Latheethen Feeds, Inc. currently offers our customers products and supplies (Feed, Wormer, Treats, Beading, etc.) for the following animals:
Latheethen Feeds will continue to offer all of the above great products, while evaluating the desire and need by our customers for the following items.
Latheethen Feeds, Inc. will continue to offer the existing services, but we will also be expanding our services to include the following as customers demonstrate an interest in supporting the addition of such services.
Latheethen Feeds is the only custom feed manufacturer in the Midland, Michigan area and surrounding 50 mile radius. In the past, our market has been individual end users. Recent market analysis suggests that our custom feeds could be marketed to other direct feed stores outside of this 50 mile radius.
In reviewing our existing customer base, and recognize the broad range of local organizations such as 4-H and Future Farmers of America (FFA) and area farms and ranches, we have seen the possibilities for potential market growth. Latheethen’s has never had a direct sales force, advertised, or approached the specialized market they dominate with any zest for growth.
More than sixteen years in this business with success in the creation of formulas of high quality, cost-contained custom feed, mixed with the energy of youth and enthusiasm to grow this family business is greatly reinforced by the simple market analysis outlined below.
Latheethen Feeds, Inc. will focus on the following markets:
Market Analysis | |||||||
2004 | 2005 | 2006 | 2007 | 2008 | |||
Potential Customers | Growth | CAGR | |||||
4-H Enrollments | 5% | 9,846 | 10,338 | 10,855 | 11,398 | 11,968 | 5.00% |
Cattle Farms | 2% | 1,450 | 1,479 | 1,508 | 1,538 | 1,570 | 2.00% |
Horse Owners | 5% | 2,750 | 2,887 | 3,032 | 3,183 | 3,343 | 5.00% |
Hunters | 8% | 20,434 | 22,068 | 23,834 | 25,740 | 27,800 | 8.00% |
Other Livestock Farms | 3% | 649 | 668 | 23,833 | 25,741 | 731 | 3.00% |
Total | 6.63% | 35,129 | 37,440 | 63,062 | 67,600 | 45,411 | 6.63% |
Strategically targeting all the 4-H enrollments close to our business helps serve the needs and requirements of our local customers, and ties in logically with our marketing plan (see below) and our style of feed store. The youth of the 4-H are our future. These customers have regimented schedules, and find value in exceptional service, low prices and high quality feed. This first tier of our market segment is also the primary focus of our marketing plan, which has a deep commitment to focusing on the support of the 4-H kids and their community.
Our THIRD-TIER group, Horse Owners, will find that Latheethen’s special blend of oats and grains, all mixed in with our high quality minerals, results in premium feed at an affordable cost. All of these things are essential factors in a customer’s feed-buying decision. Our specialty horse feeds are made for both the average horse and for the equine racer, both of which are numerous in our area. We need to market the right avenues to gain industry share in this rapidly expanding market.
Our FOURTH-TIER, Hunters, is simply the largest in number of individual purchasers. Hunters are mostly seasonal customers, from the months of September through December we will see our numbers skyrocket when compared to the other eight months of the year. For projection purposes, we figured on having a low 30% of the total available market (69,232). This total potential market includes hunters from six of our surrounding counties (within a 50 mile radius). The actual number of hunters that stop by on their way to their cabins or blinds is substantially higher than forecasted.
Our FIFTH-TIER, Other Livestock Farms, represents a market that has an abundant number of feed users. Our custom feed mill allows us to manufacture any type of animal feed we desire, which help us acquire the available customers in this tier. From sheep and goat feed to rabbit and turkey feed, we make it all. Again, when we make our high quality feed, we make it with the highest quality products and sell it at wholesale prices. This market is basically up for grabs, as there are currently no competitors within a 125 mile radius that can supply these customers with such a high quality feed at the lowest costs possible.
We acquired our data for our market analysis from the Department of Natural Resources, the 4-H Council, and from USDA National Agricultural Statistics Service.
All of our projections are based on actual, real-life numbers (number of people/farms/etc.). We forecasted conservatively to show the actual amount of business we can easily obtain through a few advertisements and direct marketing.
