NATIVE BUTCHERS BUSINESS PLAN

The concepts of e-commerce and online sales are

relatively new in Nigeria, but with increasing
internet and telecommunications penetration, the
population of almost 200 million Nigerians are
ready to accept such new concepts. Native
Butchers offers a tripod of value at unbeatable
costs. It will handsomely reward its consumers, its
community, its owners and other stakeholders in
the near future, selling meat of various types…
Nkem Joseph-Palmer
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This is a business plan. It does not imply an offering of securities.

 Table of Contents

1.0 Executive Summary............................................................................................................................1

Chart: Highlights..............................................................................................................................8
1.1 Objectives.........................................................................................................................................8
1.2 Mission and Vision.........................................................................................................................9
1.3 Keys to Success................................................................................................................................9
2.0 Company Summary.........................................................................................................................10
2.1 Company Ownership...................................................................................................................10
2.2 Startup Summary..........................................................................................................................10
Table: Startup..................................................................................................................................11
Chart: Startup..................................................................................................................................12
2.3 Company Locations and Facilities.............................................................................................12
3.0 Products..............................................................................................................................................13
3.1 Product Description......................................................................................................................13
3.2 Product Volume and Growth Expectations..............................................................................15
3.2.1 Storage and Distribution.......................................................................................................16
3.3 Byproducts and Waste Products................................................................................................16
3.3.1 Disposal of Waste Products..................................................................................................17
3.3.2 Treatment of Specified Risk Materials................................................................................18
3.3.3 Effluent and Water Use.........................................................................................................18
3.3.4 Permits and Certifications....................................................................................................19
3.4 Humane Handling and Stress on Animals...............................................................................23
3.5 Planned Plant Size and Scope.....................................................................................................23
3.5.1 Estimated Plant, Property and Equipment........................................................................24
3.6 Competitive Comparison............................................................................................................30
3.7 Sourcing..........................................................................................................................................30
3.8 Sales Literature..............................................................................................................................30
3.9 Technology.....................................................................................................................................30
3.10 Future Products...........................................................................................................................30
4.0 Market Analysis Summary..............................................................................................................31
4.1 Market Segmentation...................................................................................................................31
Table: Market Analysis..................................................................................................................31
Chart: Market Analysis (Pie).........................................................................................................32
4.2 Target Market Segment Strategy................................................................................................32
4.2.1 Market Needs.........................................................................................................................33
4.2.2 Market Trends........................................................................................................................33
4.2.3 Market Growth.......................................................................................................................33
4.3 Industry Analysis..........................................................................................................................33
4.3.1 Industry Participants.............................................................................................................34
4.3.2 Competition and Buying Patterns.......................................................................................45
4.3.3 Main Competitors..................................................................................................................45
4.3.4 Barriers to Entry/Core Competencies.................................................................................45

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4.3.5 Risk Factors.............................................................................................................................46

5.0 Web Plan Summary..........................................................................................................................46
5.1 Website Marketing Strategy........................................................................................................47
5.2 Development Requirements........................................................................................................47
6.0 Strategy and Implementation Summary.......................................................................................47
6.1 SWOT Analysis.............................................................................................................................48
6.1.1 Strengths..................................................................................................................................48
6.1.2 Weaknesses.............................................................................................................................49
6.1.3 Opportunities.........................................................................................................................49
6.1.4 Threats.....................................................................................................................................50
6.2 Strategy Pyramid..........................................................................................................................50
6.3 Value Proposition.........................................................................................................................50
6.4 Competitive Edge.........................................................................................................................50
6.5 Marketing Strategy.......................................................................................................................51
6.5.1 Positioning Statement...........................................................................................................51
6.5.2 Pricing Strategy......................................................................................................................51
6.5.3 Promotion Strategy................................................................................................................51
6.5.4 Distribution Strategy.............................................................................................................51
6.5.5 Marketing Programs..............................................................................................................52
6.6 Sales Strategy.................................................................................................................................52
6.6.1 Sales Forecast..........................................................................................................................52
Table: Sales Forecast...................................................................................................................53
Chart: Sales Monthly..................................................................................................................54
Chart: Sales by Year....................................................................................................................54
6.6.2 Sales Programs.......................................................................................................................55
6.7 Strategic Alliances.........................................................................................................................55
6.8 Milestones......................................................................................................................................55
Table: Milestones............................................................................................................................55
Chart: Milestones............................................................................................................................56
7.0 Management Summary....................................................................................................................56
7.1 Organizational Structure.............................................................................................................58
Org. Chart: Organizational Chart.................................................................................................58
7.2 Management Team.......................................................................................................................58
7.3 Management Team Gaps.............................................................................................................59
7.4 Personnel Plan...............................................................................................................................59
Table: Personnel..............................................................................................................................60
8.0 Financial Plan....................................................................................................................................61
8.1 Startup Funding............................................................................................................................61
Table: Startup Funding..................................................................................................................61
8.2 Important Assumptions...............................................................................................................62
8.3 Key Financial Indicators..............................................................................................................62

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Chart: Benchmarks.........................................................................................................................63
8.4 Break-even Analysis.....................................................................................................................63
Table: Break-even Analysis...........................................................................................................63
Chart: Break-even Analysis...........................................................................................................64
8.5 Projected Profit and Loss.............................................................................................................64
Table: Profit and Loss.....................................................................................................................64
Chart: Profit Monthly.....................................................................................................................66
Chart: Profit Yearly.........................................................................................................................66
Chart: Gross Margin Monthly.......................................................................................................67
Chart: Gross Margin Yearly..........................................................................................................67
8.6 Projected Cash Flow.....................................................................................................................67
Table: Cash Flow.............................................................................................................................68
Chart: Cash......................................................................................................................................69
8.7 Projected Balance Sheet................................................................................................................69
Table: Balance Sheet.......................................................................................................................69
8.8 Business Ratios..............................................................................................................................70
Table: Ratios.....................................................................................................................................70
8.9 Long-term Plan..............................................................................................................................72
8.10 The Investment Offering............................................................................................................72
Table: Investment Offering............................................................................................................73
8.11 Valuation......................................................................................................................................73
Table: Investment Analysis...........................................................................................................74
8.12 Payback........................................................................................................................................74
Table: Payback.................................................................................................................................75
Chart: Payback Period....................................................................................................................75
Table: Sales Forecast.................................................................................................................................1
Table: Personnel........................................................................................................................................3
Table: Profit and Loss...............................................................................................................................5
Table: Cash Flow.......................................................................................................................................7
Table: Balance Sheet.................................................................................................................................9

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1.0 Executive Summary

Overview

Native Butchers Limited, is a startup specialty butcher shop to be launched later

this year.  It will sell a wide menu of meats to customers including medium- and
high-income residents of Port Harcourt, as well as high-income residents of
neighboring towns, and high-end caterers. It will expand to Lagos and Abuja in the
mid-term, and Enugu in the long term.

The Company

Native Butchers is established as a limited liability company owned by its two co-
founders and a board chairman. Essentially, it will be a subsidiary of a food-
centered company known as "Food4All Limited", alongside another company with
agricultural products as its strategic focus (tubers, legumes, roots, fruits etc),
known as "Sarrica Limited".   The business will be managed and directed by Alhaji
Uba Adamu, Fate Foundation Model Entrepreneur for 2011, a veteran butcher
with fifteen years' experience in butcher shops and Nkem Joseph-Palmer, an
experienced manager with an MBA from the prestigious Lagos Business School.
Uba will serve as the company's CEO and Nkem as the company's COO.  

The board of the company will be steered by Chief Mike Elechi a seasoned
administrator, notable businessman, passionate farmer and consummate
entrepreneur; he also has an MBA from the reputable CIEBS Business School. Chief
Mike would bring his leadership, experience and intellectual savvy to guide the
start-up to its set goals and objectives.

Products and Service

Native Butchers will sell beef, poultry, fresh fish, goat and domestic lamb.  Upon
request, the store will sell wild game such as buffalo, alligator, grasscutter, quail,
and other specially requested items.  The products will be purchased from
suppliers within a 100-mile radius of the office to have minimal impact on the
environment and to maintain product freshness.  Products will be purchased as
whole animals and butchered in the store by trained butchers.  The sales staff will
offer suggestions of substitutions or help customers fulfill their orders through
special orders in order to make sure all customers leave satisfied.

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The Market

The meat and poultry industry is one of the most important segments of Nigerian
agriculture. In determining living standards, income and consumption are the
most popular approaches. Income refers to earnings from productive activities and
current transfers. Measuring consumption over a week or month provides an
indication of a household's consumption habits over a year because it has a smooth
flow to it; in order words it is steady. Income however, tends to vary widely from
week to week or month to month. Consumption data is much easier to collect than
income data, particularly in agricultural communities or with self-employed
persons. Consumption is therefore a better indicator of living standards.

The consumption pattern of a country depicts the aggregate demand of goods and
services in the country, and in most cases it constitutes about 60 percent of the total
GDP of the country.

In a developing country like Nigeria, the consumption pattern is skewed towards

food i.e. food accounts for a higher proportion of the total expenditure, while in
developed countries the opposite is the case.

At the national level, it is clearly shown that the total expenditure on food and
non-food for 2009/2010 is N24, 253, 670, 127, 758.80 (Twenty-four trillion, two
hundred and fifty-three billion, six hundred and seventy million, one hundred and
twenty-seven thousand, seven hundred  and  fifty-eight Naira, Eighty Kobo).
64.68% of the total household expenditure in 2009/2010 was spent on food, with the
balance of about 35.32% spent on non-food items.

National and Rivers state consumption of meat are better represented in the tables below:

National
Percentage Percentage of Total
S/N Commodity Expenditure of Food Expenditure
Food
1 Maize 745,591,888,308.67 4.75 3.07
2 Rice 1,397,928,262,310.25 8.91 5.76
3 Other Cereal 1,635,936,079,663.30 10.43 6.75
4 Bread & Similar Foods 586,287,068,386.48 3.74 2.42
5 Tubers and Plantains 3,545,548,100,772.56 22.60 14.62
6 Poultry 91,558,294,033.21 0.58 0.38

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7 Meats 462,928,721,187.21 2.95 1.91

8 Seafood 670,176,425,506.33 4.27 2.76
9 Dairy Products 174,357,580,933.05 1.11 0.72
10 Oils, Fats and Oil rich 587,208,074,677.47 3.74 2.42
nuts
11 Fruits 294,162,613,610.86 1.88 1.21
12 Vegetables excludes 2,421,106,476,408.03 15.43 9.98
pulses
13 Beans and Peas 1,517,399,036,392.62 9.67 6.26
14 Sugar, Jam, Honey, 174,188,422,160.96 1.11 0.72
Chocolate and
Confectionary
15 Non Alcoholic 627,497,560,281.93 4.00 2.59
16 Alcoholic 82,192,845,211.53 0.52 0.34
17 Food consumed in 182,374,622,152.41 1.16 0.75
restaurants and
canteens
18 Other Non-Food Items 490,226,971,084.87 3.13 2.02
Total 15,686,669,043,081.70 64.68

Rivers
Percentage Percentage of Total
S/N Commodity Total Annual Expenditure of Food Expenditure
Food
1 Maize 1,152,490,736 0.23 0.11
2 Rice 35,510,210,836 7.12 3.52
3 Other Cereal 806,529,945 0.16 0.08
4 Bread & Similar Foods 14,828,559,600 2.97 1.47
5 Tubers and Plantains 145,722,841,222 29.20 14.46
6 Poultry 3,090,244,032 0.62 0.31
7 Meats 29,584,174,512 5.93 2.94
8 Seafood 82,949,982,708 16.62 8.23
9 Dairy Products 4,109,260,463 0.82 0.41
10 Oils, Fats and Oil rich 15,344,582,549 3.08 1.52
nuts
11 Fruits 9,574,499,688 1.92 0.95
12 Vegetables excludes 86,267,875,179 17.29 8.56
pulses
13 Beans and Peas 32,204,913,062 6.45 3.20
14 Sugar, Jam, Honey, 1,426,034,864 0.29 0.14
Chocolate and
Confectionary
15 Non Alcoholic 17,213,835,778 3.45 1.71
16 Alcoholic 3,989,907,724 0.80 0.40
17 Food consumed in 653,306,331 0.13 0.06
restaurants and
canteens
18 Food Items not 14,573,980,163 2.92 1.45
mentioned above

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Sub-total 499,003,229,393.66 49.53

Non-Food
Percentage Percentage of Total
S/N Commodity Expenditure of Non-Food Expenditure
1 Clothing and foot wear 88,029,843,350 17.31 8.74
2 Rent 183,912,143,455 36.17 18.25
3 Fuel/Light 49,421,767,616 9.72 4.91
4 Household Goods 43,090,337,388 8.47 4.28
5 Health Expenditure 13,477,321,449 2.65 1.34
6 Transport 42,424,327,325 8.34 4.21
7 Education Expenditure 11,456,848,712 2.25 1.14
8 Entertainment 5,205,618,301 1.02 0.52
9 Water 61,181,872 0.01 0.01
10 Other Services 71,424,173,535 14.05 7.09
Sub-total 508,503,563,001.97 50.47
Total 1,007,506,792,395.6

Consumption of meat in our primary market, Port Harcourt, is not a mirror image
of the national data.  From the statistics above (source: Federal Bureau of Statistics),
aggregate consumption rates of meat is higher than the national average. The
industrial nature of Port Harcourt confers an advantage other cities (other than
Lagos, Kano or Abuja) may not have in terms of aggregate meat consumption:
there is a large population of high-income consumers who can afford to spend a
sizeable portion of their disposable income on meat.

The justification of using beef as the benchmark for this business plan is gleaned from
empirical market research. A study done in the South West of Nigeria (in the absence of a
documented study in Port Harcourt) suggests that beef is the main source of protein for
Nigerians. Please see the table below:

Variable OYO (%) OSUN(%) ONDO(%) POOLED(%)

Preferred Meat
Beef 17.5 16.4 9.6 43.5
Chevon 6.3 9.1 5.4 20.8
Pork 2.9 3.0 2.5 8.5
Mutton 0.8 1.7 1.7 4.2
Chicken 8.6 9.6 5.0 23.2
TOTAL 100.00
*Factor Responsible for the
Preference
Income 18.5 12.5 10.4 41.4
Taste 20.0 25.0 25.0 65.0

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Price 17.5 14.6 15.8 47.9

Proximity to market 9.6 10.4 6.3 26.3
Health reasons 18.5 9.2 5.0 32.7
Religion 10.4 13.3 9.6 33.3
Other 4.2 2.1 2.5 8.8
Source: Field Survey,2010.
* Multiple Responses

Competition

Competitors for Native Butchers fall into the following categories:

 Grocery Stores - 7 stores in the Port Harcourt area

 Local meat vendors in residential areas and markets  
 Butcher shops (Very rare)
 Local abattoirs

Using the internet to sell meat is a blue ocean strategy, and Native Butchers will
enjoy the first-mover advantage this confers. There currently exists no structured
and organized meat processing company in the whole of Southern Nigeria, despite
the high consumption rates (relative to national averages), and this presents a
unique opportunity for value provision, market leverage, and a unique selling
proposition. Native Butchers will establish its competitive edge through the
expertise of its founders.  Alhaji Uba Adamu brings with him existing relationships
with the best suppliers of meat as well as an understanding of the craft of
butchering.  Coupled with Nkem Joseph-Palmer's understanding of food service
management, sales record in business to business sales, and financial acumen, the
pair will have an edge over the town's other butcher shops and grocery stores
within its niche market.

Financial Considerations

Funding for the launch of the business will be provided primarily by equity from
the three partners.  Each will contribute from their savings to launch the business. 
The remainder of financing will be made up in investments from high-net worth
individuals/associates of the partners, and accounts payable from delayed
payments on start-up costs.  The business seeks additional investment via private
placement to finance the purchase of the equipment needed. By the third year of
operation, the business would source financing to expand to become a medium
scale meat processing plant.

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The business will reach stable positive cash flow in its third month of operation,
allowing for expedited repayment of any obligations, as well as for dividends to be
paid to the owners.  Revenue will top N948 million and profit will reach about
N340 million in the third year of operation.

Introduction

The level of beef demand and consumption in Nigerian cities has been
questionably and progressively low. This study empirically modeled a demand
function of beef meat in Port Harcourt city with the aim of identifying major
demand shifters. Based on the regression analysis, unit retail price of beef and
disposable income were found to have significant and direct influences on the
quantity of beef demanded. Further, trend and policy shift variables represented
were found to have significant but inverse effect on quantity of beef demanded.
The study further showed that the quantity of beef (in number and meat
equivalent) slaughtered has been on the increase and as such, the per capital beef
consumption has become considerably higher over the years, when compared with
the minimum value recommended for Nigeria by FAO, in response to improving
disposable income and consumer perception. The future demand of beef is
however estimated to be high. To meet this demand there is the need for both
farmers and government to increase production levels of cattle by removing the
bottlenecks in livestock husbandry.

Despite Nigeria's abundant natural resources, non-crude oil exploitation occupies a

relatively small portion of GDP, and this neglect has made the agricultural sector
change from a net exporter of products to net importer of products. The pressure
on imports has increased due to the decline in the production of quality products,
increasing social appetite for processed agricultural products and the burgeoning
population.

