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Well Structured 5 Years Business Plan For Poultry Farm

Written By Yoposts Admin on Tuesday, 1 August 2017 | Tuesday, August 01, 2017

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EYONK FARMS offers chicken for meat, eggs, hatching and sales of day old,  to Individual retailers, companies that buy day old chicks in bulk, hotels, fast foods, eateries etc in the Eastern, Northern, Southern and Western part of Nigeria, and all the well established markets, and also in local market. The business has a strong market position and a coherent strategy. It has established clear steps to achieve its objective of Becoming Nigeria's major source of poultry meat, eggs, and day old chicks in the next five years.
                                    



EYONK FARMS has set  targets that they are committed about achieving. Next year the business will achieve sales of ₦9000000. Sales will grow by 30 percent each year to reach the  figure of ₦25704900 at the end of the period. By the final year of this plan the business will be achieving a net profit of ₦10672930. This will represent a good return and provide sufficient retained earnings for future development plans.   

The Business

EYONK FARMS is formed as a Sole Trader. This is an appropriate legal structure for this type of business and will fit well with its objectives. The management team will review this structure as the business develops.

EYONK FARMS is well placed to offer chicken for meat, eggs, hatching and sales of day old,  in the Eastern, Northern, Southern and Western part of Nigeria, and all the well established markets, and also in local market. The management team have the experience and competencies to deliver the targets they have set themselves.


   Eyonk Enterprise, Owner, has  knowledge and experience of Poultry farming, including management of day old chicks, disease management, poultry structure design and and sales of agricultural materials..

  John Benco and group, CoFounder, has developed  expertise in Rendering Financial Assistant to the company, providing the necessary farm equipments and structures needed for the farm to move forward..

   IITA, Partner, is goal driven and brings  knowledge of Training and development of workers, leading a team, bringing new innovative structural designs and carrying out maintenance culture in the farm..

   Songhai Farms, Junior Partner, brings  skills in different areas of farming including but not limited to handling of day old chicks, poultry disease management, and how to market the chickens. The also bring different marketing strategies and and also equip the staff with the skills of how to envelope the market..

The management team are committed to growing the business by providing excellent customer service and building a strong credible brand. This will be demonstrated through their trustworthy relations with customers and other stakeholders. The management team take their responsbility seriously and are committed to an ethical approach to business.

In summary, EYONK FARMS has the correct legal form, values and management team to succeed.   

The Market

EYONK FARMS intends to target Individual retailers, companies that buy day old chicks in bulk, hotels, fast foods, eateries etc with its chicken for meat, eggs, hatching and sales of day old, . This market represents a good opportunity for the business to capitalise on its low price of products, we sell at low cost because we produce our feed in the farm, thereby maximizing profit. We are also known for good quality products, and quick delivery to the required customers. advantage. This will provide a strong market position from which to develop the business.

EYONK FARMS faces some competition, as would be expected in this attractive market.

  AB and co  is the main competitor. It has some strengths, but its critical weakness is its high prices, and low quality products. unreliable in business and inability to meet up to the customers demands.. This will restrict its capacity to compete.

  CD and Co also has a weakness that diminishes its effectiveness in the market. In this case the weakness is its inability to motivate workers, thereby being raised down by low productivity and unreliability..

   CD and co is also a potential competitor, but again it has an exploitable weakness. In this case the weakness is its lack of good marketing strategies, and inability to maintain effective marketing strategies. .

 EYONK FARMS will be able to exploit the weaknesses of its competitors to gain market position.

In summary, the high demand for the EYONK FARMS offer and the weaknesses identified in its main competitors provide an attractive market opportunity.   

The Strategy

EYONK FARMS has the objective of Becoming Nigeria's major source of poultry meat, eggs, and day old chicks over the next five years. To achieve this objective the management team has identified key steps that it will implement over the period.

Step 1: Bring down the selling price so as to get numerous customers

Step 2: Produce quality products that cannot be altered

Step 3: Expand the Business in every geographical location in Nigeria

Step 4: Employ more strategic marketing plans

Step 5: Maintain our integrity

 The selection and sequence of these actions has been carefully chosen to produce the full potential of the business and ensure that the targets are achieved. The management team will continuously monitor the business performance against the targets and make necessary adjustments. At all times the focus will be on achieving the key objectives.

In summary, EYONK FARMS has a systematic plan with clearly articulated stages to achieve its five year objectives.   

The Finances

Table 1 below shows a projected income statement for the five years of the plan. This demonstrates how the targets will be achieved. The projections have been carefully constructed and are based upon realistic assumptions.

