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Business Plans for Beef Cattle Backgrounding Enterprises
Backgrounding is a feeding program that targets weight gain in feeder cattle to develop the skeleton and muscle tissue of the animals while minimizing fat deposition.
Backgrounding diets typically include high levels of forages and often include limited amounts of cereal grains and various by-products of grain production. Cattle feeders normally purchase lightweight feeder cattle for backgrounding programs, and design feeding programs considering the timing of marketing finished cattle.
The Business Plan
A business plan is important to evaluate financial and production decisions related to the business. A business plan identifies requirements for financing capital items, such as feeding pens, handling facilities and feeding equipment, or sourcing operating credit or financing feeder cattle purchases. In addition, development of the business plan formalizes production practices, such as feeding and health management programs, and describes the marketing program for cattle at the completion of the backgrounding phase. Completing a business plan is similar to planning for a road trip: business plans help you identify where you are going, and, similar to a road map, assist you in reaching your final destination.
Similar to other agricultural endeavours, feeding cattle involves risk. While the price of feed and market price of feeder cattle are the two largest variables that can affect profitability of cattle feeding enterprises, factors such as experience of the cattle feeder, size of operation, animal performance and health status of calves contribute to the success of the enterprise. To reduce risk, some backgrounders choose not to own their feeder cattle, but custom-feed cattle for other producers or cattle investors. A business plan identifies risk factors for each operation, and allows producers to evaluate alternatives to 100-per-cent ownership of feeder cattle and manage their risk accordingly. Risk management strategies form a critical component of the business plan, and will be reviewed by lenders and other stakeholders when assessing the financial viability of backgrounding cattle.
A business plan helps you to:
- Analyze the enterprise on paper and identify strengths, weaknesses, opportunities and threats (SWOT);
- Make the transition from idea to implementation of the business enterprise;
- Provide lenders, cattle investors and other stakeholders with a clear understanding of your business and the requirement for external sources of capital or operating credit;
- Standardize operating procedures and identify marketing strategies for backgrounded feeder cattle;
- Establish performance and financial benchmarks and analyze year-to-year variance; and
- Manage your business more effectively.
Developing your Business Plan
A typed, professional appearance enhances business plans, especially if it will be presented to others. If this is not possible, a neat, handwritten business plan is still better than nothing at all. Elements of a business plan include:
- Title Page: Includes the business or farm name and contact information for the principal individual(s) responsible for the enterprise. Include the date the plan was created or the period of time that the business plan covers.
- Executive Summary: The executive summary is one of the most important components of a business plan. As the executive summary is the first and sometimes only part of the business plan that is read, it needs to be a concise summary of the business proposal that identifies the purpose or objective of the operation, outlines capital and credit requirements and indicates how funds will be used. It should be written last so that it summarizes the entire business plan and provides the readers with answers to the following questions:
- What is the purpose of this business plan (operational guide, financing proposal or both)?
- What is the nature of the business?
- What is the business structure (sole proprietor, corporation, partnership)?
- What is being produced or what services are being provided?
- Where will the product and/or services be marketed?
- What knowledge, skills and abilities do you have regarding feeding and care of cattle?
- Table of Contents: A single page listing topics and corresponding page numbers.
- Mission, Vision, Values and Goals Statements: These statements are typically one paragraph in length, and clearly state the objective of the enterprise, the short- and long-term goals of the producer and the values important to the individual. Animal welfare, environmentally sustainable production or verified beef production practices are examples of values producers may choose to incorporate in these statements.
- Industry Overview: The industry overview should be written to provide a reader who may have limited knowledge of the subject with a brief description of the cattle feeding industry. A simple diagram illustrating the structure of the cattle industry is often useful to include in this section to visually represent where backgrounding fits within the beef cattle supply chain. Current statistics should be included, and be sure to reference sources of information. Relevant information may include, but should not be limited to: beef cow numbers, number of feeder cattle by weight class, feed grain and forage production and number of cattle feeders. Industry trends and opportunities can be identified in this section. Once the reader has reviewed this section of your business plan, specific information related to your project can be put into the perspective of the larger industry.
- Business Description: This section includes information specific to your enterprise. Type of business, structure of business, relation to other enterprises, and size and scale of the operation, including land resources, should be identified.
Ownership of feeder cattle or custom feeding arrangements should be clearly identified in this section, as the content of subsequent elements of your business plan will be affected by this major decision. Custom feeding arrangements will be formalized, with a written contract outlining the responsibilities of both the cattle feeder and investor. Payment for services (cost per gain, yardage plus feed costs or cost per day), expectations of animal performance, health status of calves at time of placement, minimum number of days on feed, death losses and animal warranties should be clearly identified and drafted in the agreement. A copy of the contract should be included as an appendix to the business plan.
- Human Resource Management: This area describes your business and management experience in feeding and caring for cattle. It is important to identify if you will be paying yourself for the labour and management of the enterprise, or if the profit (loss) of the business will determine the return on your labour and investment.
If additional non-family labour is required for the backgrounding cattle enterprise, a description of employment variables, such as salary, benefits and provision for training, should be included. Development activities designed to improve management expertise should be included in this section.
A contingency plan should be identified in this section that details how the enterprise will be managed and day-to-day operations will proceed in the event of illness, injury or death.
- Operational Plan: This section outlines the production processes, sets performance targets and establishes costs that will be included in cash flow projections. Backgrounding cattle enterprises should include the following sections within the operational section of the business plan:
Excluding the purchase of the feeder calf, the cost of feed represents the single largest variable in feeding cattle. Backgrounding diets are typically higher in forages to minimize fat deposition and promote frame and muscle growth. Purchasing or contracting some or all of the forage, grain and supplements prior to placing cattle in the feedlot can reduce the risk of significant price increases during the feeding period. It is recommended that nutritional advice be sought in the development of feeding programs and monitoring of animal performance. A feeding protocol can be developed as part of the operational plan to ensure consistency of feeding regardless of who is responsible for daily feeding.
Herd Health Program
With the assistance of a veterinarian experienced in feeder cattle production, a herd health program should be designed and implemented for all backgrounding enterprises. Treatment and vaccination protocols, implant strategies and post-mortem procedures can be developed and documented in the herd health section of the business plan. These protocols can form the basis for a sound record-keeping system as part of a quality assurance program. Annual review of each program within the operational plan allows for ongoing adjustment and fine-tuning of important production practices.
- Marketing Plan:
Cattle feeders who own their cattle inventory assume a higher risk than feeders who are custom-feeding cattle for other investors. While the potential for profit is greater, so is the potential for loss, and the business plan should reflect the reality of the cattle feeding business. Owning the inventory of cattle requires the development of a marketing plan within the business plan. Consider the following when developing your marketing plan:
Identify the target weight for marketing feeder cattle. Lighter feeders can be placed on pasture prior to finishing in feedlots, or heavier animals can be marketed directly to feedlots.
Identify the time of year for targeted marketing. Normally, grass cattle are in greater demand during the early spring, and heavy feeders are generally marketed to feedlots during late summer.
Identify where off-type animals will be marketed.
Backgrounded cattle can be sold via auction (regular, presort, satellite or electronic) or be forward-contracted to finishing cattle feedlot operators. Sale conditions, including weighing considerations, marketing commissions, shrinkage and delivery times, should be clearly identified for all marketing alternatives. It is important to recognize that prices for cattle (finished and feeder) are established at the Chicago Mercantile Exchange. Fluctuations in the value of the Canadian dollar relative to the United States currency represent significant price risk to the Canadian cattle feeder. Risk management plans should identify foreign exchange exposure and strategies to minimize negative effects. Development of marketing plans as part of the business plan allows producers to consider all of the factors that may affect market price for cattle at the end of the backgrounding period. Given the complexity of cattle marketing, producers are strongly encouraged to seek advice and marketing assistance prior to placing cattle on feed in a backgrounding program.
The Livestock Price Insurance Program (LPI) is an easy to use risk management tool that provides beef producers with protection against price risk, currency risk and basis risk. The program uses current and historical market information to set and offer market driven coverage in the form of an insurance policy. LPI protects against volatility in the marketplace and can be used to set a "floor" price on livestock, allowing for the security of knowing what your bottom line income will be. LPI can also be used to obtain a cash advance through the Advance Payments Program.