50% of beef consumers in ECOWAS are from Nigeria and are largely responsible
for driving beef demand within the region. Considering Nigeria's population, meat
consumption is still below the regional average at 2kg per person per year in
Nigeria, compared with 8kg per person per year in West Africa.

Over the years, there has been an increasing protein deficiency within the Port
Harcourt business environment arising from low per capita consumption of animal
protein attributable to reductions in the supply of beef to the southern parts of
Nigeria.  In contrast to this is the strong rise in demand for animal products due to
the high rate of urbanization (about 50% of Nigeria's population of 160 million

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people live in urban areas), consumer's increasing purchasing power and the
emergence of a new middle class.

With the increasing demand for beef comes the demand by health-conscious, and
other discerning consumers, for healthier meat in regulated slaughterhouses;
Native Butchers is strategically positioned to acquire market share and provide
benefits to its stakeholders through its positioning as a versatile, environmentally
friendly, ethical and health conscious producer of quality meat products.

Native Butchers will be a specialty meat processing company that will buy
livestock (cow, goat and ram) and poultry to process and package for wholesale
and retail. Considering the huge prospect in meat business, we have identified an
untapped market and want to be the first firm to meet this need within the Port
Harcourt business environment. We have come to discover that with the growing
high class income earners within Port Harcourt and environs, the need to buy
hygienically prepared and packaged meat products in a very convenient way is on
the rise.

We propose to develop a medium scale meat production company in Rivers State,

Nigeria, however the financials of this business plan caters initially for a simple
slaughter house, and modest distribution and supply chains. The reason for
selecting Rivers State is because of its urban nature, the concentration of discerning
and health conscious consumers (Rivers State is the hub of the Nigerian oil and gas
sector where workers are enlightened on health, safety and environment issues,
and this has a ripple effect on the rest of the population), proximity to key
consumer populations in states like Abia, Cross Rivers, Rivers and Akwa Ibom
state, and proximity to the merchandising towns of Onitsha and Aba. Five hectares
of land would be leased for this purpose; this will be satisfactory for our current
requirements, and make room for future expansion. Plant and machinery would be
sourced from South Africa, India or China, and would include deboning machines,
processing and packaging/labeling equipment, bone crushers, mincing machines,
and sterilized cold rooms.

The Nigerian population and cultural demand (meat is an input into majority of
Nigerian dishes), as well as the variegated uses for meat (local grilled steak like
suya or local beef broth like pepper soup) will be strategic opportunities for
business sustainability.

The proposed company would take advantage of current government policies (like
the Agricultural Transformation Agenda, ATA, and the Federal Government's
Special Growth Enhancement Support, GES) and latitude for the agricultural and
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non-crude oil sectors, to build its customer base and reputation. At the heart of this
proposed growth will be the dictates of sustainable development, and Native
Butchers Limited would be an ecopreneurship emphasizing on environmental
sustainability in all its production processes, as well as CSR to its host
communities.

This business plan proposal leads the way by transforming shareholder investment
(a little above 22million naira) through a sustainable channel that guarantees a
gross margin of 34.75% within the first year, and 35.46% by year five. Revenue
grows from about 140 million naira in the first year to 1.5 billion naira in the fifth
year. Profits reach about 340 million naira by the fifth year, while the business
model guarantees a credible social impact alongside export and environmental
management opportunities.

Chart: Highlights

Highlights
N1,600,000,000

N1,400,000,000

N1,200,000,000

N1,000,000,000 Sales

Gross Margin
N800,000,000
Net Profit
N600,000,000

N400,000,000

N200,000,000

N0
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

1.1 Objectives

Native Butchers will measure its success by its ability to achieve the following
objectives:

1. Build sales to a minimum of N130, 000,000 within the first year of operations.

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2. Leverage on government initiatives for the sector to ensure business

sustainability by the second year.
3. Ensure a human resources program that guarantees employment for part-time
students of the universities and polytechnics in the Port Harcourt business
environment by the first year of business.
4. Ensure that sustainable development is meshed into its environmental
considerations, policies and plans by the first year of operations.
5. Develop an easy-to-use website for ordering of meat products by the first
quarter of the first year of business.
6. Cultivate an efficient supply chain by the first quarter of the first year of
operations.
7. Support the business activities with a ranch located within Port Harcourt
business environment by the fourth year of business.
8. Start exportation of meat products to neighboring African countries by the sixth
year of business.
9. Start exportation of hides and skin, crushed bones and hoofs by the third year
of business.
10. Ensure a consumer base that involves both B2B and B2C approaches by the first
year of business.
11. Ensure shareholders start receiving steady dividends immediately after the fifth
year of operations.
12.  Ensure that shopping at Native Butcher's Meat Shacks become part of
consumer culture by the fifth year of operations.

1.2 Mission and Vision

Mission

"To sell meat to Nigerians and their neighbors, one doorstep at a time in the most
ethical manner available to society"

Vision

"To be the leading brand in meat processing by the year 2020 through
ecopreneurship, amplified sales growth, efficient manufacturing process and
human capital differentiation"

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Native Butchers is a specialty butcher shop which seeks to serve the highest quality
meats, cut to customer specifications, and become the foremost specialty meats
provider in Nigeria.

1.3 Keys to Success

Native Butchers must follow these principles in order to achieve success in its
market:

1. Maintain high quality standards for its suppliers and continuously monitor this
quality.
2. Preserve meats in optimal conditions to maintain freshness while in the store.
3. Maintain excellence in the skill of butchering meats through hiring, training,
and supervision of staff.
4. Listen carefully to customer needs and respond with custom-cut products,
whether in person, over the phone, or through Internet orders.
5. Customer oriented production and marketing
6. Strict financial controls
7. Training, research and development
8. Excellent quality management systems
9. Top-of-the-line health, safety and environmental systems
10. Excellent customer service
11. Sustainable development through ecopreneurship

2.0 Company Summary

Native Butchers Limited will be a limited liability company registered under the
Nigerian Companies and Allied Matters Act. It will have a share capital of 10
million at inception and will be a private limited company.

Native Butchers is a startup specialty butcher shop to be launched in the coming

months.  It will sell beef, poultry, fresh/frozen fish and domestic lamb.  Upon
request, the store will sell wild game such as buffalo, alligator, grasscutter, quail,
and other specially requested items.  Customers will include medium- and high-
income residents of Port Harcourt, as well as high-income residents of neighboring
towns, and high-end caterers and restaurants.

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2.1 Company Ownership

Native Butchers is established as a limited liability company with ownership

amongst Chief Mike Elechi, Alhaji Uba Adamu, and Nkem Joseph-Palmer.  The
partners will share in management responsibilities with final decisions falling to
Chief Mike Elechi where there are differences of opinion.  The shareholder
agreement allows for shareholders to buy out the others in the case that the
partnership must be dissolved and sets predetermined methods to determine the
company's valuation in that case.

2.2 Startup Summary

Native Butchers will start its operations in the Port Harcourt business
environment, but would expand to locations like Lagos, Abuja and Kano in the
future. Most of its start-up expenses are essential to its positioning as a first-mover
within the Port Harcourt business environment in its business niche.

The following summary table shows the projected start-up costs over the three
months prior to the store's opening.

Start-up expenses for Native Butchers include initial insurance premiums covering
both general liability and product liability, as well as business renter's insurance,
rent to allow for build-out of the retail space, pre-launch marketing to cover flyers,
a direct mail campaign, and advertisements in local papers, the development of a
website with e-commerce capabilities to take orders and sell meats directly, and
the normal legal expenses for consultation and permitting.

Inventory on-hand at any given time must be relatively low, as all meats must be
kept extremely fresh and so will be ordered on a demand influenced basis.  Other
current assets include office and store furniture, shelving, computers, phone
system, and tools.  Long-term assets include the refrigerator unit for the shop,
refrigerated display cases, window displays, store fixtures, refrigerated delivery
tricycles and additional investments in improvements to the retail location.

A significant amount of cash is required to fund the first year of operations until
the business reaches break-even.

Table: Startup

Startup

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Requirements

Startup Expenses
Insurance N50,000
Rent N2,000,000
Computer N400,000
Stationery N200,000
Government Registrations N100,000
Furniture N500,000
Telephones and Internet N300,000
Basic Butchery Equipment N50,000
Others N500,000
Total Startup Expenses N4,100,000

Startup Assets
Cash Required N500,000
Startup Inventory N7,560,000
Other Current Assets N500,000
Long-term Assets N9,650,000
Total Assets N18,210,000

Total Requirements N22,310,000

Chart: Startup

Startup

N21,000,000

N18,000,000

N15,000,000

N12,000,000

N9,000,000

N6,000,000

N3,000,000

N0
Expenses Assets Investment Loans

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2.3 Company Locations and Facilities

Native Butchers shall run its operations from a head office located within the
business environment. It would also have branded kiosks located in various
residential areas and high traffic locations known as "Meat Shacks". A Meat Shack
would be equipped with basic butchery equipment, internet access and a
telephone line to serve consumers within a defined locality. Typically, Meat Shacks
will be well emblazoned and branded entities that would help in the top-of-the-
mind awareness for Native Butchers' customers, as well as one-stop shops for all
meat and fish products in every locality it exits. Vetted suppliers of fish, chicken
and chevon (goat flesh or meat) who adhere to HACCP standards and Native
Butchers' quality control mechanism would be allowed to sell their products
through Meat Shacks, provided there is a clear-cut exclusivity and financial
incentive for Native Butchers. The strategy is to focus on beef, while leveraging on
other suppliers for other protein requirements.

Beside every Meat Shack will be a "Suya Sensation" stand, and delivery of the
delicious but yet to be introduced (in southern Nigeria) "gas suya". Customers can
make orders for all types of roasted or grilled delicacies via the Native Butchers
website (www.nativebutchers.com) or via phone calls to a local Meat Shack.

3.0 Products

Native Butchers will provide the following products on a regular basis:

We shall offer varieties of beef as our main product, but would serve as an outlet
for the producers of other meat products like poultry and other livestock (e.g. ram,
goat etc), as well as fish. The varieties include processed beef, powdered meat
(danbu nama), spiced and dried beef strips (kilishi), minced meat, barbequed beef
(suya) and live cows.

Upon request, the store will sell wild game such as buffalo, alligator, grasscutter,
quail and more.  All products can be cut to the customer's specifications.

The products will be purchased from suppliers within a 100-mile radius of the
store to have minimal impact on the environment through trucking costs and to
maintain product freshness, or from the proposed ranch to be owned by Native
Butchers Limited.  Products will be purchased as whole animals and butchered in
the store by trained butchers.  They will be sold while fresh.  While products may
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be replenished within a few days, there is the possibility of certain items running
out because of high sales and going out of stock until new shipments may arise. 
The sales staff will offer suggestions of substitutions or help customers fulfill their
orders through special orders in order to make sure all customers leave satisfied.

3.1 Product Description

A recent report presented on the internet by Nairaland website showed, in glaring

terms, the deplorable state of the Trans-Amadi Slaughter, which, coincidentally, is
the main abattoir of the business environment. Poor meat handling, unhygienic
meat processing, unsanitary conditions are just some of the negative highlights of
the location. The pictures below help put Native Butcher's value proposition in
perspective

1.          The burning of live goats with old tyres at Trans Amadi abattoir;

2.          Beef displayed for sale

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The prime service offered by Native Butchers is the provision of healthy and
sustainable meat products that meet world-class processing standards. Apart from
the apparent product, byproducts such a waste are processed into fertilizers and
used to nourish plants, and can serve as a veritable revenue source. The bones and
blood  are  sold  to  feed  millers  to  be  processed  into  bone  and  blood  meal
used mainly in the poultry industry.

The horns and hoofs are used in the production of fertilizers and buttons while the
hides and skin are further processed and used in the production of shoes, wallets,
belt and watch straps amongst others.

In future, Native Butchers would also offer a cold room service; this is the process
of storing slaughtered, processed and packaged meat for other businesses that
require these services.

3.2 Product Volume and Growth Expectations

Most small butchery plants have a minimum of two people performing the
harvesting and dressing procedures. There may be an extra person bringing up
animals, working with offal, hides, heads, and waste tissues on the harvest floor.
Many efficient harvest operations can process at a rate equal to or exceeding 0.8
beef animals per man-hour. Using two people harvesting and dressing the

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carcasses will usually result in 12 beef carcasses dressed and hanging in the carcass
coolers in one day. In small operations, harvesting is usually done early in the
week with the same processors boning and processing the end of the week.

For the purposes of this business plan, we'll assume beef will be harvested twice
per day and the other species will be harvested in one to one and a half days with
the remainder of the week dedicated to boning and further processing.

The plant also anticipates processing 500 to 600 kg per week (at the onset of
business) of beef into further processed meats, which will be sold to the public.

It would be likely that processing begins in year two of the proposed plant with
volumes of at three times of that described above with incremental growth by the
following years. The harvest floor would accommodate twice the volume
anticipated. The plant would be designed such that carcass coolers and
refrigerated and frozen storage can be expanded if added capacity is needed in the
future.

3.2.1 Storage and Distribution

The meat processing plant would be designed to have adequate refrigerated and
frozen storage capacity for anticipated products. Refrigerated boxed storage
should be adequate for up to 7 days beyond processing. Frozen storage is adequate
for several weeks beyond processing.

Much of the processed meats will be sold at the plant; however, products sold in
the Meat Shacks can be easily distributed using large coolers transported in a
pickup truck via a distribution system which will see refrigerated tricycles and
motor bikes doing the retail home delivery.

3.3 Byproducts and Waste Products

The greatest liability to a new meat plant is disposal of waste products. Materials
such as waste fat, most bones, blood, and inedible offal represent a significant
percentage of the animal's carcass that must be disposed of. In Nigeria, these are

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either burnt or deposited as part of waste in abattoir, however in future these

waste products will be picked up by a rendering company owned by Food4All
Limited (the parent company for Native Butchers Limited)  who would process
them into animal supplements. Therefore, the following is a discussion of various
materials and their target market opportunity or disposal options.

Hides

Fresh "green" hides would be picked up routinely by a hide company. The plant
will have to manage hides to prevent their deterioration. Salt curing is the most
effective method of preventing deterioration and increasing the flexibility of
marketing hides to a variety of customers. Initially, hides will be laid out salted
and stored in a facility adjacent to or in a subterranean portion of the plant.

 Offal

Initially, the tongue, liver, and oxtail from cattle and the heart and hocks from hogs
will be cleaned, frozen, and packaged for specific customers. The remaining offal
(kidney, lungs, stomach and some hearts) would be considered waste material for
disposal.

 Bones/ Fat/ Tissue

The heads, hooves, bones, waste fat, and soft tissue of inedible offal will be
disposed of utilizing the strategies outlined in the next section.

 Blood

Fresh blood will be collected at the plant. Some of it can be collected in stainless
steel receptacles and sold if the price justifies it. Some of the blood could be used
by farms for fertilizer. However, most of the blood will be disposed of along with
the other waste materials as discussed in the next section.

Paunch

Paunch is the material left in the rumen of cattle and lambs when the animal is
harvested/slaughtered. This material can be used for fertilizer and can be fed back
to animals as a small percentage of the diet. Also, this material can be disposed of
in the same manner as other waste materials discussed in the next section.

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3.3.1 Disposal of Waste Products

There are typically three options for disposal of waste tissues from a small meat
plant:

1. Pick up by a rendering company for a fee. The fees depend on volume and
distance from the rendering plant. A common pricing strategy is to charge by
volume (per 55 gallon drum or barrel). Many rendering companies will take blood
as well as bones, inedible organs, meat scraps, fat, hooves, and heads. Some
companies will pick up hides and debit the value from the cost of the rendering
pick-up. These services are not available in Nigeria, and Native Butchers will have
to float a rendering company to manage this aspect.

2. Incineration. There are commercially-available incinerators for burning all

unwanted tissues. The disadvantage to this strategy is the energy cost to fuel the
incinerator and the emission concerns from neighbors if the plant is located near
other businesses or residences. This seems to be one of the short-term options open
to Native Butchers.

3. Composting. Stockpiling waste tissues (fat, bones, inedible organs, heads,

hooves, and blood) is becoming increasingly popular with small plants as
rendering pick-up costs increase and composting experience improves. A concrete
pad will be poured in a selected area close to the plant and often curbed to prevent
run-off of leachette. Dry ground wood chips or other forms ground organic matter
is required for mixing with the waste materials from the plant for proper microbial
growth in the compost pile. The grinding of long bones and head bones is often
necessary to reduce partial size. Inedible offal soft tissue, bones, inedible fat, blood
and paunch will be added daily to the compost pile and covered with the ground
organic matter and the piles turned with a loader at least once per week. After the
compost has had adequate time to fully decompose, the resultant material can be
used for organic fertilizer. Financial models in this business plan assume that
composting will be the strategy used to dispose of waste materials. 

3.3.2 Treatment of Specified Risk Materials

Despite issues with Bovine Spongiform Encephalomyelitis (BSE), the heads and
small intestines of beef cattle (cows or cattle under 30 months) will be sold for
human consumption and will not be composted. The only Specified Risk Materials
(SRM's) of beef carcasses that need disposal are the spinal column and tonsils
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(when selling beef tongues). For beef cows over 30 months, the entire head, the
vertebral bone, and dorsal root ganglia must also be removed and disposed of.
These materials will be composted or land-filled. Sheep heads should be handled
in the same way as cow heads.

