UNIVERSITY OF GONDAR

COLLEGE OF AGRICULTURAL AND ENVIRONMENTAL SICENCES

DEPARTMENT OF AGRICULTURAL ECONOMICES IN AGRIBUSINESS
AND VALUE CHAIN MANAGEMENT

COURSE TITLE: AGRIBUSINEESS PROJECT PLAANING AND

ANALYSIS

COURSE CODE: ABVM- 522

GROUP ASSIGMENT

TITLE; - BUSINESS PLAN OF ANIDINET YE ENSISAT GIBIYIT AKIRABI

MAHBER ON POULTRY FARM RUN BY PARTNERSHIP IN AMHARA
REGION, GOZAMIN WEREDA, DEBIRE MARKOS TOWN 02 KEBELE

SUBMITTED TO: Mr. TADIE M. (ASSISTANCE PROFESSOR)

BY: BINIYAM A. AND YEMARNESH T.

JUNE, 2015 E.C

GONDAR, ETHIOPIA
Contents
LIST OF TABLES ..................................................................................................................................... iv
LIST OF FIGURES ................................................................................................................................... iv
LIST OF APPENDIX ................................................................................................................................ iv
EXECUTIVE SUMMARY ........................................................................................................................... v
1. INTRODUCTION............................................................................................................................... 1
1.1. Background and Business Description ...................................................................................... 1
1.2. Organizations of the Business .................................................................................................... 2
2. MARKET ANALYSIS OF THE BUSINESS ................................................................................... 5
2.1. Capital and Financial Structure ................................................................................................ 5
2.2. Market Size and Potential .......................................................................................................... 5
2.3. Current and Future Customer Base.......................................................................................... 5
2.4. Competitor Analysis ................................................................................................................... 6
2.5. Target Market ............................................................................................................................. 6
3. MARKETING PLAN ......................................................................................................................... 8
3.1. Product of poultry (egg and meat)............................................................................................. 8
3.2. Pricing Strategy ........................................................................................................................... 9
3.3. Distribution strategies/sales method.......................................................................................... 9
3.4. Publicity and Advertising Strategy ........................................................................................... 9
4. OPERATING PLAN ........................................................................................................................ 10
4.1. Organizational Structure ......................................................................................................... 10
4.2. Skills and Experience of the Management Team ................................................................... 12
4.3. Ownership of the business ........................................................................................................ 13
4.4. Required Production Equipment ............................................................................................ 13
5. SWOT ANALYSIS OF POULTRY FARMING ............................................................................ 16
5.1. Strengths of Poultry Farming .................................................................................................. 16
5.2. Weaknesses of Poultry Farming .............................................................................................. 17
5.3. Opportunities Available to Poultry Farming ......................................................................... 18
5.4. Threats of Poultry Farming ..................................................................................................... 18
6. RISK MANAGEMENT AND CONTROL ..................................................................................... 20
6.1. Personal Risks ........................................................................................................................... 20
6.2. Production Risk ......................................................................................................................... 20
6.3. Financial Risk ............................................................................................................................ 21

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7. FINANCIAL AND ECONOMIC PLAN......................................................................................... 22
7.1. Startup requirements................................................................................................................ 22
7.2. Manufacturing and Operational Plan ..................................................................................... 23
7.3. Importance Facilities ................................................................................................................ 23
7.4. Inventory.................................................................................................................................... 23
7.5. Human Resource ....................................................................................................................... 23
7.6. Management Plan ..................................................................................................................... 24
7.7. Forecasted Sales and Expense .................................................................................................. 25
7.8. Variable Costs ........................................................................................................................... 27
7.9. Revenue ...................................................................................................................................... 28
APPENDIX ................................................................................................................................................ 30

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 LIST OF TABLES
Table 1: List of Equipment and its purpose .................................................................................. 14
Table 2: entrepreneurial teams’ salary per month and their role .................................................. 25
Table 3: Total cost of fiscal analysis of equipment, assets and management for startup capital --26
Table 4: Variable costs for the next years ..................................................................................... 27
Table 5: Revenue from selling of poultry products ...................................................................... 28

LIST OF FIGURES
Fig1: Poultry Products .................................................................................................................... 8
Fig 2: Organizational Structures of Poultry Farm......................................................................... 10
Fig 3: Equipment of Poultry Farms .............................................................................................. 15

LIST OF APPENDIX
Appendix 1: poultry and poultry products .................................................................................... 30
Appendix 2: General principles of poultry business ..................................................................... 31
Appendix 3: Value and key nutrient composition of poultry feed on cereal grains ..................... 31
Appendix 4: poultry feed cereals grains ....................................................................................... 32

