BUSINESS PLAN

ON

LAYER POULTRY FARMING

EXECUTIVE SUMMARY
The Poultry industry is one of the fastest growing sectors of the economy. It has the potential of
generating high returns on investments for investors.
Considering the present position of the industry as related to size, competition and quality, Portofino
Eateries wishes to expand and diversify its operations by venturing into the industry, with the sole aim
of gaining up to 20% of the target market within two years of commencement.

BUSINESS DESCRIPTION
The business of poultry production could be for the purpose of broiler (meat), or egg production which
is intended to raise laying hens from pullet Day-old-chicks (DOC), or stock as Point-of-Lay (POL)
birds. Layers can be reared on Deep litter system or Battery Cages system. Caged birds system require
more capital, but the merits include; ease of management, cleaner and bigger eggs, safety from
breakages (cracks), minimal feed wastage, reduced water contamination and maximized space
utilization.

Company Background

We commenced operations in 2007, and we intend to expand and diversify our operations into a new
business by going into poultry farming with an integral feed milling alongside as a way of backward
integration.

Marketing

Our company aims at producing about 300 crates of eggs per day, while the feed mill will produce
feed commensurate to the consumption of the birds on a daily basis, as a way of backward integration.
We hope to later commercialize the feed mill.

Marketing

Marketing and product distribution strategy are to be carried out vigorously based on the report of the

market survey conducted. The survey result shows that the market is highly competitive; some areas

are under-served while some areas are

near saturation level. We shall take advantage of our strategic location and the under-served areas to
launch our marketing strategy.

Financial Plan

Our Company’s equity contribution = N2,500,000.00

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Loan required = N10,000,000.00
Expansion Capital requirement (total) = N12,500,000.00

Duration = 24 months

Interest rate = 20% per annum

Sales and Cost forecasts as well as Profit and Loss statement reveal the following:

Gross Profit: = N31,484,700.00

Net Profit: = N15,490,501.36

Moratorium: = 2 months

Tenure of loan: = 24 months

The purpose of the loan is for operational expenses, battery cages, feed-milling equipment, and

procurement of feed ingredients, stock-up of birds (day old chicks- broilers and pullets), vaccines and

drugs.

The risks

The risks identified in this business are fire outbreak, diseases and infection outbreak, sometimes

resulting in mortality, sustaining injury within the factory, dressed frozen products and eggs-in-transit

accidents that may involve the truck drivers and theft/ pilfering of eggs, chicken and feed.

We shall mitigate the risk challenges through comprehensive agricultural insurance policy against fire

and disease outbreak, installation of fire extinguishers and provision of First Aid Box for staff.

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 CHAPTER ONE

1.0 BUSINESS OVERVIEW

The poultry industry has expanded rapidly in the past several years and growth is expected to
continue at a higher rate with the increasing growth of population. This offers excellent
opportunities for new entrepreneurs like ours to penetrate the market.

1.1 The Business Idea

Layer poultry farming is raising egg laying poultry birds for the purpose of commercial egg
production. Layer chickens are such a special species of hens, which need to be raised from
when they are one day old. They start laying eggs commercially from 18-19 weeks of age.
They remain laying eggs continuously till their 72-78 weeks of age. They can produce about
one kg of eggs by consuming about 2.25 kg of food during their egg laying period.

For the purpose of our business, we wish to buy Point-of-Lay chicken. There are various types
of highly egg productive layer breeds available in the country.

Layer Breeds
According to the nature and color of egg, layer hens are of two types:
i. White Egg Laying Hens: This type of hens is comparatively smaller in size. Relatively eat
less food, and the color of egg shell is white. Isa White, Lehman White, Nikchik, Bab Cock
BV-300, Havard White, Hi Sex White, Sever White, Hi line White, Bovanch White etc. are
some popular white egg laying chickens.
 Brown Egg Laying Hens: Brown egg laying hens are relatively larger in size. They eat more
foods, compared to white egg layers. Lay bigger eggs than other laying breeds. Egg shell is
brown colored. There are many types of brown layer available. Among those Isa Brown, Hi Sex
Brown, Sever 579, Lehman Brown, Hi Line Brown, Bab Cock BV-380, Gold Line, Bablona
Tetro, Bablona Harko, Havard Brown etc. are very suitable for commercial layer poultry farming.