- Environmental Plan:
Environmental farm planning is an important component of risk management for any agricultural operation. Beef cattle backgrounding operations may require approval from Saskatchewan Agriculture's Agricultural Operations Unit prior to the construction of an intensive livestock operation (ILO). The Agricultural Operations Act requires ILO proponents to submit plans for manure storage, manure management and mortality management. The intent of this legislation is to ensure provisions have been made to protect surface and groundwater from contamination by run-off from livestock facilities. It is also important to discuss development of any ILO with your neighbours and your local municipality to address any concerns or identify any development bylaws that may be relevant to your enterprise. Saskatchewan Watershed Authority should be contacted regarding licensing requirements related to the provision of water for the cattle operation.
- Financial Plan:
The financial plan is an important component of your business plan, and usually includes present financial documents as well as pro forma financial statements that identify the financial changes that will occur to the enterprise over a period of time. Requirements for debt financing and repayment schedules should be included in the financial plan. It is important to identify any assumptions that are being made that may affect the accuracy of the financial statements. Examples of documents included in the financial section of the business plan are:
- Breakeven analysis of backgrounding cattle;
- Current income statement and projected income statements for an identified period of time;
- Monthly cash flow projections for the current and subsequent fiscal years;
- Loan amortization tables; and
- A current balance sheet and projected balance sheets for an identified period of time.
- Supporting Professionals:
Identify supporting professionals that provide services or advice for your operation in this section of your business plan. These can include business partners, such as accountants, lawyers or financial service providers, as well as veterinarians, nutritionists, consultants and marketing partners.
- Supporting Documents:
A personal resumé identifying your education, prior work experience and management and feeding experience related to beef cattle production should be included in this section. If other individuals will be involved in the management of the backgrounding enterprise, include their personal resumés as well.
For custom backgrounding operators, letters of intent from prospective cattle suppliers or investors should be included. If you have previously fed cattle for someone else, include letters of reference.
A business plan is an important document that allows you to evaluate your enterprise on paper. This document serves as a basis for obtaining financing and procuring cattle supplies. Operational plans are developed and performance benchmarks established in your business plan. Once completed and updated annually, your business plan will provide you with an overview of past performance and a plan for future years.
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Starting Beef Cattle Farming Business Plan (PDF)
Starting a beef cattle farming business presents a unique and lucrative opportunity for aspiring entrepreneurs. The demand for quality beef continues to rise globally, making this an opportune time to enter the market. With a growing population and a steady increase in the consumption of protein-rich diets, the beef industry is poised for sustained growth. This demand creates a fertile environment for new entrants, offering a chance to tap into a thriving market. Beef cattle farming involves breeding cows to get calves, which are then raised and sold for beef. Beef cattle production is a very profitable business, and many farmers are making money all over the world by starting cow-calf operations businesses. However, to build a profitable, sustainable beef cattle ranching business, you require sufficient knowledge of how to efficiently keep the beef cattle, good business management skills, and a good beef cattle farming business plan. This article will outline how to start the cattle production business, and the beef cattle farming business plan – PDF, Word and Excel.
Beef cattle farming is a lucrative business project that is providing income for a lot of livestock farmers. There are some important things you need to consider before you setup a beef cattle production business. You need to gather the correct resources, decide on the size of your cattle farming project this includes the number of cattle; location of the beef cattle production business, as well as your target market. These decisions will be affected by the amount of capital you have, and the size of your target market. If you do not have a lot of capital, you can always start small and grow your beef cattle breeding project overtime. You also need to carry out market research (Who are you going to sell the cattle to? At what price?) and write a cow-calf operations business plan before you start the project.
Market research is a pivotal step when embarking on a beef cattle farming venture. It serves as the compass guiding your business decisions and can ultimately determine your success in this industry. Assessing the local demand is essential; understanding the existing market, who your potential customers are, and their preferences can help you tailor your cattle farming approach to meet these needs effectively. It’s imperative to delve into the pricing dynamics of various grades of beef within your target market. This involves a comprehensive examination of not only the prevailing prices but also the factors that influence them. Identifying potential customers and understanding their preferences and price sensitivity is equally vital, as it enables you to tailor your pricing strategy to match their expectations. Additionally, recognizing the seasonality of cattle and beef prices is key, as these fluctuations can significantly impact your revenue and profit margins. A competitive analysis will help you understand the landscape of existing cattle farms, their strategies, and what sets your venture apart. Identifying your competitive advantages and crafting a unique selling proposition can be key to carving out your niche in the market.
As a crucial component of market research in the context of starting a beef cattle farming business, the selection of the appropriate cattle breed plays a pivotal role. This decision encompasses a comprehensive assessment of various factors, including the availability of breeds in your region, their feed conversion efficiency, the cost associated with acquiring them, and the specific demands of the market. Each breed possesses distinct characteristics that impact their suitability for your business, such as their growth rate, meat quality, and adaptability to local conditions. Additionally, you should delve into supply chain considerations, establishing efficient logistics and partnerships to transport and distribute your products effectively.
Land for Beef Cattle Farming
Land is an important factor when you are starting a cattle ranching business. When selecting land for your cattle farm, some important considerations include: availability of good grass and pasture for grazing, availability of good, quality water supply, land size in relation to size of your cattle herd and soil type as it affects forage production potential. Other factors include availability of already made infrastructure like pens, sheds, buildings, as constructing new working facilities and buildings on a cattle farm is expensive.
A beef cattle farming venture requires huge tracts of land. This is because you will need spaces for grazing and other dedicated farm structures. You must consider the terrain; flat land that gently slopes is ideal. The soil characteristics are important as well – loam soil is the best. That soil type is best suited for consistent pasture and forage development. The availability of adequate pastures is yet another land consideration. You must ensure there are enough pastures. This connects to considering the quality of forage available. Ideally, you need pastures and forage mainly constituted of grasses and legumes. If the legumes composition is at least a third of the total, that would be great. Water availability is also a huge consideration. The best is to have a clean, fresh, and reliable water source. Preferably it should be within a 1 mile radius. This will be convenient for the cattle so that they do not have to go far to find water. It is advisable to check the quality of the water; especially if it is a natural water source. High salt and sulphur levels are detrimental to your cattle. Proximity of strategic road networks is of utmost importance for accessibility and mobility. Bear in mind that within the beef cattle farm, gravel roads are the best.
Housing for Beef Cattle Production Business
To be successful in the beef cattle ranching business, you need to provide proper shelter and housing for your cattle. Beef cattle can be negatively affected by mud, harsh winds, and extreme low temperatures. The design and type of beef cattle facilities should take into consideration the need to provide the required space, feed, shelter, water, waste management and livestock handling features. Beef cattle housing can broadly be in the form of cubicles, sheds, pens, corrals, barns, or open yards. However, it is important to ensure that there is enough shade for the cattle. That is why protection from the weather elements is a huge consideration in beef cattle housing. Protection from predators is also closely tied to that. Overall, the housing must be clean with good ventilation. Plus the beef cattle housing must generally be easy to clean. Ensure that there is dry surface, floor, or bedding. It is best to use dry straw on them; adding sand also helps in that regard.
The cattle housing must be big enough to allow free movement of the cattle. The housing must not be homogenous; there should be separate segments for different specific uses. For example, you need separate segments for calves, sick cattle, or newly arrived cattle. It is recommended that beef cattle housing must be set up on an elevated spot. This streamlines cleaning activities, drainage, and runoff. Take into account the prevailing wind direction in your chosen location – the beef cattle housing should be erected standing perpendicular to that. Other cattle handling structures include crowding pens, sorting corrals, working chutes & gates, squeeze gates and sick pens. However the necessity of the structures depends on the scale of the cattle farming business. The cattle ranch farm also requires good fencing. Pasture fencing for cow-calf operations business is a necessity, so as to contain the cattle and manage their grazing. This can be done by barbed wire, high tensile smooth wire or electric fencing. The costs of constructing the housing should be include in the beef cattle production business plan.
Equipment For Beef Cattle Farming Business
Beef cattle farming equipment mainly comprises of feed and water equipment. For example, you need feeding bunks and, feeding bins (or troughs) or portable hay feeders. Water equipment can be in the form of or involve drinkers, tanks, canals, pumps, pipes, and the like. Other handy equipment is for handling the beef cattle. For instance, chutes are central to this. Chutes are narrow mechanisms or passages used to control and guide the beef cattle in certain spaces. There are several different types of chutes e.g. holding chutes, working chutes, and loading chutes. Headgates are also central to the use of chutes. Cattle guards or grids are important in controlling the movement of the beef cattle. Then there are general equipment such as protective clothing, wheelbarrows, buckets & pails, livestock trailer, manure spreader, tractors, and the like. Specialized equipment for operations such as dehorning and castrating are needed too. Your cattle farming business plan should take into account the cost of purchasing or renting the land, structures and buying the equipment.