In the first year of the plan  EYONK FARMS will achieve sales of ₦9000000, a gross profit of ₦6300000 and  a net profit of ₦1300000. In 2019, midway through the plan, the business will achieve sales of ₦15210000, a gross profit of ₦10647000 and  a net profit of ₦4597000. By the end of the plan the business will achieve sales of ₦25704900, a gross profit of ₦17993430 and  a net profit of ₦10672930.

The figures demonstrate a steady growth in sales and gross profit during the period of the plan.The business becomes profitable in year one of the plan, which is earlier than many similar rivals and demonstrates the strength of the business model. This will provide a solid financial foundation to develop its plans. The average sales growth of 30 percent across the period is healthy and demonstrates the potential of the business. The predicted sales and growth are realistic given the strengths of the business and the attractiveness of the market.

==========================================================
INCOME STATEMENT
 ==========================================================

Years........ ....2017 ....2018 ....2019 ....2020 ....2021

Sales........ .9000000 11700000 15210000 19773000 25704900
Cost of Sales .2700000 .3510000 .4563000 .5931900 .7711470
..............
Gross Profit. .6300000 .8190000 10647000 13841100 17993430
..............
  
Expenses..... .5000000 .5500000 .6050000 .6655000 .7320500

..............
 Net Profit... .1300000 .2690000 .4597000 .7186100 10672930
..............

  Table 1: Income Statement Forecast 2017 to 2021 (₦).

Table 2 below shows a projected cash flow for the five years of the plan. This demonstrates  the liquidity of the business during the period.

EYONK FARMS has based the cash flow on the assumption that they will be offering customers 0 days credit. This is in line with industry norms and should be competitive within the market. Suppliers are assumed to offer 30 days credit. This is also realistic given the current practice within the industry. The business achieves a positive cash carried forward position in year one. By the end of the five years the business has a positive cash position of ₦27129852. This shows the robustness of the business and its ability to generate cash to support future plans.

==========================================================
CASH FLOW
 ==========================================================

Years........ ....2017 ....2018 ....2019 ....2020 ....2021

Cash from A/R .9000000 11700000 15210000 19773000 25704900
Cash to A/P.. .2478082 .3443424 .4476452 .5819387 .7565203
Expenses Paid .5000000 .5500000 .6050000 .6655000 .7320500
..............
Net Cash..... .1521918 .2756576 .4683548 .7298613 10819197
..............

  Cash B/Fwd... ...50000 .1571918 .4328494 .9012042 16310655
..............
  Cash C/Fwd... .1571918 .4328494 .9012042 16310655 27129852
..............
 
Table 2: Cash Flow Forecast 2017 to 2021 (₦)

In summary, EYONK FARMS has constructed methodical financial forecasts that show a resilient cash flow and attractive growth in profit over the next five years.
   

Conclusion

EYONK FARMS is well positioned to target Individual retailers, companies that buy day old chicks in bulk, hotels, fast foods, eateries etc. The management team have provided a clear objective of Becoming Nigeria's major source of poultry meat, eggs, and day old chicks in the five year period. The financial targets have been shown to be realistic given the strengths of the business and its strategic position. The management team is committed to achieve the strategic goals. They have a clear plan of strategic stages to realise the potential of the business and generate healthy returns for all stakeholders.   

Appendix

Assumptions

The following assumptions were made in developing this plan.

1. ₦9000000 sales in the first year. This level of sales is realistic given previous experience and the turnover of similar firms within the sector.

2. 30 percent annual growth in sales. This level of sales growth is achievable given the attractiveness of the market and the coherent strategic plans of the management team.

 3. 30 percent cost of sales. This cost of sales percentage is in line with the sector average. The cost of sales percentage is expected to remain stable during the period of the plan.

4. ₦5000000 expenses in the first year. This level of overhead expense is in line with similar size businesses within the sector.

5. 10 percent annual growth in expenses. This expense growth takes into account changes in overhead as the firm develops.

6. 0 days customer days credit. This is in line with industry terms of trade and should be competitive.

 7. 30 days supplier credit. This is realistic given the terms normally offered by suppliers.<

8. The cash flow forecast assumes that receivables and payables are settled before the next period.

   9. The cash flow does not take into account the acquisition of fixed assets from cash generated.

 10. ₦50000 equity cash injection. This equity is confirmed to be available and ready to be invested in the business.

11. Equity cash injections are assumed to be made at the start of the plan.

12. These figures take into account inflation.

13. These figures are realistic given the current market situation and expected trends.

14. While a conservative approach has been taken to projections and an attempt to factor in risks, like all predictions there is the potential of unexpected factors.

Do you need a business plan, contact us
  CONTACT US: 07039482540

COURTESY: EYONK FARMS LTD
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