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Business Plan 2019

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DIL-BETIGLE SHEEP AND GOAT FARMING BUSINESS BUSINESS PLAN DUBALE ABATE AWOKE JUNE, 2018 JIMMA, ETHIOPIA 1 Name of t

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DIL-BETIGLE SHEEP AND GOAT FARMING BUSINESS BUSINESS PLAN DUBALE ABATE AWOKE JUNE, 2018 JIMMA, ETHIOPIA 1 Name of the Farming business and Owners Name of business: Dil-betigle sheep and goat farming business Type of business: Partnership business Names and addresses of the owners of the Dil-betigle sheep and goat farming business No Name Email address Phone number 1 Mr. Dubale Abate [email protected] +251914451427 Manager 2 Mis. Mestawot Abate [email protected] +251960022634 Assistant manager 3 Mr. Abebe Gashaw [email protected] +251988598748 Secretary 2 Responsibility TABLE OF CONTENTS LIST OF FIGURE ...................................................................................................................... IV LIST OF TABLE ......................................................................................................................... V EXECUTIVE SUMMARY ........................................................................................................ VI 1. INTRODUCTION ................................................................................................................. 1 2. BUSINESS DESCRIPTION ................................................................................................. 2 3. 2.1. Location of the farm ......................................................................................................... 2 2.2. Vision ............................................................................................................................... 3 2.3. Mission of the farm .......................................................................................................... 3 2.4. Goals and objectives ........................................................................................................ 3 2.5. Values and future strategic plan ....................................................................................... 4 2.6. Products and services of the farm .................................................................................... 4 2.7. Facilities for Dil-betigle sheep and goat farming business .............................................. 5 MARKET ANALYSIS .......................................................................................................... 6 3.1. Market characteristics ...................................................................................................... 6 In market characteristics, market demand-supply gap, target markets and target customers of sheep and goat markets in the area are incorporated................................................................... 6 3.1.1. Market demand and supply gap ....................................................................................... 6 3.1.2. Target markets .................................................................................................................. 6 3.1.3. Target customers profiles ................................................................................................. 7 4. COMPETITOR ASSESSMENT .......................................................................................... 9 4.1. Market share ..................................................................................................................... 9 4.2. Relationship with customers .......................................................................................... 10 4.3. Financial strength/cost position...................................................................................... 10 4.4. Length of time in business ............................................................................................. 10 I TABLE OF CONTENT (Continued) 4.5. 5. 6. 7. SWOT analysis............................................................................................................... 10 MARKETING PLAN .......................................................................................................... 12 5.1. Product and services supplied in the market .................................................................. 12 5.2. Price charged and Place (or distribution system) ........................................................... 15 5.3. Marketing and salling strategy (promotional effect) ...................................................... 15 OPERATING PLAN ........................................................................................................... 17 6.1. Site and Herd Selection .................................................................................................. 17 6.2. Feeding and Housing..................................................................................................... 17 6.3. Business structure (Ownership and management) ......................................................... 18 6.4. Production capacity and production process .................................................................. 20 6.5. Inputs and equipments and its estimated cost ................................................................ 20 6.6. Land, Building and Civil Works .................................................................................... 21 6.7. Human resource requirement ......................................................................................... 22 6.8. Legal and Gender issues in business managements ....................................................... 22 6.9. Business risks ................................................................................................................. 23 6.9.1. Financial Risk ......................................................................................................... 23 6.9.2. Operational Risks .................................................................................................... 23 6.9.3. Marketing risk ......................................................................................................... 23 6.9.4. Default Risks ........................................................................................................... 24 6.9.5. Human or personal Risk.......................................................................................... 24 FINANCIAL PLAN ............................................................................................................. 25 7.1. Startup capital................................................................................................................. 25 7.2. Sales forecast .................................................................................................................. 26 7.3. Balance sheet .................................................................................................................. 26 II TABLE OF CONTENT (Continued) 8. 7.4. Income statement / business profit or loss ..................................................................... 28 7.5. Forecasted Cash flow statement ..................................................................................... 29 7.6. Breakeven analysis ......................................................................................................... 29 FINANCIAL EVALUATION ............................................................................................ 