Breeding Stock for Beef Cattle Production Business
To start a beef cattle production business, you require the breeding stock. The breeding stock consists of male cattle which are known as bulls, and female cattle/cows. Alternatively, instead of using bulls, you can use artificial insemination for breeding the cattle. The selection of cattle breeding stock is basically two-tier. The first aspect involves choosing the cattle breed you want. Then the second aspect is choosing the individual cattle. You can choose to start with calves and rear them to maturity. You could also start with cows or heifers at various stages of development. Another approach can be to start with fully grown cattle. Always remember that choosing purebreds is the best way to go. Your overall choice should be informed by personal beef cattle farming goals. That should also go hand in hand with climatic considerations of your chosen location. Availability of cattle breeding stock is also another huge consideration.
There are a number of specific attributes to note when choosing your beef cattle breeding stock. You should consider the age; young livestock is usually the best to pick. Consider fertility or reproductive rate, and mothering or maternal ability. In beef cattle farming, feed efficiency and quality of meat are important factors. What is cattle’s performance and health status? What are their behavioural profiles? For instance, aggression in cattle is not a good trait. All of these specifics must be ascertained with the backing of comprehensive records. You must also be diligent enough to make physical inspections of the cattle. The idea is to note defects or desirable characteristics. The cattle breeds you choose will affect the beef production potential of your cattle farming business. Some breeds are better than others at producing cattle with good beef quality. Other characteristics which vary among breeds include calving ease, milking ability, feed conversion, diseases resistance, longevity and average birth weight. The most popular breeds used in the the beef cattle farming business include Angus, Brahman, Limousin, Hereford, Simmental, Shorthorn, Texas Longhorn, Nguni, Gelbvieh, Charolais, Africander, Highlands among others. The beef cattle farming business plan should include the costs of purchasing the breeding stock.
Feed And Nutrition
Success in the beef cow-calf production business is also greatly affected by the feeding program. The feeding program of the beef production business should ensure that adequate nutrition is provided to both the cows and calves at all growth stages and during all seasons. This should be done while keeping an eye on the feed costs, as they greatly affect profitability of the beef cattle farming business. Failure to provide adequate feeding for the beef cattle results in low reproductive performance, poor growth of the calves and poor disease resistance. These factors all lead to reduced revenues for the beef cattle production business, thus lower profits. In beef cattle farming business, weight and grade of meat are the major goals which informs the feeding regiment. Feeding generally depends on the size of the cattle. The bigger the frame, the higher the grain content should be. Cattle f eeding programs of beef farming are usually based on pasture grazing, in combination with supplementary feed. The supplementary feed for cow-calf operations include hay, salts & minerals, concentrates, silage, commercial beef feed, fodder, corn and grains. The most important dynamic is feed conversion or efficiency. Do not make the mistake of thinking overfeeding is a good thing. It usually leads to the build-up of excess fat thus lowering the beef quality. That is why it is important to seek guidance from experts on feeding using the right rations. The feed costs should be included in the beef cattle production business plan.
Health & Disease Management in Beef Cattle Farming
Ensuring the health and well-being of your beef cattle is of paramount importance in the successful operation of your farming business. A comprehensive approach to health and disease management is not only ethical but also integral to maintaining the quality and productivity of your cattle herd. To achieve this, preventative health measures are vital. This includes implementing a vaccination program tailored to your region’s prevalent diseases, providing access to clean water and nutritious feed, and maintaining a hygienic living environment. Regular monitoring and control of external parasites like ticks and flies are also crucial aspects of preventative care.
Disease monitoring and surveillance form another critical component. Regular health checks and veterinary consultations enable the early detection of potential health issues, while meticulous record-keeping helps track your cattle’s overall well-being. Staying informed about disease outbreaks in your area and having the ability to implement quarantine measures if needed is essential. Collaboration with a veterinarian ensures that sick cattle receive proper treatment and medication, administered according to recommended guidelines. Biosecurity measures should be in place to prevent disease introduction and spread, and continuous education and training ensure that both you and your farm staff are well-prepared to manage cattle health effectively. Prioritizing health and disease management not only benefits your cattle’s well-being but also contributes to the sustainability and profitability of your beef cattle farming business.
Beef Cattle Farming Business Model
The beef cattle farming business model involves a well-defined and cyclical process that begins with the acquisition of breeding bulls and cows. These animals form the foundation of your operation, as they play a crucial role in producing calves, which will eventually become your marketable cattle. The mating of bulls and cows leads to the birth of calves, and from that point onward, the focus shifts to feeding and raising these young cattle until they reach the desired market age, and you then sell them. This careful management ensures that the cattle are healthy, well-nourished, and ready for sale, optimizing their value in the market.
The central financial aspect of this business model lies in managing the costs associated with feeding the cattle, which constitutes the major expense. However, the revenue generated from selling the cattle at market age significantly surpasses these feeding costs and other operational expenses. This robust revenue-to-cost ratio results in a healthy profit margin for the business. The key to sustained success in this model is its repeatability throughout the year, which ensures a consistent and steady stream of income. By following this cycle of breeding, raising, and selling, you can create a reliable and profitable business model in the beef cattle farming industry.
Capital for Cattle Ranching Business
The amount of capital required for the beef cattle breeding business depends on the scale of the project. When starting a cow-calf operations business, most of the capital goes to acquiring the land, building infrastructure, and buying the breeding stock. You can get a loan from the bank, or funding from investors, to use as capital to start your beef cattle farming business. If you plan to raise capital from investors and a loan from the bank, you need a good cattle ranching business plan. If you don’t have access to investors and bank loan, you can use your personal savings and start small, and grow your business overtime. Beef cattle farming is profitable, so if you reinvest the profits you get, you can grow over time. Even if you are not planning to get a loan, you should still get a beef cattle farming project plan to guide you in starting and operating the business. It is essential for you to have a beef cattle farming business plan before you venture into the cattle ranching business, so that you know all the costs involved and you make an informed decision.
Market for Beef
The market for beef cattle is very huge and is ever increasing, annual beef global demand exceeds 75 million tonnes. You can sell live cattle or slaughter and sell as beef. The market for cattle/beef includes supplying to butcher shops, abattoirs, auctions, schools, companies, individual households, farmers, restaurants, organisations, supermarkets, events etc. It’s important for the beef cattle farming business plan to include a proper marketing plan to use in your beef farming business.
The export market for beef is also very huge! As you grow your cattle farming business you will be able to export the beef to other countries. The largest importers of beef are Russia, United States of America, Japan, China, South Korea, European Union, Hong Kong, Egypt, Canada, Chile and Malaysia. Currently, the top producers of beef are United States of America, Brazil, European Union, China, India, Argentina, Australia, Mexico, Pakistan, Turkey and Russia.
Keys To Profitability in Beef Cattle Farming
Profitability is the ultimate goal for those venturing into the world of beef cattle farming, and achieving it involves a multifaceted approach. Efficient resource management stands as a cornerstone, demanding a meticulous allocation of resources like land, water, and feed. Implementing rotational grazing systems can maintain pasture health and maximize forage production, thereby reducing the need for costly supplemental feed. Breeding and genetics play a pivotal role in profitability as well. Selecting cattle breeds that align with market preferences and local environmental conditions is crucial. Furthermore, a focus on breeding programs to enhance genetic traits such as growth rate, meat quality, and disease resistance can significantly impact the bottom line.
Health and disease management cannot be overlooked, as cattle health directly correlates with profitability. Prioritizing preventative measures and proactive disease management not only ensures the well-being of your herd but also reduces costs associated with medical interventions and promotes higher growth rates. Market timing and pricing strategies are equally vital, demanding a vigilant eye on market trends and pricing fluctuations. Utilizing market data to determine optimal pricing strategies ensures that you maximize your returns when selling cattle.
Cost control and budgeting, combined with strategic marketing and branding, enable efficient financial management. Keeping a detailed budget that tracks all expenses and revenue sources is imperative, allowing you to control costs effectively. Building a strong brand identity for your beef products and fostering relationships with local buyers, restaurants, and markets secures consistent sales channels. Finally, a commitment to continuous learning and improvement ensures your profitability endures. Staying updated on industry best practices, emerging technologies, and research in beef cattle farming equips you to adapt to industry changes, enhance productivity, and reduce waste, ultimately driving the success and profitability of your beef cattle farming business.
