Abdi Ahmad Nyagaraa
Abdi Ahmad Nyagaraa
PROJECT
April,
2024
Executive summary
1.project title
2.promoter
3.project location:oromia regional state,Qersa woreda,Qersa town.
4.planned land area:1000m2
5.employement opportunity
5.1.permanent
5.2.temporary
6.Total initial investment:5,242,500
7.source of fund
7.1.promoter contribution :1,048500
7.2.bank loan:4,194,000
8.net profit:
8.1.first year.4,852,500
8.2.second year profit 4,852,500
its populations are engaging in traditional cattle production. Next to coffee export, cattle
feeding systems and feed treatments are conducted by the farmers to feed cattle, reduce
The political reforms and peaceful relationships among the neighboring and Middle East
countries fostering market accessibility for fattened cattle. The use of mobile drone
Product/services
Cattle rearing, also called livestock farming, is all about mass breeding of cattle (cows, oxen, bulls,
bullocks and calf et al) for the sole aim of making profit and it is of course a thriving and profitable
business because usefulness of beef and other by products from cattle. People eat beef, drink their
milk, and use their fur and skin. With cattle milk, cheese can be made, along with other dairy
products.
Cattle beef fattening is a livestock production practice that involves reducing the animal activity and
feeding of beef cattle with a protein balanced, high-energy diet for a period of 90 days under
confinement, thereby fattening the cattle more quickly to increase live weights and improve degree of
finish and thus obtain better grades at the abattoir. Beef fattening enables the cattle to express fully
their genetic potential for growth. Larger animals could also be sold for more money in the market as
they yield more meat.
Cattle for Fattening
The selection of the cattle is based on evaluating the potential for beef fattening of different types of
cattle in relation to the market price of different grades of beef. Factors to consider include breed of
cattle, gender, maturity, type and age. This is because different types of cattle respond differently to
the beef fattening process. Some cattle are more suitable for cattle fattening than others. A major
challenge is lack of funds to buy cattle for beef fattening when prices are favorable which is lost
opportunity to make profit. If the wrong decision is made, losses would be made before the start of
the business.
Feed and nutrition
It’s very essential that the right quantity and type of feed is given to cattle. The success of the
business depends on the ability of the cattle to gain weight and to produce high quality beef. These
factors are affected by the quality and quantity of feed. The proper feeding techniques will ensure
that the cattle will grow and utilize the feed efficiently and produce good quality beef. This will
maximize the profits of the cattle fattening farming business. Failing to properly feed the cattle will
lead to losses. The losses will be due to failure to meet the target slaughter weights and beef quality
grade.
There are companies which sell cattle fattening stock feeds. These are complete, balanced feeds,
which are designed for fattening cattle in feedlots over 90 days. The stock feeds are high energy
fattening meals which contain all the nutrients necessary for ad lib cattle pen fattening. We will also
make our own home made cattle beef fattening feeds.
Management and labor
The number of farm workers required depends on the size of the farm. There might be the need for
full time employees to manage the herd. There is need for good technical knowledge of cattle
fattening techniques for success in the business, and good management skills.
Target Market
Naturally, the target market are those who are the end consumer of livestock farm produce and also
those who benefits from the business value chain of the agriculture industry.
Every household consumes produce from livestock farms be it meat, milk, and the skin (leather) used
for bags, belts and shoes production et al. So also a large chunk of manufacturing companies depends
on livestock farms for some of their raw materials.
Profitability of cattle fattening business
Cattle beef fattening is very profitable when done the right way. The profitability of the cattle
fattening farming business depends on the buying price of the cattle, cost of the feed, price margin,
feed margin, feed conversion efficiency ratio, unit cost per kilogram when selling. It is important to
understand the mentioned margins and conversion ratios so that financial losses are not made by
paying too much for the cattle.
Competitive Advantage in the Agricultural Industry
Entrepreneurs are encouraged by the government to embrace commercial farming. This is so because
part of the success of any nation is her ability to cultivate her own food and also export foods to other
nations of the world. This increase the amount of competition in the industry to far greater heights.
Operational plan
The business is to be carried out all year round. So a lot of feeds will be stocked that will suffice all
year round. The feed which include millet/guinea corn hulls, groundnut leaves, maize stalk etc. are
mostly cheap in the market and far cheaper when planted in the farm. The mixture of the feed is done
in such a way that cattle get the required nutrient for proper weight gain. The cattle will be bought in
such a way that the selling interval will be 30 days i.e. a certain number of cattle will be available
each month for sale or slaughter. In order to maximize profit, farming of the cattle feed (groundnut,
millet, guinea corn) will be done and stocked all year round. The main produce will be sold and the
groundnut leaves, millet husk, guinea corn hulls will be kept for cattle consumption.
Management
A good management practice plays a key role in profit maximization. Enlisting people in the
technical know-how of the business either by profession or by experience is essential. The staff
would include, but not be limited, to the following:
1. Chief Operating Officer: responsible for providing direction for the business and evaluating the
success of the organization
2. General Farm Manager: responsible for ensuring compliance during project executions, carrying
out risk assessments, ensuring desired goals are achieved and overseeing the smooth running of the
daily farming.
3. Administrator / Accountant: responsible for preparing financial reports, budgets and financial
statements for the organization. He/she would also develop financial forecast, risk analysis reports
and administer payrolls.