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 EXECUTIVE SUMMARY
Name of the enterprise is Anidinet Ye Ensisat Gibiyit Akirabi Mahber, with interest focus on
Poultry products, to be in Debire Markos and surrounding and the business activity involves bird’s
egg and its by-product. This business is formed by two persons jointly entering in to contractual
relationships and our relationship is based on agreement participating in the profits and losses
arising out of it. The establishment of Anidinet Ye Ensisat Gibiyit akirab mahiber focus on poultry
and poultry products in 2015 is intended to fulfil the significant demand for chickens’ meat
production in both the domestic and international markets, while also generating employment
opportunities for the partners and the local community. As is well known, the majority of people
in underdeveloped nations, particularly in Ethiopia, lack sufficient protein. Because of this, our
farm aims to provide chickens meat products that will lessen protein insufficiency. We will provide
us with the resources, knowledge, and 8,500,000 birr needed to launch the farm. The business
startup shall be financed by owners’ equity of 4,000,000br (47.1 %) will be contributed by the
members and the rest 4,500,000br (52.9 %) is owned loan from the bank. The company's start-up
phase is predicted to see the acquisition of initial stocks of 3500 chickens. The company's goal is
to produce eggs, meat, kid’s chickens and other poultry products and increase the numbers of
customer and to provide job for the youth and woman. The business made the decision to create a
sustainable plan with the purpose of becoming a leader in the supply of poultry meat and poultry
products that is both trustworthy and organic for the local, regional, and national markets in order
to achieve our goals. The business considers a number of threats and opportunities that could
determine its future success or failure.

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 1. INTRODUCTION
1.1. Background and Business Description
Anidinet Ye Ensisat Gibiyit akirab mahber is the name that business member agreed up on it and
its meaning is friendship animal and animal product supply association , they have reason to name
so because of their business is supply of animal and animal products. Anidinet Ensisat Gibiyit
akirab mahber farm business was established in June 2015 e.c by 2 partners (namely Biniyam
Adego and Yemarnesh Tesfaw) with initial capital 8,500,000br (4,500,000br (52.9%) from the
banks and 4,000,000br (47.1%) will be contributed by the members or from equity) share capital
to operate in poultry farm in Amhara regional state Gozamin wereda Debire Markos town 02
kebele now our company has total 13 employee. They was established their business for the
purpose of enabling its partners benefit fully from their products. The business owners start these
kinds of business through discussion on idea of this which is generated from two people they
believe as it is interesting business to start with small amount of capital. We discussed on the idea
and the come to agreement to find capital. We are educated persons, from us one have the BSc in
management background, and one has BSc in Agribusiness and Value Chain Management. From
us of one female and the other is male. We have other job before starting these kinds of job and
know we want additional labor force for the future but still know they can’t hire additional worker.
They own finance and run jointly for personal gain, irrespective of the degree of formality involved
in the relationship. There is no need for one person to take all the risks or losses and the losses or
risk will be shared among the partners according to our agreement. As we share of our
responsibility and profits, we are more likely to be motivated to get more profit.

The poultry farm of project found in Amhara regional state Gozamin wereda, Debire Markos town
02 kebele. Debre Markos is a city located in the Amhara Region of Ethiopia. It is the administrative
seat of the East Gojjam Zone. It is located 300 kilometers North-West of the capital Addis Ababa
and 265 kilometers South-East of Bahir Dar, the capital of the Amhara National Regional State
with a latitude of 10°20′N and a longitude of 37°43′E and its environmental condition is favorable
for poultry production, it found by producing wheat, maize, barley and other cereals that is
important to use as feed for this business.

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1.2. Organizations of the Business
Management of the organization: We are agreed on the pattern of managing the business by one
person who have the more knowledge about these kinds of business, but we agree on the idea of
every partner has the right to take active part in the management of the business affairs. We can
make an agreement how to share the responsibility among ourselves according to our experience
and knowledge. This business has clear vision, mission and value that direct and govern its overall
economic and social operations.

The Company or Business: Our business is a partnership business run by two persons and our
relationship is based on agreement participating in the profits and losses arising out of it and we
are voluntary associations, we are form the least popular forms of business ownership.

Formation: These kinds of business are formed by two persons jointly entering in to contractual
relationships. The agreement between parties is desirable to be written and signed, to prevent
misunderstanding among us. This contract is called memorandum of association, articles of
partnership deed or partnership contract. Partner’s rights and duties should be explicitly in written
articles of partnership.

Objective of the business: To produce eggs, meat, kids chickens and other poultry products and
increase the numbers of customer and to provide job for the youth and woman.

Vision: To be competent and effective marketing cooperative company that ensured changed
living standards of its partner’s by 2020 E.c.

Mission: To increase the incomes and improve the living standards of its member through
increasing their production and productivity; through serving them as best marketing.

Values: The value of this business include Self Reliance, Quality and safety, Sustainability, mutual
support, and collaboration.

Product of the company: The Company produce live bird and egg to the market and we will sell
Eggs at the farm gate to egg collectors, in the open markets to middlemen and consumers and to
retail shops, hotels and supermarkets in towns. Eggs pass through a relatively longer chain to reach

2
the consumers than bird. The main actors in egg marketing are producers, collectors, traders or
(wholesalers), local kiosk, shops and supermarkets.

