Starting a microgreens business is an exciting venture that combines a passion for cultivation with sharp business savvy. The global market is worth billions, and there is steady demand for fresh microgreens from restaurants, health food stores, and local farmers' markets.
This guide will take you through the practical steps of validating your business concept, obtaining necessary licenses, acquiring the right equipment, and building a customer base to help you launch a successful microgreens business in the U.S.
Step 1: Validate your business concept and create a plan
Understand your local market
Begin by visiting local farmers' markets and health food stores. Talk to chefs at independent restaurants about what microgreens they use and what they wish they could source locally. Many new growers guess what will sell, so this direct feedback is invaluable.
Analyze your local competition
Next, identify your competition. Use Google Maps to find other microgreens farms in your area. You can also search Instagram and Facebook for local suppliers to see their product offerings, pricing, and how they market themselves. This gives you a clear picture of the landscape.
Estimate your startup costs
Your initial investment for a small-scale setup typically ranges from $500 to $1,500. This prepares you to grow a few dozen trays at a time. A frequent misstep is to purchase too much equipment before you have confirmed orders, so start with the basics.
- Shelving: $100 - $300
- LED grow lights: $200 - $500
- Growing trays (10x20): $50 - $150
- Seeds and growing medium: $150 - $300
- Air circulation fans: $40 - $80
Here are 3 immediate steps to take:
- Visit at least two local farmers' markets to observe customer buying habits.
- Create a list of 5-10 local restaurants to contact for market research.
- Price out a basic equipment list from two different online suppliers.
Step 2: Set up your legal structure and get licensed
Choose your business structure
You might want to consider forming a Limited Liability Company (LLC). It separates your personal assets from business debts. Many new growers start as a sole proprietorship to save on fees, but this leaves personal assets like your home or car unprotected if the business faces legal issues.
An LLC costs between $50 and $500 to file, depending on your state. It offers pass-through taxation, which means business profits are reported on your personal tax return, simplifying your accounting. This structure provides a good balance of protection and simplicity for a new farm.
Navigate permits and licenses
Your local county health department is your primary regulatory body. They dictate the rules for selling produce directly to consumers and restaurants. You will likely need a local business license, which typically costs between $50 and $100 annually, and a food handler’s permit for about $15.
While the FDA and USDA oversee food safety nationally, small farms often fall under exemptions from rules like the Food Safety Modernization Act (FSMA). Focus first on your city and county requirements, as they are the most immediate hurdle to clear before you can make your first sale.
Here are 3 immediate steps to take:
- Research the LLC formation fee and process on your state’s Secretary of State website.
- Contact your local county health department to ask about rules for selling microgreens.
- Find the general business license application on your city or county’s official website.
Step 3: Secure insurance and manage risk
Protect your farm with the right insurance
You will need insurance to protect your new business. General liability is the baseline, covering accidents at your grow location. More importantly, you need product liability insurance in case a customer claims your microgreens made them sick. A $1 million policy is standard for both.
Many new growers try to save money by skipping product liability, but this is a significant risk. A single foodborne illness claim could easily shut down your entire operation. Expect to pay between $500 and $1,200 annually for a combined general and product liability policy.
With that in mind, you should contact insurers who understand agriculture. Consider providers like Farm Bureau Financial Services, Nationwide Agribusiness, or The Hartford. They offer policies tailored to small farms and can properly assess risks like crop failure from equipment breakdown or contamination.
Here are 3 immediate steps to take:
- Request a quote for a $1 million combined general and product liability policy.
- Contact an agent at Farm Bureau or another farm-focused insurance provider.
- Ask your agent about adding coverage for equipment breakdown and crop loss.
Step 4: Set up your grow space and buy equipment
Find the right location
You can start in a 100-200 square foot space, like a spare room or basement. Most residential zoning allows for home-based businesses, but you should check your city’s planning department website for specific rules. No special agricultural zoning is typically required for a small-scale operation.
Some growers make the mistake of overinvesting in a commercial lease too soon. If you do need to rent a space, try to negotiate a short-term lease of 6-12 months to maintain flexibility. Also, clarify if utilities are included, as your electricity use will be higher.