Why You Need a Cattle Farming Business Plan
Establishing and managing a thriving cattle farming business requires meticulous planning and strategic foresight. A well-structured cattle farming business plan is not merely a formality; it serves as an indispensable tool that can profoundly influence the trajectory of your venture. Financial planning and management is a vital aspect of a comprehensive business plan. It entails detailed financial projections, helping you estimate initial startup costs, ongoing expenses, and potential revenue streams. With insights into your cash flow, you can effectively manage your finances, make informed decisions regarding resource allocation (such as purchasing cattle, feed, and equipment), and maintain financial stability. Furthermore, if you require external financing or investment to initiate or expand your cattle farming business, a well-structured business plan is essential. Lenders and investors will scrutinize your plan to assess the viability and profitability of your venture, making a comprehensive and well-researched plan instrumental in instilling confidence in potential stakeholders.
A well-structured business plan for a beef cattle farming enterprise serves as a vital tool in comprehending the profitability of the business and identifying the key factors that influence it. It provides a detailed financial outlook, allowing you to assess the projected income, expenses, and potential returns on investment. By meticulously examining these financial projections, you gain a deep understanding of the financial health of your cattle farming venture. Additionally, the business plan facilitates an exploration of the factors that impact profitability, including feed costs, market pricing, and operational efficiency. With this insight, you can make informed decisions to optimize profitability, mitigate risks, and ensure the long-term success of your beef cattle farming business.
Pre-Written Beef Cattle Farming Business Plan (PDF, Word And Excel): Comprehensive Version, Short Funding/Bank Loan Version and Automated Financial Statements
For an in-depth analysis of the beef cattle farming business, we encourage you to purchase our well-researched and comprehensive cattle farming business plan. We introduced the business plans after discovering that many were venturing into the beef cattle production business without enough knowledge and understanding of how to run the cattle ranching business, how to keep the calves, lack of understanding of the financial side of the business, lack of understanding of : the industry, the risks involved , costs and profitability of the business; which often leads to disastrous losses.
The StartupBiz Global cow-calf operations business plan will make it easier for you to launch and run your beef cattle farming business successfully, fully knowing what you are going into, and what’s needed to succeed in the business. It will be easier to plan and budget as you will be aware of all the costs involved in setting up and running the cattle ranching business.
Uses of the Beef Cattle Ranching Business Plan (PDF, Word And Excel)
The beef cattle farming business plan can be used for many purposes including:
- Raising capital from investors/friends/relatives
- Applying for a bank loan
- Start-up guide to launch your beef cattle farming business
- As a beef cattle farming business proposal
- Assessing profitability of the beef cattle production business
- Finding a business partner
- Assessing the initial start-up costs so that you know how much to save
- Manual for current business owners to help in business and strategy formulation
Contents of the Beef Cattle Production Business Plan (PDF, Word And Excel)
The beef cattle farming business plan include, but not limited to:
- Marketing Strategy
- Financial Statements (monthly cash flow projections, income statements, cash flow statements, balance sheets, break even analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortization)
- Risk Analysis
- Industry Analysis
- Market Analysis
- SWOT & PEST Analysis
- Operational Requirements (Including technical aspects of how to keep the cattle, feed requirements etc)
- Operational Strategy
- Why some people in beef cattle farming business fail, so that you can avoid their mistakes
- Ways to raise capital to start your cattle farm business
The Pre-written beef cattle farm business plan package consists of 4 files
- Beef Cattle Farming Business Plan – PDF file (Comprehensive Version – 121 Pages)
- Cattle Farming Business Plan – Editable Word File (Comprehensive Version – 121 Pages)
- Beef Cattle Farming Business Plan Funding/Bank Loan Version- Editable Word File (Short version for applying for a loan/funding – 51 pages)
- Beef Cattle Farming Business Plan Automated Financial Statements – (Editable Excel File)
The business plan can be used in any country and can be easily edited. The financial statements are automated. This implies that you can change eg the number of cattle, selling price of the cattle etc, and all the other financial statements will automatically adjust to reflect the change.
Click below to download the Contents Page of the Beef Cattle Farming Business Plan (PDF)
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Beef Cattle Farming Business Plan [Sample Template]
By: Author Tony Martins Ajaero
Home » Business ideas » Agriculture Industry » Livestock Farming » Cattle and Dairy
Are you about starting a cattle rearing farm for beef ? If YES, here is a complete sample cattle rearing business plan template & feasibility study you can use for FREE. To start with, you may want to consider going on the internet to read up a whole lot about the trade, as well as get information from those who are already in it. Below is a sample cattle rearing business plan template;
A Sample Beef Cattle Farming Business Plan Template
1. industry overview.
The agricultural industry of which livestock farming or better still cattle rearing is a subset of is no doubt among the leading industry in most countries of the world; it is the industry that produce food for the populace and raw materials for industries.
Because of the significant role the agriculture sector plays, the government of most countries ensures that they go all the way to subsidize seedlings, fertilizers, and farming implements and machinery for farmers and also encourage entrepreneurs to go into various kind of farming including cattle rearing.
There are several business opportunities available in the agricultural industry and one good thing about the industry is that there is market for all the produce from the industry.
Cattle rearing 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.
The Beef Cattle Farming industry is indeed a large industry and pretty much active in countries such as United States of America, Israel, Argentine, Holland, Egypt, China, Germany, Turkey and Nigeria et al. There is no single livestock farming company that has dominate market share in the industry hence smaller cattle rearing business can successfully make profits.
Statistics has it that in the united states of America alone, there are about 38,184registered and licensed livestock farming business responsible for employing about 62,463and the industry rakes in a whooping sum of $13 billion annually. The industry is projected to enjoy 3.1 percent annual growth.
If you are looking towards leveraging on the agriculture industry to generate huge income, then one of your best bet is to start cattle rearing business. Cattle rearing business is all about mass – breeding of cattle ( cows, oxen, bulls, bullocks, steers, heifers and calf et al ) for the sole aim of making profits. In most cases it is referred to as livestock farming business.
One thing is certain about cattle rearing business, if you are able to conduct your market research and feasibility studies , you are more likely not going to struggle to sell your cattle and its products because there are loads of people out there we eat beef, drink milk and industries that make use of byproducts from cattle in manufacturing their products.
Over and above there are few barriers to entry into the livestock production industry. Usually, all inputs are readily available. In the nearest future, players in this industry may face the highest costs associated with accessing technology, especially in relation to genetic modification engineering in livestock breeding.
So also, intellectual property rights protecting new inventions and technology may mean that new entrepreneurs coming into the industry will need to pay license fees and this of course will cause increase in the start – up fee for starting a livestock breeding/cattle rearing business.
2. Executive Summary
Perry Coleman and Family Cattle Ranch, LLC is a registered and licensed livestock farming company that will be based in the outskirt of Dallas, Texas – United States. We have done our detailed market research and feasibility studies and we were able to secure a hundred acres of land to build our cattle ranch and start our cattle rearing business.
Our cattle ranch / cattle rearing business is a going to be standard one hence will be involved in commercial breeding of cows, oxen, bulls, bullocks, steers, heifers and calf et al. We will also be involved in boarding services, breeding services, dairy support services, livestock health services, farrier services, and shearing services as well.
In the nearest future, hopefully within the first five years of officially running Perry Coleman and Family Cattle Ranch, LLC, we will start our meat processing plant and milk processing plant and also start exporting our products to other parts of the world.
Which is why aside from the fact that we’ve secured the required farming land for breeding cattle in commercial level, we have also hired some key employees who are currently undergoing training so as to be able to fit into the ideal picture of the 21 st century cattle rearing business workforce that we want to build.
We are in the cattle rearing business because we want to leverage on the vast opportunities available in the livestock farming industry, to contribute our quota in growing the U.S. economy, in national food (meat) production, raw materials production for industries, to export agriculture produce from the United States to other countries and over and above to make profit.
Perry Coleman and Family Cattle Ranch, LLC is well positioned to become one of the leading cattle rearing business in the United States of America, which is why we have been able to source for the best hands and equipment to run the business.