Our company shall be producing brown eggs, hence the choice of buying brown egg laying hens.

1.2 Description of the Business

(a). Identity of the Business

The name of the business enterprises shall be: ………………………….

(b). Location of Business Entity

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 This existing enterprise has its production base located in a prime area at
…………………………………

(c ). About the Company

Our company was registered on ……. . We have highly skilled and experience staff that are
capable of managing the business successfully.

Vision and Mission Statement

Vision

To be ranked among the leading poultry farmers in Nigeria.

Mission

To consistently deliver quality poultry products and services to our esteemed clients at
affordable prices.

The Objectives of the Company

The objectives of our company are the following:

1. Create 15 sales outlets.

2. Establish strong sales presence in the state.
3. Maintain tight control of cost and operation.

1.3 Value Proposition

Our company shall be seen as honest, transparent and trustworthy. When we promise, we shall ensure
prompt delivery of our products.

1.4 Contribution to Local and National Economy

The following are the benefits and contribution of this business to the economy:

 Employment generation for the teaming unemployed youth in the state.

 The company and staff pay taxes to the government which will increase government revenue.

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 CHAPTER TWO

2.0 THE COMPANY

2.1 HISTORY
…………… is a Private business Enterprises Company incorporated on the ….. of …… 20…. by
Corporate Affairs Commission (C.A.C). Business name Registration No. ………..
The management of the company, based on its research findings on eggs and poultry products
consumption, and found out that they have great market prospects and potentials. Presently, demand
for eggs and poultry products far outweighs the supply.
The Company plans to recruit technically sound staff in the area of poultry and poultry feed
production and management.

2.2 OWNERSHIP STRUCTURE

The company is wholly owned by a Nigerian of proven integrity and credibility. It is a sole
proprietorship. This makes decision making for this organization easier.

Mr. …… ………
He is the Managing Director/ Chief Executive Officer of this enterprise that shows great future
prospects. He is also the Chief Promoter of this project. Born some …… years ago, Mr.
…….. can be described as a man of substance and repute, and an achiever of no mean feat.
He obtained Bsc. in ……………… He has 10 years of experience in related field. All this has
empowered him to remain on top of his job as the main decision maker and head of this
enterprise.

2.3 ORGANIZATION AND MANAGEMENT

The company is proposing to organize into three (3) broad units; Administration,
Production/Farm and Marketing. Each unit will have a head, reporting to the M.D. The M.D takes full
responsibility for overall management of the Company’s operations.

2.4 TECHNICAL ASSISTANCE

No foreign technical assistance is required for this project. However, technical assistance
will be offered by competent local professionals, to include the supply of veterinary drugs and
vaccines, battery cages, day old chicks, project implementation, installation and commissioning
of the battery cages. The services of competent local professionals are also available, even on
consultancy basis for efficient and profitable management of this poultry farm.

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2.5 Key Management Staff

Details of Salary Schedule

SN Designation No of staff Salary Monthly Salary Annual Salary

1. Managing Director 1 N65,000 #65,000 N780,000

2. Farm Manager 1 N300,000 #30,000 N360,000

3. Sales/Marketing 2 N12,0000 #24,000 N288,000

4. Farm Workers 4 N12,000 #48,000 N576,000

5. Cleaner/Office Assistant 1 N10,000 #10,000 N120,000

6. Driver 1 N40,000 #40,000 N480,000

TOTAL SALARY N247,000 N2,964,000

CHAPTER THREE

MARKETING PLAN

Marketing activities include among others grading, quality, promotions, packaging and value adding.
These activities are essential as they will lead to selling large volumes of products as quickly as
possible resulting in the farmer making a lot of profit.

Eggs are graded by size and labeled according to weight. During selection and grading, care must be
applied to ensure that weight is uniform.

3.1 Market Research

The trend of sales and marketing in our chosen target market are that products are mostly dropped
with major buyers in the open market, most times on credit. Other places are egg depots across the
state.

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3.2 Target Market
Our target market comprises of eateries, bakery and confectionary companies, homes and
supermarkets. The consumption rate of eggs and poultry products is high. We even have buyers that
come from as far as Lagos in search of eggs. So the market for our eggs is firmly assured.

