DAN ALHERI FARMS ANIMAL

HUSBANDRY BUSINESS PLAN

EXECUTIVE SUMMARY 

Overview

Dan Alheri Farms is a registered Corporation entity owned and managed by Yohanna Adamu, a
committed, passionate and enthusiastic entrepreneur. This strategic business plan was drawn up to assist
the entrepreneur to expand on the existing capacity of his farm business which specializes in the rearing
and selling of sheep, goats and related by-products.  This business plan was drawn up to assist the
entrepreneur to expand on the existing capacity of his farm business which specializes in the rearing and
selling of sheep, goats and related by-products. The entrepreneur intends to add onto his skills and
competencies by studying animal husbandry with a recognized training centre or Agricultural institution.
The potential and wholesomeness of sheep and goat farming cannot be overstated as sheep and goat
farming is an essential source of benefits such as the following: meat, milk, skins, fibre, horns and offal.
Sheep farming also outlooks essential by-products such as dung which is used as manure as well as bio
gas production. Indirect benefits of sheep and goat farming encompass weed control and many others.
The entrepreneur understands the full potential of sheep and goat farming and is keep to fully exploit the
business opportunity. Yohanna believes in his business and is confident that Dan Alheri Farms will
contribute towards job creation, self reliance, economic development and poverty reduction, to mention a
few principle ones

The Business Opportunity

The business opportunity was realized by the entrepreneur, Yohanna - there is a growing demand for
sheep and goat meat, skin and associated products in the region where the business is located as well as
surrounding areas. The opportunity is also attributed to factors such as the growth in population, rising
income levels, growing middle income group and increasing urbanization which stirs a demand in the
main city centers. The increase in abattoirs and butcheries also signifies the business opportunity. There is
also a market for sheep and goat dung which used for fertilizer as well as for research purposes aimed at
producing fuel and bio gas. Additionally, there is potential for the business to supply wool for the
production of clothing and sheepskin for the production of leather.  The business opportunity is signified
by Government policies that have been implemented such as the recent livestock Policy. This policy
contributes to reconstruction and development addressing issues.

Analysis of the Market

The market for sheep and goat meat as well as the by-products is broad and can be segmented into
corporate and individual consumers. The business can anticipate a market from medium to high income
earners as these purchase sheep of goat for personal home consumption as well as for occasions such as
weddings, workshops, funerals, meetings, family gatherings and other social events. The corporate market
segment consists of businesses within the Small, Medium and Micro Enterprises (SMME) sector as well
as large entities. Agro-processors form an essential part of the corporate market. Key buyers of sheep and
goat within the corporate arena include abattoirs, butcheries, retailers and wholesalers. The Government
in terms of Municipalities, Government Departments and other Government bodies also fall under this
category. The wider private and public sector form part of the market for sheep and goat. This market
segment usually procures by means of tenders or agreed upon contracts. The quantities involved are
usually much higher than those requested by individual consumers. While corporate consumers usually
procure their products in large quantities, some delay in terms of payment and can be very particular
about quality standards and other issues pertaining to conformity.

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The Target Market

The selection of a suitable target market for Dan Alheri Farms is imperative to the attainment of
profitability, competitiveness and sustainability for the business. Essential factors such as the ability of
the entity to meet the needs, requirements and preferences of the market segments were considered. Other
determining factors such as the profitability, growth, growth potential, size and risks of the market
segments were also considered. Dan Alheri Farms shall target local small to medium sized butcheries
and abattoirs. The business shall also sell to individuals that usually purchase the meat for occasions such
as weddings, social events, family gatherings, or use it for small scale/ subsistence farming.

The Competition 

The main competition for the entity mainly emanates from two other farms that rear and supply sheep and
its associated sheep products on a commercial basis. They supply to local abattoirs and butcheries.
Indirect competition emanates from large scale farmers that are in some cases integrated forward and
backwards. Suppliers of alternatives to sheep meat products which include beef, pork, fish, chicken and
others will also contribute to the indirect competition of the business.

Competitive Advantages 

In terms of competitive advantages, Dan Alheri Farms will focus on niche markets as well as have a
thorough understanding of the needs and preferences of its clientele. This understanding of the needs and
preferences of customers will supersede that of its competitors. The ability of the business to respond to
the needs and preferences of the market shall be instrumental to the success of the farming entity. The
business will ensure that all functional areas of the business achieve their stipulated goals and objectives
which contribute the overall business strategy of Dan Alheri Farms market intelligence will be important
in terms of being aware about the strengths and weaknesses of the competitors.  The business will also
focus on adding value to Sheep and goat meat by preparing the meat for customers. This will be in the
form of salting and drying that meat. Other means of preparation such as cooking and roasting and shall
also be considered.

The Management Team

The business will endeavor to have a competent, skilled and experienced management team. The owner
and manager of the entity, Yohanna Adamu has completed entrepreneurial training courses and other
Agric related trainings as these will be instrumental to the running of Dan Alheri Farms. The
entrepreneur will upgrade and add on to his skills and competences by capitalizing on the training and
development opportunities presented by government.

The Financial Requirements 

Dan Alheri Farms will require a bank loan of N8, 000,000 and an equity of N490,000 in order to fund its
capital expenditure as well as finance its working capital requirements. The entrepreneur will invest his
time and money in the business. In terms of security, the assets of the business will serve as security for
the business. 

MACRO EXTERNAL ENVIRONMENT ANALYSIS

Discussed hereunder is an account of the changes taking place in the external environment. They
encompass Political changes, Economic changes, Social changes, Technological changes, Environmental

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changes as well as Legislative changes. The assessment of the external environment is conducted with the
view of identifying key issues pertaining to opportunities or threats that are within the context of Sheep
and goat Farming and applicable to Dan Alheri Farms the business will essentially capitalize on the
opportunities identified and avoid the threats.
 
