
To enlighten customer on the virtues and benefits of mushroom. To provide the target
customer high quality mushrooms. To offer competitive price to customer.
Project Background
Name of Business : Silly Mushy
Nature of Business : Mushroom Production
Type of Business : Sole Proprietorship

Type of Business Organization

The project will be a sole proprietorship type of business organization. A sole
proprietorship is an unincorporated business that has just one owner who pays
personal income tax on profit earned from the business. The business owner is referred
to as the “sole proprietor” and exclusively owns all the assets and profits of the
business. He or she is also personally liable for all the debts and losses that the business
might occur.
As the simplest form of business, the business registration process for a sole
proprietorship is relatively easy. Sole proprietorship are also the easiest to run since
they do not have the same formalities and regulation that corporation and partnership
have.

Physical Plant
A. Building
Mushroom do not require land or soil in acres for them to grow. A very small place
which not open to direct sunlight is more than enough to carry the business. It can be
located in our vacant lot in Batangas City where there is a storage room as temporary
place in cultivating mushroom. Mushroom can tolerate some light, but the spot should
stay dark or in low light. White button mushrooms need to be grown on composed
manure, oyster mushroom on straw.

B. Raw Materials
The raw materials that are used in oyster mushroom production are sawdust, rice
bran, lime and sugar. Initially, these materials are composted and bagged using
Polyethylene bags, PVC pipes, newspaper, rubber bands and such.
A number of tools and equipment will be used in the study. Weighing scales will be
used which is for weighing harvested mushrooms. Sprayers will also be used for
watering and keeping the fruiting bags moist. Alcohol lamps are used during
inoculation as well as grain spawn production.
C. Production Schedule
Oyster mushroom will have a period cycle of three per year. This is because the life
span of oyster mushroom fruiting bags which last for 3 to 5 months. For
conservatism purposes I projected only 4 months. It started with tissue culture and
grain spawn production which is done for the first month. Consequently, the
mixing of inputs is also done while tissue and grain spawn production is being
done. The latter part of the first month is allotted in the bagging and pasteurizing
practices. It is followed by inoculation or seeding the fruiting bags. Incubation is
done after inoculation to let the mycelia spread in the fruiting bags After a month, it
can be hanged and harvested for four (4) months

Oyster Mushroom production schedule

D. License and Permit Required

For this kind of business we need to secure DTI, Mayors permit, BIR and DFA because I
plan to have it sell in stores like Baymall, Waltermart, Shopwise and the likes.

Production Process
There are different steps or farm practices needed for producing oyster mushrooms.
Every step/phase in the oyster mushroom production is important to produce them.
A. Farm Practices of Oyster Mushroom Producers
 Farm practices of Oyster mushroom producers include grain spawn
production, composting and mixing, bagging, pasteurization, inoculation, incubation,
bagging, hanging, harvesting, spraying and scraping. Figure below shows 6 stages of
mushroom production.

Stage 6 Stage 1.
Harvesting Grain
of oyster Spawn
mushroom Production
Stage 2
Stage 5 Composting
Inoculation and Mixing
Incubation of Fruiting
And Hanging bag inputs
of Fruiting

Stage 4 Stage 3
Pasteurizatio Bagging of
n of Fruiting Fruiting bag
bags inputs

Grain Spawn Production

The first part of producing Oyster mushrooms starts with the creation of spawn.
This is done in a sanitized room to minimize contamination. This is the most
meticulous part in producing Oyster mushrooms because everything must be sanitized,
to make the area air free decreases the probability of possible contaminants. It starts by
preparing a mother culture and spawn grains. A small tissue of oyster mushroom is
inoculated into prepared potato dextrose agar (PDA). This is incubated to allow the
growth of the mycelia on top of the media which produces spawn agar. After one to
two weeks of incubation, a small portion of the pure culture is transferred or
inoculated into a bottle containing sterilized grain like sorghum or corn to multiply
the culture and for easier inoculation into the substrate bags (Andam. & Dulay, 2014).
Contamination is usually the problem in creating the spawn because once the spawn
is contaminated it can no longer be used. The use of unsanitized
equipment and exposure to too much air are some of the main reasons why the
product becomes contaminated.

Composting and Mixing of fruiting bag inputs

Composting and mixing of fruiting bag inputs start with the mixture of sawdust
or rice straw, rice bran, lime and sugar with the use of a shovel for sawdust fruiting bags.
According to Bureau of Plant Industry, the materials that will be mixed is sawdust
or rice straw, molasses or brown sugar, rice bran and lime. Seventy-eight percent of
the mixture will consist of sawdust/rice straw, 1% molasses/brown sugar, 20% rice
bran and 1% lime. Consequently, this is the ratio that the producers use in creating
fruiting bags. Majority of the producers uses these inputs for production. Fertilizer is
commonly applied during this stage of production which are commonly rice, past
compost and lemon grass. It is composted two to three weeks and mixed every three
days in the composting period.

Composting and Mixing of inputs

Bagging of Fruiting Bags

According to oyster mushroom produces, bagging of fruiting bags is one of the

most laborious task in oyster mushroom production. It is manually putting the compost
inside the standard 6 by 12 Polyethylene bag. It is then secured with cotton waste,
PVC pipe, newspaper/ manila paper and rubber band. Nowadays, there are machines
that farmers use to minimize time spent in bagging fruiting bags.
 Bagging of fruiting bag inputs

Pasteurizing (Steaming)

Pasteurization is necessary to kill the harmful organisms in the mixture.