Currently, Latheethen Feeds, Inc. is involved in the manufacture and retail sale of custom feed and related products. Latheethen Feeds straddles two industries – manufacturers of feed, and retailers of feed and farm supplies. Latheethen’s 16 years of success in the custom feed industry is the strong foundation for the success and continued growth.
There are over 7,000 farm product raw materials businesses in the United States, according to the 2002 U.S. Census Economic report. According to the same source, farm supplies and raw materials wholesalers currently sell over $62,000,000 of goods per year. Of these, only 843 of these were selling poultry and livestock feeds mixed on location. With total sales of $8,141,368, businesses like ours sold an average of $9,658 in goods each, per year. This reflects the fact that most of the custom-feed mixers in the United States are very small operations; many of them are farmers who mix their own feed for their own livestock, and sell the extra to neighbors. Latheethen Feeds started out this way, but expanded its product line with snacks for people, and wild and exotic animal feed. By becoming a full-service custom-feed store, and developing a reputation for great service and high quality feed, we have far surpassed the industry average for revenue.
Our products are purchased from wholesale suppliers and re-sold to retail consumers. Our custom feed is a huge competitor with other retail products. The raw goods and time to manufacture cost at least 80% less than similar feeds. With more focus on the overall quality of our feeds, the cost savings to our customers will become more of a word of mouth advertising from end user to end user. Direct referrals are always the best source of committed customer and sustained reliable growth.
There really is no competitor within a 50 mile radius of Latheethen Feeds for custom feed for the wide variety of animals we provide for. Our tasks are to encourage our customers to make referrals, to implement direct marketing to groups such as the 4H and FFA, and to go out to the various ranches and livestock farms and introduce our company and our line of custom feeds.
At this point, we are a great-kept secret, when comparing our customer base to the existing market research potential.
Within the feed and farm supply industry, businesses compete on price, quality, customer service, and delivery. Customer service can include things like ability to produce a range of quantities, and custom-feed options. Customers must also trust the supplier for regular, reliable service and consistent quality, since sudden changes in feed can really disrupt their animals’ digestion and health.
Our existing customers have pretty routine buying patterns. The same customers come at the same time of the week or every other week. Their deliveries are scheduled for the same time, with the same volumes each time. When asking our customers why they use our products, they always have the same answer: “your custom feed is so good for my animal and it is priced just right.”
Most of our customers have been doing business with us for several years. Solid customer relationships, a friendly atmosphere and being available to provide quality products at a good price all add to a successful bottom line.
We strongly believe that by offering delivery services, we will gain a substantial number of new customers, both through the advantages of the new service, and with the new advertising (signs on our truck). We will gain the recognition of new customers through our focused marketing plan.
Latheethen Feeds, Inc. will be entering into direct sales for the first time. Starting in October and November, we will approach members of our target markets within 10 square miles both via phone and with direct visits. Where possible, we will ask existing customers to provide us with an introduction or to mention us to their neighbors and friends before we approach them. This will both lend credibility and pre-qualify potential customers as genuinely in need of our services, based on others’ knowledge of them.
We will tell them about our current products and services, and then ask them clearly what we need to do to earn their business. We will listen to their desires and individual goals. We will then mirror back to them what they have said, to be sure we understand their needs. Finally, we will create an individualized sales proposal with their specific needs (products, volumes, frequency, price, other services) included.
We will present the proposal as a written agreement ready for signature by both parties to begin doing business.
Follow up calls will go to each customer within 24 hours of each delivery to ensure satisfaction. If for any reason there is an issue, it will be handled immediately by one of the owners directly with the customer.
Latheethen’s has previously been successful do to repeat customers. As the business switches hands we will also focus on keeping the existing customers happy and successfully introducing our new products and services. We will always focus on our repeat customers. The loyalty and respect we get from those customers will all play a big role in growing the business and taking it to the next level.
The sales forecast for Latheethen Feeds, Inc. includes all varieties of feed, as well as non-feed supplies and future forecasts for boarding stable revenue.