We have put process and strategies in place that will help us employ best practices when it comes to cattle rearing processes, meat and milk processing and packaging as required by the regulating bodies in the United States of America.
Perry Coleman and Family Cattle Ranch, LLC is a private registered livestock farming company that is owned by Perry Coleman and family. The company will be fully and single handedly financed by the owner – Perry Coleman and his immediate family members at least for a period of time.
Before starting Perry Coleman and Family Cattle Ranch, LLC, Perry Coleman has worked with some of the leading livestock farms in the United States of America. He has worked in the industry for well over 10 years before resigning to start his own cattle rearing business.
3. Our Products and Services
Perry Coleman and Family Cattle Ranch, LLC is a licensed livestock farming business that is committed to cattle rearing, meat and milk processing and packaging for both the United States’ market and the global market. We will also produce related raw materials for industries in commercial quantities.
We will also ensure that we operate a standard food processing plant as part of our complimentary business offering. These are the areas we will concentrate on in our livestock farming business. If need arises we will definitely add more related animal breeding services to our list;
- Boarding services
- Breeding services
- Dairy support services
- Livestock health services
- Farrier services
- Sale and export of cotton wool and other dairy products
- Sale of Cattle and milk
- Sale of processed meat (beef)/can – beef (Processed Diary foods, and can beef et al)
- Shearing services
- Livestock farming related consultancy and advisory services
4. Our Mission and Vision Statement
- Our Vision is to become one of the leading cattle rearing business brands not just in Dallas – Texas, but also in the United States of America.
- Our mission is to sell our produce ( cattle, beef and milk ), byproducts and processed meat in commercial quantities both locally, nationally and internationally.
- We want to build a cattle rearing business that can favorably compete with other leading livestock farming / cattle rearing brands in the United States of America and in the globe.
Our Business Structure
Perry Coleman and Family Cattle Ranch, LLC is a cattle rearing company that intend starting small in Dallas – Texas, but hope to grow big in order to compete favorably with leading cattle rearing and livestock farms in the industry both in the United States and on a global stage.
We are aware of the importance of building a solid business structure that can support the picture of the kind of world class business we want to own. This is why we are committed to only hire the best hands in and around Dallas.
At Perry Coleman and Family Cattle Ranch, LLC, we will ensure that we hire people that are qualified, hardworking, dedicated, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders ( the owners, workforce, and customers ).
As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more as agreed by the management of the farm. In view of the above, we have decided to hire qualified and competent hands to occupy the following positions; Below is the business structure of Perry Coleman and Family Cattle Ranch, LLC;
- Chief Operating Officer
General Farm Manager
- Cattle Ranch Manager/Supervisor
- Sales and Marketing Executive
- Field Employees
- Front Desk Officer
5. Job Roles and Responsibilities
Chief Operating Officer:
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
- Responsible for providing direction for the business
- Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
- Responsible for the planning, management and coordinating all farm activities across the various sections on behalf of the organization
- Supervises other section manager
- Ensures compliance during project executions
- Provides advice on the management of farming activities across all section
- Responsible for carrying out risk assessment
- Using IT systems and software to keep track of people and progress of the growth of crops, fishes, birds and animals
- 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, the most efficient resources (manpower, equipment, tools and chemicals et al) are utilized and different interests involved are satisfied. Responsible for preparing financial reports, budgets, and financial statements for the organization
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Defines job positions for recruitment and managing interviewing process
- Carries out staff induction for new team members
- Responsible for training, evaluation and assessment of employees
- Oversees the smooth running of the daily farming activities across the various farming sections.
- Defining job positions for recruitment and managing interviewing process
- Carries out staff induction for new team members
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- 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
Cattle Ranch and Animal Manager/Supervisor
- Responsible for managing the commercial breeding of cattle (cows, oxen, bulls, bullocks, steers, heifers and calf et al)
- Responsible for managing boarding services, breeding services, dairy support services, livestock health services, farrier services, and shearing services et al.
- Works closely with the General Manager to achieve the organizations’ goals and objectives
Sales and Marketing Officer
- Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
- Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of new business
- Writing winning proposal documents, negotiate fees and rates in line with company policy
- Responsible for handling business research, marker surveys and feasibility studies for clients
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
- Develops, executes and evaluates new plans for expanding increase sales
- Documents all customer contact and information
- Represents the company in strategic meetings
- Helps to increase sales and growth for the company
Field Workers/Contract Staff
- Responsible for feeding cattle and other livestock as instructed by the supervisor
- Responsible for cleaning the cattle ranch
- Change the water in the water trough/trench as instructed by the supervisor on a regular basis
- Handles farm implements and machines as instructed by the section manager/supervisor
- Assists in handling the breeding of cattle
- Carries out task in line with the stated job description
- Assist in transport working tools and equipment from the farm and back to the designated store room
- Handles any other duties as assigned by the farm manager
Client Service Executive/Front Desk Officer
- Welcomes guests and clients by greeting them in person or on the telephone; answering or directing inquiries.
- Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
- Manages administrative duties assigned by the cattle ranch manager in an effective and timely manner
- Consistently stays abreast of any new information on the company’s products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients
- Receives parcels/documents for the company
- Distributes mails in the organization
- Handles any other duties as assigned my the line manager
6. SWOT Analysis
Perry Coleman and Family Cattle Ranch, LLC do not intend to launch out with trial and error hence the need to conduct a proper SWOT analysis.
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 business that will favorably compete with leading cattle rearing/livestock farms in the United States of America and in the rest part of the world.
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 that was conducted on behalf of Perry Coleman and Family Cattle Ranch, LLC;
Our strength as a cattle rearing business is the fact that we have healthy relationships with loads of major players (agriculture merchants) in the livestock farming industry; both suppliers and buyers within and outside of the United States.
We have some of the latest cattle rearing machines; tools and equipment that will help us breed our cattle (cows, oxen, bulls, bullocks, steers, heifers and calf et al) in commercial quantities with less stress. Aside from our relationship (network) and equipment, we can confidently boast that we have some the most experienced hands in cattle rearing/livestock farming industry in our payroll.
Our weakness could be that we are a new cattle rearing business in the United States and we may not have the required cash to pump into the publicity of our business. We are aware of this and from our projection will overcome this weakness with time and turn it to a major advantage for the business.
The opportunities that are available to us cannot be quantified, we know that there are loads of homeowners, and industries that will source for cattle ( cows, oxen, bulls, bullocks, steers, heifers and calf et al ), beef, and milk and also industries that will source for the raw materials from our livestock farms both in the United States of America and other parts of the world.
Some of the threats and challenges that you are likely going to face when you start your own cattle rearing are global economic downturn that can impact negatively on household spending, bad weather cum natural disasters ( draughts, epidemics ), unfavorable government policies and the arrival of a competitor ( a commercial farm that rear same animals ) as our cattle ranch within same location.
There is hardly anything you can do as regards this threats and challenges other than to be optimistic that things will continue to work for your good.
7. MARKET ANALYSIS
- Market Trends
One of the common trends in the commercial cattle rearing or livestock farming line of business is that most players in the industry are no longer concentrating only on farming a particular species of livestock or just livestock / cattle farming alone.
They now find it easier to run both livestock farming and crop cultivation. Some even go ahead to include meat and milk processing and packaging business alongside their product offerings; it helps them 8. Our Target Market
Naturally, the target market of those who are the end consumer of livestock farm produce and also those who benefits from the business value chain of the agriculture industry is all encompassing; it is far – reaching.
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. In essence a cattle farmer should be able to sell his or her farm produce to as many people as possible.
We will ensure that we position our business to attract consumers of agriculture produce not just in the United States of America alone but also other parts of the world which is why we will be exporting some of our farm produce either in raw form or processed form to other countries of the world.
Our Competitive Advantage
It is easier to find entrepreneur flocking towards an industry that is known to generate consistent income which is why there are more cattle ranches in the United States of America and of course in most parts of the world.
For example, Statistics has it that there were 2.2 million farms in the United States of America, covering an area of 922 million acres. These goes to show that there are appreciable numbers of farmers in the United States of America but that does not mean that there is stiffer competition in the industry.
As a matter of fact, entrepreneurs are encouraged by the government to embrace commercial farming / livestock 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.
Perry Coleman and Family Cattle Ranch, LLC is fully aware that there are competitions when it comes to selling livestock and meats all over the globe, which is why we decided to carry out thorough research so as to know how to take advantage of the available market in the United States and in other parts of the world.
