Business And Economics: Cattle Fattening Business Plan PDF

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CATTLE FATTENING BUSINESS PLAN

PREPARED BY

ABDULRAHMAN ABDULLAHHI BARDA

TABLE OF CONTENTS

THE BUSINESS EXECUTIVE SUMMARY  Management  Project Objective  Product Services  Cattle Fattening  Feed and Nutrition  Management and Labor  Capital  Market for cattle and Beef  Profitability for cattle fattening Business  Operational Plan  Management START UP EXPENSES AND CAPITALIZATION  Malnourished cattle  Cattle feed  Store Room  Cattle Housing  Cattle feed crushing machine  Labor/ Salary COST SUMMARY FINANCIAL STATEMENT AND PROJECTIONS  Sales Maturity  Profitability  Payback period  Swot analysis  Risk analysis Plan

THE BUSINESS BUSINESS NAME: BUSINESS STRUCTURE: NCN:

QB INTEGRATED SERVICES NIGERIA SOLE PROPRIETORSHIP BN 2742362

BUSINESS LOCATION: DATE ESTABLISHED:

RD K42c, GORUBA HOUSING ESTATE KATSINA, KATSINA STATE. 27TH DECEMBER 2018

Management/Owner Details I am Abdulrahman Abdullahi Barda, a proud farmer and agriculturist. Graduated from the prestigious Ahmadu Bello University Zaria with a bachelor’s degree in Chemical Engineering. Right from childhood, I have great passion and engaged in small scale agriculture which involved small scale farming, poultry animal rearing etc. This indeed gave me more experience and kept me focused in achieving my goals. With increasing competition, I had to make more research in pursuit of profit making, uniqueness and innovation. Thus, focusing on cattle fattening. So far it has proven to be quite lucrative, time rewarding and reliable source of income. Project Objective This plan is prepared to provide detailed information about the cattle fattening business. The pattern, profitability and revenue forecast for the purpose of soliciting funds for the business acquisition. Product/Services Cattle fattening business is very profitable, and time rewarding business. Cattle beef fattening involves the feeding of cattle with a protein balanced high level energy for a period of 90days under confinement to increase live weights and improve degree finish and thus obtain better grades at the sale point. Beef fattening enables the cattle to express fully their genetic potential for growth. Cattle Fattening The selection of the cattle is based on evaluating the potential for beef fattening of different types of cattle in relation to the market –price of different grades of beef. Factors to consider include breed of cattle, gender, maturity type, and age. This is because different types of cattle respond differently to the beef fattening process. Some cattle are more suited for cattle fattening than others. A major challenge is lack of funds to buy the cattle for beef fattening when prices are favorable which is lost opportunity to make profit. Feed And Nutrition It is very essential that the right quantity and type of feed be chosen to the cattle. As the success of cattle fattening business depends on the ability of the cattle to gain weight and to produce high quality beef. These factors are affected by the quality and quantity of feed. The proper feeding techniques will ensure that the cattle will grow and utilize the feed efficiently and produce good quality beef. This maximizes profits of the cattle fattening business. In order to maximize profit, I choose to make my home made cattle beef fattening feed. The amount of feed consumed by the cattle daily will depend on factors such as live weight and age of the cattle. Normally it averages between 8-15kg per head per day. The average daily weight gain at 350kg live mass is about 1.6kg. When the cattle is sold or butchered, it is usually graded according to its quality; quality grades for tenderness; juiciness and flavor; and yield grades for the amount of usable lean meat on the carcass. After fattening cattle in feedlots for 90days, its beef should fetch the highest quality grade. This is the beef that fetches the highest price in the market. The purpose of cattle fattening is to increase the weight of the cattle in 90days (more weight, more money when sold) and to increase the quality of the beef (higher grade of beef, more money and patronage). Management And Labor The number of farm workers needed depends on the size of cattle fattening project. For small business, only family members are sufficient. While for large scale, full time employees are needed. There is need for good technical knowledge of cattle fattening techniques for success in the business, and good management skills. The technique needs to be understood effectively for proper raising of cattle for beef purpose. Capital

