Growth Sustainable Business Plan Management Assignment Solution

Growth Sustainable Business Plan Management Assignment Solution

Growth Sustainable Business Plan Management Assignment Solution

Introduction 

Growth Sustainable Business Plan Management for starting a new business of poultry farming in Nigeria at Lagos in Nigeria. The overview of the plan is given along with the business structure. This report also discusses the market analysis of poultry farming and the unique selling proposition of the proposed business. The industry analysis is also included here which contains details for the customers, competition and potential of business in industry. The projected sales forecast and profit and loss statements and cash flow statements for three years as forecasted are also presented in business management plan.

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Business overview

The idea of the business plan is starting poultry farm in Nigeria. The company will be located at Lagos Nigeria where the places like Ijebu Ode, Remo area and Imota in Ikorodu are perfect places to start poultry farming. The business will start with 20,000 chicks including 10,000 broilers and 10,000 layers. The company will be operated by the owner along with two labourers. The business of poultry farming in Nigeria is one of the most lucrative farming if it is setup and managed in an effective and proper manner. This kind of livestock farming is a great opportunity for entrepreneurs to make money in the shortest time possible because of quick maturity of chickens. Any person can start his poultry business even without belonging to educational and financial background. (Business, 2013)

  • Vision – To produce nutritious eggs, generate employment and create wealth for the investors.
  • Mission – To build a mechanised poultry which is efficient and rewarding?

Business structure

The poultry farming ecomomics and business will require land which will be located at Logos in Nigeria. Poultry house is also an important requirement for chicken rearing and effect poultry keeping and management. The most commonly used poultry housing for poultry farming classified according to the scale and management system in Nigeria include deep litter, half litter and half slats, battery and semi-fold. Any of these types of poultry housing can be chosen for the business as per the other requirements. The other items needed for poultry farming in Nigeria will include feeders, drinkers, perches, nests, crates, lighting system, waste disposal system, incubators, heaters or brooders, egg tray, cages and coops. Some other additional resources may also be required. (Olanrewaju, 2012)

Business structure | Assignment help

Market

There are over 160 million consumers of poultry products in Nigeria who buys on the daily basis. The demand of eggs is quite high and people every day goes for looking about the eggs for supply. The chicken reproduces very fast. An average healthy layer lays almost every day and a minimum of 4 times a week. Some breeds may even lay as many as 325 eggs in a year and takes 21 days to hatch which means that a Layer is capable of producing another chicken twice in three days. The good breeds such as California White are capable of reproducing a whopping 24 chicks within 40 days. The eggs are hatched within 21 days and they become ready for the market within 28 weeks. As a result a farmer is able to earn within 34 weeks from setting his poultry farm. Chicken sells at a good price i.e., a fully grown chicken sells between 2,000 and 2,500 naira in Nigeria. In this way by producing 12,000 chickens in the farm N 24 million can be earned by the time they are completely sold. Apart from chicken the egg market is also large in Nigeria. A crate of 30 eggs sells for N500-N650 for smaller eggs and N600-N650 for bigger eggs. For example if a poultry farm has 500 layers which produces 12,000 pullets in a month, N200,000 to N260,000 can be earned monthly by selling them. Thus it can be seen that the profit in poultry farming in Nigeria is very high. (Igwe, 2013)

Unique selling proposition

The business will be started with 20,000 chicks including both broilers and layers thus the business has the unique proposition of selling variety of eggs with fast supply and in accordance with the demand which is very high in the market of Nigeria. The quality of eggs and breed of chicks will be good which is also in the interest of business. Strength will be the hygienic environment and cleanliness of chickens.

Ownership and Management

Skills Analysis

The business will be owned and managed by the proprietor. The owner will appoint labourers to take care of the chicks. The persons handling the poultry farm shall have the communication skills to feed the cattle and shall have the required knowledge related to farming and chicks including broilers and layers along with the details of their breed. (Idahor, 2013)

Funds requirement

The business of poultry farming in Nigeria will require the investment capital as small scale chicken rearing of around 50 birds kept in cages at the backyard of residence will require about N 70,000 to start. A medium scale poultry farm which requires land, housing and other materials will N 5 million to start whereas large scale intensive poultry farming with high sophistication level and careful planning using highly advanced farming and livestock techniques takes N 10 million. Since the plan is to start with 20,000 chicks therefore it is a large scale business and initial capital of N 20,000,000 will be invested by the owner. (Norman, 2015)

Products

The business will include the following niche of poultry farming in Nigeria:

  • Layers breeding which is production of eggs by layers. The main aim is selling eggs but the layer chicken is also sold as and when it becomes weak and incapable to lay eggs.