Purchase your core equipment
With your space secured, you can buy your gear. Focus on quality items from reputable suppliers to avoid poor yields. Many new growers buy cheap LED lights online, only to find they lack the full spectrum needed for healthy plants. You might want to source from dedicated suppliers.
Here is what to look for from suppliers like Bootstrap Farmer or True Leaf Market:
- Shelving: A 4-foot wide wire rack is a good start.
- Lights: Look for full-spectrum T5 or T8 LED shop lights.
- Trays: Heavy-duty, food-safe 10x20 trays are the standard.
- Seeds: Start with easy varieties like radish or broccoli. Most suppliers have no minimum order for seed packets, but bulk purchases over one pound offer better pricing.
Here are 3 immediate steps to take:
- Measure a 10x10 foot area in your home to visualize your grow rack setup.
- Check your city’s website for its home-based business permit application.
- Compare the price of a 10-pack of 10x20 trays from two different agricultural suppliers.
Step 5: Set up your payment system
Establish your payment terms
For restaurants, weekly or bi-weekly invoices with Net 15 payment terms are standard. This means they have 15 days to pay. For direct sales at farmers' markets or to individuals, payment is immediate. Keep your terms clear to maintain good cash flow.
Choose a payment processor
While cash is easy, many customers expect to pay with a card. A frequent mistake is to operate as cash-only, which can limit your sales, especially at busy markets. You will want a reliable way to accept card payments on the spot.
For microgreens businesses that need to accept payments on-site or on-the-go, JIM offers a streamlined solution. With JIM, you can accept debit, credit, and digital wallets directly through your smartphone. Just tap and you are done.
At just 1.99% per transaction with no hidden costs or extra hardware needed, it's particularly useful for quick sales at farmers' markets. This rate is very competitive, as other processors often charge between 2.5% and 3.5% per transaction.
Getting started is straightforward.
- Get Started: Download JIM app for iOS
- Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone
- Access Funds: Your money is available right on your JIM card as soon as the sale is done - no waiting for bank transfers
Here are 3 immediate steps to take:
- Decide on your payment terms for restaurant clients.
- Download the JIM app to explore its features.
- Calculate the fee on a $50 sale using JIM's 1.99% rate.
Step 6: Secure funding and manage your finances
Explore funding options for small farms
You might want to consider an SBA Microloan. These programs offer loans from $500 to $50,000, with interest rates typically between 8% and 13%. Lenders often prioritize a strong business plan over a long credit history, which is helpful for new ventures.
In addition, look into USDA grants. The Value-Added Producer Grant (VAPG) is one possibility, but it is highly competitive. A more accessible option could be local or state-level agricultural grants, so check your state’s Department of Agriculture website for programs.
Calculate your working capital
You will need enough cash to cover your first six months of operation. For a small setup, a budget of $2,000 to $5,000 is a realistic target. This covers recurring costs like seeds, growing medium, packaging, and utilities before sales become consistent.
A frequent oversight is underestimating utility costs. Your grow lights and fans will run for many hours a day. This can add $50 to $150 to your monthly electricity bill, so be sure to factor that into your financial projections from the start.
Here are 3 immediate steps to take:
- Find an SBA Microloan intermediary lender in your area.
- Create a six-month operating budget that includes estimated utility costs.
- Research agricultural grants offered by your state's Department of Agriculture.
Step 7: Hire your team and streamline operations
Hiring your first employee
Once you consistently sell 20-30 trays per week, you might consider help. A part-time Grow Assistant can take over daily tasks. This role typically pays between $15 and $20 per hour, depending on your local market.
This person will seed, water, harvest, and pack orders. A frequent misstep is to hire before revenue is stable, so make sure your sales can support the added payroll. Your new hire will likely need a Food Handler’s Permit from your local health department.
Streamline your daily operations
A clear workflow prevents mistakes and ensures consistent quality. You can map out your weekly tasks on a simple whiteboard. Dedicate specific days for seeding, harvesting, and deliveries to create a predictable rhythm for your farm and your customers.
As you grow, a good benchmark is one full-time employee for every $75,000 in annual revenue. This helps you manage labor costs effectively. For scheduling, a shared digital calendar like Google Calendar works well for a small team.