Adding the boarding stable will utilize vacant land and make it work for the company. The addition of the boarding stable will add to our company’s feed sales, and to the specialized services we offer. Boarding Stable costs include laundering of horse blankets, feed used by horses during their stay, and wear and tear on grooming instruments.
The annual growth rates fluctuate and are defined as:
The reasoning behind the initial dramatic increase in sales is due to accurate reporting and tracking, and growth of sales (generated through direct sales and advertising). For 2007, 2008 and 2009 we are forecasting significantly increases in our sales as we open the boarding stable. We anticipate that it will take three years to book out all of our stalls.
In 2009, we are forecasting a modest increase of 12.84%, based on the growth of feed sales and stable services alone. We are also planning on bringing back the rodeos and livestock shows that the previous owners have held in past years. This year could prove to be the year to bring back some of the good old days to the new Latheethen Feeds location.
Sales Forecast | |||||
FY 2005 | FY 2006 | FY 2007 | FY 2008 | FY 2009 | |
Sales | |||||
Equine Feed | $38,040 | $39,942 | $41,939 | $44,036 | $46,238 |
Deer Feed | $12,000 | $12,960 | $13,997 | $15,117 | $16,326 |
Livestock Feed | $93,346 | $102,680 | $112,948 | $124,243 | $136,668 |
Misc. Products & Supplies | $6,000 | $7,000 | $8,000 | $9,000 | $10,000 |
Boarding Stable | $0 | $0 | $42,000 | $63,000 | $84,000 |
Total Sales | $149,386 | $162,582 | $218,884 | $255,396 | $293,232 |
Direct Cost of Sales | FY 2005 | FY 2006 | FY 2007 | FY 2008 | FY 2009 |
Corn, Oats, Molasses, Other Ingredients | $40,400 | $42,258 | $44,202 | $46,236 | $48,362 |
Misc. Products & Supplies | $3,000 | $3,500 | $4,000 | $4,500 | $5,000 |
Boarding Stable | $0 | $0 | $8,400 | $12,600 | $16,800 |
Bags, Ties, Pallets, Labels | $1,440 | $1,506 | $1,575 | $1,648 | $1,724 |
Subtotal Direct Cost of Sales | $44,840 | $47,264 | $58,177 | $64,984 | $71,886 |
Emphasize customer service We will differentiate ourselves with CUSTOMER SERVICE! We will establish our business as a clear and viable alternative for our target market, from the scores of competitors known for “do-it yourself,” “no we don’t offer that product,” and “no delivery available.”
Customer service is paramount in our business and our business plan. The management team will accomplish this goal by training employees and by providing encouragement.
The new management team of Latheethen Feeds, Inc. believes that an employee who is happy at work will enjoy working. It is always easier to please customers with staff that cares, a facility that is clean and equipment that is kept in proper working order.
Latheethen Feeds, Inc. will also work toward establishing community involvement programs that will demonstrate how the business can contribute to a better quality of community life. Community project groups such as the 4-H Council, the FFA, Schools, churches, and other groups will be welcomed for tours of the facilities and will be shown how the facility can be used to help raise funds for their needs.
Build a relationship-oriented business Build long-term relationships with customers, not single-visit deals. Become their “feed dealer of choice.” Teach them the value of the relationship.
Focus on target markets We need to focus our offerings on specific population groups as the key market segment we should own. We definitely want to be able to sell to smart, quality conscious customers.
Latheethen Feeds, Inc. has one of the most sought-after competitive edges in the industry. We have our own individual feed mill that can produce any animal feed requested. All we need is a few ingredients and some time to make our specialty custom feeds.
Our custom mill was built and wired with a 3-phase electrical system (industrial strength) and the best equipment on the market today. Other feed stores dream of having access to their own mill; this is where you make most of your money. Instead of having to be the middle man and purchase a large inventory of generic feeds, we custom-blend and produce our own feed to keep the costs down. When we can produce and market feed that costs us nearly 80% less than it costs to purchase a generic feed, we can keep our shelf prices lower than our competitors.