Political changes 

 The possibility and potential for Dan Alheri Farms to benefit from Agricultural based skills
development and training as a result of the establishment of training institutes will be an
opportunity for the business. Improved skills, competencies and knowledge will be an asset to the
operations and general management of Dan Alheri Farms
 The promotion of SME development in Nigeria has been intensified. Small business development
programmes seek to help small businesses improve the quality of their products as well as their
well being. The upliftment  of small and medium sized businesses is in line with the thinking of the
Government and its strategies that relate to economic development, Job Creation and overall SME
development
 The Spatial Development Framework stipulates and categories areas for development. Key areas
have been marked for businesses, residential occupancy, farming and other uses. This is an
opportunity for the business as dedicated land for Agriculture is made available for entities
engaged in farming activities
 Women and Youth Empowerment is one of the key agendas for the Nigerian Government at
present. The availability of support programmes such as AGSMEIS will be an opportunity for the
business in terms of access to both financial and non financial support.
 The availability of funds for Agricultural support  from programmes is an opportunity for the
entity as it will have access to funding for expansion, diversification and transformation  
 The possibility to access the export market is an opportunity for the business. This is likely to
open up opportunities for the business to have a presence in neighboring countries to Nigeria
 Farming support programmes by institutions such as CBN and Bank Of Industry shall be an
opportunity for Dan Alheri Farms

Economic Changes

 The interest rates are currently fairly low. In the most recent intervention by the CBN, interest
rates remained unchanged – the interest rate is currently 9% and 10%. This is an opportunity for
the business as the cost of borrowing (interest) is less
 The current high electricity prices and the proposed increments over the forth coming years will
be a threat to the business entity as high electricity prices shall result in high operating costs and
this shall negatively affect the profitability of Dan Alheri Farms
 The inflation rate or general rising of prices in the economy might be affected by the rise in
electricity and feed prices. This is likely to be a threat to the business as the money in possession
by consumers will be less valuable or only be able to purchase fewer commodities. High inflation
usually leads to high unemployment rates. There is a tradeoff between inflation and
unemployment. High unemployment rates result in undesirable markets for businesses and the
same applies to Dan Alheri Farms

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 Social Changes 

 The increasing number of double income families will be an opportunity for Dan Alheri Farms
This means that families have a greater disposable income as compared to previous social set ups
where only one person was an income generator in families. An increased disposable income of
families implies a greater market with a better buying potential for Dan Alheri Farms
 The growing number of middle income families will be an opportunity to the business entity.
Similar to the growing number of double income families, this scenario shall result in increased
numbers of potential customers with buying power
 The movement towards healthy eating by consumers is an opportunity for the business. This shall
be an opportunity for the business as Sheep and goat meat is a great source of Protein
 The general increase of the population in the location of the business and surrounding regions
will be an opportunity to the entity as this has resulted in greater markets for businesses in general
 The high level of insecurity in society will be a threat to the business. Generally insecurity levels
remain high in Nigeria and as a result, the entity will have to invest in additional security measures
such as the installation of an electric fence or the hiring of a security guard. This is likely to
unfortunately outlook higher operating expenses and ultimately lower net profit margins
 The unemployment rate remains high in society and this is likely to be a threat to the business as
it reduces the potential for a stronger market with buying power

Technological Changes 

The business stands to benefit lucratively from technological changes and advancements taking place.
Notable opportunities are as discussed below:

 The possibility to benefit from automated front office and back office support technologies.
Technology is an enabler; entities such as Dan Alheri Farms stand to benefit from computerized
Management Information Systems, Accounting Information Systems, Capacity or Inventory
Management Systems and much more
 The business can benefit from online based or Web 2.0 marketing by essentially setting up a
business website where customers, potential customers and the general public at large can get
access to information about the business. This essentially allows the firm to not only have a local
presence in its physical location but also Nigeria and the rest of the globe. The potential to benefit
from electronic marketing cannot be overstated and the possibilities are endless for Dan Alheri
Farms The business is at liberty to benefit from technology oriented opportunities in terms of
transportation, distribution and warehousing. Essentially trucks with advanced cooling/ refrigerated
systems are available on the market and these are likely to be advantageous for the business
particularly when it engages processing Sheep and goat meat and transporting it to the market

Environmental Changes 

 In some cases chemicals that are not environmentally friendly are used for the purpose of weed
control. An environmental way to control weed is the use of Sheep or goat. This presents an
opportunity for businesses such as Dan Alheri Farms to use its Sheep for weed control thus
contributing to the welfare of the environment

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  In terms of Environmental changes, one of the main issues pertains to the conducting of an
Environmental Impact Assessment (EIA). It will be imperative for an Environmental Impact
Assessment to be conducted. It will assess as to the positive or negative impact that Dan Alheri
Farms may have on the environment. Where the effects are not extreme, the entity can be given
the go ahead to sustain business operations
 The use of chemicals to prevent and control diseases associated with animal husbandry could
impose a negative impact on the environment. The business will have to take all the necessary
precaution to ensure that the environment is protected
 The pollution of underground water is a concern. The project will need to take underground water
into consideration by ensuring that all waste resulting from animal husbandry activities are well
managed. The business will have to ensure that all dung is collected and used as manure for
horticulture or crop farming projects

Legislative Changes 

The business will have to comply with the laws of the Federal Republic of Nigeria. Non
compliance is a threat to the business entity. It will be important for the business to observe the
following laws amongst others:

 Occupational Health and Safety Act

 Labor Relations Act
 Income Tax Act
 Employment Equity Act
 Basic Conditions of Employment Act
 Livestock Improvement Act
 Marketing of Agricultural Products Act
 Environment Conservation Act

These and many others will have to be observed by the business.