30 8.1. Payback period ............................................................................................................... 30 8.2. Net present value ............................................................................................................ 30 8.3. Profitability analysis....................................................................................................... 30 8.4. Economic benefit ........................................................................................................... 31 III LIST OF FIGURE Figure 1: Management structure of Dil-betigle sheep and goat farming business ....................... 19 IV LIST OF TABLE Table 1: The customer profile ....................................................................................................................... 8 Table 2: The target markets and the percentage their share in getting our products ................................... 13 Table 3: Estimated monthly supply of Dil-betigle farm’s products and services in 2018 .......................... 14 Table 4: Annual Raw Materials and Costs of Sheep and Goat Farm at Full Capacity ............................... 21 Table 5: Manpower And Salary Requirement for Dil-betigle Sheep and Goat Farm ................................. 22 Table 6: Initial Investment Cost .................................................................................................................. 25 Table 7:Estimated sales forecast for the next three year ............................................................................. 26 Table 8: Balance sheet of Dil-betigle sheep and goat farming business ..................................................... 27 Table 9: Income statement of Dil-betigle sheep and goat farming business ............................................... 28 Table 10: forecasted cash flow statement ................................................................................................... 29 V EXECUTIVE SUMMARY This business plan is developed to establish sheep and goat farming business. The established business is named as Dil-betigle sheep and goat farming business located in Guameda towns in south Wollo zone that has plenty open space, cheap labors, road connection, water availability and immediate access to the huge market of our product that is hotels, individuals, slaughter and other market with the initial investment of birr 689,603.The farm will be established with the aim of supplying the quality sheep and goat meat, creating job opportunities, and alleviating poverty by increasing the income of the business participants in particular which in turn increases the GDP of the country as a whole. The main products and services of the farm will be sheep and goat breed, milk fed lambs, high quality and safe meat (raw and processed), high quality milk (raw and processed),wool and leather (skin), fiber, consultancy services about sheep and goat fattening process and training services about our farm business The farm will have capacity to accommodate 200 heads of sheep and goat per month. The actual operation will be based on a batch of 50 heads per week. The whole operations are managed by the three owners namely Dubale Abate, Abebe Gashaw, and Mestawot Abate. The farm will create the employment opportunities for 16 individuals in the first year. We will have a high market shares in the markets in the districts, which accounts about 75 percents of the market in the area. To increase our market shares, we will advertise our products and services using different advertising methods like TV, radio and magazines. Besides this we will increase our customers through strengthening our relationship by providing trainings, distributing leaflets to the customers, preparing workshops, inviting them to participate in our meeting, and creating a website blogs. The farming business will get the estimated revenue of Birr 316,429 per month and Birr 3,797,148 per year where as total estimated costs incurred will be Birr 121,241, in the first year (2019) and its sales growth rate is 10%. The total sales forecasted for the future three years will be Birr 3,797,148, 4,176,863 and 4,594,549 with the net profit of birr 2,384,727.8, 2,623,659 and 2,857,772 in the year 2019, 2020 and 2021 respectively. The payback period, cash flow, net present value and the internal rate of return indicates that the business will be accepted. The different risks are estimated, but we will reduce such risks by providing high quality products and services before its occurrences. VI 1. INTRODUCTION Ethiopia holds a large number of livestock comprising about 55.03 million in 2013 that plays a great role for increasing its economy in Africa (Tamiru and Amiza, 2017). During the year of 2009, the contribution of livestock production and marketing to the country’s agricultural GDP was slightly more than 32billion Ethiopian birr or $3.2 billion US dollars (FAO, 2013). Livestock production accounts for approximately 30% of the total agricultural GDP and 16% of national foreign currency earrings; and is used as sources of meat, milk and egg production, sources of draft power and manure to support crop production, means of transport particularly in the rural areas, source of foreign currency through export of chilled meat, live animals, skin, hides, etc (Tadesse and Mengistie, 2016). From the livestock production sector, sheep and goat ranch are the one that contributes a higher percentage of the sectors benefit. Sheep and goat products like milk and meat is not only nutritious and easily digestible food but also a great source of regular income for the poor, landless and marginal farmers. They are multi-purpose animal that they can produce milk, meat, skin, fiber and manure at the same time. Because of its higher income contribution, the demand for participating in sheep and goat farming business is increasing from time to time. Sheep and goat farming business are less risky business which requires low initial investment or capital and small area for housing because of their small body size compared to other livestock. However, establishing the sheep and goat farm is profitable business. In the farming area, there is a high market demand due to the establishments of hotels, restaurants, cafes and other institutional establishments that needs a high quality sheep and goat products. Even though, there is a high demand in the market, the supply of the sheep and goat products is very low so that the users of the product cannot get the products as their needs; and this creates unbalanced demand and supply. Therefore, we will establish the farm to fulfill the market demands by increasing the supply of sheep and goat breeds and their products. 