3.3.3 Effluent and Water Use

  Water use

Beef will require approximately 300 - 450 gallons of water per animal carcass per
day. Therefore, this is also the approximate volume of wastewater produced. The
water would be potable, good quality (low nitrates and sulfates), and have high
volume per gallon. Small stock uses less than 100 gallons per animal. Since the
anticipated source of water is an on-premise borehole, water tests for water quality
will be conducted.

Wastewater

The most sensitive and critical part of planning a new slaughter plant or
expanding an existing plant is the effluent or wastewater system. All process
wastewater (effluent) from the slaughter floor should pass through a screen to
catch and separate solids. Screened effluent pumps and pipe system will convey
screened process wastewater to the proposed effluent treatment system.

A five-day Biological Oxygen Demand (BOD) value is used to measure the level of
treatment needed to discharge effluent safely. The BOD for all food-processing
effluent is relatively high compared to other industries. A high BOD level indicates
that effluent contains elevated amounts of dissolved and suspended solids,
minerals and organic nutrients containing nitrogen and phosphorus. The following
is assumed for the proposed small multi-species plant:

- Average daily process flow of 2,500 gallons per day of wastewater based on a 7-
day average. The peak daily flows = 6,000 gallons per day when harvesting
cattle. It may be necessary to utilize a surge tank to collect daily wastewater
effluent to be released at an even prescribed rate into a municipality or into the
plant's own treatment system.
- Incoming BOD into treatment - maximum of 1,600 mg/l
- Total suspended solids - 300 to 500 mg/l
- Total nitrogen = 140 to 160 mg/l

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The simplest strategy for handling effluent is accessing a municipal sewage line
and allow the municipally to treat the effluent if there is the capacity to do so. Since
we anticipate that there is no municipal plant accessible and the proposed local
municipality does not have this capacity, the plant will have to treat its own
effluent. There are several options for the plant to treat its own effluent and a
licensed wastewater engineer would be engaged to design a system specific for the
plant and its own area of the country. For the purposes of this business plan, a
commercial septic tank system and drain field will be the technology used to treat
the wastewater.

3.3.4 Permits and Certifications

Bodies with roles to play in food safety in Nigeria:

Government bodies

The Federal Ministry of Health (FMOH)

The Federal Ministry of Health is responsible for the formulation of national

policies, guidelines and regulations on food safety including monitoring and
evaluation. It is also responsible for the assessment of the nutritive value of food,
environmental sanitation, food environment and handlers, control of food borne
disease, quality of public water from taps, as well as national and international
matters relating to food.

The National Agency For Food And Drug Administration and Control (NAFDAC)

The National Agency for Food and Drug Administration and Control (NAFDAC)
is responsible for the regulation and control of the importation, exportation,
manufacture, advertisement, distribution, sale and use of food, drug, cosmetics,
medical devices, chemicals, packaged water and detergent at Federal and State
levels in Nigeria. Appropriate tests are conducted and compliance with standard
specifications for the effective control of the quality of food, bottled water and the
raw materials as well as their production processes in factories and other
establishments is ensured. The Agency undertakes appropriate investigations into
production premises and raw materials for food and establishes relevant quality
assurance systems including certification of the production sites and the regulated
products and pronounces on the quality and safety of food, bottled water and
chemicals. The role of the Agency also includes the inspection of imported food
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facilities to ascertain relevant quality assurance systems necessary for certification

of the imported food product.

The Standards Organization of Nigeria (SON)

The Standards Organisation of Nigeria is responsible for the formulation and

enforcement of set standards on the composition of imported and locally
manufactured food.

The Federal Ministry of Agriculture and Rural Development (FMA&RD)

The Federal Ministry of Agriculture and Rural Development is responsible for

formulating policies on primary agricultural production and practices which cover
plants, animals, pests and diseases etc.; supervising and overseeing its
departments and parastatals i.e. research institutes, colleges of agriculture, colleges
of fisheries etc.

The Federal Department of Fisheries

The Federal Department of Fisheries has the responsibility for ensuring that fish
and fishery products produced, imported into or exported from Nigeria conform
to international quality standards of wholesomeness as stipulated in the Sea
Fisheries (Fish Inspection and Quality Assurance) Regulation of 1995. The aim of
all of which is to ensure compliance with the Fish Quality and Quarantine Services
Regulation of 1995.

Nigeria Plant Quarantine Service (NPQS)

The NPQS was established in 1960 with an Act of Parliament "The Agriculture
(Control of Importation) Act No.28 of 1959" which gave the Division the mandate
to put in place quarantine regulations, infrastructural facilities, trained personnel
and scientific equipment and regulations that would enable her to meet the
objective of preventing the introduction of dangerous and destructive foreign plant
pests (insects, fungi, bacteria, virus, nematodes and weeds) of plants and plant
products into the country and prevent the establishment and spread where
introduction occurs despite all preventive measures. This mandate is in line with
the text of the International Plant Protection Convention (IPPC) of the Food and

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Agriculture Organization (FAO) of 1959, and revised in 1979 which Nigeria is a

signatory. There has been a review of the NPQS enabling laws and drafting of the
Nigeria Plant Protection Act also known as The Agricultural Control of
Importation and Exportation Act Amendment 2003 to conform to international
standards. Nigeria is one of the founding members of Inter-African Phytosanitary
Commission and is being represented by Nigeria Plant Quarantine Service.

Consumer Protection Council

Consumer Protection Council is the government agency responsible for protecting

consumers from unwholesome practices and assisting them seek redress for
unscrupulous practices and exploitation. The agency encourages trade, industry
and professional associations to develop and enforce quality standards designed to
safeguard the interest of the consumer.

Federal Ministry of Environment

The Federal Ministry of Environment has a role to play in the control of

environmental food contaminants, persistent organic pollutants, environmental
pollution, waste disposal, etc.

Federal Ministry of Trade and Investment

The Federal Ministry of Trade and Investment is the Notification Authority on

World Trade Organization (WTO) Sanitary and Phytosanitary rules in Nigeria and
therefore has a role to play in international trade in safe food.

Federal Ministry of Education

Federal Ministry of Education has a role to play through enlightenment and

manpower development by incorporating subjects on safe food handling in the
school curriculum and courses on Food Safety Management Systems i.e. Good
Agricultural Practices (GAP), Good Hygienic Practices (GHP), Good
Manufacturing Practices (GMP), Hazard Analysis Critical Control Points (HACCP)
etc in tertiary institutions necessary for manpower development.

Local Government Areas (LGAs)

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The Local Government Areas are responsible for Street Vended Foods, Bukaterias,
Catering establishments, local abattoirs and traditional markets.

Universities and Research Institutes

Tertiary and Research Institutes are responsible for research and will provide
scientific basis for policy development and program Sdesign in addition to relevant
training programs for capacity building and manpower development.

Private sector

The food processing/service industry applies the various standards, regulations

and guidelines to ensure that food manufactured, imported, exported, distributed
and sold for human consumption comply with the relevant food safety
laws/regulations. They should maintain appropriate internal Quality Assurance
based on the Hazard Analysis Critical Control Point (HACCP) principles to ensure
product safety and consumer protection. The private sector is also expected to
collaborate and complement government efforts in specific areas of education and
awareness creation on the need to adopt and cultivate safe food handling habits by
all categories of employees.

Various bodies are involved in food safety activities all along the food chain
therefore proper co-ordination of their activities is crucial for an effective food
control system. Poor or lack of co-ordination of activities sometimes leads to
duplication of efforts, higher cost of doing business, discouragement of
entrepreneurs etc and an ineffective food control system.

HACCP

Native Butchers Limited will prepare a written Hazard Analysis Critical Control
Point (HACCP) program and all the prerequisite programs that go along with it
including Sanitation Standard Operating Procedures (SSOP) and Good
Manufacturing Practices (GMP's). These programs should be written by someone
that is HACCP certified.

Other certification

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In order to accomplish this, the plant will also be third-party organic certified by a
certifying agency approved by NAFDAC, SON or absence of capacity by these, the
USDA. Native Butchers will acquire ISO 22000, ISO 140001, and ISO 90001
certifications.

Matters arising

From preliminary enquiries indicated that apart from the enabling legislation and
policies, no clear-cut government agency has the capacity to superintend Native
Butcher's activities as regards to third-party certification. Native Butchers will
complement the efforts of the regulatory bodies by employing self-regulation of its
practices. This implies that the company would arrange consultative meetings with
the regulatory bodies during which its views, issues of concerns and capacities are
discussed and taken into account during decision making. It hopes to form
associations that will enable the regulatory bodies organize targeted capacity
building training programs for the industry participants.

The global trend in food safety control emphasizes a multifaceted and

multidisciplinary approach with effective co-ordination and collaboration between
the regulatory bodies, the industry, academia, research institutes, professional
bodies, consumer associations and the general public. A national food safety policy
which spells out the roles and responsibilities of all stakeholders is essential for
achieving an effective food safety control system.

3.4 Humane Handling and Stress on Animals

There are number of factors that cause stress in livestock such as handling,
transport, weather conditions, and severe restrictive confinement. Severe stress
increase the release of cortisone in the animal, which can cause a number of
biochemical effects and can affect muscle pH, water holding capacity, meat color
and texture. Therefore, it is important to reduce the stress as much as possible
before harvesting these animals. Animals should not be overcrowded in trailers
and pens when being penned or transported; Animal handling facilities, animal
movement, and penning techniques prescribed by Dr. Temple Grandin would be
considered at the packing plant.

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3.5 Planned Plant Size and Scope

It is anticipated that labor will be utilized in such a way as a work crew will
harvest the animals on specific times daily on a weekly basis, and then the same
crew will bone and fabricate the carcasses on separate times after the harvest is
completed. The plant size will be designed for the number and type of animals
processed, the size of the carcasses, and the length of time the carcasses need to be
chilled before boning. For the purposes of this business plan, the following species
and numbers processed per week will be used:

 Table: Species and numbers of animals processed per week

Species # Carcasses per week Carcass chill time before
boning, hrs
Beef cattle 4– 12 48
Chicken N/A N/A
Lambs/goats N/A N/A

  

3.5.1 Estimated Plant, Property and Equipment

This business plan will use a 6,200 sq. ft. steel building inclusive of room sizes
detailed below in order to accommodate the number of animals and carcass
chilling time shown in the table above.

Processing room sizes

Table:  Room size estimates for the plant

Sq. footage
Harvest floor Inedible 600
cooler 144
Carcass drip cooler (hot box) 320
Carcass aging cooler 550
Cutting/boning room Packaging 412
room 400
Blast freezer Storage 160
freezer Storage cooler 400
Fresh sausage room (includes 64 sq. ft. cooler) Spice 600
room 600
Supply room Storage 72
(hooks, etc.) Office, 225
welfare, retail 100
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Maintenance room(compressors, etc) Hallway 900

270
304

Total building 6,177

Estimated building-only cost N24,150 N149,174,550

0

Equipment

The exact listing and cost of equipment is highly specific to the following:

- Location of the plant.

- Amount of used and new equipment available to be purchased.
- Amount of sophistication desired (i.e., removing hides off-rail using a cradle or
on-rail with a mechanical hide-puller).

For the purposes of this business plan, the following equipment list will be used
and the total cost representative of 90 percent new equipment purchases in the
long term:

Estimated equipment listing:

Department          Equipment

Harvest                  Restrainer

Harvest                  Captive bolt stunner

Harvest                  Hoist (bleeding)

Harvest                  Beef cradle

Harvest                  Hog cradle

Harvest                  Hide pulling hoist

Harvest                  Splitting saw

Harvest                  Brisket saw

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Harvest                  Breaking saw

Harvest                  Trolleys (beef and hogs)

Harvest                  Trolley spreader

Harvest                  Trolley rack

Harvest                  Stainless steel stand (final rail)

Harvest                  Gut buggy

Harvest                  Offal cart

Harvest                  Hydraulic lift for final rail

Harvest                  High pressure hose

Harvest                  Pressure pump

Harvest                  Plastic barrels

Harvest                  Head racking & washing

Harvest                  Electronic rail scale

Harvest                  Sterilizers

Harvest                  S.S. desk

Coolers                  2-way switches

Coolers                  Railing

Coolers                  Rail hangers

Coolers                  Lactic acid sprayer

Fabrication           Stainless steel tables

Fabrication           Knives, steel, scabbard

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Fabrication           Knife sharpener

Fabrication           Band saw

Further processing               Meat mixer/grinder

Further processing               Mixer

Further processing               Various totes and s.s. containers

Further processing               Portioner for grinder

Further processing               Stainless steel tables

Further processing               Sausage stuffer w/ linker

Further processing               Meat injectors

Further processing               Vacuum tumbler

Further processing               Bacon slicer

Further processing               2-truck smoker/cooker

Further processing               Portion weight scales

Packaging             Misc. freezer carts and baskets

Packaging             Roll stock packaging machine

Packaging             Chamber vacuum packaging machine

Packaging             Dip tank or steam tunnel

Packaging             Floor scale

Packaging             Scale labeler

Packaging             Box strapper

Packaging             Box scale labeler

Packaging             Ice machine

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Shipping Pallet jack

General plant        Hand wash sink

General plant        Rotary screen

General plant        Tools

General plant        Wall thermometers

General plant        Temperature recorder

General plant        Miscellaneous equipment

General plant        Blood tank

General plant        Paunch tanks

General plant        Hot water heater

General plant        Foamer

General plant        Pressure washer

General plant        Skid steer loader

General plant        Rendering totes

General plant        Pumps

Laboratory           Refrigerator

Laboratory           Incubator/counter

Laboratory           Scale

Welfare  Lockers

Welfare  Misc. employee kitchen equip.

 
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This equipment listing with 90% new equipment is estimated at N72,450,000.

Total plant and property costs

Table: Estimated Plant and Property capital costs of the project

Plant &
Property, (N)
Land (10 acres) 32,000,000
Building 149,174,550
Dirt work, roads, connections 24,150,000
Refrigeration 48,300,000
Hide building 9,660,000
Commercial septic tank & drain field 24,150,000
Concrete slab for compost 8,050,000
Animal receiving pens/concrete 16,100,000
Total 311,784,550

Disclaimer: The costs represented in the Tables above are conceptual only based on
company experience with similar-sized operations. These estimated costs have not been
confirmed by an engineering or construction company

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3.6 Competitive Comparison

3.7 Sourcing

Native Butchers shall source its cattle from Adamawa State in the short-run because of
current security considerations. In the midterm, it shall source its inventory from
neighboring African countries and in the long run, it would maintain a cattle ranch where
it shall cultivate and cross-breed varieties of cattle for optimizing of quality.

3.8 Sales Literature

3.9 Technology

Native Butcher will process meat with robust equipment like the deboning machine, bone
crusher, minced meat machine. The processing would also involve stages that would
enhance the quality of the processed meat via screening, sterilization, packaging and
storage.

3.10 Future Products

The future for Native Butchers Limited is the export of its products outside the country.
Processed beef products, as well as hides/skins, hoofs, crushed bones etc are in demand for
export to various countries where they are utilized for various manufacturing processes.

 
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4.0 Market Analysis Summary

There is currently an untapped market opportunity for the meat business, due to the
inability of existing providers of meat to cater to convenience and health-consciousness of
their consumers. Several consumers are restricted by work and social considerations from
ordering adequate quantities of meat products, either because of proximity to traditional
markets or hygiene considerations.

4.1 Market Segmentation

Our target market include busy corporate workers in financial institutions, oil & gas,
telecommunication industries and firms (fast food chains/hotels and catering companies
who   service oil and gas companies) within   Port Harcourt and its environs. These
therefore segment our market into five major categories:

           1. The general public who are often slaughter market patrons.

           2. Internet-based purchases by corporate consumers.

           3. Restaurants, Eateries and Fast Food outlets

           4. Corporate Catering Companies who buy to support culinary operations

           5. Convenience seeking Meat Shack patrons

Table: Market Analysis

Market Analysis
2014 2015 2016 2017 2018
Potential Customers Growth CAGR
Slaughter Market
3% 100,800 104,026 107,355 110,790 114,335 3.20%
Patrons
Internet-based
5% 24,000 25,200 26,460 27,783 29,172 5.00%
Purchases

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Restaurants, Eateries
10% 24,000 26,400 29,040 31,944 35,138 10.00%
and Fast Food Outlets
Corporate Catering
10% 144,000 158,400 174,240 191,664 210,830 10.00%
Companies
Meat Shack Patrons 10% 168,000 184,800 203,280 223,608 245,969 10.00%
Total 8.37% 460,800 498,826 540,375 585,789 635,444 8.37%

Chart: Market Analysis (Pie)

Market Analysis (Pie)

Slaughter Market Patrons

Internet-based Purchases

Restaurants, Eateries and Fast Food Outlets

Corporate Catering Companies

Meat Shack Patrons

4.2 Target Market Segment Strategy

Native Butchers believes that two major marketing approaches will be needed to
continuously to achieve profitability. These approaches are:

         - Business to consumer marketing

         - Business to business marketing

Business to Consumer marketing: this is the process of devising and tailoring our processes
to satisfy the needs of end users of our product(s). We will achieve this through the
implementation of direct (personal contact, mails etc.) and indirect (referrals, social

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networking) marketing technique which will be supported by state of the art information
technologies, friendly and persuasive sales personnel.

