NATIONAL OPEN UNIVERSITY OF NIGERIA

BUSINESS CREATION AND GROWTH

(GST 302)

BUSINESS PLAN ON POULTRY FARMING

(FOWL PRODUCTION AND LAYERS

BREEDING

PREPARED BY EMMANUEL SEGUN

ODUGBESAN

MATRIC NUMBER: NOU158116583

May, 2019
1.0 EXECUTIVE SUMMARY
1.1 INTRODUCTION

There are quite a great number of basic needs of man among which is food.

According to Abraham Maslow theory of motivation, food is a basic need for man.

Regardless of the economic situation, human beings must feed. However, nutritious

foods are sought for healthy living and since egg and domestic birds are nutritious

source of food; that makes poultry farming feasible.

1.2 AIMS AND OBJECTIVES

 Our major objective is to grow from very small scale to the biggest poultry farming
enterprise
 Producing eggs in large quantity
 Sales of unproductive birds
 Sales of droppings from the layer birds
 Providing consultancy services
1.3 VISION STATEMENT
Our Vision is to become one of the leading commercial poultry farm and egg

production brands operating on a large scale level not just in the Ogun States but also

the country in general.

MISSION STATEMENT

To contribute to the wellness of the community and beyond by providing quality eggs

at a relatively lower price. Creating employment and training of individuals on the

skills required for poultry farming.

Great Foundation Poultry Farms, and egg Production Company that is committed to

raising chickens and producing eggs for both Ogun State market and the country in
 general. We want our chickens and eggs to flood the nooks and crannies of Nigeria

and other countries of the world.

1.4 SUCCESS INDICATOR

There is a felt-need and great demand for eggs by hotels, restaurants, caterers, holiday resorts

and other related entities in Ijebu-Igbo and its environs. These entities usually procure their

eggs from far places and are inconvenience financially. The establishment of Poultry farm

will cut down transportation activities and their associated costs and risks. There are currently

few reliable egg producers and suppliers based in Ijebu-Igbo.

With the increased awareness on the health implications of red meat; there’s an increased

demand for white meat and birds are a source of white meat.

2.0 DESCRIPTION OF THE ORGANIZATION

2.1 Company Ownership

Great Foundation Poultry is a small scale business owned by 10 (Ten) individuals.

The idea of establishment of a poultry farming, layers breeding specifically was

conceptualized by ten individuals. There are currently few reliable egg producers and

suppliers based in Ijebu-Igbo and demand is higher than supply.

2.3.1 COMPANY LOCATION

This indigenous poultry farm named Great Foundation is located at Ijebu-Igbo, Ogun
State.

2.3.2 ORGANIZATIONAL STRUCTURE

This is why we are committed to only hire professionals and skillful member of staff
(the best hands) within our area of operations.

 Chief Operating Officer

 General Farm Manager
 Human Resources and Admin Manager
 Accountant / Cashier
 Sales and Marketing Executive
 Field Employees
 Front Desk Officer
 3.0 THE PRODUCT AND SERVICES
The products available for sale include:

Eggs produced by layer birds

Layer birds that are no longer productive

Droppings from the layer birds which serves as manure for farmers

And providing Consultancy services

3.1DESCRIPTION OF THE PRODUCE

The birds are fed with right combination of top feeds (Layer smart) under good
environmental condition and given right vaccination which in turn improves the quality of
egg produced and sold.

3.2PRODUCT AND SERVICES UNIQUENESS

 The quality of eggs produced and sold are high and price relatively lower than
that of our competitors.

 Freshness’s a top purchasing factor when it comes to selecting their food. Many
consumers feel that buying local is important.

3.3 TREND OF SALE

We are quite aware that the reason why some commercial poultry farms and egg
production companies hardly make good profits is their inability to sell off their
chickens and eggs as at when due. The product will be supplied to the market through
the distribution chain namely: Wholesalers, retailers and households.

3.4 FITNESS INTO THE CHANGING TECHNOLOGY

The firm will not relent on its effort to keep abreast of technological development. The
acquisition of farm Management software and other state of the arts equipment to
enhance productivity is pertinent.

3.5 FUTURE OF THE FARM PRODUCE

As the human diet evolves towards more animal product intake mainly eggs, the most
nutritious food, both individual and corporate clients seek the health and taste benefits of eggs.

4.0 MARKET ANALYSIS

4.1 MARKET SEGMENTATION

Although, both households and corporate entity regard eggs as an excellent source of protein, which is

at times an alternative to red or white meat. As for the differences, the quantities required and

purchased by corporate clients supersede that of individuals. The corporate market segment is more

lucrative as compared to the individual consumer market segment. This is attributed to the fact that

the segment has a greater growth rate, growth potential and is more profitable. The market

segmentation is all encompassing irrespective of age, gender, life-style, location, e.t.c.

Generally, the market segment for eggs includes:

 Wholesalers
 Retailers
 Franchise store
  Processing entities

4.2 Strategies for target market segmentation

4.2. 1 Consumers’ needs

Eggs have a wide variety of uses. People use them in the preparation of products such

as chicken burgers, scotch eggs, salad, and egg soup among others. Apart from home

consumption, eggs can be used as leavening agents in baked foods, and as an

ingredient in the manufacture of hair shampoo and for the production of egg powder

that can later be incorporated into baby food. Thus, egg is highly demanded.