We have done our homework and we have been able to highlight some factors that will give us competitive advantage in the marketplace; some of the factors are effective and reliable livestock farming processes that can help us sell our livestock and processed meat and milk at competitive prices, good network and excellent relationship management.
Another competitive advantage that we are bringing to the industry is the fact that we have designed our business in such a way that we will operate an all – round standard commercial livestock farms that will be involved in diverse areas such as animal rearing and meat and milk processing and packaging plant. With this, we will be able to take advantage of all the available opportunities within the industry.
Lastly, our employees will be well taken care of, and their welfare package will be amongst the best in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our objectives as a standard commercial cattle rearing business with a meat and milk processing and packaging plant.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Perry Coleman and Family Cattle Ranch, LLC is in the livestock breeding industry for the purpose of maximizing profits hence we have decided to explore all the available opportunities within the industry to achieve our corporate goals and objectives.
In essence we are not going to rely only on the sale of our livestock to generate income for the business. Below are the sources we intend exploring to generate income for Perry Coleman and Family Cattle Ranch, LLC;
- Sale of Cattle(cows, oxen, bulls, bullocks, steers, heifers and calf et al) and milk
10. Sales Forecast
From the survey conducted, we were able to discover that the sales generated by a commercial livestock farm / cattle rearing business depends on the size of the ranch, the network of the business. We have been able to critically examine the cattle rearing industry cum commercial livestock farm business and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast.
The sales projection is based on information gathered on the field and some workable assumptions as well with respect to the nature of cattle rearing business that we run. Below are the projections that we were able to come up with for the first three years of running Perry Coleman and Family Cattle Ranch, LLC;
- First Fiscal Year-: $200,000
- Second Fiscal Year-: $450,000
- Third Fiscal Year-: $700,000
N.B : This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown that can impact negatively on household spending, bad weather cum natural disasters (draughts, epidemics), and unfavorable government policies.
- Marketing Strategy and Sales Strategy
We are quite aware that the reason why some commercial livestock farms hardly make good profits is their inability to sell off their livestock to a larger market. In view of that, we decided to set up a standard meat and milk processing and packing plant to help us maximize profits.
Over and above, we have perfected our sale and marketing strategies first by networking with agriculture merchants and companies that rely on raw materials from the livestock farming industry who are likely to refer become our customers.
In summary, Perry Coleman and Family Cattle Ranch, LLC will adopt the following strategies in marketing our cattle rearing produce;
- Introduce our business by sending introductory letters alongside our brochure to stake holders in the agriculture industry, companies that rely on the livestock farming industry for their raw materials, hotels and restaurants and agriculture produce merchant et al.
- Advertise our business and livestock farms in agro – allied and food related magazines and websites
- List our commercial livestock farms on yellow pages ads (local directories)
- Attend related agriculture and food expos, seminars, and business fairs et al
- Leverage on the internet to promote our business
- Engage in direct marketing
- Encourage the use of Word of mouth marketing (referrals)
11. 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 ( both conventional and non – conventional means ) to advertise and promote the business. We intend growing our business which is why we have perfected plans to build our brand via every available means.
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 cattle rearing business. Below are the platforms we want to leverage on to boost our cattle rearing brand and to promote and advertise our business;
- Place adverts on both print (newspapers and magazines) and electronic media platforms
- Sponsor relevant community based events / programs
- Leverage on the internet and social media platforms like; Instagram, Facebook , twitter, YouTube, Google + et al to promote our business
- Install our Bill Boards on strategic locations all around Dallas – Texas
- Engage in road show from time to time in targeted neighborhoods
- Distribute our fliers and handbills in target areas
- Contact corporate organizations and residence in our target areas by calling them up and informing them of Perry Coleman and Family Cattle Ranch, LLC and the farm produce we sell
- List our commercial livestock farms in local directories / yellow pages
- Advertise our commercial cattle ranch in our official website and employ strategies that will help us pull traffic to the site.
- Ensure that all our staff members wear our branded shirts and all our vehicles and trucks are well branded with our company logo et al.
12. Our Pricing Strategy
Some of the factors that will help you sell your farm produce at the right price that will guarantee that you make profits is dependent on your strategy while some of the factors are beyond your control. For example, if the climatic condition is unfavorable and if there is natural disaster in the location where you have your commercial livestock farm, then it will directly affect the prices of your livestock.
Over and above, if you want to get the right pricing for your livestock, then you should ensure that you choose a good location for your cattle ranch, choose a good breed that will guarantee steady and multiple breeding (prolific breeds), cut the cost of running your farm to the barest minimum.
And of course try as much as possible to attract buyers to your farm as against taking your livestock or even your produce to the market to source for buyers; with this, you would have successfully eliminate the cost of transporting the goods to the market and other logistics.
We are quite aware that one of the easiest means of penetrating the market and acquiring loads of customers for all our cattle rearing produce is to sell them at competitive prices hence we will do all we can to ensure that the prices of our livestock and processed and packaged beef and milk are going to be what other commercial livestock farmers would look towards beating.
One thing is certain; the nature of cattle rearing business we are involved in makes it possible for farmers to place prices for their livestock/farm products based on their discretion without following the benchmark in the industry. The truth is that it is one of the means of avoiding running into loss. The easier you sell off your livestock when they are mature the better for your business.
- Payment Options
The payment policy adopted by Perry Coleman and Family Cattle Ranch, LLC is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Perry Coleman and Family Cattle Ranch, LLC will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via online bank transfer
- Payment via check
- Payment via bank draft
In view of the above, we have chosen banking platforms that will enable our client make payment for farm produces purchase without any stress on their part.
13. Startup Expenditure (Budget)
When it comes to calculating the cost of starting a cattle rearing business / commercial livestock farm, there are some key factors that should serve as a guide. The most important expenses is the construction of the cattle ranch / cages/fencing as the case may be.
For example, the start – up cost for a fish farm is different from the start – up cost for mechanized crop farming, so also the start – up cost for poultry farming is different from the start – up cost of cattle ranch (dairy farm) et al. As a matter of fact, if you choose to start a mechanized crop farming, then you should be willing to raise huge capital base to start the business.
This is so because some cultivation machines/equipment can be pretty expensive. Below are some of the basic areas we will spend our start – up capital in setting up our cattle rearing business/cattle ranch;
- The Total Fee for incorporating the Business in United States of America – $750.
- The budget for key insurance policies, permits and business license – $2,500
- The amount needed to acquire/lease a farm land – $150,000
- The amount required for preparing the farm land (for construction of cattle ranch and cages/fencing et al et al) – $100,000
- The cost for acquiring the required working tools and equipment/machines/fencing et al– $50,000
- The amount required for purchase of the first set of cattle (cows, oxen, bulls, bullocks, steers, heifers and calf et al) – $150,000
- The Cost of Launching an official Website – $600
- The amount required for payment of workers for a period of 3 months – $100,000
- Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – $2,000
Going by the report from detailed research and feasibility studies conducted, we will need an average of $650,000 to start a standard cattle rearing/commercial livestock farming business in the United States of America.
Generating Funding/Startup Jonah Perry Coleman and Family Cattle Ranch, LLC
No matter how fantastic your business idea might be, if you don’t have the required money to finance the business, the business might not become a reality. Finance is a very important factor when it comes to starting a business such as cattle rearing.
No doubt raising start – up capital for a business might not come cheap, but it is a task that an entrepreneur must go through.
Perry Coleman and Family Cattle Ranch, LLC is a family owned business and it will be financed by the owners of the cattle ranch – Perry Coleman and family. These are the areas where we intend sourcing for fund for Jonah Livingston and Family Farms Ltd;
- Generate part of the start – up capital from personal savings and sale of his stocks
- 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).
N.B: We have been able to generate about $200,000 (Personal savings $150,000 and soft loan from family members $50,000 ) and we are at the final stages of obtaining a loan facility of $450,000 from our bank. All the papers and document has been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.
14. Sustainability and Expansion Strategy
The future of a business lies in the numbers of loyal customers that they have the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business (company), then it won’t be too long before the business close shop.
One of our major goals of starting Perry Coleman and Family Cattle Ranch, LLC is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to sell our farm produce ( livestock and processed beef and milk ) a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.