Let’s face it, lower prices + higher quality feed = money in the bank.
From the very first day Latheethen’s was open for business in 1989, the owners never advertised. They let the word get around (word-of-mouth advertising). This has obviously worked in their favor, as they are operating a profitable business, as is reflected in net profit increases annually.
In the future we, the new owners of Latheethen’s, will market our products to new customers in various strategic ways. This will aid in bringing in more customers…and will also aid in spreading the word that we are expanding our business. Most of the existing customers come from within a 30 mile radius of the store. Through delivery, we can offer our products and services to anyone willing to pay for it.
Our next competitive edge is that we will be running our delivery truck on a daily basis (once we implement delivery and obtain the necessary business). Most of our other competitors do not deliver or only deliver within a short distance from their location. Again, we will serve our customers with a higher quality feed, high level of professional service, and be willing to take it to their door.
Our strongest competitive edge is that we are family owned and operated and that our knowledge of the feed industry runs deep. With the resources available, the energy we can contribute at our young age, the raw talent for business and deep understanding of customer service, the potential to grow this already exciting business is tremendous.
Latheethen Feeds, Inc. will implement the following Marketing Strategies upon the business transfer in the following order:
Through marketing our products in these ways, we project that Latheethen’s will almost double its business within the first 2 years of new ownership.
The following detailed milestone table shown identifies the primary tracking points for our initial company takeover, for our growth and our development process. We have included budgets for each subject and the name of which company came in with the lowest bid price.
Milestones | |||||
Milestone | Start Date | End Date | Budget | Manager | Department |
Business Title Transfer | 10/4/2004 | 10/31/2004 | $0 | Chris | Department |
Implement POS System | 11/1/2004 | 11/30/2004 | $6,000 | Dennis | Department |
Print Product Catalogs | 11/1/2004 | 11/30/2004 | $250 | Dennis | Department |
Buy Delivery Truck | 11/1/2004 | 12/1/2004 | $15,000 | Dennis | Department |
Begin Delivery Service | 12/1/2004 | 12/5/2004 | $0 | Dennis | Department |
Advertise in Newspapers | 11/1/2004 | 12/31/2004 | $1,000 | Dennis | Department |
Affiliate with related website | 11/1/2004 | 12/31/2004 | $400 | Dennis | Department |
Contact 200 potential customers | 11/15/2004 | 1/1/2005 | $0 | Dennis & Kay | Department |
Build Web Site | 11/1/2004 | 1/15/2005 | $1,500 | Dennis | Department |
Get 50 new contracts | 1/1/2005 | 3/1/2005 | $0 | Dennis & Kay | Department |
Track hunter snack preferences | 11/1/2004 | 3/1/2005 | $0 | Dennis | Department |
Average livestock feed sales of $7775/month | 11/1/2004 | 10/31/2005 | $0 | Dennis | Department |
Renovate Boarding Stable | 3/1/2006 | 10/1/2006 | $100,000 | Dennis | Department |
Landscaping, fencing, etc. | 10/1/2006 | 7/1/2007 | $25,000 | Dennis | Department |
Totals | $149,150 |
Latheethen Feeds, Inc.’s website will enable us to offer customers current information on special sales, promos, new product releases, events, and public service announcements. We also plan on utilizing the Web to sell and market our products and services. An e-store will also be implemented into our web design, allowing customers to place orders for the feed they need right on our website. We will be able to accept and process check and credit card orders immediately online. Our customers will still have the options of paying by cash, check or money order as well.
Our website will be promoted through the use of sponsor listings and affiliate memberships [confidential and proprietary information removed]. Our site will be registered with all of the major search engines. We will also share links with our distributors and manufacturers.
Latheethen Feeds, Inc.’s website will be initially developed with few internal technical resources. IPowerWeb will host the site and provide the technical back end. MX-Productions will produce the graphics, logos, artwork, and flash media as they will be developing our website from scratch. Our site will be maintained by one of the owners.