Here are 3 immediate steps to take:
- Draft a job description for a part-time Grow Assistant.
- Check your county health department’s website for Food Handler’s Permit details.
- Create a weekly schedule that assigns specific days to seed and harvest.
Step 8: Market your business and find customers
Focus on chefs and restaurants
Start with direct outreach to local chefs. A simple email with your product list and a free sample offer is a great first step. Many growers find that dropping off a small, well-packaged sample in person gets a much better response.
Follow up within a week of dropping off a sample. A successful strategy is to offer a "Chef's Mix" with 3-4 popular varieties like radish, pea, and sunflower. You can expect to convert about 1 in 10 chefs you approach into a regular customer.
Sell directly at farmers' markets
At the farmers' market, your booth is your storefront. Use clear, professional signage with your farm name and prices. Offer free samples of a single, flavorful microgreen like radish. This lets people taste the quality on the spot and often leads to an immediate sale.
Many new sellers make the mistake of bringing too many varieties. It is better to start with 3-5 of your best sellers. This simplifies your display and inventory management. It also prevents overwhelming new customers with too many choices.
You can also build an email list at the market. Use a simple clipboard signup sheet to collect emails for a weekly "fresh sheet" update. This helps you build a direct relationship with repeat buyers.
Here are 3 immediate steps to take:
- Create a list of 10 local restaurants and find the chef's name for each.
- Prepare five sample packs with your top 2-3 microgreens to drop off.
- Design a simple price sign and an email signup sheet for your market booth.
Step 9: Develop your pricing strategy
Set your prices by sales channel
For restaurants, price your microgreens by the ounce. A common range is $1.50 to $3.00 per ounce, depending on the variety. At farmers' markets, you can sell in pre-packaged clamshells. A 2-ounce container often sells for $4 to $6.
Many new growers underprice their products to attract their first clients. Remember that chefs value consistency and quality. They will pay a fair price for a reliable supply, so do not undervalue your product from the start.
Calculate your profit margin
You should aim for a markup of 300% to 500% over your cost of goods sold (COGS). Your COGS includes seeds, soil, and water for one tray. If a tray of radish microgreens costs you $4 to produce, you can price the full tray at $16 to $24 for wholesale.
This margin ensures you cover not just direct costs but also your time, electricity, and other overhead. Track your costs per tray in a simple spreadsheet to make sure your prices remain profitable as your expenses change.
Here are 3 immediate steps to take:
- Calculate your cost to grow one 10x20 tray of pea shoots.
- Visit a local health food store to check their retail price for a clamshell of microgreens.
- Set a wholesale price per ounce for three different microgreen varieties.
Step 10: Maintain quality and scale your operations
Keep your quality consistent
Define your quality standards from day one. Your microgreens should have uniform height, vibrant color, and no signs of mold or yellowing. Create a simple checklist for your harvest process to ensure every batch meets these visual cues before it goes out the door.
Taste and texture are just as important. Many new growers focus only on looks. Your radish should have a consistent spicy kick, and your pea shoots should be crisp. Keep a detailed grow log to track variables like seed density and watering schedules to replicate your best results.
Know when to grow bigger
Once you can deliver a high-quality product every time, you can start to think about expansion. Use clear benchmarks to guide your growth. When you consistently sell 40-50 trays per week or hit $2,000 in monthly revenue, it is a good signal to expand your grow space.
As your client list grows beyond five restaurants, a spreadsheet can become unwieldy. You might want to look at farm management software like Tend or Farmbrite. They help you manage crop schedules, track inventory, and organize customer orders in one place, preventing mistakes.
Here are 3 immediate steps to take:
- Create a one-page quality standard sheet with photos of your ideal product.
- Set a revenue goal of $2,000 per month as your trigger to review expansion plans.
- Watch a demo video for a farm management software like Tend or Farmbrite.
Starting a microgreens business is about more than just growing plants. Your success depends on consistent quality and strong relationships with chefs. Focus on mastering a few varieties first. You have the roadmap, now it is time to plant the first seed.
As you make those first sales, a simple payment process helps. JIM turns your phone into a card reader to accept payments anywhere for a flat 1.99% fee, with no extra hardware. It keeps things simple from day one. Download JIM to get started.
