"I'll start small, get the process right, then scale." Sounds sensible — but most people who start this way close within 3–6 months, not because the product is bad, but because of simple arithmetic: costs exist every month, and revenue doesn't cover them at low volumes. A "small" operation that hasn't reached break-even isn't a business — it's an expensive hobby with the illusion that "it's about to turn profitable."
Quick glossary: Cost of goods (COGS) — the sum of all costs to produce one unit: seeds, substrate, electricity, water, packaging, equipment depreciation, and time. Break-even point — the sales volume at which revenue covers all fixed and variable costs; below this point production runs at a loss regardless of product quality.
Why "Starting Small" Doesn't Work Without a Calculation
Microgreens production has fixed costs that don't change with volume: rent or depreciation of space, lighting that runs around the clock, a refrigerator, a baseline equipment set. These costs are the same whether you produce 5 kg per week or 50 kg.
At low volume, fixed costs are spread across a small quantity of product — and the unit cost of goods becomes high enough that the selling price barely covers it or doesn't cover it at all. The grower sees that "product is moving" and can't understand why the money isn't growing.
The break-even point for microgreens is a specific number that needs to be calculated before launch — not discovered after a year of losses.
How to Calculate Your Break-Even Point
The calculation is simple and takes an hour. You need two numbers.
Fixed costs per month — everything you pay regardless of volume: space rent (or the relevant share of utilities if at home), electricity for lighting and refrigeration, internet for orders, equipment depreciation (divide purchase cost by expected service life in months). Add it all up — this is your monthly "survival threshold."
Contribution margin per kg — selling price minus variable costs per kg: seeds, substrate, packaging, delivery. This is what actually remains from each kilogram sold before covering fixed costs.
Break-even in kg = fixed costs ÷ contribution margin per kg.
Example: fixed costs 8,000 UAH/month, margin per kg — 200 UAH. Break-even — 40 kg per month. Below 40 kg — a loss. This number is the minimum volume from which it makes sense to launch.
The Minimum Starting Package: What You Need and What Can Wait
The startup mistake is either buying everything at once, or cutting corners on something critical.
What you need from day one: A shelving system with room to expand — better to buy fewer sections of the right design than to replace everything a year later. Lighting with known PPFD and DLI — not "plant lamps" from AliExpress with no specs. Scales — without them seed rates are not reproducible. A refrigerator for finished product — without it shelf life and quality are unpredictable. A basic measurement kit: room thermometer and hygrometer, a pH meter if you use fertigation.
What can wait: Automated irrigation — at the start, manual control is better because it builds an understanding of each crop's needs. Expensive certifications — HACCP and organic are needed when entering retail chains, not on day one. A wide assortment — starting with 3–5 crops you know well beats 20 crops with inconsistent results.
Sales Channels: Where to Sell Before Scaling
Production volume and sales channel need to match. A retail chain wants a steady 50–100 kg per week with documentation — unrealistic at the start. Restaurants want regularity and small packs — a closer fit, but takes time to establish.
The fastest channels to start with: farmers' markets and food fairs (direct contact with buyers, fast feedback, no minimum volume); local health-food shops and cafés (smaller volumes than chains, more flexible terms); Instagram and direct sales (the highest margin, but takes time to build an audience).
Three Mistakes That Cost the Most
Launching without calculating the break-even point. "I'll see how it goes" is a strategy for reaching the first disappointment. The break-even calculation takes an hour and gives a clear answer on whether launching at the planned volume and price makes sense.
Buying equipment sized for maximum capacity upfront. A large rack for 200 trays when actual sales are 30 — that's frozen capital and the demoralisation of staring at empty shelves. Better to fill a smaller rack completely and have real revenue than to have "potential" that never materialises.
Ignoring cost and revenue tracking from day one. "I'll start keeping records once things pick up." Without records from the beginning it's impossible to know the real cost of goods, find where money is leaking, or make scaling decisions based on numbers rather than gut feeling.
How to Know the Launch Is Properly Planned
Before launch: the break-even point is calculated and the first month's target volume realistically meets or exceeds it. There is at least one confirmed sales channel — not "I'll find buyers," but specific agreements in place. Cost of goods per kg has been calculated including all costs, your own time included.
For deeper understanding: Microgreens Economics: Cost of Goods, Pricing, and Yield Calculation — a detailed breakdown of cost of goods by each expense category.