INDUSTRY ANALYSIS

Industry Overview

Sheep and goat Farming forms a part of livestock farming which is a sub sector of the Agriculture
Industry of Nigeria. Livestock farming constitutes a large portion of the Agricultural sector in Nigeria. It
is made of about 99.8 million sheep and over 88.8 million sheep. These livestock are well adapted to the
diverse climatic and environmental conditions of Nigeria. The agricultural industry has experienced a
number of significant changes. Notable changes are highlighted below:

 The agricultural sector has faced increasing deregulation and market liberalization since the mid-
1980s

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  Fluctuations, particularly declines in the foreign exchange value of the currency and in the
interest cost of farm borrowing. Declines in the value of the Naira have resulted in farm input
prices, which have a relatively large import component, rising faster than farm output prices

 Changes in tax treatment of Agriculture sector has also contributed to the dynamics of the
Agricultural sector. Overall changes in Tax policy has also impacted on the Agricultural sector
particularly when considering capital purchases

 Budgetary allocations supporting farmers declined by some 50 per cent between 1987 and 1993

 The shifts away from settlement schemes and large-scale projects as the major instruments of
agricultural development in the former homelands areas, in favour of an approach based on the
provision of farmer support services such as infrastructure, extension services, research, and access
to credit and markets

 Other notable changes encompass subsequent budgetary allocations to agriculture, Agricultural

and Rural development policy, Trade Policy reform, and Labor Market reform amongst others

MARKET ANALYSIS

Market Segments 

Individuals

The individual market segment consists of consumers from the domestic market. They consist of low,
medium and high income earners. The low income earners are made up of people earn up to N30, 000.
The segment is made up of the poor, people dependent on social grants, a few small business owners and
others. The middle income earners have an income above N30, 000. Sheep and goat Farming forms of
part of livestock farming which is a sub sector of the Agriculture Industry of Nigeria. Livestock farming
constitutes the largest portion of the Agricultural sector in Nigeria. These livestock are well adapted to the
diverse climatic and environmental conditions of Nigeria. 

Corporate

The corporate market segment is made up of businesses that belong to the medium, small and micro
enterprises MSME category, large corporate entities, Municipalities, Government Department, Public and
Private entities.     

Needs and Preferences Of The Identified Market Segments 

Individuals

Some consumers prefer sheep or goat meat as an alternative to beef meat. While individuals find lamb to
be fairly fatty, they purchase it for its health benefits. Sheep and goat meat is a great source of proteins.
Sheep or goat meat is usually a bit pricey and this is attributed to the processing procedure which involves
trimming lamb of its fat and other non edible parts. At the end of the processing, the resulting meat is

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only about 40% of its weight. Some consumers are turned off by the smell. This smell is often caused by
fat when it is burnt. For these consumers, leaner cuts that are well trimmed are usually opted for in order
to avoid this “lamb" odor. It is therefore important for the meat to be well processed. Individual
consumers also have the following in mind when it comes to purchasing Sheep:

 Some individual consumers that are also subsistence farmers purchase Sheep for the purpose of
weed control particularly where crop farming is concerned
 There are consumers that purchase Sheep as a means of providing status or prestige in the
immediate community
 Other consumers purchase Sheep for fulfilling social, cultural and religious needs and obligations
 In some cases, consumers purchase livestock for sport, culture and recreation

Individual consumers are usually on the lookout for low prices or bargains when it comes to meat
products and therefore affordability is an important need and preference that must not be overlooked.  

Corporate

Corporate customers prefer to procure Sheep or goat and its by products in large quantities. Corporate
entities such as abattoirs purchase usually purchase live Sheep or goat for processing. Some corporate
customers have advanced uses for Sheep or goat and these include:

 The major product from sheep or goat is meat and this is mainly processed by butcheries that sell
it to retailers or final consumers
 Some entities engaged in horticulture and other crop farming purchase Sheep or goat for the
production of manure as fertilizer
 Advanced corporate entities use sheep dung as fuel or for bio gas production. They usually
demand large quantities that must be delivered in a reliable, efficient and convenient fashion

Some corporate entities prefer to procure products by way of tenders and contractual agreements where
terms and conditions are agreed upon. Corporate entities are usually particular about factors such as
quality and the reliable delivery of the required quantities. In terms of payment, some corporate entities
take a long time to pay and therefore the business needs to be prepared for this kind of scenario.

Target Market
 
The business will focus on individual consumers as well as small to medium sized corporate entities. The
market will include local abattoirs and butcheries. This is based on key considerations such as the
capacity of the business as well as other factors such as the profitability, growth, growth potentials, size
and risks associated with the identified market segments.  The business shall strive to position itself as a
preferred supplier of sheep to individuals or social groups for the purpose of events such as weddings,
workshops, meetings, funerals, social gatherings and many more.

Competition
Direct Competition

A. Small scale sheep and Goat farmers

While some of the small scale Sheep and goat farmers fall under the subsistence farming category, a few

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rear Sheep and goat for sale to the local market. They sale informally on busy streets where potential
customers do pass. Customers buy these Sheep for personal consumption at home or for consumption at
occasions or events such as weddings, parties, birthday celebrations and much more. 
Dan Alheri Farms faces competition from two other nearby farms that rear sheep for commercial
purposes and target a similar market as the business. These competitors sell their sheep at market prices
but are however not as responsive to the needs and preferences of the customers. Some customers travel
long distances to acquire products from these competitors and are inconvenienced by high transportation
costs.