Business to Business marketing: this is a process of devising and tailoring our processes to
satisfy the needs of firms (fast food chains/hotels and catering outfits) for our product. We
will achieve this through the  implementation of direct  marketing  both  by  off  line 
practice  of  our  highly  experienced  sales representatives.

Market segmentation for Native Butchers is based on the specific market opportunity in the
Port Harcourt area.  While low-income households are perfectly content with purchasing
the meat options at local outlets, households with a greater level of disposable income are
interested in expanding their options for home cooked meats.  Furthermore, these
customers entertain in their homes to a greater extent than low-income households and
prefer to offer high-quality or rarer meat options at these events.

Caterers, especially those serving high-end corporate and private events, and upscale
restaurants seek high-quality meats at wholesale prices.  Native Butchers will sell in bulk to
catering businesses and restaurants at a substantial discount from retail prices, while still
allowing for margin.  Caterers and restaurants will be required to order in advance to allow
for specialty orders of meats and not deplete the products available at the retail location for
immediate purchase.

4.2.1 Market Needs

4.2.2 Market Trends

4.2.3 Market Growth

4.3 Industry Analysis

Nigeria is a major hub of animal product consumption in Sub-Saharan Africa. It is also the
largest livestock-raising country (with an estimated 16 million head of cattle) in West Africa
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despite the fact that meeting the ever-increasing domestic demand is a major economic
stake for Nigeria and neighboring countries. Livestock plays a very important role in
Nigerian agriculture contributing about 12.7% of the total agricultural GDP (CBN 1999).

 Migratory shepherds and farm herders, majority of whom are of Peul ethnicity (Shuwa
Arabs, Koyam, Kanuri, Kanembou, Touareg, etc are also ethnic herders), number about 8
million and ensure the import flows of live animals from Niger, Cameroun, Chad and Mali.
These imports are hard to assess as many of the animals are "naturalized" when they cross
the border, some of which are fattened and finished on their way to the final market
outlets.

The demand for these sources of "red meat" as they are usually called has continued to be
on increase and sometimes the supply is affected by frequent religious/communal crisis
which makes the product very expensive in the south of Nigeria. We intend to meet this
gap through Native Butchers as we see a market that is growing amongst the professional
elite within Port Harcourt and its environs, which is a member State in the Southern
Nigeria, for our product.

The American Meat Institute provides the following analysis:

"The meat industry is unique because it relies on live animals as its raw materials.  Within
livestock production, there is a classic, livestock price cycle.  Prices rise and fall as
producers raise more animals in response to high prices or low supply, and then cease
producing when livestock inventories become high and prices fall.  At the low points in the
livestock price cycle, some livestock producers have called for reviews of meat packing
industry structure to determine if the structure may be causing a price decline.  Each
review has found that industry structure is not to blame for livestock prices.  Rather, the
basic laws of supply and demand most often are the cause."

4.3.1 Industry Participants

The flesh of bovine animal that is in butchery is called beef. It is used generally to refer to
the meat of a heifer, cow, bull, young bull, bullock or steer, even if the tenderness and
flavour may vary greatly. It is a rich source of protein, lipid, vitamins, phosphorous and
other substances that are nutritionally important. The demand for animal protein in

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Nigeria, like in other developing countries of the world, is far from being met. The average
minimum supply of animal protein per head per day for Nigeria was put at 13.26g
(Okuneye, 2002), far below the recommended minimum of 35g of protein expected to come
from meat products (Oyenuga, 1987). The world shortage of protein particularly in
developing countries like Nigeria has necessitated the investigation into several sources of
protein. The acute shortage of protein has been attributed to the phenomenal rise in the
price of animal feed which accounts for about 60-80% of the cost of intensive production,
particularly for ruminants. This has the effect of escalating the prices of animal products
beyond the reach of the average Nigerian (Afolabi, 2002). Although there are many sources
of animal protein, studies have shown that products from cattle are the most commonly
consumed in Nigeria. Ikpi (1990), stated that between 1970 and 1989 beef contributed over
70.93% of the total meat consumed in Nigeria; consequently the cattle industry provides a
better nutrition through which the living standard of the people can be improved. The
issues raised so far tend to center more on production. However, production and
marketing are intricately linked. Olukosi et al. (2007), viewed marketing as part and parcel
of the production process since it creates utilities of form, place, time and possession with
goods and services produced, thus constituting a bridge between production and
consumption.

In Nigeria, there exists a high rate of spoilage of agricultural products, including beef,
arising from poor storage and transportation facilities thereby hampering the total supply
of food reaching the consumers' table (Okuneye, 2002). According to the National Livestock
Project Division (NLPD, 1992), the supply of Cattle and its product have been declining
while the demand has been increasing, the short fall in supply of cattle has often been
linked to the high cost of cattle marketing, because the cattle are brought from the Northern
part of the country to the South, usually there is high cost of transporting the Cattle
considering the long distance that the traders have to travel with them. This among other
factors probably explains why Port Harcourt City currently ranks among the Cities one is
likely to record the highest unit price for retail beef among major Cities in Southern
Nigeria.

Other factors that could also affect marketing of beef include, market policy, marketing
development, market infrastructure, market information, and enabling environments. The
pricing of cattle in designated urban markets across Nigeria is shrouded in secrecy until a
bargain is struck. According to Olukosi et al. (2007), the exact number of agents in these
markets is difficult to determine and various unfixed charges and commissions are paid by
the buyer, depending on his bargaining power. Most of the butchers and merchants are
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registered, but the brokers are not recognized to be registered officially, so they operate
without license. It is alleged that the involvement of too many middlemen in the marketing
of animal products and by-products leads to an inefficient distribution system, high
marketing costs and margins (Ekunwe et al., 2008). Also, it is a known fact that most
agricultural product are bulky, perishable and highly prone to microbial attack which leads
to their deterioration in quality and finally results in the spoilage and wastage of these
products. Ezekiel (1988), identified two marketing channels for beef cattle in old Gongola
State (now comprising of Adamawa and Taraba states). The first one was within the State
and was quite simple, moving from producer to butcher/wholesaler to retail butcher before
getting to the final consumer. The second channel linked terminal markets outside the State
and included brokers, merchants, terminal markets and butchers as middlemen.

In order to maintain the quality and quantity of beef required by consumers so as to meet
their desires and recommended minimum protein level, there is need to have an efficient
marketing system. Improved marketing efficiency is a common objective of farmers, food
marketing firms, consumers and the society at large (Olukosi et al., 2007). Marketing
efficiency, which is a percentage of value added by marketing over cost of marketing, could
be achieved by decreasing input per unit of output.

The Marketing Channel for Beef in Port Harcourt Metropolis: The results as presented in
Table 1 indicates that the marketing channel comprised of wholesalers and retailers only,
with majority of the marketers being retailers (79%) who dealt directly with the final
consumers. Only 21% of the marketers were wholesalers, suggesting that beef marketing in
Benin metropolis involves mainly retailers as can be found in the marketing of other
sources of meat. However, more complex marketing channels have been reported for other
foodstuffs. For instance, Asumugha et al. (2008), in a study on the marketing channels for
yam in Nigeria, reported a complex web of eight possible flow channels for the movement
of yam to complete the marketing chain. The relatively less perishable nature of yam, as
against beef could a ready explanation for this.

Irrespective of the critical role played by middlemen in the distribution channel, a chain
that is too complex could impact negatively on the marketing system in the long run. The
finding reported in this current study compares favourably with the finding of Erhabor et
al. (2008), who equally reported wholesalers and retailers as the only middlemen in the
study carried out on the efficiency of beef marketing in Edo State. Attention must therefore
be placed on the activities of the retailers, who constituted the bulk of the middlemen

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reported in this study (79%). Relevant regulatory bodies must ensure that these retailers are
properly monitored to ensure safety of products for consumers.

 Table 1: Marketing distribution for beef to consumers

Source Frequency Percentage
Wholesaler 25 20.8
Retailers 95 79.2
Total 120 100
Source: Computed from Field Survey Data, 2011.
 

The most direct and frequently used channel for beef marketing (as shown in Fig.1) was
that from cattle rearers (producers) in the Northern part of Nigeria through the wholesale
merchants from the North to local merchants in Port Harcourt City, who sell directly to
wholesale butchers who are then patronized by retail butchers that sell directly to final
consumers in the open markets. This appears to be the quickest (and by implication,
cheapest) route to get beef in Port Harcourt City probably due to reduced activities of
middlemen. Consumers also prefer this channel due to the high level of freedom it affords
buyers to select their preferred beef parts and to haggle for suitable price. Such
opportunities seldom exist in organized meat shops where prices are fixed and beef are
stored in frozen form, making it  difficult  to decipher preferred parts. Consumers however
expressed deep reservations about the unhygienic conditions in which the meet is
displayed in the open market which predisposes it to infestations by flies. This analyses
compares favourably with the report by Waziri et al. (2011), who studied goat and chevon
(goat) meat marketing in Delta State and posited that consumers preferred the shortest
channel that gets the meat to them in the open market, arguing that meat hawkers usually
had little quantity of chevon making it difficult for consumers to compare meat parts before
purchase.

Marketing Cost, Marketing Margin and Marketing Efficiency Index: As shown in the
marketing channel analysis, cattle can only be slaughtered and processed to beef by
wholesale butchers. This section would thus center on wholesalers and retailers who form
the bulk of the middlemen in the beef business. A summary of the average marketing cost,
marketing margin and marketing efficiency index per kilogramme of beef is presented in
Table 2. The components of the marketing cost are shown in Table 3. The cost of
transportation constitutes almost 60% of the marketing cost for retailers and only 19% for
wholesalers. Wholesalers however, spent more on market charges (32%) and processing
(39%). This is because the function of slaughtering and singeing is their responsibility.

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Another clear area where retailers incurred more marketing cost was in storage, since they
handle raw beef (sold and unsold). The market charges are largely arbitrary, depending to
a large extent on the haggling powers of the butchers. These findings agree with Olukosi et
al. (2007), who observed that the exact number of agents in these markets is difficult to
determine and various unfixed charges and commissions are paid by the buyer, depending
on his bargaining power. From the analysis, the bulk of the money paid by the final
consumer (about 57 - 62%) goes to the producers as selling price. This is also reflected in the
marketing margin (17.72% and 27.91% as retailer and wholesaler margin respectively).

A comparative analysis of wholesaler and retailer margin showed that retailers incurred
higher marketing cost (N168.81/kg as against N78/kg for wholesalers).

Further analysis of the marketing efficiency index indicated that retailers were making
N0.89 from every naira invested in beef marketing, while wholesalers made
N1.90/invested. This result agrees with the findings of Musa et al. (2011), who reported
wholesale and retail marketing margins of 20.52% and 16.39% respectively for mutton
marketing in Kano. It however contrasts with the findings of Erhabor et al. (2008), who
reported higher margins for higher marketing efficiency index for retail beef marketing
(4.89%) than for wholesale marketing (1.82%). Given the mean daily beef sales of 34kg by
retailers and 138 kg by wholesaler respectively, these middlemen could earn decent
incomes in present day Nigeria, where monthly minimum wage is still below N20,000.
However, this can only be realizable if the market for beef in Port Harcourt City is stable
enough to ensure regular sales.

Table 2: Marketing Cost, Marketing Margin and Marketing Efficiency Per kilo of Beef

Purchasing Price Marketing Cost Selling Price Marketing Margin (%) Marketing efficiency
index
Retailer 531.19 168.81 850.75 150.75 (17.72%) 0.89
Wholesaler 305 78 531.19 148.19 (27.91%) 1.90
Mean 418.09 123.40 690.97 149.48 (22.81%) 1.39
Mean daily quantity of beef sold by retailers = 34kg Mean daily
quantity of beef sold by wholesalers = 138kg Source: Computed
from Field Survey, 2011.

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Constraints faced by Beef Marketers in the Study Area: Beef marketers in the study area
identified constraints faced in the business of beef marketing. The identified constraints
were ranked in a Likert-type scale and the most important constraints faced by these
butchers are presented in Table 4. Transportation difficulties, poor access to credit facility,
high marketing charges and perishability of beef were the most serious constraints faced by
the marketers, since these variables had a mean that was  greater than or equal to 3 while,
processing and storage constraints had means less than 3, and as such were not considered
as major constraints in the study area. These important constraints also contribute to
increases in the marketing cost and could even reduce marketing efficiency. Transportation
difficulties would for example, eventually translate to high cost of transportation. If
marketing efficiency is to be achieved, serious attempt must be made to address these
constraints.  This result is in consonant with the findings of Ogisi and Begho (2011), who
reported spoilage, absence of credit facilities and market infrastructure as some of the most
important constraints faced by fish marketers in Delta State, and recommended that
government should provide adequate affordable transportation to prevent losses in transit
as well as stores and cold storage to check spoilage.

Market Locations: The main volume in the industry is now concentrated in four main
products (beef, mutton, chevon and chicken), all of which compete for retail sales through
major local markets, "side-markets", spots in residential areas, supermarkets and others.
The growth of the superstores made processed meats available to consumers who are
health conscious. Products are similar and quite competitive, costs and cost control is
critical, and channel management and channel marketing are the keys to these business'
continued success.

In the major local markets where most abattoirs are situated, the rise of the departmental
store channels has failed to siphon a lot of volume from the older and more traditional
open air marketing methods.

Summary: Form the past paragraphs, it has been shown that beef is mainly marketed in
Port Harcourt City by wholesalers (21%) and retailers (79%). Comparative analysis of
wholesalers and retailers showed variations in marketing cost components. Wholesalers
were also shown to be more efficient in beef marketing, with marketing efficiency ratio of
1.90 as against 0.89 recorded for retailers. Results of constraints faced by beef marketers in

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their marketing effort indicated that transportation difficulties, poor access to credit facility,
high marketing charges and perishability of beef were the most serious constraints.

From the above industry analysis, it is therefore safe to recommend that:

Native Butchers should provide mobile cold-rooms for easy transportation of beef. This
would reduce the constraint of high perishability/spoilage of beef and result in quality
enhancement. It should liaise with Government authorities and regulatory bodies to
intervene in the area of high/arbitrary marketing charges by helping to reduce such
charges.

Investment must be made on critical aspects of beef marketing that would help reduce
exposure to flies and harsh weather conditions. This would ultimately ensure increased
profitability and by extension, sustainability of the business.

4.3.2 Competition and Buying Patterns

Competitors for Native Butchers fall into the following categories:

 Grocery Stores - 7 stores in the Port Harcourt area

 Local meat vendors in residential areas and markets 
 Butcher shops (Very rare)
 Local abattoirs

Grocery stores provide basic meat options at relatively low prices.  They are chosen by
customers interested in buying meat along with all of their grocery and food needs, and not
traveling far from their home.  These customers will sacrifice some quality and options for
price and convenience.

Local meat vendors serve clients interested in the lowest price and able to sacrifice some
convenience (longer waits and longer travel times) for the lowest price.  They offer meats of
the same range of options and quality as grocery stores.

Butcher shops are not very popular in Port Harcourt, but are run by entrepreneurial
Nigerians who want to add additional value to what the local meat vendors' offer. Because
its meats are only slightly higher quality than local meat vendors, Butcher shops do not
serve caterers and restaurants, but sells products primarily to medium income households.

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Abattoirs focuses only on red meat and not poultry.  They sell meats to caterers and
restaurants, but these businesses would likely consider using a different vendor which
could provide a wider range of options, as well as improved hygiene and convenience. 

Indirect competitors (and also potential competitors) include restaurants, as consumers

interested in specialty meats may choose to eat out instead of cook the meal themselves. 

4.3.3 Main Competitors

Due to the apparent need and absence of standardized meat processing plants to serve
consumers, it is assumed there is little to no competition for Native Butchers services in the
region.

4.3.4 Barriers to Entry/Core Competencies

The following core competencies are necessary for this meat processing company to be
successful:

1.  The successful hiring, training and supervision of the Plant Manager and other plant
employees.

2. High quality workmanship with meat processing. 

3. Well-designed food safety programs and successful monitoring.

4. Disciplined control of overhead costs.

5. Good record-keeping, cost-of-production analysis, and sales analysis.

6. High level service to customers.

7. High level attention to food safety quality.

8. Business flexibility to make changes to take advantage of opportunities or correct

problems.

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4.3.5 Risk Factors

Possible risk factors that could be a barrier to entry or could undermine positive earnings
include the following:

1. Incidents of positive E. coli 0157:H7, Listeria, or salmonella tests resulting in recalled

products and loss of customer confidence.

2. Inability to raise sufficient capital to construct the building and to finance operating
expenses.

3. Poor relationship with relevant government agencies resulting in excessive NCR's and
possible production delays.

4. Loss of customers due to unhappy producer customers or retail or food service

customers spreading negative comments.

5.0 Web Plan Summary

Native Butchers' website will be a dynamic marketing tool for the company that serves the
needs of business development, sales, and recruiting. The company site will provide
information about Native Butchers' products and services for target customers and
potential business partners, such as marketing collateral, technical white papers, and new
product updates. It will also serve as a dynamic message board for placing product orders,
and will automatically forward texts of orders to the CEO, COO and expediters, to ensure
that every order is treated with the priority it deserves.

