Poultry Business Plan and Feasibility Study - The
business plan is written on the establishment of a poultry farm that will specialize
in the production of egg for both household and industrial use. The project
(firm) will require an initial capital of N1,000,000 that will be used for
renting of land, buying of equipment, feeds chicks etc. From the research made,
it was discovered that the project is feasible since the market demand for this
product have not been fully satisfied, egg are most time ordered from nearby
state (Enugu). The firm will be located at and supply or providing egg for
Ebonyians. For a start 200 Chicks will be acquired and a crate of egg will be
sold for N600 on average.
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The
manure of the Chicks will also be sold. Awareness will be created through the
use of advertisement. From our projection the initial profit will be N170, 000
increasingly and in the fifth year when the company has been establish the
profit will move to N529, 306 the average net profit is N341, 318.2 while the pay
back period is 3 years and the return on capital employed is 34%, with all this
we can proudly sat that this project is feasible and viable. The management
team is made up of qualified persons who had working experience and have
attended tertiary institution. This project will provide employment food for
the country.
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BUSINESS DESCRIPTION
INTRODUCTION
The proposal on the establishment of
a poultry farm is based on the survey made by Okorie Ifeoma between October 2012 and Feb. 2013. The business will
be a one man business wholly owned by Okorie Ifeoma.
From the research that was carried
out, it was discovered that the demand for egg is not fully satisfied though
they are already existing poultry farms operating in the state but eggs are
supplied by organizations located outside the state (Enugu), it is as a result
of this vacuum on supply gap discovered from the research that I decided that
will be co venture into this business. The legal requirement for the
establishment of this venture such as local government revenue (tax) per month
and the vigilante payment per month have been inquired and will be carefully
complied with.
The venture will help in providence
employment, meeting the demand for egg and making the price affordable.
Business
Description
The venture (firm) to be
establish is a poultry farm that will concentrate in the production of eggs
because of the fund required the venture will start as a small scale business
having the population of Ebonyi state as the target market. The firm is an
entirely new firm to be started from the scratch. The firm will be located
at making use of a rented
building and the necessary equipment needed for the operation. (incubator,
feeders etc.).
Business
Environment Analysis
A visit was made to the ministry
of trade and industry, chamber of commerce to ensure that all legal clearance
is made. Because of the high interest rate on loan from commercial bank we will
turn to Microfinance bank for our funds. We believe the business will excel
since people of all age consume egg and eggs are used in producing varieties of
product. Quality Chickens will be acquired though the number may be limited due
to the high price. The following are also considered access to water and
electricity supply.
As a new firm having others in the
same line of business we know it will not be easy to break into the market but
we have devised strategies to overpower our competitors.
Market Analysis
There are few people in the state
already carrying out this business though on a very small scale. The demand for
egg has not being fully satisfied that is why we have scarcity of it in some
area. Some of the eggs consume in Ebonyi state come from Enugu and is sold
between N650 and N800. There is high demand for that for both domestic and
industrial uses.
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Marketing Plans
As was mentioned earlier the
residents of Ebonyi state being our target market, awareness will be made by
means of advertisement. The advert will be made on television, radio,
newspapers etc. the price we intend to sale our product will be lower than the
existing price, we are going to make use of distributor scattered in different
part of the state. We will make sure that none of our customers are
disappointed, demand will be met on time, there will be discount for bulk
purchase.
Operation Plan
The firm will be a commercial
poultry farm therefore it will require a full time labour and geared toward
producing on a scale for the sale of egg.
Birds usually starts to lay at
around five month (20-21 weeks) of age and continue to lay for 12 month (52
weeks) on average, laying fewer egg as they new the moulting period.
The typical production cycle lasts
about 17 months (72 weeks) and involves three distinct phases as follows.
·
Phase
1: Small Chick or Broilers: This
phase last from 0-2 months during which small Chicks are kept in facility
(broiler’s house) separate from laying birds.
·
Phase
2: Growers: This phase last about 3
months from the ninth to the twentieth week of age. Growers may be either
housed separately from small Chicks or continued to be reared in broiler
cum-grower houses. Appropriate care will be provided to the growers
particularly between their seventeenth and twentieth week of age as their
reproductive organs develop during this period.
·
Phase
3: Layers: growers are transferred
from the grower’s house to the layer house when they are 18 weeks old to
prepare for the laying cycle. Birds typically lay for a twelve month period
starting when they are about 21 weeks old and lasting until they are about 72
weeks old.
·
Phase
4: Collection of egg: Eggs will be
collected frequently to prevent hen from brooding it or trying to eat them and
also to prevent the eggs from becoming damaged or dirty.