1 2. BUSINESS DESCRIPTION Dil-betigle farming business is the partnership business, which is located in the South Wollo zone, Amhara region, and northern parts of Ethiopia, owned by three individuals namely Mr.Dubale Abate, Mis.Mestawot abate and Mr.Abebe Gashaw. This farming business is established to increase/supply the sheep and goat production and breed in the zone which will in turn increases the GDP of the country so that poverty will be reduced. The farm will cover the area of 120 hectares; and has three broad houses. It will start the activity of producing the sheep and goat breeds and their products in the year of 2019 with the initial investment of Birr 989,603 and will continue up to three years that is 2019-2021. From the total initial investment, Birr 600, 253 will be from the owners where as the other Birr 389,350 will be obtained from the banks. The business will repay the loan within three years. The immediate target customers will be those who live in the farm and around the farm. In the target market, our business will mainly be targeting hotels, restaurants and lamb butcheries which have risen in number over the past few years due to increased business activity in the district as well as the establishment of a healthcare office which employs numerous expatriates. Prolong the sufficient supply to the customer is one of our most important purpose. We want to extend our supply beyond these areas with affordable price. Dil-betigle sheep and goat farming business will get the estimated revenue of Birr 316,429 per month and Birr 3,797,148 per year where as total estimated costs incurred will be Birr 121,241, in the first year (2019). The total sales forecasted for the future three years will be Birr 3,797,148, 4,176,863 and 4,594,549 in 2019, 2020, 2021 year respectively. Therefore, our business will be profitable. 2.1.Location of the Farm Our farming business is located in Guameda town, in south Wollo, Amhara region, Ethiopia. In this site, there are accesses to get Bed room, well known hotels with respected waiters, reliable shops so that everyone who comes to this farming business is lucky. This means that the business site is comfortable, viable and reliable for the customers. 2 2.2.Vision The vision of farm is to be the first sheep and goat producing farm in south Wollo by 2021. 2.3. Mission of the Farm Our sheep and goat farming business will be the standard of the future farming business in providing the quality products and services that cannot be founded anywhere else, to the customers. Our business will be focused on offering the quality and excellence service that our customers will be satisfied by employing the known professionals, using quality raw materials or inputs as well as by supplying both the raw and the processed products. We will enable the customers to get the sheep and goats themselves, both processed and raw meat of goat and sheep as well as goat milk to the customers. Besides supplying the quality sheep and goat meat, creating job opportunities, and alleviating poverty by increasing the income of the business participants in particular which in turn increases the GDP of the country, will be our mission. 2.4. Goals and Objectives The goal of the business is to increase the income of the business by 70% yearly and establish three sheep and goat farming business branches by 2020 (after two years of the establishments) The farm has the following objectives that will be achieved in the future: To market and supply the quality sheep and goat breed and their value added products. To produce the pure and exotic sheep and goat breed To benefit the community by creating the job opportunities in our business To create sufficient profitability to increase the number of farming enterprises in to three. To represent and promote the interests of sheep and goat producers, by: ✓ Working to maintain and expand sustainable and profitable sheep and goat production in Guameda and around the area. ✓ Collaborating with Primary Producers in Guameda ✓ Facilitating the sharing of information and provide network opportunities for members 3 ✓ Promoting the adoption of proven technology and production methods ✓ Identifying and supporting the development of future industry leaders 2.5. Values and Future Strategic Plan ➢ Customer is first ➢ Honesty ➢ Accountable and responsible: ➢ Inclusiveness: All religion ➢ Excellence: All operations in the farm will be effective, efficient, innovative, and nullifies wastages of resources. 2.6. Products and Services of the Farm Our business is capable of providing a quality, healthy and safe products and services depending on the customer’s choice/order. Quality assurance is the main motto of our business and we are not-compromise in the question of quality. To ensure the quality we always take high care of our sheep and goats. Our business has the opportunities to provide the following sheep and goat products and services: ➢ Sheep and goat breed ➢ Milk fed lambs ➢ High quality and safe Meat (raw and processed) ➢ High quality Milk (raw and processed) ➢ Wool and leather (skin) ➢ Fiber ➢ Manure ➢ consultancy services about sheep and goat fattening process ➢ Training services about our farm business 4 Main activities of the business will be conditioning, cleaning, feeding, upgrading, etc, of the above mentioned breeds. In the farm, intensive flock management, which includes proper feeding, ensuring the health of the flock, etc, will be carried out. 2.7. Facilities for Dil-betigle Sheep and Goat Farming Business The necessary facilities for sheep and goat farming business include the followings: Great source of fresh and clean water supply. Availability of all types of equipment. Easily available food source. Fertile field for crop, grasses and other green plant production. Availability of full time labor. Good transportation and veterinary service. A market near the farm land so that you can sell your products easily and buy necessary commodities. 5 3. MARKET ANALYSIS It is critical as a business person to understand the market in where it functions. This can be achieved through market research to understand potential customers and their characteristics, and reviewing expected product/ service preferences. In the marketing analysis, the targeting market characteristics, the past, current and forecasted price, the customer profiles and competitor will be analyzed as follows. 3.1.Market Characteristics In market characteristics, market demand-supply gap, target markets and target customers of sheep and goat markets in the area are incorporated. 3.1.1. Market demand and supply gap In the country, Ethiopia, the population is increasing from time to time. This incensement of population could increase the demand of the quality sheep and goat products either for their healthy consumption or marketing. Sheep and goats butcheries and retail sheep and goat meat in supermarkets are found in the major towns at but not in smaller towns. This trend will create a good opportunity to be succeeded and expand our farm business. The supply and demand of both sheep and goat and its products in the market are unbalanced in the farm area. This means that the supply is lower than the demand so that the customers are not satisfied. The demand for sheep and goat and their products are very high especially in the holidays like, Christmas, epiphany, Easter and new year (enqutatash). But at these days the supply is less so that we will supply more at that time. Therefore, establishing sheep and goat farming business creates a high level of customer’s satisfaction so that our business will be profitable in the area. 3.1.2. Target markets Before deciding on business to establish, we are planning to visit with several businesses in the target area to determine the products we are selling. This will help us to eliminate the possibility of establishing the other farms that will be unmarketable. Then after visiting we are deciding on 6 establishing sheep and goat farming business based on the information we got from the market and community/residents of the district. Based this market intelligence, the immediate markets for our farm are those who live in the farm and around the farm. Besides this there will be other market participants at Woreda and zonal level. Guameda, Adjibar, Densa markets and other markets in area will be targeted for our product sales and advertisements. In the target market, our business is mainly targeting hotels, restaurants and lamb butcheries which have risen in number over the past few years due to increased business activity in the district as well as the establishment of a healthcare office which employs numerous expatriates. 