3.3 Target Customers

Our target customers include the civil servants, the private businessmen and women. Others are
popular eateries like Portofino, Mr. Biggs, Tantalizers, Captain Cook and Chicken Republic, bakeries
and confectioneries.

3.4 Description of Products

Our products are:

i. Brown Eggs
ii. Spent Layers

Product Packaging and Delivery

The eggs are packaged in the traditional paper egg crates, each crate contains 30 eggs. With time, we
hope to customize our packaging using plastics.
Eggs are stored in a cool room at about 13oC and transported in an insulated truck. Unfortunately,
many shops selling eggs do not store them under ideal conditions. In the home and shop situation it is
best to store them at normal refrigerator temperature (4-6oC).

Pricing Strategy
The method adopted for setting our prices is prevailing market price method. We intend to have an
introductory or attractive market penetration price that is 10% less than the prevailing market price.
This we hope will be a good leverage for us in the market. Marketing involves a range of prices,
depending on the different sizes of egg, different brands, or other differences which attract particular
buyers.

Selling Price:

S/N DESCRIPTION DEALER’S AVERAGE MARKET PRICE/UNIT

PRICE/UNIT (N) (N)

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1. Crate of Eggs 900.00 1200.00

2. Spent Layers 1,700.00 2500.00

3.5 Distribution Strategy

We shall canvass to market men and women and their associations perceived to be dealers of poultry
products. Friend, families and associates are not out left. We wish to adopt two approaches, first,
direct sales to the customers, and secondly, to supply the dealers in the major markets in he State and
the neighboring states.
As we introduce our business to various people, we shall ask for referrals that may lead to potential
buyers. This shall be handled by our marketing team. We shall also employ the services of sales
agents.

3.6 Promotional Strategy

Our strategy for penetrating the market is as follows:

a. Publicity and Advertisement

Publicity and advertisement in this context involves creating public awareness.

b. Sales Method
We shall give priority to customer care and satisfaction. Good public relations must be
established. We shall see our prospective customers to be our real employers. In selling our
products, we shall supervise our sales agent in the selling process. Every member of staff is a
potential marketer of our products. Appropriate commission shall be given to members of staff
that could open and close a sale. We shall give some determined discount to consistent customers,
dealers and agents.
As a matter of policy, we shall allow credit facility to only accredited dealers and those who can
give us credible guarantors and blue chip companies and eateries.

3.7 Competition
In the market we shall be competing with the following products:
1. Agbelere Cooperative
2. Tisco Farms
3. Melinda-D Farms

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4. Joshua Farms
5. Greenyard Poultry Farms
6. Animal Care Farms
7. Seven Days Adventist Poultry Cluster

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 CHAPTER FOUR

PRODUCTION PLAN

PRODUCTION FLOW CHART

Young Pullet (Point

of Lay)

17 weeks – 22 weeks (Up to 50% lay)

Growers Mash

Eggs to the Market Mature Layers

Layers Mash

(Layers disposed after 18

Spent /Culled layers to
the market Months)

4.1 Description of the Location/Farm Site

Adequate clean water is needed for consumption and cleaning operations within the poultry project
premises. So it is imperative to provide a reliable source of potable water.

4.2

UTILITIES REQUIREMENT / OPERATING COST

Table 3.2
 S/N Particulars Qty Used Unit Price Monthly
Monthly Cost
1. PHCN 1,500 14.00 21,000.00
2. Fuel (Diesel) 10L 200 2,000.00
3. Office Stationeries 2,000 3.50 7,000.00
TOTAL 30,000.00

a. Direct Material Cost

Direct Materials Qty Cost Per Unit Amount (N)

(N)
1. POL Layers 800 1,150.00 920,000.00
2. Livestock Feeds 72 2,500.00 175,000.00
3. Vaccines 1,200 150.00 180,000.00
4. Egg crates 500 40.00 200,000.00
4. Labor 5 18,000.00 90,000.00
5. Electricity 1,500 Kwh 14.00 21,000.00
Total Cost that Produce 1,586,000.00
3,172 crates
Total Cost per Crate 500.00
Total Cost per unit 16.67