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Management and
Organization
Though the business will be owned by
one person, the will need other hand to push it to greatness to this end the
firm will have the following in its management team;
Gabriel
Okechi-General Manager: He holds a degree in the department of business
administration from the University of Nigeria Nsukka and has been working in
Adamawa poultry in the outskirt of Lagos.
Ihedimegwu
James I-production Manager: He holds a HND from the federal polytechnic Uwana
in the department of Agric/Economic. He also has a working experience having
worked in the ministry of Agriculture Ebonyi state.
Emmanuel
Odikka-Marketing Manager: The marketing manager has worked for over ten year in
Guinea Company as their marketing officer. He has a degree in the department of
marketing and masters in finance both from the Nnamdi Azikiwe University Awka.
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Financial Plan
The initial cost of starting this
small scale poultry farm is about N1,000,000 that will be used for acquiring
500 layers, rent a plot of land building structure that house the Chicken
buying equipment daily feeding and medical treatment.
The expenses for rearing Chicks
include;
Chicks
600,000
Feeds
100,000
Housing
350,000
Equipments 200,000
Labour 180,000
Vaccination 70,000
Mortality 40,000
Project
Cost 1,000,000
Weekly Costs and
Sales
- Egg sold-20
crate per pair
- Feed used
- Rearing cost
minus a and b.
Income for the
year
Sale
of eggs 2,310,000
Sale
of culled birds -
Sales
of manure 190,000
Total
income 2,500,000
Production
budget for the year
Unit
to be sold
Eggs 4200
crate
Plan
closing stock 600
crates
Less
opening stock 4800
Unit
to be produced 4800
Manure
production budgets for the year
Unit
to be sold 840
bags
Planned
closing stock 120
bags
960
Less
planned operating stock -
Planned
production 960
Operating
expenses for the year
Salaries
800,000
Wages 270,000
Light
power & heating 80,000
Transportation 240,000
Advertising 60,000
Insurance 150,000
Security 60,000
Rent 120,000
Feeds
230,000
Factory
exp. 40,000
Selling
& distribution exp. 90,000
Electricity 130,000
Projected income
statement
Sales 2,500,000
Purchases
(ducks) 60,000
(Feeds) 230,000
290,000
Wages 270,000 (560,000)
Gross
profit 1940,000
Salaries 800,000
Light
power & heating 80,000
Transportation 240,000
Advertising 60,000
Insurance 150,000
Securities 60,000
Rent
120,000
Selling
& distribution exp. 90,000
Factory
exp. 40,000
Electricity 130,000 (1770, 000)
Net
profits 170,000
Project balance
sheet as at Dec 20-1st year
Building
350,000
Equipments 200,000
550,000
Current Assets
Stock 60,000
Debtor 240,000
Bank
270,000
Cash 100,000 670,000
1,270,000
Capital
1,000,000
Net
profit 170,000
(50,000) 120,000
1,120,000
Creditors 334,000
Accrued
exp. 16,600 50,000
1,170,000
Project
statement for 5 years
Sales
|
2,500,000
|
2,750,000
|
3,025,000
|
3,327,500
|
3,660,250
|
Costs
of sales
|
560,000
|
644,000
|
740,600
|
851,690
|
979,444
|
Gross
profit
|
1,940,000
|
2,106,000
|
2,284,400
|
2,475,810
|
2,680,806
|
Operating
exp
|
1,770,000
|
1,858,500
|
1,951,425
|
2,049,000
|
2,151,500
|
Net
profit
|
170,000
|
247,500
|
332,975
|
426,810
|
529,306
|
Sales
will increase by 10% yearly cost of sales will increase by 15% operating
expenses will rise by 5%.
Net
average profit = 5 years profit
No
of year
= 170000 + 247500 + 332975 + 426810 +
529306
5
= 1,706,591
5
= N 341,318.2
Profitability
Analysis & Evaluation of Project
Payable
period = Total investment
Net Average income
= 1,000,000
341,318 = 2.9
= 3 years
Annual
rate of return = Av profit
Total investment
= 341,318
1,000,000
= 34%
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CONCLUSION
From the survey carries out and the
projection made it is discovered that the project will be a worthwhile one. The
project has the ability to pay back its owner capital within just three year
and has a capital employ of 34% making it very viable.
We have the confidence that our idea
(dream) and further research will lead this firm to greatness. When the firm is
well established, it will provide employment for both the owners and other, it
will also provide egg for both household and fast food or industrial use.
Extensive research has being made
still other suggestion will still be welcomed from well wishers.
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