3.1.3. Target customers profiles As the information we obtained from market intelligence/assessment, almost all the residents of the Dil-betigle farming business area are willing to be a customer of our business. Especially the hotels/restaurants and sheep and goat traders are highly wanted to be a pioneer customers in the district. Our customers will be the hotel/ restaurants, abattoirs, sheep and goat speculators and traders, the community in the area. Our products and services are favorite for all aged groups so that everyone can get the products and services as per their demand. We will be intended to target on the customer’s preference and needs. This means that, our story will target a customer base who wishes to buy locally and support the sustainable livelihood efforts meant to uplift disadvantaged communities in the area. The customers want to get the quality sheep and goat breeds and products. But in the area the quality sheep and goat breeds are not there so that the communities are trying to find the good breeds from other areas. Besides this they are not getting the quality sheep and goat meat, though they prefer it. However, we will meet their wants and preferences by supplying high quality and safe sheep and goat meat in the district. The main customers with their address, who made a promise to be our customers, are the following: 7 Table 1: The customer profile No Name Email address Responsibility 1. Walelign Cheru [email protected] Sheep trader 2. Gebeyehu Engidawork [email protected] Dulla hotel manager 3. Gutema Baye [email protected] Erigicha restaurant head 4. Amisalu Mitiku [email protected] Firigirg hotel manager 5. Kassahun Zegeye [email protected] Wool factory supervisor 6. Workun Mulaw [email protected] Sheep and goat traders 7. Tadese Amisalu [email protected] 8. Alemitu Ayele [email protected] Sheep and goat traders Sheep and goat traders Source: Data from market assessment, 2019 8 4. COMPETITOR ASSESSMENT Dil-betigle will be the first modernized sheep and goat farming business even though there are sheep and goat rearers and traders in the districts. In the area the rearers or farmers are supplying the traditional sheep and goat breeds in the market so that they received a minimum benefits or profits. The restaurants and hotels in the district are preparing the less quality “wot” because of the absence of the quality raw materials (health sheep and goat). Therefore, this situation creates a good opportunities for Dil-betigle sheep and goat farming business, since it will have a high quality products which in turn increases the number of customers. In farming area, there is no product, which is packed, graded and processed, supplied in the market. But our farming business will supply the processed, packed, graded and qualified products based on customer’s preferences in the market so that our business will be competent in the market in the district. Regarding to the price, other suppliers and sellers of sheep, goat and their products in a higher price (birr 1800) without maintain the breed and products quality; but our farming business will sell the high quality and safe products with fair price (birr 1600). The competitors are distributing their products in different marketing areas around their farming area (not in other markets where it far from their farming area). But our products will be distributed not only in market areas of farming district but also in different markets of the Woreda, region and country so that we will be beneficial from our farming business establishments. 4.1.Market Share A high portion of the market in the area was covered by sheep and goat market so that we can say that there is a high marketing share of sheep and goat breeds in livestock markets. Even though there is no high quality sheep and goat breed, the numbers of buyers are higher. This means that the number of customers/ buyers will be much higher in number if we will establish the modernized Dil-betigle sheep and goat farming business than other farming business else. Therefore, the market share of our business products will be higher due to our efforts in promoting our product and services provided to customers. 9 We will have a high market shares in the markets in the districts, which accounts about 75 percents of the market in the area. 4.2.Relationship with Customers We will create good relationship with customers using different strategies like by: ➢ providing trainings, ➢ distributing leaflets to the customers, ➢ preparing workshops, ➢ inviting them to participate in our meeting ➢ creating a website blogs 4.3.Financial Strength/cost position The competitors have no sufficient financial capitals to lead their business rather than using the credit obtained from credit and saving institution. But Dil-betigle sheep and goat farming business will have their own sufficient financial capitals. Even initially we have our own initial capital of 600,253; but our competitors started the business with credit (had no their own initial capital). Our farming business will increase its financial position by offering a high quality products and services to the customers. 4.4. Length of Time in Business Most of the competitors do not have business trainings and backgrounds; but they started the business without business background so that they are not motivated to continue and sustain in the business. Dil-betigle farming business will be held by the well professional personnel who have good business backgrounds so that the business will be sustained for many years. 4.5. SWOT Analysis Strength: ✓ Increasing the productivity of the farm ✓ Producing healthy weaned kids 10 ✓ Producing commercial breeding stock ✓ On-going stock improvement programme ✓ Presence of promotion and advertising effort ✓ Producing processed and high quality products ✓ Presence of incentives like bonuses, rewards, share of profit ✓ Presence of both local and exotic breeds ✓ Qualified staffs Weakness: ✓ higher expense of operation ✓ Limited availability of high quality forage ✓ High cost of labour ✓ Persistence of negative consumer behaviour toward goat’s milk Opportunities: ✓ Increasing the demand of sheep and goat product ✓ Development of new production technology ✓ Possibilities for job creation and additional income from associated activities ✓ Great market potential for new breeding Threat: ✓ Increasing the establishment of other farming business ✓ Illegal importation of small ruminants from abroad ✓ Death of sheep and goat ✓ Broken of the house due to natural accidents ✓ Financial crisis 11 5. MARKETING PLAN Important marketing assumption: ✓ The total number of sheep supplied in the market per month ..…………118 ✓ The total number of goat supplied in the market per month ………….