Indirect Competition
A.    Alternative or Substitute meat product Suppliers

Suppliers of alternative meat such as Beef,Chicken, Pork and Goat Meat. Most consumers have a
preference for Beef and Chicken and these consume most of the shelf space in retail and wholesale
purposes.

B.    Large scale farmers

These encompass highly commercialized farms that rear sheep or goat and most cases also process the
sheep or goat and its by – products.

 INTERNAL ENVIRONMENT ANALYSIS

Shared values and principles 

Shared Values and Principles are instrumental for guiding the behavior and actions of employees. They
form part of an essential component of the business culture. Yohanna as an entrepreneur demonstrates a
strong commitment and passion in Dan Alheri Farms. Yohanna is an entrepreneur who has knowledge
and understanding of the sheep husbandry. Additionally, the entrepreneur, Timothy and his team are
committed, dedicated and passionate about delivering according to the needs and preferences of
customers.

Understanding of the strategic planning process

Timothy understands the environment within which the Sheep and goat Farming Industry operates and is
keen to be knowledgeable about the Political, Economical, Social and Technological changes influencing
activities in the Sheep and goat Farming Industry. Yohanna exhibits a good understanding of the market
environment as well as the existing competition in the market. Timothy shall strive to capitalize on the
opportunities and avoid the threats identified in the External Environment. The entrepreneur shall also
ensure that plans drawn up for the short term, medium term and long term are achieved.

Organizational structure
The need for a well understood formal organizational structure is necessary for efficient business
operations. The entrepreneur understands the need to separate the entrepreneurial process from the
business management process and to employ suitably qualified persons in Finance, Marketing,
Operations/ Production and the Human Resource functions of the business.

Leadership style
The entrepreneur demonstrates to have a democratic leadership style. Participation by all employees is
encouraged and this also contributes to the motivation of the employees. Strong leadership skills which

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shall be vital for the realization of the Vision and Mission of Dan Alheri Farms The leadership style to
be demonstrated will be goal and objective oriented while at the same time being people centered.

Staff requirements 
A highly competent team comprising of a General Manager, Finance and Administration Officer,
Marketing and Distribution Officer, Production/ Operations Officer and General Assistants shall be
required in order to further explore the business idea and concept successfully.

Skills and competencies

Dan Alheri Farms shall require skills in Animal Husbandry, Project Management, Human Resource
Management and Team building techniques. Continuous training will be conducted to enhance the skill
levels of team members.
The entrepreneur holds qualifications Marketing and Business Management and is very familiar with the
application of Performance Management Systems. There will be need to expose the entrepreneur to well
structured Management Information Systems, Accounting Information Systems, the healthy rearing of
Sheep in order to achieve the goals and objectives of Dan Alheri Farms

 SWOT ANALYSIS

The SWOT analysis is a summary of the external and internal environment analysis conducted in the
previous sections. It reduces the key Strengths, Weaknesses, Opportunities and Threats surrounding Dan
Alheri Farms Strengths

 The passion, drive, enthusiasm and commitment demonstrated by the business owner and existing
workforce 
 The Business Management and Marketing skills of the entrepreneur will be an asset to the
business
 The shared values of the team with reference to teamwork, commitment, drive, optimism and
perseverance are strength to Dan Alheri Farms
 The strong participative and democratic style of leadership demonstrated by the business owner is
a strength

Weaknesses 

 The current challenges in terms of sourcing and accessing additional funding

 The team will need training in animal Husbandry as well as advanced Financial Management
skills
 The business will need to install Management Information Systems, Accounting Information
Systems and Performance Management Systems amongst others.
     

Opportunities

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  The existence of financial and non financial support for medium, small and Micro enterprise.
 The opportunities presented by the advent of technology. The business could benefit from
Information Technology as it can be used to enhance the front office and back office operations as
well as key areas such as processing, marketing and distribution
 The potential to access funds from Agricultural support programmes
 The reduced interest rates will mean lower cost incurred as a result of borrowed money
 The movement by consumers for healthy diets that include proteins is an opportunity for the
business. Consumers are becoming more health conscious and this is an opportunity for the
business
 Intensified Rural Development is an opportunity for the business. There is potential for the
business to benefit in terms of Agricultural land through the livestock policy
 The growing realisation of the Agricultural sector by the Government as well as the growing
concern with regard to issues such as food security

Threats

 The threat from direct competitors

 The threat from indirect competitors
 The intensity of rivalry
 The threat in terms of changes in tastes and preferences by consumers
 The threat from social ills such as insecurity. There is a potential threat in terms of livestock theft.
The business will have to invest in security measures
 The threat from animal related diseases related to Sheep or goat as well as those that could
potentially be passed on to humans.
 The threat from alternative meat products such as goat meat, beef, pork, chicken and other
essential sources of protein
 The proposed increments in electricity prices will hinder the attainment of higher profits
 Compliance with various acts and laws
 Environmental concerns such as the pollution of underground water and the need for an
Environmental Impact Assessment may be costly for the entity

STRATEGIC INTENT

Vision
The Vision of Dan Alheri Farms will be as follows:
To be renowned for being the best advocates of healthy sheep and goat meat consumption in the
region by 2025

Mission
 The Mission of Dan Alheri Farms will be as follows:
 To contribute to the health and wellness of the consumers as well as work towards adding value
to the stakeholders of the business.

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 Values and principles
 The values and principles will serve to guide the actions or behavior of the team.
They include:
Commitment This will form part of the core values of the entity. The business will
essentially be committed towards meeting its objectives and realising its
vision.