The amount of capital required for cattle fattening business depends on the scale of the cattle pen fattening project. Startup capital is needed for constructing the feedlots, buying the cattle, buying the stock feeds, payment of salaries and wages etc. Market For Cattle And Beef The market for beef is very huge and is ever increasing. The annual global demand of beef is 58milliontonnes. Marketing and advertising is essential for the success of the business. To establish a firm market network a continuous year round supply of beef is required. Profitability Of Cattle Fattening Business Cattle beef fattening is very profitable when done in the right way. The profit ability of the cattle fattening business depends on the buying price of the cattle, cost of the feed, price margin, feed margin feed conversion efficiency ratio, unit cost per kg when selling. Its is important that the mentioned margin and conversion ratios before starting this livestock business. It is easier to calculate how much profit made, when these margins and ratios are understood. Thus it can easily be a decision of whether the price of buying the cattle is profitable for beef fattening purposes. The maximum price payable for the cattle must be calculated before starting the fattening business. Operational Plan The business is to be carried out all year round. So a lot of feeds will be stocked that will suffice all year round. The feed which include millet/guinea corn hulls, groundnut leaves, maize stalk etc are mostly cheap in the market and even far more cheaper when planted in a farm. The mixture of the feed is done in such a way that the cattle get the required nutrient for proper weight gain. The cattle will be bought in such a way that the selling interval will be 30 days i.e a certain number of cattle will be available each month for sale or slaughter. In order to maximize profit, farming of the cattle feed (groundnut, millet guinea corn) will be done and stocked all year round. The main produce will be sold and the groundnut leaves, millet husk, guinea corn hulls will be kept for the cattle consumption. Management Cattle fattening is a friendly business that requires special knowledge and skills. A good management practice plays a key role in profit maximization. Individual or staff with little or no experience can also be successful. Enlisting the assistance of someone in the know-how of the business either by profession or by experience is essential. Supervision and training will be given to personnel to improve their technical skills. A total number of four managing laborers would be employed, and offering fair wage and allowance. A corps member with veterinary Medicine as his/her Major would also be employed. A sales and marketing representative will also be employed or an agreement be reached based on sales incentives.

START UP EXPENSES AND CAPITALIZATION The following are expected to be in place for the project to be effectively carried out: i. Procurement of Malnourished Cattles ii. Cattle fattening feed iii. Construction of a Store Room iv. Cattle Housing v. Borehole vi. Cattle feed Crushing Machine.

Malnourished Cattles S/N MATERIAL o 2 Cattles each month X 12 months

QUANTITY 24

UNIT COST (N) 100, 000

COST (N) 2,400,000

2,400,000

Cattle Feed S/N MATERIAL o 1 Groundnut leaves 2 Millet Husk 3 Guinea corn Hulls 4 Maize stalk

Store Room S/N MATERIAL o 1 6” Vibrated blocks 2 Cement 3 Sharp sand 4 Gravel Wood & zinc Laborers Others

Cattle Housing S/N MATERIAL o 1 shades 2 3 by 4 ply-wood 3 Labor 4 Miscellaneous

Cattle feed crushing Machine S/N MATERIAL o 1 Cattle feed crushing Machine 2 Electrical wiring 3 Electrical lightening

Labor /Salary S/N o 1 Laborers 2 Veterinary Corpse Member 3 Sales Marketing Representative