…..82 ✓ The total tone of sheep meat supplied in the market per month ……..100tone ✓ The total tone of goat meat supplied in the market per month ………..42 tone ✓ The estimated average selling price of one sheep ……………………Birr1600 ✓ The estimated average selling price of one goat ………………………Birr 1245 5.1. Product and Services supplied in the Market Dil-betigle sheep and goat farming system will provide Sheep and goat breed, Milk fed lambs, high quality and safe Meat (raw and processed), High quality Milk (raw and processed), Wool and leather (skin), Fiber and Manure to the community and or residents of the area and other traders who come from other places. Most of the products will be supplied and offered to Guameda market participants, which covers almost 57% of our products supplied in the market. Next to Guameda market, 24.5% of our products will be supplied in Adjibar market. The following table indicates the target markets and the percentage their share in getting our products. 12 Table 2: The target markets and the percentage their share in getting our products No, Target market Products supplied Share 1 Guameda market Sheep and goat breed, Milk fed lambs, 57% High quality and safe Meat (raw and processed), High quality Milk (raw and processed),Wool and leather (skin), Fiber and manure It covers the highest percentage because of its short distance from our farming business. 2 Adjibar market Sheep and goat breed, Milk fed lambs, 24.5% High quality and safe Meat (raw and processed), High quality Milk (raw and processed),Wool and leather (skin) and Fiber Next to Guameda market, in Adjibar market, there is shortage of the products so that only 24.5% of our products will be estimated to be enough. 3 Densa market Sheep and goat breed, Milk fed lambs, 11.5% High quality and safe Meat (raw and processed), High quality Milk (raw and processed),Wool and leather (skin) and Fiber Since there is a long distance between our farm and Densa marketing area only 11.5% of our products will be estimated to supplied. 4 Other areas market Sheep and goat breed, Milk fed lambs, 7% High quality and safe Meat (raw and processed), High quality Milk (raw and processed),Wool and leather (skin) and Fiber Total percentage Source: our computational plan, 2019 Remark We will also plan to supply our products in other markets other than the nearest markets. 100% The small volume of our products (7%) will be supplied in the other regional markets of the country, Ethiopia. This is due to many challenges that will hinder us from reaching our products to other far area markets. From these challenges lack of transportation, loss/wastage of the products in transporting and other costs are the main factors. In order to reach our products in such marketing area, we will use the quality packaging materials. Hence, we will send only the packed products to such areas. 13 Our products that will be supplied in the market will be the processed or packed product. After processing our products, we will label them to provide full information about the product to the customers. Besides this we will provide certified and inspected high quality products. We will also provide the following services ➢ consultancy services about sheep and goat fattening process ➢ Training services about our farm business ➢ Giving rewards for the loyal customers ➢ Giving solutions for the problems raised among customers by identifying their problem ➢ Reaching the products to the customer’s house by making agreement on the date of their demand. ➢ If the customer’s preference is getting the sheep or goat directly, we will give them the sheep or goat as they need by inviting them to select which sheep or goat ➢ Prepare workshop and invite our customers to be there and etc. Therefore, by doing all the above activities, we facilitate our marketing activity. As a result our farming business will be more profitable one. Table 3: Estimated monthly supply of Dil-betigle farm’s products and services in 2018 No. Products supplied Estimated Volumes Units price (P) Total price (P*Q)=R to be supplied (Q) (in Birr) (in birr) 1 Sheep breed(sum) 118 1600 188,800 2 Goat breed(sum) 82 1245 102,090 3 Sheep meat(tone) 100 120 12,000 4 Goat meat (tone) 42 120 5,040 5 Sheep skin () 23 240 5,520 6 Goat skin 12 242 2,904 7 Sheep & goat Milk (litter) 50 15 75 Total monthly revenue 3582 14 316,429 5.2.Price Charged and Place (or distribution system) The price of sheep and goat is dependent upon the supply to the market. According to the market assessment results, the average price of sheep and goat in the Guameda town is between 7502000Birr and 600-1500birr respectively; and the price of the sheep and goat skin is between 120250birrr. Based on this interval we are envisaged the price to be 1600, 1245, and 242birr respectively for sheep, goat, and their skin in the area. We will distribute our products to the different market areas of the country. This means that only the processed and packed sheep and goat products, such as, meat, skin, will be distributed to the different market areas of the country, where they are very far from our farm. We also provide both the processed and unprocessed products to the customers who live around the farm. All in all, we will supply our products to large group traders, processors/retailers and consumers in the area. 5.3.Marketing and Salling Strategy (promotional effect) We will advertise our products and services using different advertising methods like TV, radio and magazines. We will advertise our products and services once a year on September. Most of the farming businesses in the Woreda are not promoting/advertising their products and services; but Dil-betigle farming business will advertise its products and services by developing its own advertising plan. Dil-betigle sheep and goat farming business will publicize its first advertisement with the expense of 1,000 birr. We will facilitate our marketing and selling activities by using the following strategy: Using website and Social media Our partnership business will create a website and Face-book page to allow public access to the business’s story, services, and contact information. Additional social networking sites, such as twitter, and online advertising will continually be researched by the Marketing Advisor. We will also advertise our business activities and services using Television, Radio, YouTube and etc. 15 Using leaflet and flyers Small leaflet and flyers with the business description, services, and contact information will be personally delivered to the homes of the community around the farming business and other areas known traders/cooperatives. The personal delivery is meant to establish strong customer relations and business networking that will jump start an initial customer base. Reaching out to our community to promote our partnerships will prove useful in two ways: loyal customer base and community motivation. Personally talking to our community members will build a relationship that is familiar and close. By promoting our partnership’s success through our background story, we hope to motivate others from our community that they, too, have the opportunity to be successful either by becoming a member of our partnership business or starting their own. Using posts on different sites The same flyers will be posted to the public bulletin boards of the Guameda People’s Center, the City of Cape Town offices, public libraries, and similar public buildings. Additionally, chalk written logo, slogan, and contact information will be drawn on roads and pathways in our local townships to actively attract attention. Magazines and books We will write the books about our farming business and put it in the library, governmental and non-governmental office, and in our bureau. Besides this we advertise our products and services using magazines, reputable news paper. 