Team Work Teamwork will form an essential component of the culture of the business.
The business will reward team effort as opposed to individual performance

Perseverance The business will aim high in its endeavors to ensure that it reaches its
goals and objectives and realises its full potential.

Customer Intimacy The entity will strive for a high customer orientation. It will essentially
strive for a better understanding of the needs and preferences of the
customers and deliver according to the expectations of the customers.

Efficiency and Effectiveness Driving efficiency and effectiveness will form part of the core values of the
entity. The business will essentially focus on doing the right things and
doing things right. 

Reliability The business will strive to be reliable in terms of supplying its products as
per the specifications of the customers. The internal processes of the
business shall be such that they enhance the reliability and performance of
the entity.

Quality Quality control and assurance will be upheld as core values to ensure that
customers get value for their money. This will contribute towards customer
satisfaction. 

Strategic Objectives 
Short term objectives 

The short term objectives of Dan Alheri Farms encompass the following:

 To source funding for the formalization and expansion of the business

 To set up efficient and effective systems
 To engage and establish a skilled, competent and knowledgeable work force 

Medium term objectives 

The medium term objectives of the entity shall encompass the following:

 To enhance the competitiveness of Dan Alheri Farms

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  To enhance the sustainability and going concern status of Dan Alheri Farms
    

Long term objectives 

The long term objectives of the entity shall encompass the following:

 To further expand the business entity

 To diversify the production base of the business
 To transform the business

Strategies
Short term strategies 

The short term strategies of Dan Alheri Farms are put into the following categories: 

 Financial Strategies
 Marketing Strategies
 Operations Strategies
 Human Resource Strategies

In terms of financial strategies, the following is envisaged:

 The sales mix shall be planned in such a way that the contribution margin in the business will be
maximized on a monthly basis
 The business risk shall be minimised by diversifying the customer base and ensuring that the
business does not depend on a few big customers
 Operating expenses will be monitored against the budget on a weekly and monthly basis with a
view of identifying expenses that are not in line with the budget
 Debtors shall be minimised through the employment of a strict debtor’s policy and a strict debt
collection policy. A debtors ageing schedule will also be prepared and followed through

In terms of the Marketing strategies, the following is envisaged:

 Understanding the needs and preferences of customers shall be taken as a prime consideration in
crafting the marketing strategy and plan for the business. This will also form part of the
competitive edge for Dan Alheri Farms developing the brand equity and degree of customer
loyalty will form part of a key marketing strategy for Dan Alheri Farms

In terms of the internal operations strategies, the following is envisaged:

 The internal operating systems in Dan Alheri Farms shall be aimed at ensuring customer
satisfaction, satisfying the shareholders and complying with Government Laws. The operational
systems shall be aimed at ensuring fast and efficient service in the front office as well as accuracy
in the back office operations

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  Health and Safety audits shall be conducted on a regular basis to ensure and enhance the Health
and Safety of customers and employees at all times

In terms of the Human resources strategies, the following is envisaged:

 The business will recruit motivated employees that have a passion for farming
 A series of internal workshops on Dan Alheri Farms values and principles shall be held on a
regular basis to ensure that both staff and management teams subscribe to the same core ideologies
 A Performance Management System shall be employed to evaluate the performance of each and
every business unit as well as each employee. Employees shall be assigned key performance
activities to be used as part of their reward and remuneration system. Self appraisals and 360
degree appraisals will be conducted so as to assess the strengths and weaknesses of each employee
and come with interventions as to how to capitalise on the strengths and mitigate the weaknesses

Medium term strategies 

The medium term strategies will be directed on focusing on the selected target market and serving the
market according to the identified needs and preferences. Meeting the expectations of the customers will
be instrumental to the attainment of a desired 100% customer satisfaction and retention rate. The
competitiveness and sustainability of the concern will be strengthened by also improving the internal
efficiency of the business, living up to the stipulated values of the business and striving to employ
industry’s best practice systems as much as possible. Market intelligence, in terms of studying the
strengths and weaknesses of direct and indirect competitors will be important in terms of devising tactics
and strategies aimed at combating competition and achieving a higher market share.

Long term strategies 

The long term strategies of Dan Alheri Farms will focus on the expansion and diversification through
the formation of strategic relationships as well as building value laden relationships with strategic
alliances. This will be aimed at establishing at least two more Farms within the North West Province.
Diversification will focus at moving into other value added activities such as the processing of Sheep
Meat and its skin as well as the rearing and sale of other animals such as cattle, goat and chicken.

 IMPLEMENTATION PLAN

Organisational Structure
The proposed organisational structure for Dan Alheri Farms is as depicted below:

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Roles and responsibilities
General Manager
The General Manager will be responsible for the implementation of the business plan. The responsibilities
shall encompass all key management functions such as Planning, Leading, Organising, Controlling and
Coordinating. The General Manager will essentially oversee all the functions of the business and ensure
that the business is running as smoothly as possible. This position will be ideally held by the owner of the
business.

