In this episode Chris Thoreau joins me to explore the idea – Can you actually make a living growing microgreens? Is it actually possible or just an unrealistic dream?
If it is possible what does that look like? How big does the business need to be? How much do you need to be selling? Would you need employees?
TLDR: It is possible, with the right combination of luck, skills and hard work. Some people will find it’s a fit for them and their lifestyle, but they’ll need to be committed.
Can you make a living raising microgreens? (4:45)
On a personal level, my goal was to generate revenue growing microgreens, but as a rule, I generally have multiple sources of income.
I feel that I could make it my sole source of income, but if I did it would really limit flexibility in my life.
Making $150k/year could be done with two people but it would be a full-time job all the time. The business would truly depend on me being there and if I got sick or took time off the business would take a hit.
The way we set up the Food Peddlers was to have more employees than we needed to get the work done so we always had flexibility. We could handle people taking time off, and we could focus on having a number of income streams. People could work more hours if they wanted to earn more money.
Can a microgreens business support a minimal take-home income of $60-80k, for a family of four to live comfortably? (7:20)
In order to make a living as a microgreens producer that has more real-life flexibility than in the previous example of 2 people earning $150k/yr you would need to scale to the size of an enterprise, which means you are leaving the realm of being a mom-and-pop business and becoming a scaled-up enterprise with 30 or so employees. You become upper management and have levels of management in the system, with a complex infrastructure to manage.
I offer a crop-planning spreadsheet that comes pre-filled with an income of $125k/yr because that’s the point at which running a small business 3-4 days a week starts to make sense. You can build that up as much as $250-300k/yr, but eventually, you get to another level of production where costs become significant and you need to take on more debt to produce more, which means then you need to earn and produce more to keep up. You need to decide on what level of this production spectrum you want to bring your business to.
You need to consider that your income needs to be much higher than you first imagined. (12:40)
There’s a big spectrum of farms out there. One to two acres is a micro-scale farm. Having a farm that’s 40-50 acres is where it starts to become a small scale farm in terms of impact. You need to consider that if you want to clear $80k/yr that your income should be in the realm of $1m/yr. When you think of scale you need to have a realistic perspective of what your costs are going to be and how big you must grow to bring home your target income.
People need to ask; What am I trying to achieve here? Is this a side business? Or am I trying to scale this to the point where it is my full-time income? This takes a lot more to accomplish than a laissez-faire attitude which nano-scale growers can have.
You not only need to be excellent at production, but you also need to face the challenge of selling outside of a commodity market where people aren’t going to just buy what you have to sell like on a large scale farm. (16:30)
Yes, there’s a lot you have to consider beyond just the demands of being an entrepreneur which is already radically different than the get a degree, get a job, collect a paycheck that most people do. There’s not only unpredictability in farming it’s also physically demanding on top of all the mental stress you’ve been talking about. It’s important to think about what your goals are. Are you ideals based, and are you thinking about how you are going to make a living?
So ask yourself; what does making a living growing microgreens look like? And that’s going to be different based on your personality, your skillset, your location. It’s a complex equation that takes time to be realized.
There’s a curve to the trajectory. You start with just yourself and you end as far out as having a national company with many employees your managing and maybe even hiring above you to get someone who is better at running a large corporation. This is something many people don’t think of from the beginning. (24:00)
There are big shifts that can happen, too. Eventually, you can have a board where a group of people are now making major decisions, and that may even include removing you if you’re not part of the direction they want to take things. Are you creating a company that eventually you are going to phase out of? This is why I turned my sole proprietorship business into a co-op. It freed me up for life – now I don’t have to be there all the time to keep it from collapsing.
I don’t want to sound harsh, I just see so many farms where it’s just the couple running the business and I don’t understand how that works in the long term. How do you make any plans? Be that kids, travel, or just enjoying each other’s company. If you don’t have employees and it just supports two people it doesn’t seem like a living. You can never step away, including the times you may have to. (28:00)
I have met couples who have gotten to that stage together and are happy with their farm, so I’d want to know what they’d say. I’m also reflecting on the three different types of people we encounter in the microgreens world. One would be young and eager and just goes out and starts going after the business. Then there’s the entrepreneur who gets it – who understands the worth of a tray of microgreens and also the expenses that go into making that tray. They know the business needs to grow in scale. Then there are people who are older like me who see microgreens as a way to transition out of a corporate job. It takes a lot to take on anything entrepreneurial in nature and all of these kinds of people need to really reflect on what it’s going to take to run this business. There’s a much larger challenge in starting your own business than doing a job.
There are shows coming out now that show someone becoming interested in starting a business and they go after it not because there is an opportunity, but because of self-interest. They are pushing on the market, not responding to a pull. People who start farms seem to want extra points or credit because we need food. Maybe the best business for these people isn’t to start a farm in their location. (32:30)
I think food and agriculture are what I call an absolute market. Everyone needs to eat at every point in their lives. Other markets are segmented, by comparison, they appeal to certain demographics. So there is a lot of room to get into it. You can get into the market and out-compete people who have been doing it for a while. But it does take a lot of skill. You can be a poor worker as a professional and are still likely to get a job.
