Worm Farm Business Plan, With a Projection

A worm farm business plan sells two things from the same beds: the worms themselves, and the castings they leave behind. The castings are made from food scraps and bedding that cost little, but the worms are also the factory, so every pound sold is a pound that isn't breeding, and a farm that sells too many in its first months has nothing left to grow. The plan has to start with enough worms, sell slowly while the beds fill, and pay someone to feed and tend them every week. In the example below, a worm farm in Georgia sells red wigglers, castings direct and to garden centers, and starter kits, and ends its first year about $10,800 ahead on $41,800 of sales, with the bed tending paid, on the way to about $36,000 a year at full speed. Below is a description example, each part of the plan, the breeding stock, the first year month by month, the startup budget, and a free template.

The short version

• Describe the farm in a paragraph: the worms, the beds, the food, who buys, the goals.
• Cost each sale from the harvesting, screening and packing up; the food is nearly free.
• Worms bring the most a sale; castings bring the steady volume.
• Keep a breeding stock that's never sold; sell from what it grows.
• Feeding and tending the beds is a weekly fixed cost.
• TaroStack keeps the breeding stock on hold, castings by batch, and kits as a recipe. More below.

Part 1: the business description

Oconee Worm Works, a made-up worm farm near Athens, Georgia, I use in these examples, writes:

Oconee Worm Works raises red wigglers in four flow-through beds in a barn, fed on produce trimmings and coffee grounds collected from grocers and cafés, and sells worms shipped to gardeners, screened worm castings by the bag direct and to garden centers, and worm bin starter kits.

Part 2: what each sale costs

The food scraps are collected for free, so they're a fixed cost of fuel; the bedding, the heat and the weekly feeding are fixed too. What a sale costs is the harvesting and packing:

Worms ship with the postage charged on top. The kit is a bin, a pound of worms, bedding and a bag of castings, boxed to ship. How a business costs what it packs into a kit is in kitting for gift boxes.

Part 3: customers and prices

At full speed the castings bring about $3,000 of the month's $4,850 of contribution, the worms about $1,300, and the kits about $500. A garden center buys a bag for $14 and sells it for about $25; that leaves the farm half what a bag sold directly leaves, but garden centers take the bags by the pallet in spring. How to price for shops that resell is in how to price handmade items for wholesale.

Part 4: the breeding stock

Red wigglers multiply in good conditions, but only as fast as the beds, the food and the temperature allow, so a worm farm sells from what the herd grows, not from the herd. This plan starts with 200 pounds of worms and sells about 340 pounds in its first year, as pounds and in kits, slowly at first, so the beds are fuller at the end of the year than at the start. The breeding stock has a number, written down, that's never sold, and every harvest is checked against it. The same discipline as a garlic farm's seed or a dairy's herd: the stock that makes the product isn't the product. How much stock to keep on hand in general is in how much inventory to keep on hand.

Part 5: the first year, month by month

Fixed costs are $1,855 a month: barn space ($500), feeding and tending the beds for 10 hours a week ($780), heat and power averaged over the year ($150), fuel for collecting food scraps ($100), coir and cardboard bedding ($100), insurance ($50), the website ($40), marketing ($100), and software and card fees ($35). Sales start at 15% of full speed and reach it in month 11:

The year's sales are $41,769 and the profit $10,767, after paying for the bed tending and the harvesting. Cash falls to −$3,003 by month 4, so the plan keeps $3,500 of working cash. A second year at full speed is about $36,000 ahead, which is why the first year's slow selling pays: it's what fills the beds. Castings sell most in spring and fall; plan the screening for it. Working out when the fixed costs are covered is in break-even point for a food business; the arithmetic is the same.

Part 6: the startup budget

The starting worms are the biggest purchase, and the one that decides how fast the farm can sell. Buying fewer and waiting longer is cheaper and slower; buying more fills the beds sooner. The $13,400 spent before working cash is earned back in the first months of the second year.

Get the template

Download the worm farm business plan workbook. Four sheets: your worms, castings and kits with price, variable cost and a month's volume at full speed; the first year, month by month, with sales, profit and cash; your fixed costs; and your startup budget with working cash. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

Four beds at different stages, a breeding stock that mustn't be sold, castings screened in batches, a pallet promised to a garden center for April, worms shipped every week, and kits that take a pound of worms each. A notebook can't say how many pounds of worms the beds can spare this month, how many bags of castings are screened and ready, or whether the kits have been eating into the breeding stock.

How TaroStack does it

TaroStack keeps the breeding stock on hold, castings by batch, and kits as a recipe.

The breeding stock on hold. The worms that stay are put on hold, which keeps them from being sold or picked for an order, and the worms for sale are counted apart, so a busy week of orders can't empty the beds.

Castings by batch. Each screening is a batch that gives the bags a lot with its date, with the good bags and the rejects, so a garden center's pallet is picked from what's screened and ready, and the lots it got are recorded as it ships.

Kits as a recipe. A starter kit is a recipe of a bin, a pound of worms, bedding and castings, so each kit takes them off stock, and bins come up on a reorder list in days of cover.

Counting, lots, holds, recipes and sales orders are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

Is worm farming a profitable business?

It can be, slowly. In the example, a worm farm ends its first year about $10,800 ahead on $41,800 of sales, with the bed tending paid, and about $36,000 ahead in a second year at full speed.

How much does it cost to start a worm farm?

In the example, $16,900: four flow-through beds, 200 pounds of starting worms, a trommel screener, a scale and bagging station, a heater and insulation, bags and labels, a website, and $3,500 of working cash.

How much do red wigglers sell for?

In the example, $40 a pound shipped, with postage on top, which leaves $32.50 after the harvesting, the box and the fees.

Is it better to sell worms or worm castings?

Both, from the same beds. In the example, worms leave more a sale, but castings bring more of the money, and selling worms too fast leaves nothing to make castings with.