As the company grows, its recruiting needs can be addressed by posting career

opportunities and FAQs about the company. Nativebutchers.com will also communicate
company news to create and maintain positive public relations with the community and
investors. The goal will be to implement a functional and professionally designed
website that can be adapted to meet the company's growing needs.

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5.1 Website Marketing Strategy

Native Butchers will maintain a two-way link between its website and consumers. In

addition to using the page as a sales tool and making it an item on all search engines, it will
develop a monthly newsletter and a links page for other sites that support its objectives
(e.g. meat/health sites, organic food product information sites, cooking sites, spices and
supporting condiment sites etc. It hopes to publish recipes and unique uses of its products,
while maintaining two-way links between large women's organizations and supporters.

5.2 Development Requirements

Creation of future versions of the Native Butchers website will continue to be outsourced to

a professional graphics designer with years of experience. The contractor will work with
the marketing department to conceptualize the company's logo and overall design. It will
be maintained in-house and major site redesigning will be made through a contractor. 

6.0 Strategy and Implementation Summary

1. Establish its retail location by signing a lease once funding is secured.

2. Begin by targeting high-income residents of Port Harcourt and the surrounding towns,
as well as medium-income residents of Port Harcourt and business customers (upscale
caterers and restaurants).
3. Business customers and retail customers will be grown as separate revenue streams, but
will reinforce each other.
4. Establish Meat Shacks in various high-density residential localities in Port Harcourt
City
5. Establish an efficient distribution system that maintains the freshness of products
6. Establish an excellent sourcing system for cattle and other raw materials
7. Ensure that its processing plant is built by the third year of business
8. Ensure that it builds a ranch that matches its sales growth projections and sourcing
requirements
9. Ensure that customer service is the bedrock of its delivery
10. Find efficient ways of improving processes, and ensure that con

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6.1 SWOT Analysis

The SWOT analysis provides us with an opportunity to examine the internal strengths and
weaknesses Native Butchers Limited must address. It also allows us to examine the
opportunities presented to it, as well as potential threats.

Native Butchers has a valuable inventory of strengths that will help it succeed. These
strengths include: a knowledgeable and friendly staff, state-of-the-art computer hardware,
a strong leadership (the chairman) /management and a clear vision of the market need.
Strengths are valuable, but it is also important to realize the weaknesses Native
Butchers must address. These weaknesses include: a dependence on quickly changing
technology, and the cost factor associated with sourcing, marketing and retaining product
freshness.

Native Butchers' strengths will help it capitalize on emerging opportunities. These

opportunities include, but are not limited to, a growing population of health conscious
consumers, the rapidly falling cost of Internet access and the growing social bonds fostered
by the new Internet communities. Threats that Native Butchers should be aware of include,
perception devaluation through bad press or unfounded gossip from direct/indirect
competition, government legislation, defective products due to poor inefficient staff, and
emerging local competitors.

6.1.1 Strengths

1. Knowledgeable and friendly staff. Native Butchers will go to great lengths to find
people with a passion for marketing and good customer service. The staff will be both
knowledgeable and eager to please.
2. State-of-the art equipment. Part of the Native Butchers experience includes access to a
state-of-the-art website and technology that enables improved customer shopping
experience, as well as creates top-of-the-mind awareness for all. Our customers get
rapid response to the enquiries and would be allowed to make product comparisons, if
necessary.
3. Upscale ambiance. When you walk into Native Butchers, you'll feel the technology,
efficiency and the "sense of hygiene". High backed mahogany booths with flat-screen
monitors inset into the walls provide a cozy and for receptive shopping environment.

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Large round tables with displays viewable from above provide a forum for larger
gatherings and friendly "how-to" classes on the Internet. Aluminum track lighting and
art from local artists sets the mood. Last, but not least, quality non-alcoholic
beverage machines and a glass meat display case provide enticing refreshments.
4. Clear vision of the market need. Native Butchers knows what it takes to build an
upscale meat retail outlet. We know the products, we know the customers, we know the
technology, and we know how to build the service that will bring the three together.
5. Innovation. By our quest to succeed we have tied this vital virtue to our core values and
purpose for existence
6. Experience. Our management team comprises of experienced personnel who
understand the industry.
7. Emphasis on hygiene in our proposed marketing communications.
8. Acquired customer base. Our Meat Shacks would be distributed to existing meat sellers
in their areas of operation, with the proviso that they must buy our meat. This would
mean acquiring their customers.

6.1.2 Weaknesses

1. A dependence on quickly changing technology. Nativebutchers.com is a place for

people to experience the technology of the Internet. The technology that is the Internet
changes rapidly. Product lifecycles are measured in weeks, not months. Native
Butchers needs to keep up with the technology because a critical aspect of the Native
Butchers experience is technology.
2. Cost factor associated with keeping state-of-the-art hardware. Keeping up with the
technology of the Internet and other requisite technologies is an expensive
undertaking. Native Butchers needs to balance technology needs with the other needs
of the business. One aspect of the business can't be sacrificed for the other.
3. Growing health consciousness that suggests that meat is not ideal for consumers over
40 years.
4. Inadequate funding.
5. Boko Haram crisis in Northern Nigeria.

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6.1.3 Opportunities

1. Growing population of daily Internet users. The importance of the Internet almost
equals that of the telephone. As the population of daily Internet users increases, so will
the need for the services Native Butchers offers.
2. Social bonds fostered by the new Internet communities. The Internet is bringing people
from across the world together unlike any other communication medium. Native
Butchers will capitalize on this social trend by providing product information targeted
at different groups. Native Butchers will grow some of these communities on its own by
establishing chat areas and community programs. These programs will be designed to
build customer loyalty.
3. A very lucrative market that is yet untapped.
4. Busy workers that love healthy living.
5. Other competitors are too busy with other responsibilities.
6. Rapidly falling cost of Internet access. The cost of access to the Internet for users is
dropping rapidly. Internet access may become so cheap and affordable that most people
will be willing to pay for access to it. Native Butchers is aware of this opportunity and
will closely monitor the possibility of expanding its markets.

6.1.4 Threats

1. Emerging local competitors. At its inception, Native Butchers Limited will enjoy a first-

mover advantage in the local meat market. However, additional competitors will come
on the horizon, and it needs to be prepared for their entry into the market. Many of its
programs will be designed to build customer loyalty, and it is its hope that its quality
and hygienic service, and up-scale ambiance won't be easily duplicated.
2. Possible downturn in the economy that would impact retail sales.
3. Expansion of national online discount stores into the local market: including
Jumia, Konga and Shopmart into our meat sales space.
4. Competition from a national store. Or a store with greater financing or product
resources could enter the market.
5. Continued price pressure due to competition or the weakening market reducing
contribution margins.
6. Expansion of major meat retailers into the online environment with massive Web
marketing and search engine techniques may capture Internet customers before they
ever enter the Native Butchers marketplace.
7. Varieties of alternatives (Other Competitive Products)
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8. Failure to take advantage of the first-mover opportunity

6.2 Strategy Pyramid

6.3 Value Proposition

"Provision of quality and hygienic meat through convenient channels for a variety of
consumers".

6.4 Competitive Edge

Native Butchers will establish its competitive edge through the expertise of its founders. 
Alhaji Uba Adamu brings with him existing relationships with the best suppliers of meat as
well as an understanding of the craft of butchering.  He has trained a number of assistant
butchers who have gone on to take head positions at butcher shops.  Coupled with Nkem
Joseph-Palmer's understanding of food service management, sales record in business to
business sales, and financial acumen, the pair will have an edge over the town's other
butcher shops and grocery stores within its niche market.

6.5 Marketing Strategy

The marketing strategy of Native Butchers is to establish anticipation of the store's opening
in the community so that it can hit the ground running with retail sales immediately upon
launch.  To that end, the following tactics will be used:

 Direct mail of flyers to a select list of 5,000 high income households.

 Advertisements in local newspapers and magazines.
 Flyers in the downtown area around the site of the store.
 Launch of the website in anticipation of opening.
 Yellow Pages listing.

To market to businesses, Native Butchers will join the local Chamber of Commerce and
Food Provider organizations to network and market to other members.

After opening, the following tactics will be used going forward:

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 Direct mail to additional households with higher incomes.

 Search engine marketing via local Google ads.
 Email newsletter describing developments in meat offerings to business customers and
certain households.

6.5.1 Positioning Statement

6.5.2 Pricing Strategy

6.5.3 Promotion Strategy

6.5.4 Distribution Strategy

6.5.5 Marketing Programs

6.6 Sales Strategy

The sales strategy for the business includes both retail sales and business sales strategies.

Retail sales will be based on the marketing of the store and its locations, explained in the
marketing plan section, as well as online sales via the website.  At an operational level,
orders will be taken in person by clerks working the floor of the store (two on duty at any
given time), or by the office clerk over the phone or Internet.  Orders for specific cuts will
be transmitted from these clerks to the butchers on duty who will prepare the cuts.  They
will be packaged, priced, and prepared for sale by the floor clerks.

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Customers will be greeted with a standard greeting and served to meet their satisfaction
with the greatest care taken to provide quick service to walk-in customers.  A machine will
give numbers to waiting customers so they can be served in an orderly fashion.  Waiting
customers will have a few seats in the store to sit in while waiting.

The business sales strategy relies on prospecting by Nkem Joseph-Palmer to establish sales
to caterers and restaurants.  He will research, contact, and present to these businesses,
drawing on his past sales experience.  As a partner of the business, he will work to
maximize this revenue stream to increase profits, rather than because of commissions on
sales.

6.6.1 Sales Forecast

The sales forecast table represents the business scaling up sales quickly in the first year as
the community recognizes the high quality of its products and as in-roads are made with
the dozens of area caterers and restaurants.

Retail sales will be the greatest driver of sales growth and represents the best margins for
the business, with a 54% markup over cost.  Special orders are more expensive to provide,
but will provide a vital line of business that will encourage high-income customers to use
the store.  Their cost of sales will be 100% of sales.

Products sold to businesses will be sold at lower rates, but costs will also be reduced
through bulk ordering and the ease of working with businesses in an ongoing way.  The
cost of sales to businesses will be 57% as well (as against 65% for others).  This category
(corporate catering companies), including both Meat Shack and restaurant sales, will
represent a larger portion of sales than retail sales.  The presence of the store and the brand
name it establishes will allow caterers and restaurants to advertise the fact that they
purchase their meats from Native Butchers without any fear, as customers will see it as a
mark of quality.

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Table: Sales Forecast

Sales Forecast
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Unit Sales
Slaughter Market Patrons 61,200 93,668 96,478 340,200 350,406
Internet-based Purchases 3,600 9,548 10,025 38,880 40,046
Restaurants, Eateries and
5,400 12,840 14,124 48,600 50,058
Fast Food Outlets
Corporate Catering
3,600 12,840 14,124 48,600 50,058
Companies
Meat Shack Patrons 18,000 128,310 141,141 495,720 510,592
Total Unit Sales 91,800 257,206 275,892 972,000 1,001,160

Unit Prices FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Slaughter Market Patrons N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00
Internet-based Purchases N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00
Restaurants, Eateries and
N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00
Fast Food Outlets
Corporate Catering
N2,100.00 N2,100.00 N2,100.00 N2,100.00 N2,100.00
Companies
Meat Shack Patrons N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00

Sales
Slaughter Market Patrons N91,800,000 N140,502,000 N144,717,060 N510,300,000 N525,609,000
Internet-based Purchases N5,400,000 N14,322,000 N15,037,500 N58,320,000 N60,069,000
Restaurants, Eateries and
N8,100,000 N19,260,000 N21,186,000 N72,900,000 N75,087,000
Fast Food Outlets
Corporate Catering
N7,560,000 N26,964,000 N29,660,400 N102,060,000 N105,121,800
Companies
Meat Shack Patrons N27,000,000 N192,465,000 N211,711,500 N743,580,000 N765,888,000
Total Sales N139,860,000 N393,513,000 N422,312,460 N1,487,160,000 N1,531,774,800

Direct Unit Costs FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Slaughter Market Patrons N975.00 N975.00 N975.00 N975.00 N975.00
Internet-based Purchases N975.00 N975.00 N975.00 N975.00 N975.00
Restaurants, Eateries and
N975.00 N975.00 N975.00 N975.00 N975.00
Fast Food Outlets
Corporate Catering
N1,197.00 N1,197.00 N1,197.00 N1,197.00 N1,197.00
Companies
Meat Shack Patrons N975.00 N975.00 N975.00 N975.00 N975.00

Direct Cost of Sales

Slaughter Market Patrons N59,670,000 N91,326,300 N94,066,089 N331,695,000 N341,645,850
Internet-based Purchases N3,510,000 N9,309,300 N9,774,375 N37,908,000 N39,044,850

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 Native Butchers

Restaurants, Eateries and

N5,265,000 N12,519,000 N13,770,900 N47,385,000 N48,806,550
Fast Food Outlets
Corporate Catering
N4,309,200 N15,369,480 N16,906,428 N58,174,200 N59,919,426
Companies
Meat Shack Patrons N17,550,000 N125,102,250 N137,612,475 N483,327,000 N497,827,200
Subtotal Direct Cost of
N90,304,200 N253,626,330 N272,130,267 N958,489,200 N987,243,876
Sales

Chart: Sales Monthly

Sales Monthly
N22,000,000

N20,000,000

N18,000,000
Slaughter Market Patrons
N16,000,000

N14,000,000 Internet-based Purchases

N12,000,000 Restaurants, Eateries and Fast Food Outlets

N10,000,000
Corporate Catering Companies
N8,000,000
Meat Shack Patrons
N6,000,000

N4,000,000

N2,000,000

N0
Jul Nov Mar
Sep Jan May

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 Native Butchers

Chart: Sales by Year

Sales by Year

N1,600,000,000

N1,400,000,000

Slaughter Market Patrons

N1,200,000,000
Internet-based Purchases
N1,000,000,000
Restaurants, Eateries and Fast Food Outlets
N800,000,000
Corporate Catering Companies
N600,000,000
Meat Shack Patrons
N400,000,000

N200,000,000

N0
FY 2015 FY 2017 FY 2019
FY 2016 FY 2018

6.6.2 Sales Programs

6.7 Strategic Alliances

6.8 Milestones

The following table lists important project milestones during the pre-production start-up
period, with dates and managers in charge, and budgets for each milestone. The milestone
schedule indicates our emphasis on planning for implementation.

The production schedule is based on three shifts. During the first month only one shift will
be in operation, in the second month, two shifts, and from the third month, a full three
shifts of production. During the start-up period, the employees will be located and trained.

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The municipality of Stamford, Texas will assist us in recruiting about seventy employees.
There is an adequate work force within the surrounding communities, which will enable us
to choose quality people.

The accompanying table shows specific milestones, with responsibilities assigned, dates,
and budgets. The milestones represented in this plan are those which we have determined
to be the most important.

Table: Milestones

Milestones

Milestone Start Date End Date Budget Manager Department

Website Development 5/1/2014 5/31/2014 N100,000 Nkem Administration
Design Flyers and Ads 5/1/2014 5/31/2014 N200,000 John Marketing
Direct Mail Campaign 5/1/2014 12/1/2014 N20,000 John Marketing
Newspaper Ad Campaign 7/1/2014 12/1/2014 N2,000,000 John Marketing
Search Engine Marketing 6/2/2014 12/1/2014 N200,000 John Marketing
Business Sales Prospecting 6/2/2014 12/1/2014 N500,000 John Sales

Totals N3,020,000

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Chart: Milestones

Milestones

Website Development

Design Flyers and Ads

Direct Mail Campaign

Newspaper Ad Campaign

Search Engine Marketing

Business Sales Prospecting

Q3 `09 Q4 Q1 `10 Q2 Q3

7.0 Management Summary

Alhaji Uba Adamu, Chief Executive Officer and Founder

A participant of the World Bank Enterprise Leaders training, Uba brings management and
entrepreneurial experience from having worked in the meat industry for several years,
rising from being just a butcher to being a broker in cattle, and finally to owning a company
that manages the whole value-chain. As Fate Foundation Model Entrepreneur for 2011,
Alhaji Uba showed the world that possibilities exist in the meat industry if people but dare
to make a difference. He has worked in a number of product development groups,
including the Association for Improved Meat Quality in Port Harcourt. While an
entrepreneur in the local meat market, Uba created the first Native Butchers vision,
recruited a co-visionary, developed and managed the initial operational processes, and
developed the operations management strategy. Originally a mathematician by
inclination, Alhaji Uba Adamu read Mechanical Engineering at Bayero University, Kano
and has taken several short courses in butchery and animal husbandry. He has enlisted for
a diploma in Food Safety.

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Nkem Joseph-Palmer, Chief Operating Officer and Founder 

Nkem is the founder and former CEO of Calton-Rise Limited, until its merger in 2009. A
biochemist who specialized in Food Biochemistry, he has more than 15 years of experience
in Health, Safety and Environment (HSE), and research in industrial and commercial
settings. He has worked for multinationals like Saipem and Shell, as well as facilitated for
an entrepreneurship program organized by the Rivers State Government. He was selected
as one of the participants for the World Bank Enterprise Leaders Training (GEL-Grooming
Enterprise Leaders who have demonstrated structure and appreciable growth in their
businesses) and has been associated with business planning, business retooling and
strategic management for about 10 years. Nkem wrote a well endorsed business case study
while at the business school, and has developed over 20 business case studies for
educational and management purposes.