4.6 Opening Stock

Table 4.6: Opening Stock

Stock / Item Quantity Unit Total
Cost
Livestock Feeds 50 2500
125,000.00
Vaccines 60 150
9,000.00
POL Birds 800 1150
 920,000.00
Egg Crates 500 40
20,000.00
TOTAL    
1,074,000.00

4.7 Pre-operating Activities and Expenses

Table 4.7: PRE-OPERATING ACTIVITIES AND EXPENSES

Item Description Amount
Rent Two years
150,000.00
Equipment Feeders and Drinkers
300,000.00
TOTAL  
450,000.00

CHAPTER FIVE

FINANCIAL PLAN

5.1 Financial Assumptions

We assume inflation will be relatively stable, while the interest rate is taken to be 20% per annum to illustrate
the worst case scenario. Other assumptions include: Tax at 5% of net profit, depreciation is considered using
straight line method, the insurance at 5% on total capital expense.

5.2 Expansion Capital Estimation

Table 5.1: Required
Startup Capital Estimate    

ITEMS AMOUNT COMMENT

Pre-operating Expenses 450,000.00  

Opening Stock 1,074,000.00  

Initial Operating Expenses
-2months 33,000.00  

Total Startup Capital Estimated 1,557,000.00  

SOURCES OF FUNDS AMOUNT %

Personal Fund /Equity 467,100.00 20%

Bank Loan 1,089,900.00 80%

Total Funds Sourced 1,557,000.00 100%

Table 5.2: Loan Repayment Schedule

Monthly Monthly Principal +
Month Principal Principal Interest Interest Cumulative
           

0 1,089,900.00        

1 1,089,900.00 - 18,165.00 18,165.00 18,165.00

2 1,089,900.00 - 18,165.00 18,165.00 36,330.00

3 1,089,900.00 49,540.91 18,165.00 67,705.91 104,035.91

4 1,040,359.09 49,540.91 18,165.00 67,705.91 171,741.82

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 990,818.18 49,540.91 18,165.00 67,705.91 239,447.73

6 941,277.27 49,540.91 18,165.00 67,705.91 307,153.64

7 891,736.36 49,540.91 18,165.00 67,705.91 374,859.55

8 842,195.45 49,540.91 18,165.00 67,705.91 442,565.45

9 792,654.55 49,540.91 18,165.00 67,705.91 510,271.36

10 743,113.64 49,540.91 18,165.00 67,705.91 577,977.27

11 693,572.73 49,540.91 18,165.00 67,705.91 645,683.18

12 644,031.82 49,540.91 18,165.00 67,705.91 713,389.09

13 594,490.91 49,540.91 9,908.18 59,449.09 772,838.18

14 544,950.00 49,540.91 9,908.18 59,449.09 832,287.27

15 495,409.09 49,540.91 9,908.18 59,449.09 891,736.36

16 445,868.18 49,540.91 9,908.18 59,449.09 951,185.45

17 396,327.27 49,540.91 9,908.18 59,449.09 1,010,634.55

18 346,786.36 49,540.91 9,908.18 59,449.09 1,070,083.64

19 297,245.45 49,540.91 9,908.18 59,449.09 1,129,532.73

20 247,704.55 49,540.91 9,908.18 59,449.09 1,188,981.82

21 198,163.64 49,540.91 9,908.18 59,449.09 1,248,430.91

22 148,622.73 49,540.91 9,908.18 59,449.09 1,307,880.00

23 99,081.82 49,540.91 9,908.18 59,449.09 1,367,329.09

24 49,540.91 49,540.91 9,908.18 59,449.09 1,426,778.18

GRAND
TOTAL   1,089,900.00 336,878.18 1,426,778.18
 CHAPTER SIX

6.0 BUSINESS RISK AND MITIGATION FACTOR

6.1 Identified Risks

i. It is labour intensive
ii. Pests and predators can cause massive loss
iii. Out-break of diseases
iv. Theft/ Pilfering of eggs, feed and birds
v. Adulterated poultry feeds and vaccines

7.2 Mitigation
We shall put in place a comprehensive insurance policy from Nigerian Agricultural Insurance
Corporation (NAIC). This will take care of all associated risks.

APPENDICES

1. SALES FORECAST
2. COST FORECAST
3. OPERATING ACTIVITIES AND EXPENSES
4. PROFIT AND LOSS STATEMENT
5. CASH FLOW FORECAST