Product | Assignment help

  • Broilers breeding which relates to the production of chicken meat as made by Broilers. The broilers will also be sold to consumers along with the meat produced from such broilers.

 Product1 | Assignment Help

  • Hatchery which refers to the breeding of chicken for the purpose of hatching of new chicks. This aspect of poultry farming business is very important since the health of the chickens and their hygienic effectiveness is determined by the hatchery process.
  • Poultry feed which includes food production of feed for other poultry farmers. The food for the poultry will be produced and sold to consumers.

Industry Analysis

Customers

The major customers of the business of poultry farming in Nigeria will include traders of food industry, bakery, wholesale distributors and suppliers of eggs to the ultimate consumers, slaughter houses, hotels and individual customers. Thus the customers of business will include both B2B and B2C. The B2B customers will include slaughter houses and wholesale distributors and suppliers of eggs and chicken in Nigeria whereas the B2C customers will include the bakeries, hotels and individual consumers who are the ultimate consumers of the eggs and meat. (Chikaire, 2015)

The following chart shows the percentage of each category of consumers out of total customers of business:

Analysis | Assignment Help

Competitors

There are a few businesses engaged in poultry farming in Nigeria and the demand for eggs and meat is too high. The demand is not fully satisfied in the country. Thus the competition in poultry farming business in Nigeria is less as compared to other businesses. Even if any competitor exists the Unique selling proposition of the company acquired through good quality breed of chickens and hygienic environment and quality feed for the layers and broilers will be able to help the business gain competitive advantage over others. Thus the elimination of competitors will be an easy task for the business if the management and rearing, breeding, feeding, hatchery and storage are done in a hygienic and effective manner.

Regulatory requirements

For starting poultry farming business in Nigeria registration with any regulatory body is not required. It can be done by any person even if he does not belong to financial or educational background. However the guidelines issued by the National Environmental Standards Regulation and Enforcement Agency (NESREA) of Nigeria are required to be followed. These guidelines relate to the cleanliness and hygiene maintenance and requirements which need to be followed by the poultry farmers during rearing of chickens. Apart from this the compliance requirements of Nigeria Customs Service also need to be followed to prevent the risk of purchasing damaged or diseased chicken which may affect the poultry business. (Fasina, 2014)

Findings

Project Schedule

The table for the duration of the project for starting the business along with acquisition of assets and the Gantt chart for the project can be represented as follows:

S. No.

Particulars

Time period (days)

Details of activities

A

Collection do data and establishing requirements

5

All the relevant data needed to start the business will be gathered in accordance of which the business plan will be prepared.

B

Development of plan

8

At this stage the business plan will be prepared defining the requirements for starting the business

C

Acquisition of assets

11

Here the assets required for the business will be purchased along with the resources.

H

Implementation of plan

7

Once assets and resources are acquired the plans made for the set-up of business will be implemented at this stage...

E

Evaluation and feedback

4

This is the last stage where the evaluation of effectiveness of implementation of plan will be done and changes if any will be incorporated.

gain chart | Assignment help

Financial Analysis

Start-up costs: The business will be started with an initial investment of Nigerian Naira 20,000,000 as invested by the proprietor. The initial costs to be incurred for starting the business will include the cost of acquiring the assets for the business and setting up of poultry house and other utilities. The breakup of start-up cost which is estimated to be Nigerian Naira as 19,830,000 after which the cash balance of N 170,000 will be remaining is as follows:

Land

N 2,320,000

Poultry house

N 3.5 million

Borehole

N 150,000

Delivery van

N 760,000

Battery cages

N 25 million

Feed to lay

N 6,820,000

Point of lay birds

N 22.8 million

Utility

N 1,500,000

Total

N 19,830,000

chicken and eggs and the estimated costs related to the direct costs of sales along with projected profit and loss statement for 3 years showing projected income and cash flow statement showing estimated inflows and outflows along with cash balances for the 3 years from the start of business are as follows:

Sales forecast

(Amount in Nigerian Naira)

 

Year1

Year2

Year3

Sales

 

 

 

Chicken

3,900,000

4,200,000

4,500,000

Eggs

600,000

600,000

900,000

Total sales

4,500,000

4,800,000

5,400,000

Direct cost of sales

 

 

 

Chickens

2,340,000

2,520,000

2,700,000

Eggs

312,000

312,000

630,000

Total direct costs

2,652,000

2,832,000

3,330,000

Forecasted Profit & Loss Statement

(Amount in Nigerian Naira)