Perry Coleman and Family Cattle Ranch, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our organization’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner of our business strategy.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of five years or more as determined by the management of the organization. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
- Business Name Availability Check : Completed
- Business Incorporation: Completed
- Opening of Corporate Bank Accounts various banks in the United States: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of All form of Insurance for the Business: Completed
- Leasing of farm land in Dallas – Texas: Completed
- Conducting Feasibility Studies: Completed
- Start – up Capital Generation: Completed
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Design of The Company’s Logo: Completed
- Graphic Designs and Printing of Packaging Marketing / Promotional Materials: Completed
- Recruitment of employees: In Progress
- Building /construction of cages and fence et al: In Progress
- Purchase of the needed working tools, machines and equipment: Completed
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business (Business PR): In Progress
- Farm land Treatment, Health and Safety Arrangement: In Progress
- Establishing business relationship with key players in the industry (agriculture farm produce merchants and transporter / haulage): Completed
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How to write a business plan for a cattle farm?
Are you an aspiring cattle farmer looking to start up a business, or an existing one looking to expand and become more profitable? If so, then writing a business plan for your cattle farm is essential.
A well-crafted business plan can help you identify potential opportunities and risks associated with running a cattle farm, as well as guide you on how best to manage the operations of the farm.
In this in-depth guide, we’ll explore why it’s important to write a business plan for your cattle farm, what information is required to create one, what should be included in the document itself, and which tools are available that can make the process easier.
Let’s get started!
In this guide:
Why write a business plan for a cattle farm?
- Information needed to create a business plan for a cattle farm
- What goes into your cattle farm financial forecast?
- The written part of a cattle farm business plan
- What tool should I use to write my cattle farm business plan?
To draw up a roadmap
A business plan for a cattle farm helps you define your objectives and set goals for the next 3-5 years, which can be incredibly useful for achieving success in the long run.
The writing process of a business plan requires careful consideration of all aspects of running your cattle farm, from financial management to sales & marketing strategies and operational procedures.
Having these clear objectives laid out ahead of time will help ensure that your cattle farming venture runs smoothly and achieves its desired outcomes.
To compare financials and track progress
One of the main benefits of writing a business plan for a cattle farm is to be able to regularly compare your actual financial performance against what you planned in your forecast, and make adjustments where needed.
This enables you to maintain visibility on your future cash flows and make informed decisions about investments to grow your farm.
To secure funding
If you want to receive capital from investors or banks, you must have a comprehensive cattle farm business plan.
Financiers will be looking closely at your venture's growth prospects, profitability, and cash flow to estimate the possible returns on their investment.
Now that you know why it’s important to write a business plan for a cattle farm, let's look at the information needed to create one.
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What information is needed to create a business plan for a cattle farm?
Carrying out market research for a cattle farm.
Conducting market research is an essential step before creating a business plan for a cattle farm. Market research can help you to estimate revenues and provide insights into potential areas of growth or decline.
When you embark on market research of your cattle business, you seek to answer the following questions:
- Is the cattle industry growing?
- What segments (processed milk products, beef processing and packaging, breeding services, and cowhide sale) of the market are most attractive?
- Who is the competition?
- How long does it take from calving to sales?
- What is the best time for breeding?
- What are sales and profit margins like?
- What are the major trends in the cattle industry? For example, consumers are more interested in organic-bred cattle than those bred using hormones, steroids, and antibiotics.
This information will help you create and communicate in your business plan the strategies that will give your farm the best chance for success.
Developing the marketing plan for a cattle farm
Creating a sales & marketing plan for your cattle farm is the next step.
Having a concrete action plan in place will be necessary to create an accurate budget for sales and marketing expenses in your business plan, and to ensure that you have sufficient resources to deliver your sales forecast.
The staffing and equipment needs of a cattle farm
Before starting a cattle farm business plan, it is also key to take into consideration the investments and recruitment plan.
This will ensure that all necessary costs are accounted for and that sufficient capital is available to launch or grow the venture.
Some of the costs you must be aware of includes:
- Land purchase
- Fencing the land
- Land preparation
- Water source or supplies
- Tools and equipment costs
- Cattle shelter
- Cattle purchases
- Licenses and permits
Once you have gathered all the necessary information to create the business plan for your cattle farm, it is time to start building the financial forecast.
What goes in the financial forecast for a cattle farm?
The financial forecast of a cattle farm’s business plan will include important information like the Profit and Loss (P&L) statement, balance sheet, cash flow statement, and sources and uses table.
Let’s have a look at each table in a bit more detail.
The projected P&L statement
The projected P&L statement of a cattle farm business plan shows how much revenues it is expected to generate, how sales will evolve and how profitable it can be in the future.
The projected balance sheet of your cattle farm
The balance sheet of a cattle farm is an essential financial statement that provides a snapshot of the farm’s financial position at any given time.
It records the assets, liabilities, and equity of the farm and serves as a valuable tool for owners, investors, and lenders to understand the overall financial health of the venture.
Assets are what a business owns and uses to make money. Examples of assets for a cattle farm include:
- Machinery and equipment
Liabilities on the other hand are what the business owes, they include things like:
- Accounts payable (money owed to suppliers)
- Tax payables
When total liabilities are deducted from total assets, what is left is the owner’s equity which represents the net worth of the business for the owners.
The projected cash flow statement
A projected cash flow statement for a cattle farm is a financial document that shows how much cash the farm will generate and spend in the future.
All transactions that involve the inflow and outflow of cash from a business are recorded in the cash flow statement.
This statement makes it easy for financiers to understand how much money your business produces (or will produce) and how much cash it will need for smooth operations.
The initial financing plan
An initial financing plan is important when writing a cattle farm business plan. It is also called sources and uses table.
This table helps you figure out how much money you will need to start your farm, where it will come from, and what it will be used for.
Having this information all in one place makes it easier to plan your finances and prepare for the future of your business.
A solid financial forecast is the foundation for any successful cattle farm business plan. But to understand how relevant this financial data is, it's essential to provide context within the written part of the plan.
What goes in the written part of a cattle farm business plan?
The written part of a cattle farm business plan consists of 7 main sections:
The executive summary
The presentation of the company, the products and services section, the market analysis, the strategy section, the operations section, the financial plan.
The executive summary section of your cattle farm’s business plan should be a one-page (two-page maximum) summary presented in such a way that will convince investors and banks to read the rest of the plan.
The executive summary of your cattle farm business plan should begin with an overview of the farm itself, including key points such as the purpose of the business, its legal structure, its management team, and any pertinent information about the geographic area in which it operates.
After this should come a quick market overview highlighting who the farm sells to and who it competes with.
Then you should include key financials such as forecasted sales, growth, and profit, as well as expected cash flow projections and capital requirements.
This section of your business plan should include details about the ownership and legal structure of your cattle farm, your farm’s location, and information about the management team.
When writing about the legal structure, you should include information about the legal entity that owns the farm, such as whether it is a sole proprietorship, limited liability company, partnership, or other type of legal ownership.
You should also list the shareholders (people with a stake in the business) and the percentage of ownership each one holds.
The location section should provide an overview of the geographical area where the farm is located, with information about nearby cities and towns, access to major roads and highways, availability of water sources, climate considerations, and any other factors that could influence the success of the farm.
Then you should continue with the presentation of the management team which provides an in-depth look at who is running the farm’s day-to-day operations, including information about each individual's experience, education, and qualifications for their specific roles on the farm.
When writing the products and services section of your business plan for a cattle farm, it is important to clearly describe what breed of cattle (lisrace lumberjack, bos taurus, Angus cattle, etc.) you will raise and any other related services or products that you may offer.
This should include information about the size and quality of the herd, as well as any specialized breeds or special care practices used in raising them.
It is also important to outline any additional sources of income such as selling hay, feed, or providing agricultural consulting services.
Additionally, outlining plans for expansion into new markets could help convince investors that this is an enterprise with growth potential.
When presenting the conclusion of your market analysis in your cattle farm business plan, you should touch on demographic and segmentation information, your target market and competitors, and details about any barriers to entry and relevant regulations that you must comply with.
The demographic and segmentation section should include information about the different customer segments on the market and their purchasing habits for each of the main categories of products and services.
The target market section then zooms in on the segments you intend to serve and why your products and services match what customers are looking for.
Then you should explain who your main competitors are, and how your products and services compare to theirs.
You should also consider any potential barriers that can impede entry into the market (such as a limited availability of farm land for example) and relevant regulations that must be adhered to for compliance purposes.
In the strategy section of your cattle farm's business plan, you should explain your competitive advantage, price strategy, marketing plan, milestones, and risks and mitigants.