Finance and Administration

The Financial and Administration officer shall be responsible for the following:

 The accurate and complete recording of all transactions in the books of accounts and
other bookkeeping activities
 The handling of customer and supplier invoices as well as other source documents
 The preparation of bank reconciliation statements
 Assisting with the preparation of the Trial Balance
 Assisting with the preparation of the Statement of Financial Performance
 Assisting with the preparation of the Statement of Financial Position and other
Financial statements
 The handling of all administration tasks such as record keeping, filling, typing of
minutes and other paper work

Marketing and Distribution

The Marketing & Distribution officer will be responsible for the following:

 Ensuring that the marketing mix - that is; the product, place, price, promotion and packaging
meets the expectations and needs of the target market
 Offer solutions to Dan Alheri Farms in terms of how it can best create awareness for the
business, improve sales and ultimately profits

DAN ALHERI FARMS Page 15

  The development of value laden relationships with appropriate organisations and associations
within the industry and implementing a customer relationship management system for Dan Alheri
Farms and the clients it serves
 Ensuring that the right products get to the market at the right time

Marketing and Distribution

The Marketing & Distribution officer will be responsible for the following:

 Ensuring that the marketing mix - that is; the product, place, price, promotion and packaging
meets the expectations and needs of the target market
 Offer solutions to Dan Alheri Farms in terms of how it can best create awareness for the
business, improve sales and ultimately profits
 The development of value laden relationships with appropriate organisations and associations
within the industry and implementing a customer relationship management system for Dan Alheri
Farms and the clients it serves
 Ensuring that the right products get to the market at the right time

Operations/ Production
The responsibilities of this function will be as follows:

 Primarily responsible for the rearing of Sheep and goats

 Other responsibilities will also encompass quality control and assurance
 The health and safety of the animals

Human Resource
This function will be managed by the owner of the business:

 The recruitment, selection and dismissal of employees

 The motivation of employees
 Ensuring high or optimum levels of performance
 The retention of quality employees
 Responsible for remuneration aspects of the employees
 Other human resource related activities.

General Workers
General workers will assist in terms of the following:

 Shepherding the Sheep and goat flock

 Caring for Sheep and goats during lambing and other basic animal husbandry responsibilities

DAN ALHERI FARMS Page 16

  Assisting with activities such as loading and transporting sheep and goats to areas of processing
and selling

MARKETING PLAN

Short term perspective

Objective To create awareness and further penetrate the market within the first year of operations 

Strategies Focus Area Initiatives

Produce healthy & Product Dan Alheri Farms shall strive to rear healthy quality sheep and goats
quality products for at all times. The entity will ensure that disease free animals are reared.
the target market The entity will essentially adopt a good management system of
livestock which takes into consideration imperative issues such as
hygiene, nutritional management and vaccination against diseases. The
business could also add value to the meat from sheep by preparing it for
the customers. Value can also be added by traditional methods of
preservation, including salting, drying and smoking. 

Set a competitive Price A business will price its products in line with ruling market prices.
price for the While the business will adopt a competitive pricing approach, it will be
product  important to adopt a comprehensive costing model in order to know the
actual cost of production per sheep. This will keep the business from
pricing its products much lower than the cost of production.

Advance promotion Promotion A website shall be hosted to promote the business through the internet.
and brand The local media shall also be used to enhance promotions. Branding
development will be instrumental to the business in terms of giving it a unique
personality or identity. It will be important for the business to seek
assistance with the creation of well designed business cards,
letterheads, presentations and much more.

Ensure a value based Place
distribution channel
In terms of place, the entity shall be located where customers can easily
access the business. Prime market areas will be identified and the
business will take initiative to transport ready-to-sale sheep and goats to
the market. A direct channel of distribution will be used so as to ensure
that the final consumers get the best value for their money.

Ensure suitable Packaging The sheep and goat will be offered to the customer in a suitable
presentation of manner. The entity will ensure that they are properly handled and
products to clientele delivered in an appropriate manner to the customers.

Improve the skills People Market related training will be provided to personnel servicing in the
and competencies of Marketing and Distribution function of Dan Alheri Farms in order to
personnel within the ensure that the attainment of the stipulated marketing oriented
marketing function objectives. Both front line and back office staff shall continuously be
subjected to intensive training in customer service and communication
skills.

DAN ALHERI FARMS Page 17

 Improve the internal Processes Dan Alheri Farms shall employ internal processes to monitor and
processes of Dan evaluate market campaign results on a monthly basis. These would be
Alheri Farms utilised in enhancing the business’ competitiveness and sustainability in
the market and ensure that value is added.

Medium term perspective

Objectives To enhance the competitiveness and sustainability of Dan Alheri Farms

Strategies Focus Area Initiatives

Improve the Focus  Focusing and dedicating the provision of value to the target market
competitiveness and which includes individual customers and small to medium corporate
sustainability of the entities will be imperative to the attainment of the desired degree of
business competitiveness of the entity.

Customer Customer Intimacy in terms of having a thorough understanding of the

Intimacy needs and preference of the customers as well as building a lasting
relationship with the customers of the business.

Process Dan Alheri Farms will develop structured process, procedures and
Efficiency  systems to ensure that all the internal activities of the business.

Long term perspective

Objectives To grow and expand on the capacity of Dan Alheri Farms so as to have a greater market
coverage and diversify the product and service base of the entity  

Strategies Focus Area Initiatives

Grow the market Market The business will identify new market segments to target. Market
share of the business Development research will also be important in terms of identifying market related
opportunities and a way forward to attain a better market positioning
and greater market share.

Diversify the Research and The business shall diversify its operations to include elements such as
product/ Development the processing of livestock and skin. These processes can be
service  base of the conducted in house in the long term as opposed to selling live sheep
business and goat directly to abattoirs, agro processors and other related
entities.

Establish Broad Based The formation of strategic relationships/ alliances with key strategic
relationship with Networking partners and associations will be instrumental to the achievement of
strategic alliances  growth and long term sustainability of the entity.

DAN ALHERI FARMS Page 18

Layout of the farm

Shown below is a possible farm layout that Dan Alheri Farms could adopt. The layout shows prime
sections of the farm and these include the following key areas:

 The administration office

 The store room
 Shower/ toilet
 Feeding Alleys which include areas for food (creeps, grain, hay or grass)
 Pens
 Isolation pane for animals suspected of illness

While specialized housing is not usually necessary, the business could consider fencing to enable easy
control of the animals as well as protect the flock from theft.