Poultry farming is a great business idea as an increasing number of people are switching to eating
healthy and incorporating protein into their daily food and poultry products are a main source of
protein. From that, the poultry business has several advantages, both for the business owners and
the customers. Such as:

 Customers get access to fresh eggs and meat that is organic and hygienically obtained
following standard processing procedures.
 The prices of the products are reasonable thus making it possible for greater number of
customers to purchase the items, which in turn increases the market reach for the business
owners.
 The owners of the business on the other hand also benefit from raising chicken birds in the
poultry business as they can get both eggs and meat from the same sources.
 Also, the rate of return in the poultry business is quite good as the products are sold at a
good rate and there is a continuous demand for the products. Etc…

Generally, Poultry farming can be done alongside regular farming as the need for materials is not
too extensive. Additionally, the bird droppings from the poultry farm are rich in nitrogen which
can thus be used as an organic source of the essential element nitrogen in the form of a fertilizer
for the regular farming land. Thus, poultry farming business can indirectly benefit regular farming
as well.

Types of Technology used in the business

Some of the technology that we use to our poultry farm production and protection are the
following:

 Electronic water regulators

 Heating sheds
 Drones with mobile sensors for monitoring environment
 Mobile sensors for identifying diseases

3
Functions of the Technology: Over all the technology are used to mitigate risks shall be by taking
the following activities; like

 Regular vaccination of the birds

 Regular invitation of veterinary to check the birds
 Install fire extinguishers at strategic points in the farm
 Train workers on fire safety measure with regular refreshers
 Take necessary measures, within our powers to mitigate any unforeseen risk, except for
force majeure
 Pay workers well and regularly to prevent massive pilfering of produce

Customers of the business: Live birds and eggs are either directly sold to consumers or sold to
intermediaries for retail in the larger towns (Debire Markos, Dejen and also other wereda towns)
and cities like local or in small market in their surroundings. Our company sells poultry and poultry
products like live bird and egg to different customers like hotel, retailers, wholesaler’s, super
markets, kiosk and to local consumers.

Religious festival days are associated with increased poultry consumption and sales and fasting
periods with decreased consumption. These patterns cause strong fluctuations in prices of poultry
products. Prices increase in the onset of festivities and decrease in fasting periods. It is difficult to
change this demand pattern as it is a matter of religion. The only option is to cope with the existing
situation. If poultry production could be carefully planned and managed to match the fluctuating
market demand, economic benefits might be higher.

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 2. MARKET ANALYSIS OF THE BUSINESS
One of the common trends in the Ethiopian poultry farming is that most farmers are no longer
concentrating only on farming a particular species of hens or poultry farming alone. Now we find
it easier to run both poultry farming and crop cultivation. Only some traditionally process live bird
and egg to use it as source of income. Despite the fact that poultry farming has been in existence
since time immemorial, that does not in any way make the poultry industry to be over saturated.

2.1. Capital and Financial Structure

The total capital of the partnerships is Birr start up is 8,500,000 ETB (4,500,000 Br from the banks
and 4,000,000br will be contributed by the members). The major creditor of the company will
Amhara bank and the former Amhara Credit and Savings Institution (ACSI) for now Tsedey bank.

2.2. Market Size and Potential

This friendship poultry farm business contains of two partner members as well additional
permanent employee. The friendship business association has huge potential to supply poultry and
poultry products with best quality in addition to product innovation, distinctive branding,
competitive pricing, Promotional activities, to promote its marketing businesses.

2.3. Current and Future Customer Base

With its marketing plan, our cooperative considered what products to be marketed and what sales
goals to be set according to the quality assuring procedures, standards and preference of consumers
and the market at large. Market linkage institutions include local consumers, Agro Processing
Industries, retailers, Relief non-governmental organizations to distribute for different
beneficiaries, kiosk, restaurants, Exporters and Whole Sellers etc…

The Farm will focus on its target market, low to middle class residents in the area, along with local
businesses that are located inside or outside the local. The demand for egg and chicken depends
on many factors including consumer preference, consumer’s income, population size, price of the
product and other factors.

Our retail and corporate customers are especially sensitive to service value. And our pricing
strategy will be competitive within the various product range, but we will not rely on the selling
price to overshadow other advantages of doing business within the company, such as a diverse line

5
of high quality chicken and egg that are readily available, reasonably price, and backed by service
excellence and on time delivery. Products that are readily available, reasonably priced, service
excellence and on time delivery.

2.4. Competitor Analysis

Competition is increasing significant in the agri-business markets and absence of strong
competitors might force the company to solidify its market position. There are different private
small scale farm and household farm competitor in Debire Markoss town. On city level four small
scale poultry farm and large numbers of small scale farm they have. But this farm unit not actively
produced egg and chicken at sufficient quantity and quality. Due to this there is no strong
completion between us. We distinguish ourselves from them by providing better quality egg and
poultry for meat at reasonable prices, and delivering to the customer door. Bu we have other
differences that are included in the table below.

Competitor We have, but they don’t have They have, but we don’t have

Private small scale farm Skilled poultry staff, lower Luxury environment, high end
price customers

Household farm Better quality, specialized table service, various other

products better equipment food item

2.5. Target Market

Our target is that we will be the most sought after poultry farm and so we intend to sell our produce
product wherever we can reach. But he main our target market are includes the following:

 Hotels,
 Restaurants
 Market both open and chain-stores
 Bakeries
 Roadside chicken barbecue places

6
  Individual and collective families
 Local consumers
 Agro Processing Industries
 Retailers,
 Kiosk
 Exporters and Whole Sellers

Threat of Substitutes: Chances of substitute product for poultry and poultry product is very less,
as the people are prefer poultry meat and egg specially during different festival.