QUANTITY

UNIT COST (N) 10, 000 5,000 5,000 2,000

10Hecters of farm 50Hecters of farm 50Hecters of farm 100Hecters of farm

QUANTITY

UNIT COST (N) 120 2,500 8, 000 18, 000 137, 000 75, 000

500 30 Bags 1 Truck 1/2 Truck

QUANTITY

UNIT COST (N) 3000 200 12,000 5,000

24 85

QUANTITY

UNIT COST (N) 340, 000

1

QUANTITY

UNIT COST (N) 10,000 15,000

4 1 1

COST (N) 100,000 250,000 250,000 200,000 800,000

COST (N) 60, 000 75, 000 8, 000 18, 000 137, 000 75, 000 15, 000 388,000

COST (N) 72,000 17,000 12,000 5,000 106,000

COST (N) 340, 000 5,000 12, 000 357,000

COST (N) 480,000 180,000 120,000 780,000

TOTAL: N 4, 831, 000 COST SUMMARY Malnourished Cattle………………………………………….………. N2,400,000

Cattle Feed……………………………………………………………. N800,000 Store Room…………………………………………………...………. N388,000 Cattle Housing……………………………………………….............. N106,000 Cattle Feed Crushing Machine…………………………………….. N357,000 Labor/ Salary………………………………………………………… N780,000 Miscellaneous…………………………………………………........... N169,000 TOTAL………………………………………………………………… N5,000,000 FINANCIAL STATEMENTS AND PROJECTIONS This cattle fattening business will hopefully be financed with a Loan/ Grant of Five Million Naira. And the payback period is forecasted to be Two years, six months. Though the profit is not fixed, there is a projected profit of N100, 000 per head after all expense deductions. Sales/ Maturity The sale of the fattened cattle will be sold monthly likewise the purchase of the malnourished ones in order to keep uniform format of revenue and purchase flow. Buyers/ Demand The demand for beef is a continuous and essential one. It’s a necessity and as vital as grains and vegetables in every household. This makes the business more inviting and less stressful. The buyers will be local Butchers and market men from the local and modern markets. The selling point will be in the local market or Abattoir with a competing bid for higher prices. Profitability The profit forecast is usually 100percent of the original buying price of each fattened cattle. A cattle bought at hundred thousand Naira would be sold in between two hundred and forty thousand and two hundred and sixty thousand depending on the nature of the market. So the excess 40-60 thousand will be for the feeds and other expenses. And the profit will be N100, 000. Payback Period The payback period will be two and a half years. The first two months will not count because it takes three months to transform a malnourished cattle to a healthy fattened cattle. However, the profit generated will be N5,000,000 at the 30th month of the commencement of the business at a net profit of N100,000 X 2cattles monthly. In addition to the first two months that are excluded from the revenue projection, additional 3months are included in case of any shortfall or unforeseen circumstance on the monthly projected revenue. Swot Analysis Strengths Location

Contacts in Business and other aiding agencies Enthusiasm

Weakness Financial Acumen

Notes The cattle house will be located in the central area of Katsina State, which is easily accessible to nearby markets and abattoirs. It is easily accessible to government and other aiding agencies. The owner is so energetic and passionate about the business and willing to do whatsoever to make sure it succeed. The closeness and commitment creates a large positive driving force towards its success.

Notes Lack of funding stopped the owner from starting up the long aspired and carefully trained business.

Limited Financial Resources

Business is small

Opportunity Rising Beef Demands

Easy Access to Market

Threats Theft Foreign Exchange Economy

Relatively, large debt will have to provide funding. But projections indicates that the loan can be serviced without hiccups. This gives the pitfalls of smaller businesses but can also act as a positive influence by giving exclusivity. Notes As the population is rising, so also the demand of beef. The government’s campaign on promoting indigenous farm output is also an added advantage. The proximity to market will play a key role in the success of the business.

Notes With the current rise in cattle rustling, a close vigil and security will be insured. The weak exchange rate against the Nairamight have a negative effect on the business. The current state of economy might reduce the purchasing power of most intending buyers.

Risk Plan The cattle house is fenced and secured in such a way that criminals cannot gain easy access. A veterinary expert would be always consulted at every stage to ensure proper welfare and healthy being. Additional 3months are added to the payback period of the loan or grant in order to stay on track with the payback time....