4. Cattle Ranch and Animal Manager / Supervisor: responsible for managing the commercial
breeding of cattle. He/she would work closely with the General Manager to achieve the
organizations’ goals and objectives
5. Sales and Marketing Officer: responsible for handling business research, market surveys and
feasibility studies for clients. He/she also documents all customer contact and information
6. Field Workers / Contract Staff: responsible for feeding cattle as instructed by the supervisor,
cleaning the ranches, changing the water in the water troughs and feeding the cattle on a regular
basis.
Following the agricultural business plan project cycle which consists of five distinct stages to
develop a cattle rearing and cattle fattening business plan. These five stages include:
Export promotion etc. Projects are selected based on desirable criteria which may include
suitable soil, climatic factors, available raw materials and many others. These identified
projects must agree with the national agricultural sector plan, objectives, targets, policies
and regulations.
2. Project preparation and analysis: It involves all the work necessary to bring a project
to a point where it can be carefully reviewed, appraised and analyzed to determine the
resources. Agricultural projects preparation task require the input of technical experts in a
financial analyst etc. The first step in the preparation of agricultural project is to carry out
a detailed feasibility study that will supply enough information to guide the decision to
commit resources to project or otherwise. This involves the business plan described
below.
3. Project Appraisal: This is a critical review of all the assumptions made concerning the
assumptions. The review appraise the technical, commercial, environmental and financial
aspects of the feasibility report to establish reality of the project. Analyst will review
input prices, expected output, output prices, market share, industry structure, competition,
project is that it has been adjudged viable. At this stage implementation is seriously
monitored to ensure that actual result reflects the expected result as contained in the blue
print or project plan. Budget is closely monitored for variability and deviation since price
5. Evaluation: At this stage, the actual achievement is evaluated to learn some lessons as financial
analyst etc. The first step in the preparation of agricultural project is to carry out
a detailed feasibility study that will supply enough information to guide the decision to
commit resources to project or otherwise. This involves the business plan described
below.
TOTAL 1,200,000
3.CATTLE FEED
S.N MATERIAL quantity Unit cost Total cost
4.STORE ROOM
S.N MATERIAL quantity Unit cost Total cost
• Generate part of the start – up capital from friends and other extended family members
• Generate a larger chunk of the startup capital from the bank (loan facility).
Buyers/demand
The demand for beef is a continuous and essential one. It’s a necessity and as vital and grains and
vegetables in every household. This makes the business more inviting and less stressful. The buyers
will be local butchers and market men from the local and modern markets. The selling point will be
in the local market or abattoir with competing bid for higher prices.
Profitability
The profit is usually 100% of the original buying price of each fattened cattle. A cattle bought at a
100,000 would be sold in between 240,000 and 260,000 depending on the nature of the market. So
the excess 40,000-60,000 will be for the feeds and other expenses. The profit will be 100,000.
Payback period
The payback period will be between three and half years. The first two months will not count
because it takes three months to transform a malnourished cattle to a healthy fattened cattle. However
the profit generated will be 5,000,000 at the 30th month of the commencement of the business at a
net profit of 100,000 by 4 cattle monthly. In addition to the first two months that are excluded from
the revenue projection, additional 3 months are included in case of any shortfall or unforeseen
circumstances on the monthly projected revenue.
STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS (SWOT) ANALYSIS
The need to conduct a proper SWOT analysis cannot be over emphasized for the success of the
business. We know that if we get it right from the onset, we would have succeeded in creating the
foundation that will help us build a standard cattle rearing and fattening business that will favorably
compete with leading cattle rearing / livestock farms in Nigeria.
As a cattle rearing business, we look forward to maximizing our strength and opportunities and also
to work around our weaknesses and threats. Here is a summary from the result of the SWOT
analysis conducted:
STRENGTHS
The envisaged project possesses wide range of benefits that help promote the socio-economic
goals and objectives stated in the strategic plan of the OromiyaNational Regional State. It
boosts inter sectorial linkage between the agricultural (livestock) and industrial sector. At the
same time, therefore, it helps diversify the economic activity of the region. The other major
benefits
are listed as follows:
A. Profit Generation
The project is found to be financially viable and earns on average a profit of Birr 2.84 million
per year and Birr 7,770,098 Birr within the project life. Such result induces the project
promoters to reinvest the profit which, therefore, increases the investment magnitude in the
region.
B. Tax Revenue
In the project life under consideration, the region will collect about 442,029.8 Birr from
corporate tax payment alone (i.e. excluding income tax, sales tax and VAT). Such result creates
additional fund for the regional government that will be used in expanding social and other
basic services in the region.
The proposed project is expected to create employment opportunity to several citizens of the
region. That is, it will provide permanent employment to 6 professionals as well as support
staff. Consequently the project creates income of Birr 1080,0004 within a year. Moreover, the
envisaged project benefits rural income from the sale of cattle, onions and the like.
Risk Plan
The cattle house is fenced and secured in such a way that criminals cannot gain easy access. A
veterinary expert would always be consulted at every stage to ensure proper welfare and healthy
being. Additional 3 months are added to the payback period of the loan/grant in order to stay on
track with the payback time.
Source of finance,4
Equity 1,048,500
Loan from bank 4,194,000
Interest rate 17% 712,980
Payment period in 5years(60 )months 4194000
Product 1 Purchasing Unit selling Total selling Total profit Gross total
price for 1 beef price price profit
20 beef 40000 70000 1,400,000 60000 1,800,000
Since we sold three times per year, we will optain net profit of Birr 1,800,000 per year.so,in five years of
operation we will obtain 9,000,000 million Birr ETB.
Financial estimations
Cattle feed:260000
Store room:400,000
Preparation of house:500000
Machine costs:200,000
Salary payment:1080000
Interest payable:
Principal payed
Tax payable.
Balance sheet