16 6. OPERATING PLAN Important operating assumption: ➢ The total number of sheep for starting ………………………………..400 ➢ The total number of goat for starting ………………………………..278 ➢ The total number of staffs employed for starting ………………….…..17 ➢ The total operating expense for starting ……………………….birr 230,218 ➢ The total number of heads purchased in one week ………………...66heads 6.1. Site and Herd Selection Before establishing a farm, we will select the farming area where there is a great source of fresh and clean water supply, availability of all types of equipment, easily available food source, fertile field for crop, grasses and other green plant production, availability of full time labor and a market near the farm land so that we could sell our products easily. By considering these preconditions we select the farming area (Guameda) in which our business is established. Regarding to the herd and breed selection, we select the sheep and goat which are healthy, physically strong, capable in production and reproduction. Sheep’s are selected for fattening should be from six months to six months of age. At this age they are weaned and used to eating green fodder and grass. The sheep and goat will be tagged on arrival to the farm by including the information about their breed, live weight and age of the date of purchase etc. 6.2. Feeding and Housing For protecting sheep and goat’s health, safety and for easy manure collection, housing goat and sheep is mandatory. This means that with good housing, a waterproof roof and draught-proof walls to keep out damp and draughts, we will avoid goats and sheep becoming sick. Therefore, by considering this information, we will build the three room houses that are partitioned for general flock (Ewe / Doe), ram or buck, lambing or kidding, lamb or kid, sick sheep and goat, shearing and storeroom and attendant. Regarding food, separate feeders and water troughs should be placed for concentrate feeds, green fodders and water. 17 6.3.Business Structure (Ownership and management) A business structure is a category of organization that is legally recognized in a given jurisdiction and characterized by the legal definition of that particular category. Business structure is the paramount for viability of any business so that choosing a good business structure is crucial for establishments of any business enterprise. Business structure includes sole proprietorship, partnership, corporation and cooperatives. From these types of business structure, our business is a partnership business, which is named as “Dil-betigle Sheep and goat farming business”. Our business will be owned by three individuals namely Dubale Abate, Abebe Gashaw, and Mestawot Abate. I, Dubale Abate, will be the general manager of the business, that I make the final decisions concerning about the business venture’s operation. Mestawot Abate is the assistant manager of the business, who assists me in managing the business. I, Dubale Abate, as the manager of the business, will do the following tasks: ✓ Managing labor/part time personnel ✓ Communicating with buyers ✓ Communicating with lenders and veterinarian ✓ Making overall decisions with input from others ✓ Making capital purchase decisions ✓ Completing business analysis, cash flow projections, and marketing plans Miss. Mestawot Abate will be the assistant manager of the business with the following duties: ✓ Making decisions in the absence of the manager ✓ Generating accounting and financial reports Mr. Abebe Gashaw will be the secretary of the operation with the following responsibilities: ✓ Writing the meeting reports ✓ Any activities related to writing tasks ✓ Writing books, posts and notes for news paper In order to operate all the farming business activities effectively and efficiently, employing other proficient personnel’s will be mandatory. For this reason, we will employee competent, skilled 18 and qualified manpower. These qualified and competent man-powers we will be intended to employ are: ❖ Human resource and administration manger ❖ Accountants and casher ❖ Supervisor, ❖ Sales and marketing manager, ❖ Quality inspector and veterinarian ❖ Sheep and goat custodian/guard Figure 1: Management structure of Dil-betigle sheep and goat farming business 19 6.4. Production Capacity and Production Process Production capacity The farm will have capacity to accommodate 200 heads of sheep and goat per month. The actual operation will be based on a batch of 50 heads per week. The main function of the farm will be conditioning, cleaning, feeding, upgrading etc. of good bread sheep and goats. Hence, one batch will stay in the farm for one month, however, for effective utilization of resources (manpower, equipment, transport, etc) and efficient operation and management the farm operation schedule will be based on weekly basis. In one week 66 heads, i.e., 39 sheep and 27 goats will be purchased and considered as one batch. Production process: Sheep and goat will reach the farm through suppliers or contract as per the pre-determined procurement procedure. The next process will be receiving and treating the animals. The treatment includes weighing, vaccination and Deeping followed by prophylactic treatment. Physical examination to isolate sick animals and separation of sexes are also part of the production process. Then, the actual feeding and supplements practice are the main part of the task. Castration will be done depending on the request of the client. The final stage of this process will be marketing. At this time it is also important to separate marketable and unfit animals. Production schedule Dil-betigle sheep and goat farming business will start its production in the first year, almost about 90% of its capacity. And the full production capacity will be started in the second years. 6.5. Inputs and Equipments and its Estimated Cost The inputs and equipments we will require are land, feeds, sheep and goat, machines. Annual inputs requirement at full capacity of sheep and goat farm are described in following table. 20 Table 4: Annual Raw Materials and Costs of Sheep and Goat Farm at Full Capacity No Description Quantity Unit Cost in Birr Total cost Input 1 Feed (tones) 5 6,000 6,000 2 Sheep (head) 400 850 340,000 3 Goat (head) 278 746 207,388 4 Land (ha) 120 1000 120,000 5 Vaccine (in number) 10 200 2,000 Sub total 8,796 675,388 Machines/equipments 1 Deeping vat 1 30,000 30,000 2 Hoof treamer 3 250 750 3 Burdizzo crusher 2 324 648 4 Syringes 5 3,000 15,000 5 Feeder and water trought 8 2,700 21,600 6 Trailer 1 55,142 55,142 7 Water tank 1 80,000 80,000 Subtotal 171,416 203,140 Utilities Electricity (Kwh) 5,500 0.1 550 Water (litter) 12,650 0.5 6,325 Fuel (litter) 250 15 2000 Sub total Grand Total 15.6 8,875 180,228 887,403 Source: our operational plan, 2018 6.6. Land, Building and Civil Works The total area required for sheep and goat farm is about 120 ha. Out of which only 80m2 is required as building area for store and treatment. Fencing of the farm area will also need so that 21 we will fence the farm area with an estimated cost of 50,000Birr. The total cost of building and civil works is estimated at Birr 20,000 birr. 6.7. Human Resource Requirement We will employee the professional, qualified, knowledgeable and skilled manpower. The following table show that the manpower requirements with their salary for our farming business. Table 5: Manpower And Salary Requirement for Dil-betigle Sheep and Goat Farm Req. Monthly Annual salary No. Description No. salary, (Birr) (Birr) 1 Farm Manger 1 2000 24000 2 Sales and marketing manager 1 1700 20400 3 Secretary 1 800 9600 4 Flock Attendant 3 650 23400 5 Veterinarian 1 1500 18000 6 Record keeper 1 800 9600 7 Accountants and casher 2 1000 24000 8 Drivers 1 750 9000 9 Quality inspector &Supervisor 2 1510 36240 10 Sheep & goat custodian/guard 3 350 12600 Sub Total 16 11,060 Employees benefit 186,840 18,684 (10%) Grand Total 16 11,060 205,524 6.8. Legal and Gender Issues in Business Managements We will do all the activities based on the rules and regulation of trade in the country. We will be licensed from the office of trade. Regarding to gender issue, we will employee both male and female staffs in our farming business. 