He has served on advisory bodies, as well as on the boards of private companies, and non-
profit institutions (He was national director for Business Affairs for JCI Nigeria, an
international leadership and entrepreneurship organization). Nkem is a trained project
manager who graduated in Biochemistry from the University of Calabar, Calabar, and
received his Master’s in Business Administration degree from the Lagos Business
School, Pan Atlantic University. He has a certificate in Agricultural Standards and
Regulation from the World Bank Institute and is currently trying to get HACCP auditor
certification, as well as a diploma in Food Safety.

He is a member of the Nigerian Institute of Management (NIM), the Institute of Strategic

Management and the Project Management Institute. He was also a runner-up for the Fate
Foundation Model Entrepreneur for 2011.

Folashade Foresythe, Chief Financial Officer 

With more than 10 years of management and financial experience, Folashade Foresythe is a
qualified Chartered Accountant under the umbrella of the Association of Chartered
Certified Accountants (ACCA), as well as an associate member of the Chartered Institute of
Taxation of Nigeria (CITN). She holds a BA (Hons) degree in Accounting & Finance from
the University of Glamorgan, Wales, and Shade is also an alumnus of the prestigious Lagos
Business School (LBS) where she obtained her MBA. She is also studying for a Diploma in
International Financial Reporting. 

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Oluwafemi Adeniba, Chief Marketing Officer

Oluwafemi Adeniba is a serial entrepreneur and senior marketing professional with

significant, cross-industry management experience gained with industry-leading
organizations like Procter & Gamble, Hewlett Packard and FrieslandCampina. A thorough-
bred professional with close to 15 years offering IT solutions, marketing communications
and new media skills with demonstrated success in driving marketing strategy, planning
and integrated program execution across multiple customer segments and channels, while
providing marketing leadership in very competitive and demanding markets.
He serves on the board of ADVAN (Advertisers Association of Nigeria) and also a board
member of ICOM (International Conference on Online Monitoring) for West Africa and
Sub-Sahara Africa. He holds an HND in Electrical Electronics Engineering Technology
from the Federal Polytechnic Ado-Ekiti, a BSc in Computing from University of
Portsmouth and a participant of the prestigious Executive-MBA at the Lagos
Business School (Pan African University).
He is a member of the Chartered Institute of Marketing UK and Project Management
Institute. 

*(Resumes of any of the above people are available on request.)

7.1 Organizational Structure

Native Butchers Limited is organized in three main functional areas: production, sales, and
administrative. Everyone has their assigned jobs but can and will help each other in other
areas whenever necessary.

Uba and Nkem will continue to cooperate on product development. All the management
team are willing to work without pay, for the first year in order to help Native Butchers
Limited to grow past the break-even point, with the expectations of a steady growth in
salary as Native Butchers becomes more successful.

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Org. Chart: Organizational Chart

Chief Micheal ElechiChairman

Alhaji Uba AdamuCEO Nkem Joseph-PalmerCOO Folashade ForesytheCFO Oluwafemi AdenibaCMO

7.2 Management Team

The management of Native Butchers will consist of Alhaji Uba Adamu, Nkem Joseph-
Palmer, Folashade Foresythe, and Oluwafemi Adeniba.

Alhaji Uba Adamu, CEO, will manage all personnel, materials, inventory, business
development, and strategic partnership development. He will be largely responsible for all
sourcing and ranch management activities, as well as sales and marketing responsibilities.
He will work with the COO and CMO to develop strategic plans, marketing plans and
other resources required to aid the company reach its goals and objectives.

Nkem Joseph-Palmer, COO, will design the store's floor plan, plan, order and install all
equipment purchases, establish operations procedures, train butchering staff and
operations staff (in conjunction with the CEO and CMO), and establish relationships with
all suppliers. He will also manage all human resources and logistics issues, as well as is
responsible for maintaining standards (ISO, HACCP etc).

Folashade Foresythe, CFO, will manage the whole gamut of the accounting and financing
activities for the business. She is the chief accounting officer of the company and will liaise
with external auditors to audit the business' accounts. She will be responsible for approved
borrowing and steering the company to meet its financial targets.

Oluwafemi Adeniba, CMO, will manage sales, advertising and marketing for the business. 
This will include training sales staff, managing all marketing programs, and being the
liaison to the website developer and important strategic alliances for the business.

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7.3 Management Team Gaps

To maintain a lower start-up budget, no management team member will be a salaried
employee until at least nine months into Native Butchers' operation. We wish to bring the
management team into a salaried position as soon as possible. The team will receive a 10%
commission on website orders until the company can afford to hire them full-time.

Native Butchers will depend on its professionals, its financial auditors and attorney, for

some key management help. This is despite the management team's strong background in
finance or business management.

As we grow we will need to develop more manufacturing technique, more mass

production. Alhaji Uba Adamu grew up with the meat retail business, knows the
process well, but admits a weakness in establishing a standardized business.

7.4 Personnel Plan

Our first plant will be located in Port Harcourt, Rivers State, a large metropolitan city,
where large numbers of health conscious consumers exist because of the influence and
sensitization from the oil and gas sector, the main employers of labor in the city. The area
has a large workforce in desperate need of jobs, which will help Native Butchers recruit
qualified and devoted workers that will be paid the average wages for this area, which
are more than in less populated areas. The direct labor cost shows that initial start-up plant
will require approximately 24 workers in one shift.

The team for the first retail outlet is currently being interviewed with the help of Praik
Applied Consultancy Services. The Personnel table shows the position and salary of the 24
employees that will work in one shift of eight hours. Production is based on seven working
hours with one hour budgeted for break.

The Personnel table shows the direct and active involvement of the company founders (the
inventor) and seed investors in all stages of the startup, purchasing of the machinery and
running the business. The team includes highly qualified professionals as consultants in
different areas that will enable a smooth and efficient entry to production. As the projected
expansion takes place, Native Butchers will begin a search for highly qualified
management candidates that will manage the company in the future.

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 Native Butchers

Native Butchers will also investigate foreign licensing that will bring additional revenue
streams to the company.

The Personnel table for the first 12 months appears in the appendix.

Salaries are generally in line with market pay for the Port Harcourt area, although our
benefits are above standard market level, so we ultimately pay a bit more for our people
than what might be considered standard in our market. As we grow, we expect to see
steady increases in our personnel to match the increases in sales.

Table: Personnel

Personnel Plan
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Procurement Personnel
Procurement Officers N480,000 N480,000 N576,000 N576,000 N691,200
Butchers N480,000 N480,000 N576,000 N576,000 N691,200
Subtotal N960,000 N960,000 N1,152,000 N1,152,000 N1,382,400

Sales and Marketing Personnel

Marketers N1,920,000 N1,920,000 N2,304,000 N2,304,000 N2,764,800
Customer Service N1,440,000 N1,440,000 N1,728,000 N1,728,000 N2,073,600
Drivers N1,200,000 N1,200,000 N1,440,000 N1,440,000 N1,728,000
Subtotal N4,560,000 N4,560,000 N5,472,000 N5,472,000 N6,566,400

General and Administrative

Personnel
Executives N9,000,000 N9,000,000 N10,800,000 N10,800,000 N12,960,000
Accounting N1,440,000 N1,440,000 N1,728,000 N1,728,000 N2,073,600
General Administration N480,000 N480,000 N576,000 N576,000 N691,200
Subtotal N10,920,000 N10,920,000 N13,104,000 N13,104,000 N15,724,800

Other Personnel
QHSE Supervisor N1,200,000 N1,200,000 N2,196,000 N2,196,000 N2,196,000
QHSE Officers N480,000 N480,000 N878,400 N878,400 N878,400
Subtotal N1,680,000 N1,680,000 N3,074,400 N3,074,400 N3,074,400

Total People 24 24 24 24 24

Total Payroll N18,120,000 N18,120,000 N22,802,400 N22,802,400 N26,748,000

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8.0 Financial Plan

We want to finance growth through a combination of long-term debt and cash flow.
Purchase of the larger facility and equipment will require approximately eighty percent
debt financing. Additional technology will be primarily financed with cash-flow. Inventory
turnover must remain at or above four or we run the risk of backing up orders and
jeopardizing our freshness guarantees. We have had no problems with accounts receivable
and we expect to maintain our collection days at 30 with thirty percent of sales on credit.

In addition, we must achieve gross margins of thirty-five percent of revenue and hold
operating costs no more than thirty percent of sales.

8.1 Startup Funding

Table: Startup Funding

Startup Funding
Startup Expenses to Fund N4,100,000
Startup Assets to Fund N18,210,000
Total Funding Required N22,310,000

Assets
Non-cash Assets from Startup N17,710,000
Cash Requirements from Startup N500,000
Additional Cash Raised N0
Cash Balance on Starting Date N500,000
Total Assets N18,210,000

Liabilities and Capital

Liabilities
Current Borrowing N0
Long-term Liabilities N0
Accounts Payable (Outstanding Bills) N0
Other Current Liabilities (interest-free) N0
Total Liabilities N0

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 Native Butchers

Capital

Planned Investment
Promoters N2,310,000
Investors 1st Phase N10,000,000
Investors 2nd Phase N10,000,000
Additional Investment Requirement N0
Total Planned Investment N22,310,000

Loss at Startup (Startup Expenses) (N4,100,000)

Total Capital N18,210,000

Total Capital and Liabilities N18,210,000

Total Funding N22,310,000

8.2 Important Assumptions

Important assumptions for this plan are found in the following table. These assumptions
largely determine the financial plan and require that we secure additional financing.

8.3 Key Financial Indicators

The most important factor to Native Butchers Limited's anticipated growth is the

procurement of necessary financing. The size of the projected orders are larger than what
can be produced given the initial plant capacity and working capital.

The following chart shows changes in key financial indicators: sales, gross margin,
operating expenses, collection days, and inventory turnover. The growth in sales goes
above thirty percent in the first year, and continues to incline up. We expect to increase
gross margin but our projections show a decline in the third year following the purchase of
the new facility. This is due to the facilities not being run at maximum capacity. The
projections for collection days and inventory turnover show that we expect a decline in
these indicators.

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Chart: Benchmarks
Benchmarks
11.0

10.0

9.0
FY 2015
8.0

7.0 FY 2016

6.0 FY 2017
5.0
FY 2018
4.0
FY 2019
3.0

2.0

1.0

0.0
Sales Operating Expenses Inventory Turnover
Gross Margin% Collection Days

8.4 Break-even Analysis

The break-even analysis shows that Native Butchers Limited has sufficient sales strength to
remain viable. Our break-even point is close to 6,000 units per month and our sales forecast
for the next year calls for almost 8500 units per month on average. Projections are detailed
in the following table.

Table: Break-even Analysis

Break-even Analysis

Monthly Units Break-even 5,625

Monthly Revenue Break-even N8,569,829

Assumptions:
Average Per-Unit Revenue N1,523.53
Average Per-Unit Variable Cost N983.71
Estimated Monthly Fixed Cost N3,036,499

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 Native Butchers

Chart: Break-even Analysis

Break-even Analysis
N3,000,000

N2,000,000

N1,000,000

N0

(N1,000,000)

(N2,000,000)

(N3,000,000)
0 2000 4000 6000 8000 10000
1000 3000 5000 7000 9000 11000

8.5 Projected Profit and Loss

As the profit and loss table shows, Native Butchers expects to continue its steady growth
in profitability over the next three years of operations.

Table: Profit and Loss

Pro Forma Profit and Loss

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Sales N139,860,000 N393,513,000 N422,312,460 N1,487,160,000 N1,531,774,800
Direct Cost of Sales N90,304,200 N253,626,330 N272,130,267 N958,489,200 N987,243,876
Procurement Payroll N960,000 N960,000 N1,152,000 N1,152,000 N1,382,400
Other Costs of Sales N0 N0 N0 N0 N0
Total Cost of Sales N91,264,200 N254,586,330 N273,282,267 N959,641,200 N988,626,276

Gross Margin N48,595,800 N138,926,670 N149,030,193 N527,518,800 N543,148,524

Gross Margin % 34.75% 35.30% 35.29% 35.47% 35.46%

Operating Expenses

Sales and Marketing

Page 34
 Native Butchers

Expenses
Sales and Marketing Payroll N4,560,000 N4,560,000 N5,472,000 N5,472,000 N6,566,400
Advertising/Promotion N6,000,000 N6,000,000 N6,000,000 N7,200,000 N7,200,000
Other Sales and Marketing
N2,400,000 N2,400,000 N2,400,000 N2,880,000 N2,880,000
Expenses
Total Sales and Marketing
N12,960,000 N12,960,000 N13,872,000 N15,552,000 N16,646,400
Expenses
Sales and Marketing % 9.27% 3.29% 3.28% 1.05% 1.09%

General and Administrative

Expenses
General and Administrative
N10,920,000 N10,920,000 N13,104,000 N13,104,000 N15,724,800
Payroll
Marketing/Promotion N2,400,000 N2,400,000 N2,400,000 N2,880,000 N2,880,000
Depreciation N1,599,996 N1,599,996 N1,599,996 N1,599,996 N1,599,996
Rent N1,999,992 N1,999,992 N1,999,992 N2,400,000 N2,400,000
Utilities N1,200,000 N1,200,000 N1,200,000 N1,440,000 N1,440,000
Insurance N360,000 N360,000 N360,000 N432,000 N432,000
Payroll Taxes N2,718,000 N2,718,000 N3,420,360 N3,420,360 N4,012,200
Other General and
N600,000 N600,000 N720,000 N720,000 N720,000
Administrative Expenses
Total General and
N21,797,988 N21,797,988 N24,804,348 N25,996,356 N29,208,996
Administrative Expenses
General and Administrative
15.59% 5.54% 5.87% 1.75% 1.91%
%

Other Expenses:
Other Payroll N1,680,000 N1,680,000 N3,074,400 N3,074,400 N3,074,400
Consultants N0 N0 N0 N0 N0
Other Expenses N0 N0 N0 N0 N0
Total Other Expenses N1,680,000 N1,680,000 N3,074,400 N3,074,400 N3,074,400
Other % 1.20% 0.43% 0.73% 0.21% 0.20%

Total Operating Expenses N36,437,988 N36,437,988 N41,750,748 N44,622,756 N48,929,796

Profit Before Interest and

N12,157,812 N102,488,682 N107,279,445 N482,896,044 N494,218,728
Taxes
EBITDA N13,757,808 N104,088,678 N108,879,441 N484,496,040 N495,818,724
Interest Expense N0 N0 N20,000,000 N36,000,000 N28,000,000
Taxes Incurred N3,647,344 N30,746,605 N26,183,834 N134,068,813 N139,865,618

Net Profit N8,510,468 N71,742,077 N61,095,612 N312,827,231 N326,353,110

Net Profit/Sales 6.08% 18.23% 14.47% 21.04% 21.31%

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 Native Butchers

Chart: Profit Monthly

Profit Monthly

N3,000,000

N2,500,000

N2,000,000

N1,500,000

N1,000,000

N500,000

N0

(N500,000)

(N1,000,000)

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Chart: Profit Yearly

Profit Yearly

N330,000,000
N300,000,000
N270,000,000

N240,000,000
N210,000,000
N180,000,000
N150,000,000
N120,000,000
N90,000,000

N60,000,000
N30,000,000
N0
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

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 Native Butchers

Chart: Gross Margin Monthly

Gross Margin Monthly

N8,000,000

N7,000,000

N6,000,000

N5,000,000

N4,000,000

N3,000,000

N2,000,000

N1,000,000

N0
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

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 Native Butchers

Chart: Gross Margin Yearly

Gross Margin Yearly

N550,000,000
N500,000,000
N450,000,000

N400,000,000
N350,000,000
N300,000,000
N250,000,000
N200,000,000
N150,000,000

N100,000,000
N50,000,000
N0
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

8.6 Projected Cash Flow

The cash flow projection shows that provisions for ongoing expenses are adequate to meet
Native Butchers Limited's needs as the business generates cash flow sufficient to support
operations. The third month decrease in cash flow reflects the payment of initial cost of
goods sold prior to a large number of receipts being paid. As can be
seen, Native Butchers has anticipated such a decrease and has budgeted a sufficient
amount of cash to cover losses.

