Business plan

Amico Investments Limited

Plot No. 1059 Chitimukulu Road
P.O.Box 710217
Mansa

Cell: +260 977 770375

 Contents
Page

1. Summary................................................................................................3

2. Business overview....................................................................................4
Introduction
Current position
Competitive advantage
Growth plan

3. Business strategy......................................................................................6
Tactics
Strategic issues
Core values

4. Marketing................................................................................................7
SWOT and critical success factors
Market research
Distribution channels
Strategic alliances
Tactical promotion plan

5. Team and management structure................................................................9

Skills, experience, training and retention
Advisors

6. Financial budgets and forecasts...................................................................11

Cash flow forecast
Capital expenditure budget
Break-even analysis

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 1. Summary
This business idea has been generated in order to create wealth and increase the value of share
for the shareholders. The nature of the businesses is purely poultry farming therefore, the
reader should note that the company will be involved in chicks production and distribution. This
business in unique in Luapula province and has targeted a niche market market with 100%
guanteed of continous business for the period of 5 years.

Amico Investments Limited has seen a business opportunity in poultry farming in Luapula
province. The most notable market opportunity is the increase in the number of broiler chicken
farmers in the province.

The company has forecasted to make a K 1.1 billion revenue per annum. This business idea
has the potential to earn the company more K 47 million per month net profit.

In order to make operate the business beyond break even point the company will produce
between 12000 and 24000 chicks per month.

Note that, Amico Investments Limited has ventured in varous buisnesses ranging from trading
to production and that chicks production is a new line of business. The company has decided to
venture into this business on purely profetional basis to leverage the shareholders investments.
For more details refer to the business overview on the next page.

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 2. Business overview

Introduction
Amico Investments limited was registered in 1998 as a limited company by
shares. The core business of the company was wholeselling and trading in
household goods. In 1998 the company was the first to deal in wholeselling and
operated as monolpoly for the periond of six (6) years. For this reason the
company registered significant growth exceeding 80%. From the proceeds from
wholeselling the company has diversified its business namely, mealie meal
production , Real Estate,service station (filling station) and transport businesses.
It suffices to say that the company has the muscle to venture in any business
ofcourse with the caustion as regard to investment portfolio and leverage.
After a thourogh research the company has decided to venture into chicks
production because there is no single producer of chicks in Luapula Province. As a
forward looking company we took an extra mile to look into DR Congo market. DR
Congo import the chicks from Copperbelt Province and we strongly feel that our
company will have a ready market. As a poineer company we are destined for
success.
Finally, our new business will be production of broiler chicks and distribution.

Current position
Amico Investments Limited on inception in 1998 started with K 300,000,000 as
operating capital for the wholeselling business. For a period of six (6) years the
company registered upward growth yeilding a total of 80% profits alone. This
means that the company has increased its capital to K 540,000,000.
Additionally, our mealie meal business produces more than 5000 by 25kg bags,
that is over K 2 billion per annum. The service station earns the company K 1.2
Billion per annum and the tranport business earns K 500 million per annum in
profits. As at present these business have reached growth stage in the marketing
cycle.
The directors of the company we have decided to diversify the business into
broiler chick production and distribution locally and internationally. We are
diversifying the business because we want to leverage our investments in
Zambia.

Competitive advantage
Our new line of business ( Broiler Chicks Production) is the first of its kind in
Luapula province. This means we shall not experience any local competition. The
only competition is expected from such companies Nova Tech, High Breed and
Zamchick. However, our plan is to produce a quantity that will enable as gain
from the economies of scale. Furthermore, our competitive edge lies in our
strategic alliance with the farmers’s associations in Luapula.

Growth plan
Amico Incestments Limited in Luapula Province services all the retail business
and consumers.
At present we only have outlets in Mansa for the wholeselling business. However,
for our new line of business will shall operate multiple outlets to cover the
farmers in other dictricts in the province. In the initial stage the compny will be
producing 12000 chicks every 21 days at 50% production capacity. The second
year the company will increase by 20% untill it reaches 100% production in the
fifth year.

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Multiple locations: For the reason that poultry farmers are found in every
district we shall open outlets or sign franchises with the local dealers in each
district except Mansa. This means we shall have outlets in Mwense, Kawambwa,
Nchelenge and Samfya to take the product to our customer’s doorstep.

New client bases: Our core customers are local farmers in Luapula. In addition,
the farmers in the neighboring DR Congo are also our target customers.

New products: Diversity is the answer to continued stay in business. Our chicks
will enable us to increase the revenue by K 96 Million per month. In the short
term will produce for the local market and in the long run we will produce for both
local and export market. As mentioned above at 100% production capacity, the
company will also supply DR Congo.

Marketing: The strategic alliances with farmers associations in Luapula

constitute the liable constant market for the chicks.

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 3. Business strategy
Our mission is to remain successful; therefore we shall endeavor to be
proactive, not reactive. This means taking the initiative to change various aspects
of our business and add new ones. In order to measure the effectiveness of this
strategy, we have set concrete and meaningful objectives as follows.
 To be the first and highets producer of broiler chicks in the Province
 To expand our business to reach the export market in Congo
 To begin producing animal feed as another line of business

Brand Creation and Positioning

In the inception year we shall first create and position our brand as the
organically healthy broiler chicks. This product will be positioned head to head
with the existing brands in order to establsih the taste. For this reason we shall
target the nich market in the local market.