7
 3. MARKETING PLAN
3.1. Product of poultry (egg and meat)
Because of its favorable nutritional profile, chicken meat can play an important role for individuals
in specific age groups (pregnant women, children, and to the elderly). Chicken meat and eggs are
widely available, relatively less expensive and can be of central importance in helping to meet
shortfalls in essential nutrients particularly of impoverished people. The incidence of several
common metabolic diseases associated with deficiencies of critical dietary minerals, vitamins and
amino acids can be reduced by the contribution of poultry products rich in all essential nutrients
except vitamin C. Chicken meat can make many positive contributions to the diet of those on low
incomes. Although not all meat is seen as healthy, chicken meat is, and is frequently more
affordable than other meats. It is of a consistently high quality, is low in saturated fats and can be
enriched with some essential nutrients and is sought after worldwide.

Fig1: Poultry Products

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3.2. Pricing Strategy
To get the right pricing for our poultry and poultry products, then we should ensure that we choose
a good location for our poultry farm, we improve this through;

 Choose a good breed

 Cut the cost of running our farm
 Try to as much as possible to attract buyers to our farm
 Build the farm near the market to cut of transport cost and such

3.3. Distribution strategies/sales method

There are different ways of distributors around Debire Markoss town, we intend to use different
distribution channel service and knowledge of distribution within our vicinity as well as the use of
our own direct sales force from our outlet. We will be discount for bulk purchase, free delivery
and payment method will be through cash and online payment through mobile banking, CBE birr
as well as tell birr. We use Promotion strategy that we will be adopted to promote or market to the
business. For example social network like as Facebook, telegram and such.

3.4. Publicity and Advertising Strategy

Any business that wants to grow beyond the corner of the street or the city they are operating from
must be ready and willing to utilize every available means (conventional and non-conventional
means) to advertise and promote the business. We know that it is important to create strategies that
will help us boost our brand awareness and to create a corporate identity for our poultry farming
business.

In order to promote our poultry and poultry products, we will use different promotional means
such as Facebook, telegram, posters, you tube channels and so on. Participation in market and
trade fairs is among the promotional activities it undertakes in collaboration stakeholders
processing and retailing as well as whole selling actors. The way which are listed below are the
platforms to promote and advertise our business;

 Sponsor relevant community based events / programs

 Leverage on the internet and social media platforms like; Telegram, Facebook, YouTube,
Google to promote our business
 Install our Bill Boards on strategic locations and engage in road show from time to time.

9
 4. OPERATING PLAN
4.1. Organizational Structure
The organizational structure refers to the cooperate relationship between the employee and the
company. There are sets of roles and responsibilities assigned to each of the employee in the
company. The purpose of this is to ensure that each team member understands what is expected
out of him/her in daily.

General Farm Manager

Ass. Farm Manager

Finance/Account Manager Stock Man

Production Manager Part-Time Workers

Executive Marketing/Sales Cleaners Laborers

Manager

Fig 2: Organizational Structures of Poultry Farm

Among several stakeholders who are involved on our poultry farm with in the organizational
structures are the following:

General Farm Manager

 Responsible for the planning, management and coordinating all farm activities
 Ensure compliance during project executions
 Providing advice on the management of farming activities across all section

10
  Responsible for carrying out risk assessment
 Responsible for overseeing the accounting, costing and sale of farm produce after harvest
 Represent the organization’s interest at various stakeholders meetings
 Ensures that farming goals desired result are achieved
 Defining job positions for recruitment and managing interviewing process
 Responsible for training, evaluation and assessment of employees
 Oversee the smooth running of the daily farming activities across the various farming
sections

Assistant farm manager

The role Assistant farm manager is as the assistant farm manager will responsible for the
management of the poultry farm. This will means responsibility for health, welfare and the
performance of the poultry unit.

Finance/Accountant manager

 Responsible for financial forecasting and risks analysis.

 Responsible for developing and managing financial systems and policies
 Responsible for administering payrolls
 Ensuring compliance with taxation legislation
 Handles all financial transactions for the company
 Serves as internal auditor for the company

Production manager

The production manager is responsible for managing the production and operating to ensure that
the achievement of production target within the specialized quality, environmental standard and
budget. And also have the role of;

 It is his duty to manage the production team

 Adherence to plan
 Adherence to site and business protocols

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Executive Marketing/Sales Manager

 Identify, prioritize and reach out to new partners and business opportunities
 Identifies development opportunities; follows up on development leads and contacts
participates in the structuring and financing of new business
 Writing proposal documents, negotiate fees and rates in line with company policy
 Responsible for handling marker surveys and feasibility studies for clients
 Responsible for supervising implementation, advocate for the customer’s needs and
communicate with clients
 He/she is in charge of calling customers
 Maintenance and extension of sales territory
 Increasing sales line, image, and building and developing product knowledge

Poultry stock man

Stock man is responsible for supporting the husbandry of the farm’s birds. This will include
insuring they are fed, watered and locked after feeding in other to meet health and welfare
requirement as well as growth targets for birds bred for meat or egg production for layers. He/she
has the duty of stock man to ensure the health status of the chickens in other to enhance a good a
product.

