Enterprise Viability
Annual Expenses There are many ways to calculate operation expenses. Below we’ve listed the items most commonly purchased, and the average amount participants spent on each item. We also listed the average amount that participants spent on other durable and non-durable expenses during years one and two. For certain durable items, such as a chainsaw, we’ve also assumed that these items will need to be replaced every three to five years (depending on the item). To account for this upcoming cost, we’ve amortized the cost of the items over the years preceding their purchase. In other words, money is put aside each year to save up the future purchase of big-ticket items based on how long the item is expected to last. Using these assumptions, we find that the cost to start a small shiitake operation is approximately $1,000. Keep in mind that for many landowners who already own items like a chainsaw, angle grinder and shade cloth, the up-front costs will be much lower. Ongoing cost total roughly $500 per year.
Annual Expenses Year 1 * Items are replaced every 5 years. Cost of repurchase amortized over 5 years. ** Items are replaced every 3 years. Cost of repurchase amortized over 3 years.
Year 2
Year 3
Year 4
Year 5
Tree-Cutting Supplies Chainsaw*
$363.33
$72.67
$72.67
$72.67
$72.67
Chainsaw Chain*
$35.75
$7.15
$7.15
$7.15
$7.15
Chainsaw Chain Sharpening
$36.67
$7.33
$7.33
$7.33
$7.33
Inoculation Supplies
Other Non-Durable Expenses Includes business cards, chainsaw repairs, flagging tapes, labels, organic certification fee, propane, shipping expenses, spread ingredients, tent and tractor Rentals
Other Durable Expenses Includes building materials, extension cords, baskets, generators, gravel hoses, safety equipment, scales, signs, stoves, tables, tents, water tanks, and wax pots
Drill Bit**
$29.65
$9.88
$9.88
$9.88
$9.88
Inoculation tool**
$32.64
$10.88
$10.88
$10.88
$10.88
Wax
$33.23
$33.23
$33.23
$33.23
$33.23
Angle Grinder Adaptor*
$36.14
$7.23
$7.23
$7.23
$7.23
Spawn
$110.00
$110.00
$110.00
$110.00
$110.00
Wax Applicators
$7.67
$7.67
$7.67
$7.67
$7.67
Generator Gasoline
$9.67
$9.67
$9.67
$9.67
$9.67
Food
$15.41
$15.41
$15.41
$15.41
$15.41
Harvesting, Packaging, Sales Shade Cloth *
$123.69
$24.74
$24.74
$24.74
$24.74
Plastic & Paper Bags
$20.78
$20.78
$20.78
$20.78
$20.78
Gasoline
$50.74
$50.74
$50.74
$50.74
$50.74
Other Expenses Other Non-Durable
$71.00
$67.00
$67.00
$67.00
$67.00
Other Durable
$65.00
$36.00
$36.00
$36.00
$36.00
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