DAN ALHERI FARMS Page 19

 RISK ANALYSIS

This section discusses the key risks and issues likely to face Dan Alheri Farms A discussion on the
possible mitigation efforts that the entity can consider is also provided.
Risk Description

Event Risk or Risk of Disease
Outbreak
An event risk or risk of disease, if there is a risk of outbreak of diseases that could adversely affect
the flock of the entity. If proper vaccination programmes are not followed the farm could suffer
major financial losses. It is important that a proper vaccination programme is followed. The
vaccination will minimize the threat of diseases. Where necessary deworming of the flock should be
carried out regularly. Personnel will ensure that the flock are monitored for diseases and that the
farm and housing are kept clean and secure from other event risks. It will also be crucial for
personnel handling the animals to take precautions so as to avoid animal diseases that affect or can
be transferred to humans (or what is commonly referred to as Zoonose). Other possible infections
include helminth infections that may involve animals and humans in alternative stages of a parasitic
lifecycle such as tapeworms.

Market Risk The market risk emanates from the fact that Dan Alheri Farms will face direct and indirect
competition from other farms. The business also faces competition from suppliers of substitute to
Sheep and goat meat products such as beef, chicken, pork, fish and many more. To mitigate the
Market Risk, the business will focus on a specific market segment and strive to understand the
customers better than the competitors. Market research and development shall be imperative
towards mitigating the market risk. The business could also request for assistance with a
comprehensive Marketing Plan and Strategy from agencies.

Financial Risk In terms of the financial risk, To mitigate this risk, the Dan Alheri Farms will strive to reinvest at
least 55% of the profits into the business so as to improve the investment ratio. The project will
strive for a good return on investment. The implementation of key financial controls as well
ensuring that accurate and complete financial record in terms of management accounts, asset
registers, ledgers and other books of accounts will be imperative to the mitigation of the financial
risk. The business should ensure that all monies collected are recorded in the Cashbook and
deposited in the business bank account.

Human Resource Risk
Dan Alheri Farms shall require skilled, knowledgeable and competent staff in significant areas
such as business management, financial management, costing, entrepreneurship and technical
aspects relating to animal husbandry. It will be important for the owners, management and
employees to be well trained. Moreover, a loss of key personnel is likely to affect the business
adversely. To mitigate this risk, the business will promote and cultivate a culture of sharing
knowledge and skills amongst the members and employees.

Economic Risk Another risk facing Dan Alheri Farms is an economic risk. On a global level, there is currently
an economic recession (declining at present), as such the unemployment rate has gone up meaning
that few people have buying power and the fact that consumers have tighter budgets as compared
excellent financial years such as the year 2016. The depreciating naira is also a factor to consider as
it also affects prices of procurements such as imported capital equipment, vaccines and medicines
and feed supplies. This risk is external and out of the control of the business. The business will
strive to not pass on the costs to consumers as it understands that affordability is one of the key
success factors in the Farming sub sector of the Agricultural Industry.

DAN ALHERI FARMS Page 20

FINANCIAL PROJECTIONS 

Assumptions

Assumption Variable

Loan Amount N8,000,000

Term loan period 5 Years

Interest Rate 9%

Inflation rate 6%

Debtors collection period 30 days

Creditors payment period 45 days

Tax rate 28%

Vat rate 14%

Business days per week 5 days

DAN ALHERI FARMS Page 21

Average monthly expenses

General and Administrative  Amount

  N

Salaries and Wages  (General and Administrative) 20 000

Telephone 2 000

Printing and Stationery 700

Fuel and transportation 2 000

Advertising and Marketing 1 500

Repairs and Maintenance 1 000

Accounting and consulting fees 700

Finance charges 600

Skills Development Levy 1 000

Security 600

Insurance 800

Water and Electricity 2 000

Depreciation 5 000

UIF 2 000

Other General & Administrative Expenses 1 000

Total General & Administrative Expenses 49 000

DAN ALHERI FARMS Page 22

FINANCIAL PROJECTIONS 

Income Statement Projections

Sales Year 1 Year 2 Year 3 Year 4 Year 5

Sale of Sheep 1,318,000 1,449,800 1,594,780 1,754,258 1,929,684
- - - - -
Total Sales 1,318,000 1,449,800 1,594,780 1,754,258 1,929,684
 
Cost of Goods Sold
Material & Labor 790,800 869,880 956,868 1,052,555 1,157,810
 
Total Variable COGS 790,800 869,880 956,868 1,052,555 1,157,810
 
Total Cost of Goods Sold 790,800 869,880 956,868 1,052,555 1,157,810
 
Gross Profit 527,200 579,920 637,912 701,703 771,874
 
Operating Expenses
G & A (without 430,800 444,184 466,378 489,699 514,183
Depreciation)
Depreciation 39,996 40,000 40,000 40,000 40,000
 
Total Operating Expenses 470,796 484,184 506,378 529,699 554,183
 
Income From 56,404 95,736 131,534 172,004 217,691
Operations(tenths)
 
Interest Expense(tenths) 56,112 46,780 35,940 23,362 8,761
Income before 292 48,956 95,594 148,642 208,930
Taxes(tenths)
Taxes on Income(tenths) 82 13,708 26,766 41,620 58,500
 
Net Income After 210 35,248 68,828 107,022 150,430
Taxes(tenths)