Part-time workers and cleaners

Part-time workers are workers who work time to time not regularly. They also take part in cleaning
to ensure that the farm is clean and to prevent and check farm products from contacting diseases.

4.2. Skills and Experience of the Management Team

The management team will be individuals of high skills due to undergoing training on how to
handle the business. To ensure the progress of the business by minimizing cost and maximizing
profit. It will be also individuals who have experience because may have been engaged in the
business several time before have experience of how to run the business and prevent the farm from
uncontrollable factor which may do harm and affect the progress of the business.

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4.3. Ownership of the business
The ownership type of friendship poultry farm is a partnerships business. This type of ownership
is selected because it is easy to form, and the owners enjoy partner control of our business profits.
Partnership is an association of two or more persons to carry on as co-owners of a business for
profit. Partnerships are voluntary associations, and most are relatively small businesses. We
formed the least popular forms of business ownership. The operation is six days (from Monday to
Saturday) and opening hour will be morning at 2 o’clock and closing time will be afternoon at 12
o’clock but it have continuous follow up needed to manage the risk.

4.4. Required Production Equipment

For this sake of understanding the business in detail, it is significant to state some of the equipment
which is required for the business to stay. The most used pieces of farm equipment in broiler
houses are feeders, drinkers, crates and weighing scales, flame guns and other cleaning equipment
are also used. This equipment is listed in the table below and the description of this equipment is
also stated.

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Table 1: List of Equipment and its purpose

No Equipment Description and purpose

1 Generator This is used to supply electricity to the poultry house as well
as to keep the poultry house gadget

2 Feeders They are device used to feed the birds/chickens, some of

Which are made from plastic or meters.

3 Lighting Bulbs and rechargeable for light

Gadgets
4 Drinker This are device use for holding water for the

Birds/chickens to drink.
5 Waste bin This is used to trash waste in the poultry farm
6 Table/chair The table and chair are for sales representative

and customers
7 Shovel Will be used to clean up the poultry house
8 Nose max This will be use protect and clear the breath of

staff when cleaning the poultry house

9 Gloves Will be used to protect the staff while working in the farm
10 Feeds Feeds for the birds
11 Water Water gotten from the borehole
12 Vaccine Treatments for the birds
13 Saw dust The dust for the floor of the poultry house

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Fig 3: Equipment of Poultry Farms

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 5. SWOT ANALYSIS OF POULTRY FARMING
Poultry farming is the process of raising birds like chickens, ducks, turkeys, geese, and others to
get eggs, meat, or feathers. The bird rising could be domestic or commercial but our focus would
be on commercial and mass-scale chicken poultry farming. When we talk about commercial-scale
poultry farming, then the poultry feed comprises of a perfectly balanced high energy protein based
diet to maximize the feather, skin, organ, and muscles. We plan to raise chickens in a perfectly
controlled environment to avoid frightening, overheating, chilling and crowding.

SWOT analysis of poultry farm focus on the internal and external factors impacting of our poultry
farms. Here’s the SWOT analysis of poultry farming as follows;

5.1. Strengths of Poultry Farming

Strengths is internal factors that give an organization an advantage over others. So in our poultry
farm the strength are as follows:

High-profit margin: Poultry farming is one of the world's most profitable businesses

Limited competitors: There are a limited number of competitors in the poultry farming industry,
making it a stable business environment. When our product (chickens) is ready, then we can easily
sell it in the market without investing any capital on marketing and promotion every time. We just
have to build the relations at once with local sellers, hotels, and restaurants; it would benefit you
in the long term.

Experienced operators: Experienced operators can provide tips and tricks to improve
productivity. When we establish our poultry farm, then we would need to buy chicks, feed, and
other relevant products. It compels us to increase our business circle and connect with other poultry
farmers, suppliers, distributors, and operators. The experienced operators give us tips and tricks to
improve our productivity.

Not easy entry: The cost of establishing a poultry farm is high, making it difficult for new
competitors to enter the market

High yield: Poultry farming provides a high yield of meat and eggs, which are highly nutritious
and high in protein

Immediate demand: Poultry farming raises agricultural products that have immediate demand

16
Employment opportunities: Poultry farming creates employment opportunities on multiple
levels. So we can get the employment in easily and we can start in easily.

Easy marketing: Marketing is easy for poultry farming and we get near market because the
product is more essential for peoples and wanted by humans.

5.2. Weaknesses of Poultry Farming

Weaknesses is the internal factors that place an organization at a disadvantage relative to others.
So in our poultry farm the weakness are as follows:

Low Differentiation: our competitors are selling the same product (chickens) whatever we are
selling. In other words, there’s no product differentiation in this industry. It doesn’t give anyone a
competitive edge over the other. Rather than taking the product to the home even it is also cost.