 

Year1

Year2

Year3

Sales

1,752,000

1,927,200

2,119,920

Direct cost of sales

613,200

674,520

741,972

Other

0

0

0

Total cost of sales

613,200

674,520

741,972

Gross margin

1,138,800

1,252,680

1,377,948

Gross margin %

65.00%

65.00%

65.00%

Expenses

 

 

 

Payroll

373,800

431,400

465,432

Sales and marketing

77,400

82,800

93,000

Depreciation

16,200

16,500

16500

Rent

145,200

158,400

158,400

Maintenance

35,520

37,272

39,198

Utilities

27,000

28,500

30,000

Total operating expenses

675120

754,872

802,530

Profit before interest and taxes

463,680

497,808

575,418

EBITDA

479,880

514,308

591,918

Interest expenses

8,463

6,978

4,854

Taxes

101,220

106,530

127,272

Net Profit

353,997

384,300

443,292

Net profit/ Sales

20.20%

19.94%

20.91%

 Forecasted Cash Flow Statement

 (Amount in Nigerian Naira)

 

Year0

Year1

Year2

Year3

Cash Inflow

 

 

 

 

Sales*

0

1,752,000

1,927,200

2,119,920

Capital Investment

20,000,000

-

-

-

Bank Overdraft

0

0

0

0

Total Inflow

20,000,000

1,752,000

1,927,200

2,119,920

Cash Outflow

 

 

 

 

Start-up cost

19,830,000

-

-

-

Operating expenses excluding depreciation

-

658,920

738,372

786,030

Cost of sales

-

613,200

674,520

741,972

Taxes

-

101,220

106,530

127,272

Total outflow

-

1,373,340

1,519,422

1,655,274

 

 

 

 

 

Net cash flow

170,000

378,660

407,778

464,646

Opening Balance

 

170,000

548,660

956,438

Closing balance

170,000

548,660

956,438

1,421,084

It is assumed that all the sales are cash sales.From the above statements it can be analysed that the net profit of the company is near about 20% in each of the three years which shows that the poultry farming business in Nigeria is profitable and has a high growth potential. Therefore the farmers getting indulged in this business will be better off even from the first year of operation.

Conclusion

From the above data analysis of the business plan it can be concluded that the poultry farming business in Nigeria has high potential and therefore the farmers doing poultry can earn huge profits. The competition in Nigeria is also less which makes it easy for the farmers to accomplish their objectives in short run.  The financial analysis of the business also predicts good results therefore the business plan will be successful if managed and operated properly. (Medugu, 2014)

References

"Business Plan", 2013, The Journal of Perioperative Practice, vol. 23, no. 7/8, pp. 155
Chikaire, J.U., Ani, A.O., Nnadi, F.N. & Godson-Ibeji, C.C. 2015, "Analysis of Information and Communication Technology Roles in Poverty Reduction Among Small and Medium Scale Farmers in Imo State, Nigeria", Library Philosophy and Practice, , pp. 1.
Fasina, O.O. 2014, "Farmers' involvement in capital markets investment as an alternative source of funding for agriculture in Ondo State, Nigeria", African Journal of Food, Agriculture, Nutrition and Development, vol. 14, no. 2.
Highly Pathogenic Avian Influenza in West and Central Africa: stakeholders meet for increased vigilance in the poultry sector 2015, , Normans Media Ltd, Coventry.
IDAHOR, K.O. 2013, "Alternative feedstuffs utilisation in Nigerian poultry industry: potentials, problems and prospects", World's Poultry Science Journal, vol. 69, no. 3, pp. 666.
Igwe, K.C. & Onyenweaku, C.E. 2013, "A Linear Programming Approach to Food Crops and Livestock Enterprises Planning in Aba Agricultural Zone of Abia State, Nigeria", American Journal of Experimental Agriculture, vol. 3, no. 2, pp. 412
Medugu, N.I., Majid, M.R., Johar, F. & Taiwo, I.S. 2014, "Assessing the Impact of Forestry II Program on Agricultural Productivity in the Arid Zone of Nigeria: a case of Kano and Jigawa State", Management of Environmental Quality: An International Journal, vol. 25, no. 6, pp. 783-801.
Olanrewaju, R., Olufemi, A. & Iyabo, F. 2012, "Effect of Poultry Production on the Poverty Status of Small Scale Farmers in Oyo State, Nigeria", Asian Journal of Agriculture and Rural Development, vol. 2, no. 4, pp. 565-578