To demonstrate the financial viability of your farm, you must be able to clearly explain what your competitive advantage is - i.e. how you intend to compete in an already crowded marketplace.
In addition, you should include details of your pricing strategy and show that it is profitable for you and attractive for customers.
Then comes your sales and marketing plan which outlines how you will reach your target markets, followed by any important and realistic milestones which are achievable within specified time frames.
Finally, you must detail any potential risks associated with your farm and possible solutions or mitigations for these risks.
The operations section of your cattle business plan should provide an overview of the functions and activities of your cattle farm.
It should cover information such as the staffing team, roles of staff members, recruitment plan, operating hours, key assets, and intellectual property needed to operate the farm.
A cattle farm may have the following type of staff on its payroll:
- Farm manager
For example, if you plan on hiring a veterinary technician or farm manager, explain their experience requirements and how they will contribute to the operation of your business.
You should also include your schedule and operating hours to give investors an idea of what a typical business day for your farm looks like, as well as information on the main assets and intellectual property that the business requires to operate.
These assets include any resources such as land, buildings, equipment or technology essential for running the farm. If you plan on leasing or buying any of these assets, provide details about the timelines and costs involved.
Lastly, the operations section should include information about the suppliers that you plan to work with. Be sure to provide details such as the cost of goods, delivery times and any other relevant commercial terms.
This will give investors a better understanding of how you plan on running your farming operation.
The financial plan section of the cattle farm business plan will include the financial forecast (balance sheet, P&L and cash flow statements, and the sources and uses table) that we talked about earlier.
Now that you have a clear understanding of the content of your cattle farm business plan, it's time to look at the tools available for creating one.
What tool should I use to write my cattle farm's business plan?
In this section, we will look at three options for writing a detailed business plan for your cattle farm: writing it yourself with Word and Excel, hiring a consultant to do it, and using online business plan software.
Create your cattle farm's business plan using Word or Excel
Creating a cattle farm business plan with Word or Excel is a possible option but usually not the best one.
On the plus side, both programs are relatively inexpensive. However, there are some significant drawbacks to using these programs to create a business plan.
Excel isn’t an easy tool to use, especially when it comes to creating financial forecasts without making mistakes.
As a result, it will be hard for financiers to trust the accuracy and validity of your numbers, and, therefore, using Excel isn’t recommended unless you are well versed into the art of accounting and finance.
Drafting the written part with Word also suffers from severe flaws. You start from scratch with no instructions to aid you, forcing you to think long and hard before filling up the pages. It is also time-consuming and tedious to format your business plan with Word.
Hire a business plan writer to draft your cattle farm's business plan
Outsourcing the business plan for a cattle farm to a consultant can be a viable solution as they are used to writing such plans. But this solution also comes with certain disadvantages.
Business plan writers may lack the livestock industry expertise needed to anticipate sales and cost accurately, forcing them to rely on your assumptions.
Hiring consultants to write a business plan is also expensive (budget a minimum of $2,000 or £1,500), with additional fees if the business plan needs to be updated after the initial version has been produced.
Finally, hiring a consultant gives you less control over the result than writing it yourself and your vision for the farm's future may not be adequately presented in the business plan.
Use an online business plan software for your cattle farm's business plan
Another alternative is to use online business plan software .
There are several advantages to using specialised software to write a cattle farm’s business plan:
- You are guided through the writing process by detailed instructions and examples for each part of the plan
- You can be inspired by already written business plan templates
- You can easily make your financial forecast by letting the software take care of the financial calculations for you, without error
- You get a professional document, formatted and ready to be sent to your bank
- You can easily update your financial forecast and track it against actual financial performance to see where the farm stands
If you're interested in using this type of solution, you can try our software for free by signing up here .
We hope that this article has helped you to better understand how to write the business plan for a cattle farm. Do not hesitate to contact us if you still have questions.
Also on The Business Plan Shop
- How to write a business plan for a poultry farm
- How to write a business plan for a fish farm
Know someone in the farming industry? Share this article with them!
Founder & CEO at The Business Plan Shop Ltd
Guillaume Le Brouster is a seasoned entrepreneur and financier.
Guillaume has been an entrepreneur for more than a decade and has first-hand experience of starting, running, and growing a successful business.
Prior to being a business owner, Guillaume worked in investment banking and private equity, where he spent most of his time creating complex financial forecasts, writing business plans, and analysing financial statements to make financing and investment decisions.
Guillaume holds a Master's Degree in Finance from ESCP Business School and a Bachelor of Science in Business & Management from Paris Dauphine University.
Published on 22 Mar 2023 , last update on 27 Jun 2023 , as per our editorial standards .
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Developing a pork production plan
A pork production plan can help you:
- make the best use of piggery pens, buildings, paddocks and shelters
- set targets for the number of pigs sold, pigs weaned, litters born and sows mated per week
- avoid under or overstocking
- compare marketing opportunities and determine optimum marketing weight for your business.
Step 1: Calculate how many pigs you can accommodate
The number of pigs you can put in each pen also depends on your pen design, the health status of your herd, temperature and ventilation control, and the need to minimise re-mixing of pigs. However, stocking densities must meet the pig welfare code.
- Work out the space available in the weaner pens through to the finisher pens.
- Draw a floor plan of the grower sheds with the measurements for all the pens.
- Calculate the living space in each pen and the total space available, excluding space taken up by feeders.
- Determine the target number of pigs that can be put through the grower spaces each week to keep the sheds fully occupied, with the pigs sold at the most profitable weight. You will need to meet the space requirements stated in the Model code of practice for the welfare of animals: pigs (pig welfare code) or higher allowances, if demanded by the pig buyer.
The same principles apply to free-range systems regarding the number and size of available paddocks.
In addition, for both indoor and outdoor piggeries, you must meet the conditions of the environmental authority to operate.
Step 2: Set breeding herd targets
Once you've worked out how many pigs you can house or run in paddocks, you can then work out your breeding herd's targets.
- determine a target number of litters per week—based on the target number of weaners and the average litter-size weaned
- determine a mating target—based on the target number of litters per week and the average farrowing rate of the herd
- ensure your mating program is planned well in advance so you have the right balance of sows, gilts and boars, allowing for the use of purchased semen. This is the ultimate goal of a production plan.
Step 3: Balance the breeding and grower herd production
Make sure you have enough space for pigs born from your breeding herd. You may need to adjust the plan if your breeding and growing facilities are not balanced. The production plan will identify any bottlenecks in the system and you can use it to consider alternative options.
Review and update your plan regularly, particularly in the early stages. Actual production must be checked against the targets set for the business.
- Last reviewed: 6 Aug 2020
- Last updated: 22 Nov 2022
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How to draft a business plan – Part 2
A farmer’s production plan, describing the farm’s resource potential, the type of enterprise, planned production output, and the existing output is an important part of a business plan..
It’s important to have a business plan when you apply for a loan. As Phatisa’s agribusiness expert Duncan Pringle says, a business plan must include information on the loan’s purpose, applicant/s details, the business location, the production plan, marketing plan, management plan, financial plan, and a risk assessment.
READ: To make a profit, first make a plan
This week we look at the production plan, which should show the farm’s resource potential with production areas, the enterprise type, planned production output, and, if available, the current level of output.
Firstly, you must determine your resource base. What natural resources will your business depend upon?
You’ll need to show that you have considered the soil, climate, vegetation, water resources and terrain. For example, if the terrain is too steep for crops, instead plant a tree crop, or use the land for grazing. Climatic limitations will also dictate what crops you can grow.
If you wish to go into poultry, the resource base would be the buildings as physical assets and not the natural resource base. Provide details about buildings and infrastructure. Consider if there is water, road access and electricity. For example, how will you provide electricity if your production system needs power?
You must also share your production expectations, known as an input/output analysis. Inputs include how much fertiliser and seed you need to buy and outputs are the expected yields. If you’re producing maize, show if you’ll be using conventional mechanised production or a minimum tillage system.
If you’re beef farming, show the number of livestock units the veld and pastures can carry and what production system you’ll use. Will you be producing weaners or oxen? What will your level of productivity be for calving percentage and cattle weight gain? That will determine how much product you must sell.
The production plan should also include clear details on the capital expenditure you’ll need for, say, on irrigation equipment or a shed.
Source: Duncan Pringle, head of Phatisa Agri Business South Africa. Call 031 765 2442, e-mail [email protected] , or visit www.phatisa.com .