DAN ALHERI FARMS Page 23

FINANCIAL PROJECTIONS 

Balance Sheet Projections

Assets Year 1 Year 2 Year 3 Year 4 Year 5

   Current Assets

Cash(tenths) (43,503) 92,983 124,632 431,527 552,000

Investments - - - - -

Accounts Receivable 127,500 143,242 157,566 144,186 158,604

Notes Receivable - - - - -

Inventory(tenths) 10,729 11,672 22,059 20,186 22,205

Other Current Assets - - - - -

   Total Current Assets(tenths) 94,726 247,897 304,257 595,899 732,809

   Plant & Equipment

Machinery, Equipment & Other 400,000 400,000 400,000 400,000 400,000

Assets(tenths)

Accumulated Depreciation (39,996) (79,996) (119,996 (159,996 (199,996

) ) )

   Total Net Plant & Equipment(tenths) 360,004 320,004 280,004 240,004 200,004

Total Assets(tenths) 454,730 567,901 584,261 835,903 932,813

Liabilities & Owners' Equity

Current Liabilities

DAN ALHERI FARMS Page 24

Accounts Payable 112,500 257,835 283,619 519,068 570,975

Total Current Liabilities 112,500 257,835 283,619 519,068 570,975

Long Term Debt(tenths) 341,920 274,508 196,256 105,427 -

Total Liabilities(tenths) 454,420 532,343 479,875 624,495 570,975

Owner/Stockholder Equity

Common Stock 100 100 100 100 100

Retained Earnings 210 35,458 104,286 211,308 361,738

Dividends Payable - - - - -

Total Owners' Equity 310 35,558 104,386 211,408 361,838

Total Liabilities & Equity 454,730 567,901 584,261 835,903 932,813

DAN ALHERI FARMS Page 25

Cash Flow Projections

      Sources of Cash: Year 1 Year 2 Year 3 Year 4 Year 5

Operations During the Year
Net Income After Taxes 210 35,248 68,828 107,022 150,430
Add items not decreasing cash
Depreciation 39,996 40,000 40,000 40,000 40,000
Increase in Accounts Payable 112,500 145,335 25,784 235,449 51,907
 
Deduct items not increasing
cash
Increase in Accounts 127,500 15,742 14,324 (13,380) 14,418
Receivable
Increase in Inventory 10,729 943 10,387 (1,873) 2,019
Cash from Operations(tenths) 14,477 203,898 109,901 397,724 225,900
 
Financing & Other
Proceeds from Long Term 8,000,000 - - - -
Loans
Cash/Operations & 414,477 203,898 109,901 397,724 225,900
Financing(tenths)
 
Applications of Cash
Purchases of Fixed Assets 400,000 - - - -
Repayment of Short Term - - - - -
Loans
Repayment of Long Term 58,080 67,412 78,252 90,829 105,427
Loans(tenths)
Increase/(Decrease) in Cash (43,603) 136,486 31,649 306,895 120,473
 
Change in Cash Balance
Ending Cash Balance (43,503) 92,983 124,632 431,527 552,000
Beginning Cash Balance 100 (43,503) 92,983 124,632 431,527
Increase/(Decrease) in Cash (43,603) 136,486 31,649 306,895 120,473

DAN ALHERI FARMS Page 26

Ratio Analysis

      Ratios Year 1 Year 2 Year 3 Year 4 Year 5

Current Ratio 0.84 0.96 1.07 1.15 1.28

Quick Ratio (Acid Test) 0.75 0.92 0.99 1.11 1.24

Return on Total Assets 0.05% 6.21% 11.78% 12.80% 16.13%

Total Assets Turnover 2.90 2.55 2.73 2.10 2.07

Total Debt to Total Assets 1.00 0.94 0.82 0.75 0.61

Gross Profit Margin 40.00% 40.00% 40.00% 40.00% 40.00%

Operating Profit Margin 4.28% 6.60% 8.25% 9.80% 11.28%

Net Profit Margin 0.02% 2.43% 4.32% 6.10% 7.80%

Return on Sales 0.04% 6.08% 10.79% 15.25% 19.49%

Return on Owners' Equity 67.74% 99.13% 65.94% 50.62% 41.57%

Total Debt to Owners' Equity 1,465.87 14.97 4.60 2.95 1.58

Operating Ratios

% Inc from Ops / Total Assets 12.40% 16.86% 22.51% 20.58% 23.34%

% Profit BT / Total Assets 0.06% 8.62% 16.36% 17.78% 22.40%

Sales / Total Assets 2.90 2.55 2.73 2.10 2.07

Sales / Day (244 business days) 5,402 5,942 6,536 7,190 7,909

DAN ALHERI FARMS Page 27

Asset Management (Efficiency)

Total Liabilities / Total Assets 1.00 0.94 0.82 0.75 0.61

Total Debt to Total Assets 0.75:1 0.48:1 0.34:1 0.13:1 0.00:1

Debt to Capitalization 3419.20:1 2745.08:1 1962.56:1 1054.27:1 0.00:1

Liabilities / Net Worth 1,465.87 14.97 4.60 2.95 1.58

Return on Equity (Pretax) 94.19% 137.68% 91.58% 70.31% 57.74%

Return on Equity (After tax) 0.05% 6.21% 11.78% 12.80% 16.13%

Working Capital Cycle

Sales / Receivables 10.34 10.12 10.12 12.17 12.17

Days Sales Outstanding 35.31 36.06 36.06 30.00 30.00

Cost of Sales / Inventory 73.71 74.53 43.38 52.14 52.14

Days of Inventory 4.95 4.90 8.41 7.00 7.00

Cost of Sales / Payables 7.03 3.37 3.37 2.03 2.03

DAN ALHERI FARMS Page 28