Higher Investment: Poultry farming requires a significant amount of investment to establish a

well-controlled farm that can generate revenue

Transportation Cost: The transportation cost of bringing the small chicks to the farm and then
distributing the final product to the stores, hotels, and local food markets is very high. If the retail
price is good, then it pays off all the expenses and generates revenue. Otherwise, we have to pay
it from our pocket. The cost of transporting poultry products can be high, which can reduce
profitability.

Fixed Pricing: Poultry farmers often face fixed pricing, which can limit their ability to increase
profits. The prices of chicken and egg are fixed and we can’t negotiate over the price. Whatever
price food and price regulatory authority set, we have to accept that even if it doesn’t meet our
expenses.

Risk of Loss: Poultry farming is susceptible to various risks, such as disease outbreaks, which can
lead to significant losses

Environmental Conditions: Some birds do not excel in certain environmental conditions, which
can lead to loss if not managed properly and so on

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5.3. Opportunities Available to Poultry Farming
Opportunities is the external factors that an organization may be able to exploit to its advantage.
So in our poultry farm the opportunities are as follows:

Partnership & Acquisition: Poultry farming businesses can expand their operations by partnering
with other businesses or acquiring them. So we could borrow additional capital and loan from the
banks and the investors by showing them our previous record. We could utilize the borrowed
money to further expand our farm in terms of product and business portfolio.

Product Line Extension: Poultry farmers can extend their product line by producing further
processed products, such as pre-cooked meat products and franchise products.

Wholesale Distribution: Poultry farmers can sell their products to wholesalers, who can then
distribute them to retailers. If our poultry farm’s production is growing, then we can expand our
business by becoming a wholesale distributor of chickens. It would allow us to build relations with
bigger hotels and supermarkets.

Selling Business: Poultry farmers can sell their business to other investors who are interested in
the poultry farming industry. The most interesting thing about the poultry farming business is that
it allows us to conveniently sell our business at the price to earnings ratio. For instance, if our
current earning and share price is good, then we can sell our business at a much higher profit than
our original investment.

Relation with Vendors; - if we develop better relations with vendors and provide them an option
of urgent delivery. It means that they could come and take the poultry and poultry product at any
time they need it. It would reduce our transportation cost and save our time.

5.4. Threats of Poultry Farming

Threats is the external factors that could cause trouble for the organization. So in our poultry farm
the threats are as follows:

Increasing Cost;- high rent, costly feed, high distribution, and transportation costs, insurance, and
other running, variable, and administrative costs make the overall expenditure very high. It could

18
bankrupt our entire business. Therefore, it’s important to keep in mind various costs before
investing our capital.

Regulations; - many animal welfare activists are working to pass legislation about the better
treatment of chicken on farms. It would further increase the cost.

Diseases: Poultry farming is strictly linked with foodborne and zoonotic diseases. Eradication,
elimination, and/or control of foodborne and zoonotic pathogens are major challenges to our
poultry farm relative with our capacity. Poultry immunity, health and production are several factors
that challenge the future growth of the poultry farm. The emergence and re-emergence of diseases
will continue to be major challenges to the current situation and the strategic future of our farm.

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 6. RISK MANAGEMENT AND CONTROL
Poultry farming is surrounded by risks all over which affect both small and large scale operators.
Along this line, we have foreseen, forecast and predict some possibly occurring risk that our
business and may face and we carefully provide matching solutions to the risks and dangers.

The risks might include:

 Personal risks
 Production risk
 Financial risk

6.1. Personal Risks

Personal risks arise from events affecting the personal lives of the farmer and or his partners which
may in turn affect the operation of the business. In this instance we predict some personal risks
such as fire, flood or death. It can also include variation of goals and objectives between the high
desk and the low desk.

Control and Management of Personal Risk

 In the first instance of fire, flood and death the business organization has planned to register
all its works to the insurance services, in order to minimize or even obliterate some risks
that might be faced in that regard.
 Establishing a common understanding of the business goals among the partners.

6.2. Production Risk

Many factor from outside of the business environment and from inside are likely to put the farm
and the whole of its productions in risk. Poultry farming has sensitive risks to weather conditions
that are in the farming environment e.g. sunlight, rainfall, humidity, temperature and others can
include insects’ diseases and pests.

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Control and Management of Production

 We intend to grow disease resistant varieties of poultry that can absorb and sustain the
shock of infections
 We intend to use preventive means of insect and predators control such as nets to protect
the chickens

6.3. Financial Risk

Most risk that are related to finance result from inadequate cash flow to meet obligations
which may in turn cause shut-down of the business. It may be caused by high or mortgage
payments and assets or as a result of personal or production problems.

Control and Management

In order not to fall in trap of financial risk, we should be plan the following ways:
 Diversification of the business: we planned to engage in different niche of poultry
farming so as to escape the misfortune.
 Acquiring tools and equipment of simple cost: due to expensiveness of some
equipment, the business will center on hiring, renting or even with neighboring farms
(if exist)
 We plan not to buy things until when the need arise
 Saving in the bank: since keeping money at home or in business place is so risky we
plan to equipped our business with banking

Generally in order to minimize the risk of damaging and vandalizing the organization owned
assets, skills workers are employed and the following measures we will be take it; Those are;

 Washing the equipment and other tools regularly especially after use
 Storing them/the equipment’s in a shady and dry place
 Immediate repairing of the spoiled and shaping them worn ones

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 7. FINANCIAL AND ECONOMIC PLAN
Anidinet Ye Ensisat Gibiyit Akirab Mahiber enterprise will be start by the buying poultries to
provide health and sufficient hens and eggs to the public. In addition to meat, meat and eggs this
company plans to provide manures to the local farmers.