Diversification
Within six months of operation the company will diversify into animal feed
production.

Increase Productivity
To increase productivity we shall work around the clock. The company has
planned to hire qualified personnel for each line of business in order to run these
businesses professionally. By doing this high productivity for each line of business
is expected to increase linearly. Additionally, will offer employees 50 percent of
their daily wage for each sick or personal day they don't take. This will motivate
our workers to work extra hard.

Core value
The following are the core values under which the business shall operate;
 Integrity(Personal Integrity is our standard)
 Accountability(we take responsibility for all our decisions)
 Stewardship (to be good stewards of all that has been entrusted to
us).
 Teamwork (if we work as a team, much more can be accomplished)
 Excellence (we aspire to the highest level of excellence as individuals,
team and in our services)
 Innovative (to be creative and striving for continuous improvement)

These above core values are are crucial to our long-term business success, in that
they will allow us to attract and keep our customers. Furthermore, these values
will enable our employees to exercise their innovativeness and through team
work our employees will learn from each others experiences.

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 4. Marketing
SWOT and Critical Success Factors
The table below outlines the SWOT analysis of the market for the proposed
product.

Strengths
- The product will be produced cheaply
- The product is a fast moving
commodity
- There is no need of packaging
- It can sold in the open market
- The price is not controlled
Weaknesses
- The company is new in this business
and its not familiar with the difficulties
in this business environment.
- Demand for the product fluctuates
according to season.
- Inability to hire skilled the Animal

- We are the first to commercialize the Husbandry Officer at the start of the

product
Opportunity
- The business is the first of its kind to
be commercialized in the province.
- The market is readily available
- The incubator can be used to
produce other chicks (guinea fowls)
- The export market is available in
Congo DR
business.
Threats
- The business is not controlled and as
such entry is not restricted.
- The technical experts may be difficult to
hire.
- Transport costs might eat into the profit
of the company.
- Luck technical knowledge about
incubators might hamper the business

The critical success factors for this project are as follows;

- The market for chicks is readily available.
- The only input is fertilized eggs.
- Operation costs is low
- The incubatior can be used to produce all types of chicks

Market research
Before developing this business idea we undertook marketing research.
The company conducted research in Mansa district of Luapula Province.
Statistics show that approximately 150 poultry farmers buy the chicks
from either Copper belt or Lusaka. Therefore, bringing the chicks to their
door steps will reduce their farming costs as a result the company will
have the whole market to itself.

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 Strategic alliances
In its pursuit to operate the business professionally and profitably, we
shall establish the alliances with poultry farmers so that we produce chicks
on order. This is with the view to expand the market for our products.

Tactical Promotion plan

In order to gain 90% of the market share the company will endeavor to
provide free transport to local customers within the radius of 20
kilometers.

Pricing
Our product will be priced on a cost plus margin basis. We plan to add
25% profit margin. The production cost of this product is low due to
availability of fertilized eggs locally and low labour cost. Note that, price
will be varied according the cost of production so that we ensure break-
even point is exceeded.

Business Location
The business is located 1 kilometer from Mansa on a 50 acre plot in
Chisembe Village. However, the sale outlet will be located in the heart of
Mansa town along Chimpampwe Road.
Business Geographical Coverage and Target Customer
The business will cover the whole province. However, on inception the
company will be located in Mansa to serve the Mansa residents.
The target market for our product is Luapula Province and DR Congo.

Estimated Sales Volume/Month

PRODUCT QUANTITY
12,000
Broiler Chicks

Estimated Market Share

The company will establish and increase the market share from 60% to
90%.

Marketing Strategy
In order to increase the market share the company will employ the
following marketing strategies;
 Intensive advertising
 Personal selling
 Trade shows
 Contest

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 5. Team and management structure
Management
The company will be run by a qualified management team. All management will be hired by the
assocition to ensure that the business is run proffessionary. Senoir managers will need to have
undergraduate degrees. The Junior managers will need to be diploma holder to qualify for the
positions outlined below. The association will operate lean management so that the labour cost
is kept to a minimum.
We do understand that achieving the objectives of the business requires proper management
system. A procedural manual and a code of ethics will be designed to harmonise the
management process. The procedural manual will encorperate critical corporate governance
issues.
Below is the initial management structure for our four companies outined in this document.

Board of Directors Business

Advisors/Lawyers

General Manager

Paultry Farm Manager

Paultry Farm Manager

General Workers General Workers

LABOUR COSTS

Direct Labour Quantity Unit Cost Amount

FARM Farm Manager 1 1,500,000 3,000,000
Farm Supervisor 1 1,000,000 2,000,000
General Workers 15 500,000 7,500,000

Sub-Total 17 12,500,000

Indirect Labour
Board Members 1 6,000,000 6,000,000
General Manager 1 2,000,000 2,000,000
Advisors 1 3,000,000 3,000,000

Sub-Total 3 11,000,000

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 Grand Total 20 23,500,000

Advisors
The company receives legal and business advise from Chibangu Chisunka and Associates and
Otam Consultancy and General Services repectively. The company banks with Barclays, Zanaco
and Cavmont Capital Bank.

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 6. Financial budgets and forecasts
Attach financial budgets and forecasts you are attaching to the business plan such as:
 Cash flow forecast
 Capital expenditure budget
 Break-even analysis

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