22 6.9. Business Risks Dil-betigle sheep and goat farming business may face following types of risks. But in order to reduce those risks expected different strategic plans will be developed. 6.9.1. Financial risk It is the risk that results when the farm business borrows money and creates an obligation to repay debt. Our expected revenues and costs may changed due to the change in pricing policies of our competitors and the country, failure of our promoter/advertiser from well promotion and or advertising of our product, the length time related to payments of the debt. To solve this risk we will try to ensure good marketing and good value. 6.9.2. Operational risks To attract and retain users to the business products, we must continue to provide quality and hygienic content. This confers certain risks including the failure to: ➢ Anticipate and respond to consumer preferences for content, preferences and service ➢ Attract, excite and retain a large audience of consumers to the farm products ➢ Create and maintain successful strategic alliances with high quality partners ➢ Deliver high quality, customer service and adequate information ➢ Build the business brand rapidly and substantially ➢ Compete effectively against better established sheep and goat farming business ➢ Avail the required feed and budget timely ➢ Create favorable environment for the growth of sheep and goat ➢ Unknown outbreak of disease 6.9.3. Marketing risk We will supply the high quality products in the market based on the customer preferences. But due to the change in the marketing policy, the price may be either deflated or inflated. In this case the customers demand, preference and tastes might be affected. Therefore, these risks would be reduced by offering high quality product and service to the customers. 23 6.9.4. Default risks Default occurs when somebody fails to honour an agreement. This may be a farmer who promised to deliver a product but decides to sell it to a third party who offers a better price. Therefore, to avoid such risks, we will receive the products from the owner as much before maturity date of the agreement as possible and shorten 6.9.5. Human or personal risk It refers to factors such as problems with human health or personal relationships that can affect the farm business; may be due to accidents, illness, death, and divorce are examples of personal crises that can threaten a farm business. To reduce this problem, we will employee many qualified personnel; and train all staffs about all operations and marketing activities of the business so that if one staff died, the other can have ability to replace him and do his activities for future. 24 7. FINANCIAL PLAN Important Assumptions: Year 1 Plan month Year 2 Year 3 1 2 3 Current interest rate 10.00% 10.00% 10.00% Long-term Interest Rate 10.00% 10.00% 10.00% Tax Rate 30% 30% 30% 7.1. Startup Capital The total initial investment cost is Birr 989,603. From this birr 600,253 is our owners equity and Birr 389,350 is obtained from bank. Table 6: Initial Investment Cost No. Cost Items Cost in birr 1 Site preparation 15,000 2 Inputs/raw materials 675,388 3 Machines and Equipment 203,140 4 Utilities 8,875 5 Stationery 200 6 Building 20,000 7 Fence 50,000 8 Advertisement and promotion 1,000 9 Insurance 10,000 10 Working capital 6,000 Total investment cost 989,603 25 7.2. Sales Forecast The table below outlines our estimated sales forecast for the next three years. Table 7:Estimated sales forecast for the next three year Products sale forecast Year 1 Year 2 Year 3 1 Sheep breed 2265600 Birr 2492160 Birr 2741376 Birr 2 Goat breed 1225080 Birr 1347588Birr 1482347Birr 3 Sheep meat 144000 Birr 158400 Birr 174240Birr 4 Goat meat 60480 Birr 66528 Birr 73180.80Birr 5 Sheep skin 66240Burr 72864 Birr 80150.40Birr 6 Goat skin 34848 Birr 38332.8Birr 42166.08Birr 7 Sheep & goat Milk 900 Birr 990 Birr 1089Birr No. Total sales forecasted Total cost incurred 3,797,148 Birr 121,241Birr 4,176,863Birr 4,594,549Birr 143,000Birr 213,454Birr Source: our computational plan, 2019 7.3. Balance Sheet Balance sheet shows the financial position of a given business in a given period of operation. The total assets in the first, second and third year is birr 689,603, 1,088,563.30 and 1,197,419.63 respectively. From these asset, birr 600,253.00, 660,278.30 and 726,306.13 in the respective years are our owners equity. The table below summarizes the estimated balance sheets for this period. 26 Table 8: Balance sheet of Dil-betigle sheep and goat farming business Dil-betigle farming business , Balance Sheets Assets Year 1 Year 2 Current Assets Liability and owners equity Current Year 1 Year 2 Year 3 Liabilities (CL) Year 3 Cash Accounts Payable 250,000.00 Accounts Receivable 275,000.00 302,500.00 90,506.90 131,761.56 144,937.72 Accruals 170,884.00 Total Current Assets 503,163.00 Fixed Assets Land and 140,000.00 Buildings Machinery and 203,140.00 Equipment Total Assets 187,972.40 553,479.30 206,769.64 608,827.23 49783.32 54,761.65 Total CL Long-Term Debts 60,237.82 307,763.48 254,349.99 279,784.99 135,000.01 148,500.01 163,350.01 Total Liabilities 389,350.00 428,285.00 471,113.49 154,000.00 223,454.00 169,400.00 245,799.40 150,000.00 Fixed 493,140.00 102,587.95 119,783.24 99,557.59 Inventories Vehicles 93,261.77 Notes Payable 82,279.00 84,783.43 Shareholder's Equity (SE) Preferred Stock 185,000.70 165,000.00 542,454.00 181,500.00 596,699.40 223,850.85 203,500.77 Common Stock 250,000.00 275,000.00 302,500.00 Accumulated Depreciation Net Assets 6,700.00 7,370.00 8,107.00 Paid- in Capital 150,063.30 165,069.63 181,576.59 Fixed 486,440.00 535,084.00 588,592.40 Retained Earnings Total SE Total Assets 989,603.00 15,189.00 16,707.90 18,378.69 600,253.00 660,278.30 726,306.13 1,088,563.30 1,197,419.63 Total Liabilities 989,603.00 1,088,563.3 1,197,419.6 & Equity 0 2 27 7.4. Income Statement / Business Profit or Loss Dil-betigle sheep and goat farming business will capitalize on the strong demand for high quality and nutritious sheep and goat products. The owners have provided the farm with sufficient startup capital. With successful management aimed at establishing and growing magnificent customer base, the farming business will increase the capital or net worth in the first two years. It will maintain a healthy increasing of gross margin, which combined with reasonable operating expenses, will provide enough cash for further growth. Table 9: Income statement of Dil-betigle sheep and goat farming business Year 1 Year 2 Year 3 Sales 3,797,148 Birr 4,176,863 Birr 4,594,549 Birr Cost of Goods Sold 121,241 143,000 213,454 Gross Profit 3,675,907 4,033,863 4,381,095 Less Operating Expenses Selling and marketing Expenses 11,000 12,100 13,310 payroll Expenses 205,524 226,076 248,684 Land rent 2,000 2,200 2,420 Maintenance 1,452 1,597 1,757 Utilities 8,875 9,763 10,739 Payroll tax 1366.5 1,503 1,653 Total Operating Expenses 230,218 253,239 Operating Profit Less Interest Expenses 3,445,689 38,935 32,540 Net Profit Before Tax Less Profit Tax (at 30%) Net Income After Tax (Net profit) 3,780,624 4,102,532 20,000 3,406,754 3,748,084 4,082,532 1,124,425 1,224,760 1,022,026.2 2,384,727.8 28 278,563 2,623,659 2,857,772 7.5. Forecasted Cash Flow Statement Table 10: forecasted cash flow statement Cash flow Present factor Present value of cash flows (NPV) (Discount factor) (10%) Year 0 (initial outlay) value - 989,603 1 447,400.00 2 509,250.00 3 686,562.50 Total 1 -989603 0.909091 406727.3134 0.826446 420867.6255 0.751315 515824.7047 653,609.50 3.49 353,816.64 7.6. Breakeven Analysis The break even analysis is the process of determining points where the profit is zero. The point where the total cost is equal to the total revenue is called breakeven point. The breakeven point for Dil-betigle sheep and goat farming business in each three years are as follows: 𝑭𝑰𝒙𝒆𝒅 𝒄𝒐𝒔𝒕 For year 1: 𝑩𝑬𝑷 = 𝒔𝒂𝒍𝒆−𝒗𝒂𝒓𝒊𝒂𝒃𝒍𝒆 For Year 2: 𝑩𝑬𝑷 = For Year 3: 𝑩𝑬𝑷 = 𝑭𝑰𝒙𝒆𝒅 𝒄𝒐𝒔𝒕 𝒔𝒂𝒍𝒆−𝒗𝒂𝒓𝒊𝒂𝒃𝒍𝒆 𝑭𝑰𝒙𝒆𝒅 𝒄𝒐𝒔𝒕 𝒔𝒂𝒍𝒆−𝒗𝒂𝒓𝒊𝒂𝒃𝒍𝒆 𝟒𝟗𝟑,𝟏𝟒𝟎.