Producers steam their fruiting bags with the use of autoclave or improvise
autoclave (drum) to minimize and to remove contamination of fruiting bags. It is
stacked inside the autoclave and is steamed for 6 to 8 hours depending on the heat
that is used by the producers. Producers who steam their fruiting bags either use
sawdust as a medium to heat their fruiting bags or gasoline. Most of the producers uses
gasoline for an even treatment in steaming the fruiting bags. While others use saw dust
because its cheaper

Autoclave used in pasteurization

Inoculation

Inoculation or seeding is manually putting the grain spawn or sorghum

seeds with mycellia using a sanitized spatula into the pasteurized fruiting bags. After
making sure that the fruiting bags are in optimum condition and has been sterilized,
the spawn from the grain bottles will be placed in the fruiting bags. It will be placed at
both ends and in the middle of the hole to lessen the time of waiting for the oyster
mushroom mycellia to spread. In addition, it will make the mycellia spread evenly
inside the fruiting bag.

Incubation
Incubation is storing the inoculated fruiting bags to let the mycellia spread
inside the fruiting bags. It is the step prior to transferring oyster mushrooms to the
growing houses. It is usually done by storing the inoculated fruiting bags in a clean
and dark room. It is usually done 2 to 4 weeks depending on the rate of how the
mycellia spread.

Mature incubated fruiting bags that are ready to be hanged

Hanging

After the incubation period, hanging of fruiting bags is done. Hanging is

placing the fruiting bags in the growing house. Commonly, it is stacked into a column
which allows the producer to harvest easily. Hanging fruiting bags are less prone
to contamination (De Guzman, 1993). It can be harvested after 3 to 7 days prior to
when fruiting bags are hanged. It will be hanged vertically each one placed above the
other using straw ropes/nylon ropes to avoid touching the ground. In addition, the
sealed opening of the fruiting bags will be opened to allow the propagation of the
oyster mushroom.

Hanged fruiting bags

Harvesting

Harvesting of oyster mushrooms is done everyday. The mode of harvesting is

either by plucking or cutting out the mushroom from its stem. Usually producers
handpicked oyster mushroom while others use scissors to cut and to harvest oyster
mushrooms from their fruiting bags. Both methods of harvesting, require
sanitation of themselves and their equipment. The harvested oyster mushrooms are
usually put in crates and baskets.

Financial Plan
Producing mushrooms doesn’t need huge amounts of money yet can give
you a great profit. Starting capital may come from own savings. Personnel for the time
being or at the start of the business can be my cousins who have no work around the
area or those relatives who shepherd animals.

Cost and Return Analysis of Oyster Mushroom per 50kg rice straw (dry weight)
at 300 Fruiting Bags
ITEM MAN- DAYS AMOUNT (P)
A. LABOR COST
Hauling of rice straw 2 400.00
Chopping of rice straw 5 1500.00
Soaking of rice straw 1 200.00
Packing of fruiting bags 5 1500.00
Sterilizing of fruiting bags 2 400.00
Inoculating of fruiting bags 1 1200.00
Sub-total 5,200.00
B. MATERIAL COST Quantity Unit Price (P) AMOUNT (P)
Pp plastics bags 3 packs (8x12) 100.00 300.00
Steel Drum 1 800.00 800.00
Steel saw 1 150.00 150.00
PVC pipe 1 tube 128.00 128.00
Firewood 5 bundles 40.00 200.00
Table 1 500.00 500.00
Cotton (300 g) 3 rolls 100.00 300.00
Denatured alcohol 1 bottle 70.00 70.00
Rubber band ¼ ¼ 1/4kg 40.00 40.00
Ethyl alcohol 1 bottle 75.00 75.00
Grain spawn 6 bags 75.00 450.00
Sawdust 3 sacks 10.00 30.00
Rice bran 1 kg 12.00 12.00
Sub – total 3,227.00
C. Gasoline Expense 500.00
TOTAL OF A & B 8,975.00
D. GROSS INCOME 90 kg 150/kg 13,500.00
E. NET INCOME 4,525.00
F. RETURN ON 33.52%
INVESTMENT (ROI)

MARKETING PROGRAM OF PLAN

Market Segmentation
The farm will assure to have the following criteria so that the oyster
mushroom consumers will be satisfied and will attract more customers.

1. Fresh and high-quality harvest of the commodity

2. Be open to the adaption of new technology from research and extension service to
increase production.
 Strengths Weaknesses Opportunities Threats
- Sure market - Newly - Increasing - Susceptible to
- High demand Introduced to the Demand climate and
of product Market - gradual expansion temperature
of enterprise

Target Market
The general target market is Batangas because Batangeneos lacks supply of oyster
mushrooms. Baymall, Waltermart, Shopwise, Robisons, Shopee and Lazada.
Specifically, fresh oyster mushrooms that are produced will be distributed to the
different wet markets in Batangas, malls and nearby Province.

Product mix
Mushrooms are not just produced and sold raw; growers creatively make
products out of harvested mushrooms. They make burgers, embutido, longganisa,
adobo, curry, bagoong, tocino, and laing using the mushrooms that they cultivate.
Other producers turn them into mushroom chips and chicharron.