Latheethen Feeds, Inc. is presently made up of three employees. The two current owners and one mill operator put in approximately 75 hours a week. As the new business ownership takes effect and various marketing plans are implemented, the product volume will increase. There is sufficient room in the production mill to expand and produce more feed daily. It is planned that the two new owners will oversee the production and day to day business practices.
We will also be contracting a new outside CPA to handle the corporate book keeping and business accounts (listed in the Profit and Loss table). We value and understand how important proper accounting and reporting of all sales activities are to the successful growth of a company. It is through development of this accuracy that true business growth will be verified and available for the continued security of this well-established family business.
Latheethen Feeds, Inc. is currently run and operated by one person in the mill and one person in the store. In time, as we implement our marketing plan, we will need to hire in an additional person to assist in the mill, and possibly another person to assist Kay in the store. We also could possibly need to hire a delivery person in the year 2005. When the business expands with new customers and larger feed orders, Dennis will need to be on site to assist Kay with inspecting the orders prior to delivery to ensure quality and accuracy of all orders. As growth evolves other family members may be of age to assist in the processes or employees may need to be placed.
As we expand we will hire independent contractors. We believe this way would best suite a company our size. Instead of spending the amount of money required by law to actually hire an employee, we feel we would all benefit more from setting up our personnel in this aspect.
Personnel Plan | |||||
FY 2005 | FY 2006 | FY 2007 | FY 2008 | FY 2009 | |
Dennis | $12,000 | $18,000 | $20,000 | $25,000 | $25,000 |
Kay | $12,000 | $15,000 | $15,000 | $15,000 | $15,000 |
Extra Mill Operator | $7,000 | $12,000 | $18,000 | $18,000 | $24,000 |
Extra Store Help | $0 | $0 | $10,000 | $15,000 | $18,000 |
Total People | 3 | 3 | 4 | 4 | 4 |
Total Payroll | $31,000 | $45,000 | $63,000 | $73,000 | $82,000 |
The financial plan is to borrow $15,000 now as a short-term loan from Citizens Bank, at an interest rate of 7%, to buy a delivery truck suitable to our needs. We will repay this loan within two years from the cash flow of the business. This truck will allow us to expand our services to include delivery, giving us a further edge over the local competition and enabling us to further expand into our target market, while increasing recognition of our name and services.
The second phase of the plan is to borrow $135,000 in long-term loans from the bank in early 2006, to fund the renovation of the existing property’s barn and outbuilding into a structurally-sound, attractive, and livable horse boarding stable, and to install fencing and landscaping suitable to that purpose. This renovation will be completed within 7 months, although final landscaping and fencing is not expected to be finished until early 2007. We will repay this loan over 10 years. We will secure this loan with our equity in the value of the existing property. The boarding stable will open up a new revenue stream for the business, and attract new steady customers.
With aggressive target marketing and the sales strategies outlined above, we will increase sales over 3% in the first year. We expect a bigger increase in year two, with the extensive renovation generating some free publicity and with existing customers making referrals, but the largest expansion is planned for 2008, when we can first realize a full year’s revenue from the boarding stable.
From the very start, the new owners of Latheethen’s will start building the business and taking it to the highest level. The new owners have bright futures ahead of themselves, as does Latheethen Feeds, Inc. The once small, unknown feed store will be transformed into the area’s premier livestock feed store and equine boarding facility. The new Latheethen Feeds will be capable of hosting large scale rodeos and other livestock shows by the end of 2009.
This business plan was developed for Latheethen Feeds, Inc. assuming the following:
General Assumptions | |||||
FY 2005 | FY 2006 | FY 2007 | FY 2008 | FY 2009 | |
Plan Month | 1 | 2 | 3 | 4 | 5 |
Current Interest Rate | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% |
Long-term Interest Rate | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% |
Tax Rate | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% |
Other | 0 | 0 | 0 | 0 | 0 |
Break-even is based on fixed costs of approximately $5,900 including loan repayment, insurance, maintenance and labor. Additionally, controllables such as service labor, payroll taxes, property taxes, advertising and legal/professional fees are included.