4.2.2 Market trends

The Poultry and Chicken Egg Production industry has greatly benefited from

campaigns advertising the health benefits of chickens and eggs as a good source of

protein. No doubt, the increased demand of chicken and eggs from households and

food related businesses and of course the growing popularity of specialty and

processed eggs have rapidly improved revenue growth for the industry.

4.2.3 Market growth

In the face of this growth, profit margin has suffered from rising feed costs and also

regulations regarding animal welfare. As a matter of fact, one of the new trends is that

with the recent advancement in technology, poultry farmers can now comfortably

predict and produce the quantities of chickens / birds and eggs per time.

4.3 ANALYSIS OF THE INDUSTRY

Obvious with the need to improve the economy is equally improving the welfare of

our people, providing food and better nutrition structures to make the people feel

comfortable and healthy within the society.

The government, organization and individuals all have a role to play, if we must move

forward in achieving such development. This implores a need for this type of business

to bring development to the people of Ogun state in areas of:

  Feeding the populace in and outside the state

 Providing a source of income to the populace

4.3.1 Strengths

 Our strength as a commercial poultry farm and egg production company is the fact

that we have healthy relationships with loads of major players (agriculture

merchants) in the industry; both suppliers of poultry feeds and medications and

buyers of chickens and eggs within and outside of the state

 Production feeds by ourselves to cut down cost and prevent the purchase of adulterated feeds.

 Acquisition of landed property at a cheaper price.

Weaknesses

 Our weakness could be that we are a new commercial poultry farms and egg

production firm, and perhaps it might take us sometime to attract big time customers

in the industry.

 Non-availability of reliable hatchery around Ijebu-Igbo which makes the cost of

stocking pullets high

 The lack of funding to procure equipment and other assets

4.3.2 Opportunities

 Low cost of transportation within Ijebu-Igbo and Ogun State

 Increased small business support as demonstrated by the increase in small business

support forums, Small Enterprise Development agency and many more

Threat

 Non availability and affordability of vaccines

  Outbreak of diseases

 Bad road transport

 Epileptic power supply

5.0 FINANCIAL ANALYSIS

This means that the start-up can either be low or high depending on your goals, vision

and aspirations for your business. The tools and equipment that will be used are

nearly the same cost everywhere, and any difference in prices would be minimal and

can be overlooked.

As for the detailed cost analysis for starting a commercial poultry farm and egg

production business; it might differ in other countries due to the value of their money.

Below are some of the basic areas we will spend our start – up capital in setting up

our commercial poultry farm

5.1 IMPORTANT ASSUMPTIONS.

Land acquisition –N150, 000.00
Building - N600, 000. 00
Fixtures and fittings - N100, 000. 00
Direct cost Price (N)
Layers 2,000 birds 250, 000. 00
Cost of brooding Monthly 100, 000. 00
Feeding 115 bags 200,000.00
Treatment/Vaccines Monthly 55,000.00 605, 000. 00
Indirect cost
Miscellaneous Monthly 100,000.00
Expenses
salaries Monthly 125, 000. 00 225, 000. 00
Total 830,000.00
TOTAL NUMBER OF LAYERS– 2, 000
PRICE PER CRATE FORM FARM is N700
CRATE - 125 crates × N700
= N87, 500.00
UNCRACKED CRATE OF EGGS– 110 crates × N700
= N77, 000
CRACKED CRATE OF EGGS– 15crates × N500
 = N7, 500.00
Sales of droppings from birds per month = N10, 000. 00
DAILY PROFIT ISN77, 000.00 + N7, 500.00= N84,500.00
MONTHLY PROFIT EQUALSN84, 000.00 × 4weeks × 5days = N1, 680,000.00 + N10,
000
MONTHLY SALARY

 Chief Operating Officer 50,000.00

 General Farm Manager 30,000.00
 Accountant / Cashier 25,000.00
 Sales and Marketing Executive 10,000.00
 Field Employees and poultry attendants 10,000.00
Total =N125, 000.00
Total Gross profit equals
N1, 690,000.00– 605, 000. 00(direct cost) = N1, 085, 000. 00
Total net profitN1, 085, 000. 00 – N225, 000. 00 = N860, 000, 00
NOTE: The monthly net profit can be lower or higher than this depending on the market turn
out.
5.2 Financial Indicators
5.2.1 Pricing
The business will make use of accounting and costing systems to determine the unit cost of

the eggs cum the prices of its competitors so as to promote competitiveness depending on the

size of the egg.

size Selling price per crate (N)

Pullet/small 700
medium 850
Jumbo/large 1, 050

fixed cost
Land acquisition – N150, 000.00
Building - N600, 000. 00
Fixtures and fittings - N100, 000. 00
Total – N850, 000. 00

5.3 Break even analysis

Break even points in Unit = Fixed cost
Contribution Margin per Unit
Contribution Margin per Unit = selling price – variable cost per unit