Table: Cash Flow

Pro Forma Cash Flow

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Cash Received

Cash from Operations

Cash Sales N104,895,000 N295,134,750 N316,734,345 N1,115,370,000 N1,148,831,100
Cash from Receivables N29,658,000 N92,305,070 N104,745,250 N340,995,194 N381,653,464
Subtotal Cash from
N134,553,000 N387,439,820 N421,479,595 N1,456,365,194 N1,530,484,564
Operations
Page 38
 Native Butchers

Additional Cash Received

Sales Tax, VAT, HST/GST
N6,993,000 N19,675,650 N21,115,623 N74,358,000 N76,588,740
Received
New Current Borrowing N0 N0 N0 N0 N0
New Other Liabilities
N0 N0 N0 N0 N0
(interest-free)
New Long-term Liabilities N0 N0 N400,000,000 N0 N0
Sales of Other Current
N0 N0 N0 N0 N0
Assets
Sales of Long-term Assets N0 N0 N0 N0 N0
New Investment Received N0 N0 N400,000,000 N0 N0
Subtotal Cash Received N141,546,000 N407,115,470 N1,242,595,218 N1,530,723,194 N1,607,073,304

Expenditures FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Expenditures from
Operations
Cash Spending N18,120,000 N18,120,000 N22,802,400 N22,802,400 N26,748,000
Bill Payments N91,133,628 N287,350,726 N342,973,243 N1,141,944,631 N1,135,015,136
Subtotal Spent on
N109,253,628 N305,470,726 N365,775,643 N1,164,747,031 N1,161,763,136
Operations

Additional Cash Spent

Sales Tax, VAT, HST/GST
N6,993,000 N19,675,650 N21,115,623 N74,358,000 N76,588,740
Paid Out
Principal Repayment of
N0 N0 N0 N0 N0
Current Borrowing
Other Liabilities Principal
N0 N0 N0 N0 N0
Repayment
Long-term Liabilities
N0 N0 N0 N80,000,000 N80,000,000
Principal Repayment
Purchase Other Current
N0 N0 N400,000,000 N0 N0
Assets
Purchase Long-term Assets N0 N0 N320,000,000 N0 N0
Dividends N0 N0 N50,000,000 N0 N0
Subtotal Cash Spent N116,246,628 N325,146,376 N1,156,891,266 N1,319,105,031 N1,318,351,876

Net Cash Flow N25,299,372 N81,969,094 N85,703,952 N211,618,162 N288,721,428

Cash Balance N25,799,372 N107,768,466 N193,472,419 N405,090,581 N693,812,009

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Native Butchers

Jun Jul
Chart: Cash

Cash

N24,000,000

N21,000,000

N18,000,000

N15,000,000 Net Cash Flow

N12,000,000 Cash Balance

N9,000,000

N6,000,000

N3,000,000

N0

8.7 Projected Balance Sheet

Native Butchers Limited's projected company balance sheet follows.

Table: Balance Sheet

Pro Forma Balance Sheet

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Assets

Current Assets
Cash N25,799,372 N107,768,466 N193,472,419 N405,090,581 N693,812,009
Accounts Receivable N5,307,000 N11,380,180 N12,213,045 N43,007,851 N44,298,087
Inventory N3,543,300 N7,580,202 N6,083,004 N70,332,550 N21,184,608
Other Current Assets N500,000 N500,000 N400,500,000 N400,500,000 N400,500,000
Total Current Assets N35,149,672 N127,228,848 N612,268,468 N918,930,982 N1,159,794,704

Long-term Assets
Long-term Assets N9,650,000 N9,650,000 N329,650,000 N329,650,000 N329,650,000
Accumulated Depreciation N1,599,996 N3,199,992 N4,799,988 N6,399,984 N7,999,980
Total Long-term Assets N8,050,004 N6,450,008 N324,850,012 N323,250,016 N321,650,020

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Total Assets N43,199,676 N133,678,856 N937,118,480 N1,242,180,998 N1,481,444,724

Liabilities and Capital FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Current Liabilities
Accounts Payable N16,479,208 N35,216,311 N27,560,322 N99,795,610 N92,706,226
Current Borrowing N0 N0 N0 N0 N0
Other Current Liabilities N0 N0 N0 N0 N0
Subtotal Current Liabilities N16,479,208 N35,216,311 N27,560,322 N99,795,610 N92,706,226

Long-term Liabilities N0 N0 N400,000,000 N320,000,000 N240,000,000

Total Liabilities N16,479,208 N35,216,311 N427,560,322 N419,795,610 N332,706,226

Paid-in Capital N22,310,000 N22,310,000 N422,310,000 N422,310,000 N422,310,000

Retained Earnings (N4,100,000) N4,410,468 N26,152,546 N87,248,157 N400,075,388
Earnings N8,510,468 N71,742,077 N61,095,612 N312,827,231 N326,353,110
Total Capital N26,720,468 N98,462,546 N509,558,157 N822,385,388 N1,148,738,498
Total Liabilities and Capital N43,199,676 N133,678,856 N937,118,480 N1,242,180,998 N1,481,444,724

Net Worth N26,720,468 N98,462,546 N509,558,157 N822,385,388 N1,148,738,498

8.8 Business Ratios

Standard business ratios are included in the following table. The ratios show an aggressive
plan for growth in order to reach maximum production within three years. Return on
investment increases each subsequent year as the management bring the new facility to
maximum capacity and production. Return on sales and assets remain strong and cost of
goods decreases based upon efficiency projections. Projections are based on the 2014/15
selling price.

Table: Ratios

Ratio Analysis
Industry
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Profile
Sales Growth n.a. 181.36% 7.32% 252.15% 3.00% 1.35%

Percent of Total Assets

Accounts Receivable 12.28% 8.51% 1.30% 3.46% 2.99% 20.26%
Inventory 8.20% 5.67% 0.65% 5.66% 1.43% 11.42%
Other Current Assets 1.16% 0.37% 42.74% 32.24% 27.03% 30.41%
Total Current Assets 81.37% 95.17% 65.34% 73.98% 78.29% 62.10%

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Long-term Assets 18.63% 4.83% 34.66% 26.02% 21.71% 37.90%

Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Current Liabilities 38.15% 26.34% 2.94% 8.03% 6.26% 50.94%

Long-term Liabilities 0.00% 0.00% 42.68% 25.76% 16.20% 43.47%
Total Liabilities 38.15% 26.34% 45.63% 33.80% 22.46% 94.42%
Net Worth 61.85% 73.66% 54.37% 66.20% 77.54% 5.58%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Gross Margin 34.75% 35.30% 35.29% 35.47% 35.46% 45.79%
Selling, General &
28.66% 17.07% 20.82% 14.44% 14.15% 23.24%
Administrative Expenses
Advertising Expenses 4.29% 1.52% 1.42% 0.48% 0.47% 1.11%
Profit Before Interest and
8.69% 26.04% 25.40% 32.47% 32.26% -5.78%
Taxes

Main Ratios
Current 2.13 3.61 22.22 9.21 12.51 1.05
Quick 1.92 3.40 21.99 8.50 12.28 0.83
Total Debt to Total Assets 38.15% 26.34% 45.63% 33.80% 22.46% 94.42%
Pre-tax Return on Net
45.50% 104.09% 17.13% 54.34% 40.59% -465.85%
Worth
Pre-tax Return on Assets 28.14% 76.67% 9.31% 35.98% 31.47% -26.02%

Additional Ratios FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Net Profit Margin 6.08% 18.23% 14.47% 21.04% 21.31% n.a
Return on Equity 31.85% 72.86% 11.99% 38.04% 28.41% n.a

Activity Ratios
Accounts Receivable
6.59 8.64 8.64 8.64 8.64 n.a
Turnover
Collection Days 29 31 41 27 42 n.a
Inventory Turnover 36.34 45.60 39.83 25.09 21.58 n.a
Accounts Payable
6.53 8.69 12.17 12.17 12.17 n.a
Turnover
Payment Days 27 31 34 19 31 n.a
Total Asset Turnover 3.24 2.94 0.45 1.20 1.03 n.a

Debt Ratios
Debt to Net Worth 0.62 0.36 0.84 0.51 0.29 n.a
Current Liab. to Liab. 1.00 1.00 0.06 0.24 0.28 n.a

Liquidity Ratios
Net Working Capital N18,670,464 N92,012,538 N584,708,145 N819,135,372N1,067,088,478 n.a
Interest Coverage 0.00 0.00 5.36 13.41 17.65 n.a
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Additional Ratios
Assets to Sales 0.31 0.34 2.22 0.84 0.97 n.a
Current Debt/Total Assets 38% 26% 3% 8% 6% n.a
Acid Test 1.60 3.07 21.55 8.07 11.80 n.a
Sales/Net Worth 5.23 4.00 0.83 1.81 1.33 n.a
Dividend Payout 0.00 0.00 0.82 0.00 0.00 n.a

8.9 Long-term Plan

In addition to the enclosed financial information contained in this Business Plan, Native

Butchers would like to make the following observations that were not emphasized in this
Business Plan:

The Business Plan covers five years of activities. We consider the financial projections in the
Business Plan as conservative. The Business Plan does not include any income from
products other than beef. Other meat products that are equally profitable will be sold by
Native Butchers (possibly through strategic alliances with producers who require a
marketing outlet and are willing to comply with Native Butchers' standards) and proceeds
from the intended "Suya Sensation" are not factored.

As previously mentioned, a division or subsidiary of Native Butchers Limited will be

proposed to manage the rendering of waste products. Native Butchers anticipates
substantial revenues and success in the rendering market.

The multiplier effect on sales from the increased plant by year three was not factored in the
projections herein.

8.10 The Investment Offering

We are currently in search of an investor/partner(s) who will bring more to Native
Butchers than just financing. The ideal Investor/Partner(s) we are seeking should bring
expertise in the areas of legal, financial, and international regulatory issues, as a portion of
our target market(s) will be international in scope in the near future. The
Investor/Partner(s) will receive an equity position in the company and sit on the Board of
Directors.

The success of this plan is predicated on securing start-up funding from an

investor/partner in exchange for a minority equity stake in Native Butchers. We are only

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 Native Butchers

looking for investor/partners that will also bring additional added value to Native
Bucthers, such as expertise in finance, international business, C-Level contacts, industry
networks, and more. Additional second round funding may eventually be needed to go
into a larger scale production run, if Native Butchers cannot self-fund our own growth.
However, we believe that we will be in a position to fund ourselves, limiting the risks
while increasing the ROI on our investor/partner(s).

Of particular interest to investors is the Dividends row in the Cash Flow table. We project
increasing dividends, which will be distributed first to outside investors; the founders will
defer dividends until the third year.

Table: Investment Offering

Investment Offering Seed Round 1 Round 2 Exit

Proposed Year: 1 2 3 10

Valuation, Investment, Shares

Investment Amount N20,000,000 N50,000,000 N400,000,000
Equity Share Offering
50.00% 0.00% 0.00%
Percentage
Valuation N40,000,000 N0 N0 N5,000,000,000
Investor Exit Payout #VALUE! #VALUE! #VALUE!
Investor Years Until Exit 9 8 7
Investor IRR 0.00% 0.00% 0.00%

Share Ownership Year 1 Year 2 Year 3 Year 10

Founders' Shares 1,000,000 1,000,000 1,000,000 1,000,000
Stock Split Multiple 0 0 0
Stock Options Issued 0 0 0 0
Investor Shares Issued 1,000,000 0 0
Price per share N20.00 N0.00 N0.00 #VALUE!
Options Holders' Shares 0 0 0 0
Year 1 Investors' Shares 1,000,000 1,000,000 1,000,000 1,000,000
Year 2 Investors' Shares 0 0 0
Year 3 Investors' Shares 0 0
Total Shares Outstanding 2,000,000 2,000,000 2,000,000 2,000,000

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Equity Ownership Percentage Year 1 Year 2 Year 3 Year 10

Founders' Equity 50.00% 50.00% 50.00% 50.00%
Option Holders' Equity 0.00% 0.00% 0.00% 0.00%
Year 1 Investors' Equity 50.00% 50.00% 50.00% 50.00%
Year 2 Investors' Equity 0.00% 0.00% 0.00%
Year 3 Investors' Equity 0.00% 0.00%
Total Equity 100.00% 100.00% 100.00% 100.00%
Investors' Equity 50.00% 50.00% 50.00% 50.00%
Founders' & Employees' Equity 50.00% 50.00% 50.00% 50.00%

8.11 Valuation

The ending valuation of the company in 2019 is projected at over N3 billion. This valuation
is based on the proprietary processes available at start-up, future expansion, and a strong
revenue stream. We anticipate sales of about N1.5 billion by 2019, the exit year. These
projections are based on real-world research with potential customers (especially the oil
workers and bankers).

This anticipated increase in the company's valuation will yield an internal rate of return of
83% on an initial outside investment of N22,000,000, which purchases 50% of the
company's ownership.

Table: Investment Analysis

Investment
Analysis
Start FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Initial Investment
Investment N22,310,000 N0 N0 N400,000,000 N0 N0
Dividends N0 N0 N0 N50,000,000 N0 N0
Ending Valuation N0 N0 N0 N0 N0 N1,631,765,000
Combination as
(N22,310,000) N0 N0(N350,000,000) N0 N1,631,765,000
Income Stream
Percent Equity
50%
Acquired
Net Present Value
N661,752,275
(NPV)
Internal Rate of
83%
Return (IRR)

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Assumptions
Discount Rate 10.00%
Valuation Earnings
10 10 10 10 10
Multiple
Valuation Sales
2 2 2 2 2
Multiple

Investment
N22,310,000 N0 N0 N400,000,000 N0 N0
(calculated)
Dividends N0 N0 N50,000,000 N0 N0
Calculated
Earnings-based N85,100,000 N717,420,000 N610,960,000 N3,128,270,000 N3,263,530,000
Valuation
Calculated Sales-
N279,720,000 N787,030,000 N844,620,000 N2,974,320,000 N3,063,550,000
based Valuation
Calculated
N182,410,000 N752,225,000 N727,790,000 N3,051,295,000 N3,163,540,000
Average Valuation

8.12 Payback

As the following table shows, we do not plan to pay any dividends in the initial years. We
need a solid cash balance from which to further develop applications for our technology
and advance our marketing plans. With planned sales reaching almost N3 Billion by 2019,
we expect to be able to return a 163% IRR on the initial investment in 2019. Five years after
investing N22,000,000, an outside investor would receive N35,000,000 in payback. Again,
this is based on our exit strategy, where the investor's preferred participating stock would
be entitled to a double dip provision. We believe that Native Butchers Limited could be
sold for 7 to 10 times EBIT in year 5, based on comparable deals in the Nigerian business
environment.

Table: Payback

Payback

Projected Payback
Calculation
Investment FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Investment N5,000,000
Cash Returns by Year N0 N0 N5,000,000 N5,000,000 N5,000,000
Combination as Income (N5,000,000) N0 N0 N5,000,000 N5,000,000 N5,000,000
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 Native Butchers

Stream
Cumulative Net Cash Flow
(N5,000,000) (N5,000,000) (N5,000,000) N0 N5,000,000 N10,000,000
to Investors
Payback Period 3 years

Chart: Payback Period

Payback Period

N32,000,000

N28,000,000

N24,000,000

N20,000,000

N16,000,000

N12,000,000

N8,000,000

N4,000,000

N0

(N4,000,000)
FY 2015 FY 2017 FY 2019 FY 2021 FY 2023
FY 2016 FY 2018 FY 2020 FY 2022 FY 2024

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 Appendix

Table: Sales Forecast

Sales Forecast

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Unit Sales

Slaughter Market Patrons 2,400 2,400 2,400 4,800 4,800 4,800 6,600 6,600 6,600 6,600 6,600 6,600

Internet-based Purchases 0 0 0 0 0 0 600 600 600 600 600 600

Restaurants, Eateries and Fast
0 0 0 600 600 600 600 600 600 600 600 600
Food Outlets
Corporate Catering Companies 0 0 0 0 0 0 600 600 600 600 600 600

Meat Shack Patrons 0 0 0 0 0 0 0 0 0 6,000 6,000 6,000

Total Unit Sales 2,400 2,400 2,400 5,400 5,400 5,400 8,400 8,400 8,400 14,400 14,400 14,400

Unit Prices Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Slaughter Market Patrons N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00

Internet-based Purchases N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00
Restaurants, Eateries and Fast
N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00
Food Outlets
Corporate Catering Companies N2,100.00 N2,100.00 N2,100.00 N2,100.00 N2,100.00 N2,100.00 N2,100.00 N2,100.00 N2,100.00 N2,100.00 N2,100.00 N2,100.00

Meat Shack Patrons N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00 N1,500.00

Sales

Slaughter Market Patrons N3,600,000 N3,600,000 N3,600,000 N7,200,000 N7,200,000 N7,200,000 N9,900,000 N9,900,000 N9,900,000 N9,900,000 N9,900,000 N9,900,000

Internet-based Purchases N0 N0 N0 N0 N0 N0 N900,000 N900,000 N900,000 N900,000 N900,000 N900,000

Restaurants, Eateries and Fast
N0 N0 N0 N900,000 N900,000 N900,000 N900,000 N900,000 N900,000 N900,000 N900,000 N900,000
Food Outlets
Corporate Catering Companies N0 N0 N0 N0 N0 N0 N1,260,000 N1,260,000 N1,260,000 N1,260,000 N1,260,000 N1,260,000

Meat Shack Patrons N0 N0 N0 N0 N0 N0 N0 N0 N0 N9,000,000 N9,000,000 N9,000,000

Total Sales N3,600,000 N3,600,000 N3,600,000 N8,100,000 N8,100,000 N8,100,000 N12,960,000 N12,960,000 N12,960,000 N21,960,000 N21,960,000 N21,960,000

Direct Unit Costs Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
Slaughter Market Patrons 65.00% N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00
Internet-based Purchases 65.00% N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00