𝟎𝟎 = = = = 15.84% 𝟑,𝟕𝟗𝟕,𝟏𝟒𝟖− 684,263 𝟒𝟗𝟑,𝟏𝟒𝟎.𝟎𝟎 =14.40% 𝟒,𝟏𝟕𝟔,𝟖𝟔𝟑− 𝟕𝟓𝟐,𝟔𝟖𝟗.𝟑 𝟒𝟗𝟑,𝟏𝟒𝟎.𝟎𝟎 =13.09% 𝟒,𝟓𝟗𝟒,𝟓𝟒𝟗− 𝟖𝟐𝟕,𝟗𝟓𝟖.𝟐𝟑 29 8. FINANCIAL EVALUATION 8.1. Payback Period The payback period is the period required recovering the original investment outlay through the accumulated net cash flows earned by the farming business. Accordingly, based on the proposed cash flow it is estimated that the project’s initial investment will be fully recovered within the first one months of second year (1 year and 45 days). Payback period (T) = Io/R= 989,603/653,609.50 = 1.51(one year and 45 days) 8.2. Net Present Value Net present value (NPV) is the total present (discounted) value of a time series of cash flows. NPV aggregates cash flows that occur during different periods of time during the life of a business in to a common measuring unit i.e. present value; and it is an indicator of how much value an investment adds to the capital invested. Mathematically, NPV=∑30 𝐶𝐹𝑖=DF1*CF1+DF2*CF2+ DF3*CF3=-989603 + 406727.3134 + 420867.6255+515824.7047=353,816.64birr. In principal a business is accepted if the NPV is greater than zero. Accordingly, the net present value of the farming business at 10% discount rate is found to be Birr 353,816.64 which is acceptable. 8.3. Profitability Analysis According to the proposed income statement, Dil-betigle sheep and goat farming business will start generating profit in the second year of operation. Important ratios such as profit to total sales, net profit to equity (Return on equity) and net profit plus interest on total investment (return on total investment) will show an increasing trend during the life-time of the farming business. The income statement and the other indicators of profitability show that the business is viable. This means that the trend of income obtained from the business will be increasing as indicated in the income statements. 30 PI=NPV/Io= 353,816.64/989,603= 36% 8.4.Economic Benefit Our farming business will create employment for 17 persons. In addition to supply of the domestic needs, the project will generate a tax revenue of birr 1.2 million. The establishment of Dil-betigle sheep and goat farming business will reduce the poverty by increasing the GDP of our country. 31

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TAHIR K A S I M ABADIGA

• Other Affiliations: Jimma University, Ethiopia , Agricultural Economics and Agribusiness , Graduate Student Jimma University, Ethiopia , Agricultural Economics and Extension , Undergraduate add
• Research Interests: Research on Coffee and Coffee Production and Productivity () edit
• About: Mr. Tahir Kasim Abadiga  ✓Ethiopian edit
• Advisors: Dr. Adeba Gemachu , Advisor edit

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Publication date: 2023, research interests: business plan (), page numbers: 53, research interests: business and management (), page numbers: 38, page numbers: 19, publication name: financial plan, research interests: financial planning (), page numbers: 35, publication name: project proposal, research interests: project proposal (), page numbers: 29, publication name: american journal review, research interests: feasibility study (), publication name: amarican journal review, research interests: feasibility studies (), publication name: business plan on woodwork and metalwork for loan request at agaro town oromia regional state ethiopia, page numbers: 23, research interests: business planning (), page numbers: 42, page numbers: 1, publication name: waliigaltee hojjataa, research interests: legal theory (), journal name: academia, page numbers: 21, publication date: jun 5, 2021, publication name: business plan on vegetables at agaro city, publication name: muuxannoo hojii, research interests: template (), publication name: work experience, publication name: خبرة في العمل, research interests: sample (), publication date: 2022, publication name: የሥራ ልምድ ማስረጃ, research interests: amarna letters (), research interests: senior thesis (), issue: issnd-1, publication date: 2018, publication name: senior research on determinant of tax payer voluntery compliance with taxation case study in agaro town, research interests: senior research fellow (), research interests: biography (), page numbers: 52, publication date: 2017, publication name: practice and challenges of performance appraisal in agaro public sector office, research interests: case study (), publication date: 2010, publication name: seenaa gabaaba haj yuusuf aadam ykn ciroo, research interests: biography of the prophet muhammad (), page numbers: 41, publication date: 2005, publication name: oromo islamic scholars on aqida, research interests: oromo(language/linguistics and literature (), research interests: open access books in linguistics (), research interests: blogger (), time: 1 am to 2 am, location: jimma, ethiopia, more info: jimma south west ethiopian city, event date: jun 2014, journal name: memorial day of jimma university college of agriculture and veterinary medicine (jucavm), organization: jimma university, publication date: jun 2014, publication name: vip dorm in jucavm in 2014, conference end date: dec 2018, conference start date: jun 2014, research interests: vip group (), research interests: memorials for holocaust (), publication date: 2013, publication name: rangeland improvement and rehabilitation in ethiopia, research interests: senior seminar (), page numbers: 3, research interests: employees motivation job satisfaction and organisational commitment (), publication date: 2012, publication name: analysis of beef cattle value chain in seka chekorsa woredas, page numbers: 28, publication name: attachment write molla tigabu around qobbo, south wollo province, page numbers: 7, research interests: cv format (), research interests: ethiopian studies (), publication name: waliigaltee gaa'elaa, research interests: science fiction film (), research interests: presentation slides (), publication name: waliigaltee qaxarri hojjata fi hojjachiisa, research interests: agreement (), more info: business plan for start up, publication name: business plan on bread bakery at agaro town, research interests: business (), event date: jan 5, 2016, page numbers: 14, publication date: 2015, publication name: business plan on dairy farm at agaro town', oromia region ethiopia, research interests: agribusiness ().

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