7.1. Startup requirements

Startup expenses in (ETB)

 Legality -----------------------------------20,000
 For facility ------------------------------1000,000
 2500 chickens per 300birr------------156,000
 Feed chemical-----------------------------40000
 Insurance-----------------------------------25,000
 Research and development------------- 50,000
 Expensed for equipment/tools--------------500,000
 Feed -----------------------------------------200,000
 Other----------------------------------------60,000

Total start up expense----------------------------------------------2,051,000

Startup asset in (ETB)

 Cash required-------------------------200,000
 Startup inventory--------------------190,000
 Housing-------------------------------180,000
 Other current asset-------------------15,000
 Long term asset----------------------1,500,000

Total asset ------------------------------------------------------ 2,085,000

Total requirements------------------------------------------------4,136,000 (2,051,000+ 2,085,000)

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7.2. Manufacturing and Operational Plan
The operational plan of poultry farm comprises principles of adjusting the size of the farm to secure
the most economical values of labor and equipment to facilitate the operations. The question of
breeding of chickens is raised also important to beginner here. Since our farm is commercial
poultry production we plan to keep leghorn because of their slightly lower feed intake and housing
cost per hen becomes significantly and enough to them are kept.

7.3. Importance Facilities

Anidinet Ye Ensisat Gibiyit akirab mahiber farm brought all the necessary equipment. The
necessary equipment’s are 200 feeders in provided double sided feeder for 20 chickens, growers,
layers, sand or coarse feeder, waterier used to providing water, electric light, ventilator, incubation,
Candler, personal computer, generator egg trays, beam balance, light controlling instrument, feed
storage and etc.

7.4. Inventory

The determination of beginning farm size for the business is the central idea of this section.
Therefore, as management get in to agreement, the farm planned to start with 350,000 chickens.
The management also considered wisely and carefully on hatchability and expected chickens. In
order to increase the hatchability rate of the egg, the management deeply watches out the fertility
the eggs, quality of the eggs, which is verified by candling, storage and incubation temperature,
humidity and position of storage of the eggs have a paramount effect on the hatchability rate of
egg.

7.5. Human Resource

Poultry and egg production is no minor farm enterprise. Since the business has to become
technological and there is every indication that the popular one, management should be allocating
human resource us the professions permit. Anidinet Ye Ensisat Gibiyit Akirab Mahiber farm will
have:

 One business manager

 One supervisor
 One accountant

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  One guard
 Four sale man
 Five workers for close operation in the farm

Totally, Anidinet Ye Ensisat Gibiyit Akirab Mahiber farm contain 13 permanent employees. The
company also hires additional temporary employees when needed. No matter how many workers
are there it is safe that all will produce quality products. Careful business analysis and honest
advertising will take the enterprise a real life.

7.6. Management Plan

Success in any enterprise is usually measured by the profit made from the effort put for the profit
from poultry farming on partly a matter of good husbandry or good management practice and a
matter of applying sound business principle to enterprise. Good management includes such
practices as sanitation, the feeding of balanced ration, maintaining suitable housing condition and
the hatching of early chickens. Our poultry farm idea is established from the action oriented, highly
motivated individual who are good at creating of business opportunity from simple thing better
working environments create job for those who doesn’t have livelihood participate in development
activities of in our country.

Our poultry farm will have 13 entrepreneurial teams. Some of the members of the team have their
own role in managing and controlling any activity in the business farm and indicates as follows.

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Table 2: entrepreneurial teams’ salary per month and their role

Employee Salary/month Role

Business manager 7500 Manages, lead the company

Sales man (4) 4000*(4) To sale the products

Supper visor 7000 Supervise, monitor & attend operation

Accountant 6500 Prepare financial documents

Security 3,000 secure the farm

Other workers (5) 2000*(5) Cleaning, feeding & chemical spraying

Total (13) 50,000

7.7. Forecasted Sales and Expense

Summary of the forecasted sales and the appropriate expense for the first year:

Annual revenue in (ETB)

 Sales of egg---------------------------------------300,000
 Sales of broilers-----------------------------------525,000
 Sales of hens and cocks for meat --------------675,000
 Sales of manure----------------------------------- 200,000

Total revenue -----------------------------------------------------1,700,000

Operating and administrative expense in (ETB)

 Feed expense -----------------------110,000

 Water sources ---------------------40,000
 Salary expense ---------------------50,000/month = 600,000/year
 Health expense ---------------------20,000
 Advertising -------------------------10,000

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Total operating expense --------------------------------------------- 681,000

Expected profit -------------------------------1,019,000 (1,700,000 – 681,000)

Generally the Fiscal Analysis of Equipment, Assets and Management to startup of the poultry farm
are summarized as follows;