Do you think passion trumps common sense when people get into farming? (35:45)
Well, you also need to consider how efficiently people are planning on bringing a product to market. Someone might make $2k going to a market and keep half of it where someone else earning the same amount has used $1,900 to produce that product. I’ll reference Curtis here – he used a tight system that was efficient for him. What I see happen is some people will start out with this system but can’t continue to keep it efficient.
Can one introduce, say $400k worth of microgreens into most market streams to make that full-time, no worries, income we’ve been talking about? (38:40)
What’s the size of the market and what do you need to get by living in that area are two important questions to ask. Here in Vancouver the Food Peddlers make $150-200k/yr and could fairly easily scale to double that because people are wealthy, the demand is there, but the cost of living is also quite high. Often the market and your cost of living balance out. You can also look for a sweet spot where people are highly interested in the product and low living expenses. As you go more rural sometimes demand drops a lot.
You should consider economic leverage points as well. If you have a piece of land you can produce on vs. growing in a warehouse you have to pay rent on that changes the economics quickly. If you identify a market that doesn’t have any of your product at all. If you are good at noticing these opportunities can make all the difference.
What market stream could the Food Peddlers use to double their income? (44:20)
You can shift from doing one farmer’s market a week to three. Increasing wholesale – you take a hit on price so would need to produce more. Restaurant sales – which can shift constantly. You need to be aware of how these markets are constantly shifting so you need to make changes consistently. This comes down to relationships. You are making connections that need time invested in them. If all of your time is going into production then you can’t expand sales. You need to take a leap of faith here and hire someone to handle the production tasks, and so your costs will go up, but you then use the time that’s been freed up for you to solicit sales. Or, if it comes down to it, hire someone to do your marketing – but realize that person you’re likely going to need to pay more than someone who would do the production.
Thinking about rural farmers, potentially your cost of living goes down, but not as significantly as the drop in your available sales. CSAs and farmers’ markets are handicapped sales models – with microgreens you have to sell to restaurants or wholesale to make enough. And if someone has already taken that spot at those markets what do you do? (48:20)
I like to think that I can compete with my microgreens in any free market city I went to. You have to come to capture market share by being competitive on the significant aspects of what your customers are looking for; consistency in high-quality product, accurate and timely invoicing, responsiveness and competitive pricing.
This goes back to having an edge. You have to find ways to make your way into a market by being extremely savvy and innovative. It’s more than ever a convenience world – you need to be as convenient as Amazon as they’ve set the bar. (56:20)
The bar to start a company is getting lower all the time. The divide between a small and big company is shrinking. You can start an online store in hours now when recently it wasn’t something you could do on your own. You have to remember you’re not just a business you’re a service and product provider. You are competing with Whole Foods delivering organic food to your doorstep within hours of ordering.
Luck is a significant part of the equation as well. When I put together the Permaculture Voices Conference I don’t think I could’ve designed a better conference, but I struggled to sell tickets. Wrong place, wrong time. When I started Paperpot Co. it wasn’t like that at all, it’s been successful from the beginning. Right place, right time. (59:00)
One thing we have been talking about here today that we haven’t said directly yet is; market research. You want to start with a business plan. You’re creating a pathway because you see something. Luck favors those with experience. You saw something and went after it. I went after microgreens first ten years ago when there was little competition because I saw something and I was lucky. But I didn’t have everything figured out at that point and still had a lot to learn in order to get all the aspects of the business running. This is also why bringing in partners can be so helpful since they can fill these gaps for you.
Going back to the original question after all this discussion; can you make a living growing microgreens? The answer it seems we’ve arrived at is yes, but only if you are willing to grow a difficult start-up earning far more money than you ever thought you would need to make it sustainable. (1:06:40)
An add on to that is if you’re already a successful market gardener with an established sales stream that’s a case where adding on microgreens can really pay benefits. It’s a great add on crop, and you already have many of the skills and tools required to get started.
If you’re ready to take the steps required to start a microgreens business what can people anticipate to find in your course? (1:09:00)
You should first take some time to search over the internet about microgreens to see if it’s something you are interested in. Throughout the workshop, we cover a lot of these skills, not just the hard skills like seed starting, that we’ve been discussing, that one needs to make a viable business. We have also gone into detail most courses don’t cover while breaking it out into individual topics so you can address them as they are relevant to you.
So it is possible, with the right combination of luck, skills and hard work. Some people will find it’s a fit for them and their lifestyle, but they’ll need to be committed. If you want to start it as a business the best advice is; learn as much as you can before you start. That’s where Chris’ course can come it to teach you so much of what you need to know. Interested? Be sure and check it out here. And until next time, be nice, be thankful, and do the work.