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 Appendix
Restaurants, Eateries and Fast
65.00% N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00
Food Outlets
Corporate Catering Companies 57.00% N1,197.00 N1,197.00 N1,197.00 N1,197.00 N1,197.00 N1,197.00 N1,197.00 N1,197.00 N1,197.00 N1,197.00 N1,197.00 N1,197.00
Meat Shack Patrons 65.00% N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00 N975.00

Direct Cost of Sales

Slaughter Market Patrons N2,340,000 N2,340,000 N2,340,000 N4,680,000 N4,680,000 N4,680,000 N6,435,000 N6,435,000 N6,435,000 N6,435,000 N6,435,000 N6,435,000

Internet-based Purchases N0 N0 N0 N0 N0 N0 N585,000 N585,000 N585,000 N585,000 N585,000 N585,000

Restaurants, Eateries and Fast
N0 N0 N0 N585,000 N585,000 N585,000 N585,000 N585,000 N585,000 N585,000 N585,000 N585,000
Food Outlets
Corporate Catering Companies N0 N0 N0 N0 N0 N0 N718,200 N718,200 N718,200 N718,200 N718,200 N718,200

Meat Shack Patrons N0 N0 N0 N0 N0 N0 N0 N0 N0 N5,850,000 N5,850,000 N5,850,000

Subtotal Direct Cost of Sales N2,340,000 N2,340,000 N2,340,000 N5,265,000 N5,265,000 N5,265,000 N8,323,200 N8,323,200 N8,323,200 N14,173,200 N14,173,200 N14,173,200

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 Appendix

Table: Personnel

Personnel Plan

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Procurement Personnel

Procurement Officers N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000

Butchers N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000

Subtotal N80,000 N80,000 N80,000 N80,000 N80,000 N80,000 N80,000 N80,000 N80,000 N80,000 N80,000 N80,000

Sales and Marketing Personnel

Marketers N160,000 N160,000 N160,000 N160,000 N160,000 N160,000 N160,000 N160,000 N160,000 N160,000 N160,000 N160,000

Customer Service N120,000 N120,000 N120,000 N120,000 N120,000 N120,000 N120,000 N120,000 N120,000 N120,000 N120,000 N120,000

Drivers N100,000 N100,000 N100,000 N100,000 N100,000 N100,000 N100,000 N100,000 N100,000 N100,000 N100,000 N100,000

Subtotal N380,000 N380,000 N380,000 N380,000 N380,000 N380,000 N380,000 N380,000 N380,000 N380,000 N380,000 N380,000

General and Administrative

Personnel
Executives N750,000 N750,000 N750,000 N750,000 N750,000 N750,000 N750,000 N750,000 N750,000 N750,000 N750,000 N750,000

Accounting N120,000 N120,000 N120,000 N120,000 N120,000 N120,000 N120,000 N120,000 N120,000 N120,000 N120,000 N120,000

General Administration N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000

Subtotal N910,000 N910,000 N910,000 N910,000 N910,000 N910,000 N910,000 N910,000 N910,000 N910,000 N910,000 N910,000

Other Personnel

QHSE Supervisor N100,000 N100,000 N100,000 N100,000 N100,000 N100,000 N100,000 N100,000 N100,000 N100,000 N100,000 N100,000

QHSE Officers N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000 N40,000

Subtotal N140,000 N140,000 N140,000 N140,000 N140,000 N140,000 N140,000 N140,000 N140,000 N140,000 N140,000 N140,000

Total People 24 24 24 24 24 24 24 24 24 24 24 24

Total Payroll N1,510,000 N1,510,000 N1,510,000 N1,510,000 N1,510,000 N1,510,000 N1,510,000 N1,510,000 N1,510,000 N1,510,000 N1,510,000 N1,510,000

Page 3
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Page 4
 Appendix

Table: Profit and Loss

Pro Forma Profit and Loss

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Sales N3,600,000 N3,600,000 N3,600,000 N8,100,000 N8,100,000 N8,100,000 N12,960,000 N12,960,000 N12,960,000 N21,960,000 N21,960,000 N21,960,000

Direct Cost of Sales N2,340,000 N2,340,000 N2,340,000 N5,265,000 N5,265,000 N5,265,000 N8,323,200 N8,323,200 N8,323,200 N14,173,200 N14,173,200 N14,173,200

Procurement Payroll N80,000 N80,000 N80,000 N80,000 N80,000 N80,000 N80,000 N80,000 N80,000 N80,000 N80,000 N80,000

Other Costs of Sales N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0

Total Cost of Sales N2,420,000 N2,420,000 N2,420,000 N5,345,000 N5,345,000 N5,345,000 N8,403,200 N8,403,200 N8,403,200 N14,253,200 N14,253,200 N14,253,200

Gross Margin N1,180,000 N1,180,000 N1,180,000 N2,755,000 N2,755,000 N2,755,000 N4,556,800 N4,556,800 N4,556,800 N7,706,800 N7,706,800 N7,706,800

Gross Margin % 32.78% 32.78% 32.78% 34.01% 34.01% 34.01% 35.16% 35.16% 35.16% 35.09% 35.09% 35.09%

Operating Expenses

Sales and Marketing

Expenses
Sales and Marketing Payroll N380,000 N380,000 N380,000 N380,000 N380,000 N380,000 N380,000 N380,000 N380,000 N380,000 N380,000 N380,000

Advertising/Promotion N500,000 N500,000 N500,000 N500,000 N500,000 N500,000 N500,000 N500,000 N500,000 N500,000 N500,000 N500,000
Other Sales and Marketing
N200,000 N200,000 N200,000 N200,000 N200,000 N200,000 N200,000 N200,000 N200,000 N200,000 N200,000 N200,000
Expenses
Total Sales and Marketing
N1,080,000 N1,080,000 N1,080,000 N1,080,000 N1,080,000 N1,080,000 N1,080,000 N1,080,000 N1,080,000 N1,080,000 N1,080,000 N1,080,000
Expenses
Sales and Marketing % 30.00% 30.00% 30.00% 13.33% 13.33% 13.33% 8.33% 8.33% 8.33% 4.92% 4.92% 4.92%

General and Administrative

Expenses
General and Administrative
N910,000 N910,000 N910,000 N910,000 N910,000 N910,000 N910,000 N910,000 N910,000 N910,000 N910,000 N910,000
Payroll
Marketing/Promotion N200,000 N200,000 N200,000 N200,000 N200,000 N200,000 N200,000 N200,000 N200,000 N200,000 N200,000 N200,000

Depreciation N133,333 N133,333 N133,333 N133,333 N133,333 N133,333 N133,333 N133,333 N133,333 N133,333 N133,333 N133,333

Rent N166,666 N166,666 N166,666 N166,666 N166,666 N166,666 N166,666 N166,666 N166,666 N166,666 N166,666 N166,666

Utilities N100,000 N100,000 N100,000 N100,000 N100,000 N100,000 N100,000 N100,000 N100,000 N100,000 N100,000 N100,000

Insurance N30,000 N30,000 N30,000 N30,000 N30,000 N30,000 N30,000 N30,000 N30,000 N30,000 N30,000 N30,000

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Payroll Taxes 15% N226,500 N226,500 N226,500 N226,500 N226,500 N226,500 N226,500 N226,500 N226,500 N226,500 N226,500 N226,500
Other General and
N50,000 N50,000 N50,000 N50,000 N50,000 N50,000 N50,000 N50,000 N50,000 N50,000 N50,000 N50,000
Administrative Expenses
Total General and
N1,816,499 N1,816,499 N1,816,499 N1,816,499 N1,816,499 N1,816,499 N1,816,499 N1,816,499 N1,816,499 N1,816,499 N1,816,499 N1,816,499
Administrative Expenses
General and Administrative
50.46% 50.46% 50.46% 22.43% 22.43% 22.43% 14.02% 14.02% 14.02% 8.27% 8.27% 8.27%
%

Other Expenses:

Other Payroll N140,000 N140,000 N140,000 N140,000 N140,000 N140,000 N140,000 N140,000 N140,000 N140,000 N140,000 N140,000

Consultants N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0

Other Expenses N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0

Total Other Expenses N140,000 N140,000 N140,000 N140,000 N140,000 N140,000 N140,000 N140,000 N140,000 N140,000 N140,000 N140,000

Other % 3.89% 3.89% 3.89% 1.73% 1.73% 1.73% 1.08% 1.08% 1.08% 0.64% 0.64% 0.64%

Total Operating Expenses N3,036,499 N3,036,499 N3,036,499 N3,036,499 N3,036,499 N3,036,499 N3,036,499 N3,036,499 N3,036,499 N3,036,499 N3,036,499 N3,036,499

Profit Before Interest and

(N1,856,499) (N1,856,499) (N1,856,499) (N281,499) (N281,499) (N281,499) N1,520,301 N1,520,301 N1,520,301 N4,670,301 N4,670,301 N4,670,301
Taxes
EBITDA (N1,723,166) (N1,723,166) (N1,723,166) (N148,166) (N148,166) (N148,166) N1,653,634 N1,653,634 N1,653,634 N4,803,634 N4,803,634 N4,803,634

Interest Expense N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0

Taxes Incurred (N556,950) (N556,950) (N556,950) (N84,450) (N84,450) (N84,450) N456,090 N456,090 N456,090 N1,401,090 N1,401,090 N1,401,090

Net Profit (N1,299,549) (N1,299,549) (N1,299,549) (N197,049) (N197,049) (N197,049) N1,064,211 N1,064,211 N1,064,211 N3,269,211 N3,269,211 N3,269,211

Net Profit/Sales -36.10% -36.10% -36.10% -2.43% -2.43% -2.43% 8.21% 8.21% 8.21% 14.89% 14.89% 14.89%

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 Appendix

Table: Cash Flow

Pro Forma Cash Flow

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Cash Received

Cash from Operations

Cash Sales N2,700,000 N2,700,000 N2,700,000 N6,075,000 N6,075,000 N6,075,000 N9,720,000 N9,720,000 N9,720,000 N16,470,000 N16,470,000 N16,470,000

Cash from Receivables N30,000 N900,000 N900,000 N937,500 N2,025,000 N2,025,000 N2,065,500 N3,240,000 N3,240,000 N3,315,000 N5,490,000 N5,490,000

Subtotal Cash from Operations N2,730,000 N3,600,000 N3,600,000 N7,012,500 N8,100,000 N8,100,000 N11,785,500 N12,960,000 N12,960,000 N19,785,000 N21,960,000 N21,960,000

Additional Cash Received

Sales Tax, VAT, HST/GST
5.00% N180,000 N180,000 N180,000 N405,000 N405,000 N405,000 N648,000 N648,000 N648,000 N1,098,000 N1,098,000 N1,098,000
Received
New Current Borrowing N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0
New Other Liabilities (interest-
N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0
free)
New Long-term Liabilities N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0

Sales of Other Current Assets N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0

Sales of Long-term Assets N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0

New Investment Received N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0

Subtotal Cash Received N2,910,000 N3,780,000 N3,780,000 N7,417,500 N8,505,000 N8,505,000 N12,433,500 N13,608,000 N13,608,000 N20,883,000 N23,058,000 N23,058,000

Expenditures Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Expenditures from Operations

Cash Spending N1,510,000 N1,510,000 N1,510,000 N1,510,000 N1,510,000 N1,510,000 N1,510,000 N1,510,000 N1,510,000 N1,510,000 N1,510,000 N1,510,000

Bill Payments N30,541 N916,216 N928,216 N1,469,341 N7,056,091 N6,653,716 N6,799,159 N10,991,521 N10,252,456 N10,527,706 N18,461,206 N17,047,456

Subtotal Spent on Operations N1,540,541 N2,426,216 N2,438,216 N2,979,341 N8,566,091 N8,163,716 N8,309,159 N12,501,521 N11,762,456 N12,037,706 N19,971,206 N18,557,456

Additional Cash Spent

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Sales Tax, VAT, HST/GST Paid
N180,000 N180,000 N180,000 N405,000 N405,000 N405,000 N648,000 N648,000 N648,000 N1,098,000 N1,098,000 N1,098,000
Out
Principal Repayment of Current
N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0
Borrowing
Other Liabilities Principal
N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0
Repayment
Long-term Liabilities Principal
N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0
Repayment
Purchase Other Current Assets N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0

Purchase Long-term Assets N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0

Dividends N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0

Subtotal Cash Spent N1,720,541 N2,606,216 N2,618,216 N3,384,341 N8,971,091 N8,568,716 N8,957,159 N13,149,521 N12,410,456 N13,135,706 N21,069,206 N19,655,456

Net Cash Flow N1,189,459 N1,173,784 N1,161,784 N4,033,159 (N466,091) (N63,716) N3,476,341 N458,479 N1,197,544 N7,747,294 N1,988,794 N3,402,544

Cash Balance N1,689,459 N2,863,243 N4,025,027 N8,058,186 N7,592,094 N7,528,378 N11,004,719 N11,463,197 N12,660,741 N20,408,035 N22,396,828 N25,799,372

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Table: Balance Sheet

Pro Forma Balance Sheet

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
Starting
Assets
Balances

Current Assets
Cash N500,000 N1,689,459 N2,863,243 N4,025,027 N8,058,186 N7,592,094 N7,528,378 N11,004,719 N11,463,197 N12,660,741 N20,408,035 N22,396,828 N25,799,372
Accounts Receivable N0 N870,000 N870,000 N870,000 N1,957,500 N1,957,500 N1,957,500 N3,132,000 N3,132,000 N3,132,000 N5,307,000 N5,307,000 N5,307,000
Inventory N7,560,000 N5,220,000 N2,880,000 N900,000 N1,316,250 N1,316,250 N1,316,250 N2,080,800 N2,080,800 N2,080,800 N3,543,300 N3,543,300 N3,543,300
Other Current Assets N500,000 N500,000 N500,000 N500,000 N500,000 N500,000 N500,000 N500,000 N500,000 N500,000 N500,000 N500,000 N500,000
Total Current Assets N8,560,000 N8,279,459 N7,113,243 N6,295,027 N11,831,936 N11,365,844 N11,302,128 N16,717,519 N17,175,997 N18,373,541 N29,758,335 N31,747,128 N35,149,672

Long-term Assets
Long-term Assets N9,650,000 N9,650,000 N9,650,000 N9,650,000 N9,650,000 N9,650,000 N9,650,000 N9,650,000 N9,650,000 N9,650,000 N9,650,000 N9,650,000 N9,650,000
Accumulated
N0 N133,333 N266,666 N399,999 N533,332 N666,665 N799,998 N933,331 N1,066,664 N1,199,997 N1,333,330 N1,466,663 N1,599,996
Depreciation
Total Long-term Assets N9,650,000 N9,516,667 N9,383,334 N9,250,001 N9,116,668 N8,983,335 N8,850,002 N8,716,669 N8,583,336 N8,450,003 N8,316,670 N8,183,337 N8,050,004
Total Assets N18,210,000 N17,796,126 N16,496,577 N15,545,028 N20,948,604 N20,349,179 N20,152,130 N25,434,188 N25,759,333 N26,823,544 N38,075,005 N39,930,465 N43,199,676

Liabilities and Capital Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Current Liabilities
Accounts Payable N0 N885,676 N885,676 N1,233,676 N6,834,301 N6,431,926 N6,431,926 N10,649,773 N9,910,708 N9,910,708 N17,892,958 N16,479,208 N16,479,208
Current Borrowing N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0
Other Current Liabilities N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0
Subtotal Current
N0 N885,676 N885,676 N1,233,676 N6,834,301 N6,431,926 N6,431,926 N10,649,773 N9,910,708 N9,910,708 N17,892,958 N16,479,208 N16,479,208
Liabilities

Long-term Liabilities N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0 N0
Total Liabilities N0 N885,676 N885,676 N1,233,676 N6,834,301 N6,431,926 N6,431,926 N10,649,773 N9,910,708 N9,910,708 N17,892,958 N16,479,208 N16,479,208

Paid-in Capital N22,310,000 N22,310,000 N22,310,000 N22,310,000 N22,310,000 N22,310,000 N22,310,000 N22,310,000 N22,310,000 N22,310,000 N22,310,000 N22,310,000 N22,310,000
Retained Earnings (N4,100,000) (N4,100,000) (N4,100,000) (N4,100,000) (N4,100,000) (N4,100,000) (N4,100,000) (N4,100,000) (N4,100,000) (N4,100,000) (N4,100,000) (N4,100,000) (N4,100,000)
Earnings N0 (N1,299,549) (N2,599,099) (N3,898,648) (N4,095,697) (N4,292,747) (N4,489,796) (N3,425,585) (N2,361,374) (N1,297,164) N1,972,047 N5,241,258 N8,510,468
Total Capital N18,210,000 N16,910,451 N15,610,901 N14,311,352 N14,114,303 N13,917,254 N13,720,204 N14,784,415 N15,848,626 N16,912,836 N20,182,047 N23,451,258 N26,720,468
Total Liabilities and
N18,210,000 N17,796,126 N16,496,577 N15,545,028 N20,948,604 N20,349,179 N20,152,130 N25,434,188 N25,759,333 N26,823,544 N38,075,005 N39,930,465 N43,199,676
Capital

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 Appendix

Net Worth N18,210,000 N16,910,451 N15,610,901 N14,311,352 N14,114,303 N13,917,254 N13,720,204 N14,784,415 N15,848,626 N16,912,836 N20,182,047 N23,451,258 N26,720,468

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