Table 3: Total cost of fiscal analysis of equipment, assets and management for startup
capital

No. Items No. of items Estimated Cost in ETB

1 Land 2 plots 1,200,000

2 Building and fencing - 2,500,000

3 Water sources 1 borehole 200,000

4 chickens (300birr per chickens) 3500 chickens 1,050,000

5 Cleaning equipment including machines - 1,000,000

6 Egg trays 30 100,000

7 Heaters/incubators 50/30 100,000

8 Broiler starters (chicks) 150 400,000

9 Feed - 550,000

10 Workers payment - 600,000

11 Transport vehicle - 100,000

12 Maintenance - 100,000

13 Other expenditures/other cost - 200,000

14 Risk anticipatory (insurance) - 140,000

15 Depreciation cost (for machine 5% rate and building 10% rate) 10,000+ 250000 = 260000

Total cost - 8,500,000

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7.8. Variable Costs
The costs for labor forces, poultry feed, transport vehicles and chickens cost for start the farm are
included under variable cost.

Table 4: Variable costs for the next years

No Variables 1st Year 2nd Year 3rd Year 4th Year 5th Year
cost
1 Labor 600,000birr 600,000 birr 600,000 birr 600,000birr 600,000birr
Cost
2 Feed and 750,000birr 750,000 birr 750,000birr 750,000birr 750,000birr
water
source
3 For 1,050,000birr 0 0 0 0
Chickens
to startup
4 Transport 100,000birr 100,000birr 100,000birr 100,000birr 100,000birr
vehicles
Total 2,500,000birr 1,350,000birr 1,350,000birr 1,350,000birr 1,350,000birr

Variable cost during 5 year = 2,500,000 + (1, 350,000*4)

= 7,900,000 Br.

Total Fixed cost = 1,200,000 + 2,500,000 + 1,000,000 + 100,000 + 400,000

=5,200,000 Br.

Total cost incurred during 5 years of production = Total Fixed cost +Variable cost in 5 year

7,900,000 Br. + 5,200,000 Br. = 13,100,000 Br.

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7.9. Revenue
Throughout the project year (the next 5 years), sales of various products will be the source of the
revenue. As a result, the income will come from the sale of chicken meat, eggs, hens and other
poultry products. The following table displays the product and sale income received over the
course of the project.

Table 5: Revenue from selling of poultry products

Years
No Items 1st Year 2nd Year 3rd Year 4th Year 5th Year
1 Sales of 20,000eggs 30,000eggs 40,00eggs 45,000eggs 50,000eggs
egg
2 Sales of 1500chickens 2000chickens 3500chikens 4000chickens 4500chikens
broilers
3 Sales of 2000kg 2500kg 3000kg 3500kg 4000kg
manure
4 Sales of 1500 hens 2500 hens 3000 hens and 3500hens and 4000 hens and
hens and and cocks and cocks cocks cocks cocks
cocks for
meat
Income from different poultry products
1 Sales of 300,000birr 450,000birr 600,000birr 675,000birr 750,000birr
egg
2 Sales of 525,000birr 700,000birr 1,225,000 1,400,000birr 1,575,000birr
broilers
3 Sales of 200,000birr 250,000 300,000birr 350,000birr 400,000birr
manure
4 Sales of 675,000birr 1,125,000birr 1,350,000birr 1,575,000birr 1,800,000birr
hens and
cocks for
meat
Total 1,700,000 2,525,000 3,475,000 4,000,000 4,525,000

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Note:

 Eggs = 15 birr/egg
 Broiler Chickens = 350birr/chickens
 Hens and cocks for meat = 450birr/hens
 Manure = 100birr/kg

The total income during the period of 5 year is calculated as:

Income of year 1 + Income of year 2 + Income of year 3 + Income of year 4 + Income of year 5

= 1,700,000 + 2,525,000 + 3,475,000 + 4,000,000 + 4,525,000

= 16,225,000 Birr

Net profit revenue (NPR) of Anidinet Ye Ensisat Gibiyit Akirabi Mahber farm

= Total income- Expenditure (cost incurred)

16,225,000 Br. - 13,100,000 Br.

NPR =3,125,000 Br.

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 APPENDIX
Appendix 1: poultry and poultry products

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Appendix 2: General principles of poultry business
 Learn about poultry farming
 Choose the poultry industry
 Select the poultry industry
 Select the appropriate bird
 Choose a farm location
 Purchase poultry farming equipment
 Purchase good-breed chicks
 Start the poultry farm

Appendix 3: Value and key nutrient composition of poultry feed on cereal grains

Ingredient Protein Energy Calcium Available P Lysine (%)

(%) (kcal/kg) (%) (%)

Wheat 13.0 3153 0.05 0.20 0.5

Corn 8.5 3300 0.05 0.20 0.3

Sorghum 9.0 3263 0.02 0.15 0.3

Barley 11.5 2795 0.10 0.20 0.4

Rye 12.5 2734 0.05 0.18 0.5

Triticale 15.4 3110 0.05 0.19 0.4

Oats 12.0 2756 0.10 0.20 0.4

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Appendix 4: poultry feed cereals grains

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