The following chart shows that we need to produce approximately $8,500 from sales per month to break-even (according to the assumptions). That is less than what the previous owners have accomplished in previous years. We strongly believe we will succeed and provide handsome returns for our company and its owners.
Margins are harder to assume. Our FY 2005 gross margin is forecasted at 69.98%. In the following years our gross margin will continue to grow beyond our starting point because of the continued growth in total product sales and the release of our new equine boarding stable. The products manufactured in the mill cost about $3.50 for 50 pounds of feed on average. The lowest sale (market) price on those products is $5.50 with the highest coming in at $10.75. The majority of our gross profit on feed products is made directly as a result of having the luxury of our own custom mill.
Not only will we serve a much higher number of customers monthly than required by this break-even chart, we believe that we are going to possibly double the amount projected in our cash flow charts in this business plan, because we are going to be the only facility of its kind within a 150 mile radius. As advertising and direct sales follow suit from outside areas, our delivery service will prove to be valuable to our company and our customers.
Break-even Analysis | |
Monthly Revenue Break-even | $7,929 |
Assumptions: | |
Average Percent Variable Cost | 30% |
Estimated Monthly Fixed Cost | $5,549 |
Outlined below and in the following table and chart, are some of the intrinsic facets of the projected profit and loss for Latheethen Feeds, Inc.
Cost of sales reflects our cost to manufacture the feed and purchase all other non-manufactured products. Gross margin will continue to rise at a steady pace throughout the years forecasted.
Payroll expenses currently includes income for the two owners. As forecasted, additional employees will be brought aboard as required to keep up with the growing pace of Latheethen Feeds, Inc. Further details are available in our Personnel table (above).
Advertising and marketing expenses (news ads, magazine ads, etc.) are projected to increase as net profits increase and positive results are accomplished as a direct result of the same marketing and advertising. All direct sales and marketing is performed by Dennis. Commissions are not paid to him as a result of a gained customer as he is one of the two major owners of the corporation.
Depreciation forecasted includes normal wear and mechanical tune-ups on trucks, tractors and all equipment in the mill.
Fuel costs are projected to grow as the amount of sales made that require delivery increase. This projected expense includes fuel for the trucks, tractors, etc.
Utilities are projected to increase year to year. The current market prices for utilities will change as the years past. We have prepared for an annual $100 increase.
Insurance: Latheethen’s was quoted an insurance premium of $1,200/monthly, which includes liability, property, theft, fire, and personal insurance. The equipment (Mill machines, vehicles, and tractors) is also included in the monthly premium amount.
Payroll taxes include social security, unemployment and workers compensation, etc. Feed dealers permit and state sales tax license is projected to be paid in one annual installment in the month of January. Latheethen’s anticipates paying sales taxes monthly, and income tax quarterly, as required by law.
All website expenses are listed below, from initial development, to hosting, to account management for our e-commerce transactions.
Boarding Stable: The expensed portion of the barn renovations in year two is shown as an operating expense. The remainder ($125,000) is shown as purchase of new long-term assets in the Cash Flow table, representing the increased value of the property after renovation.
Pro Forma Profit and Loss | |||||
FY 2005 | FY 2006 | FY 2007 | FY 2008 | FY 2009 | |
Sales | $149,386 | $162,582 | $218,884 | $255,396 | $293,232 |
Direct Cost of Sales | $44,840 | $47,264 | $58,177 | $64,984 | $71,886 |
Other Costs of Goods | $0 | $0 | $0 | $0 | $0 |
Total Cost of Sales | $44,840 | $47,264 | $58,177 | $64,984 | $71,886 |
Gross Margin | $104,546 | $115,318 | $160,707 | $190,412 | $221,346 |
Gross Margin % | 69.98% | 70.93% | 73.42% | 74.56% | 75.48% |
Expenses | |||||
Payroll | $31,000 | $45,000 | $63,000 | $73,000 | $82,000 |
Advertising & Marketing | $1,110 | $1,500 | $1,800 | $2,100 | $2,400 |
Depreciation | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 |
Fuel | $7,185 | $7,490 | $7,822 | $9,000 | $9,600 |
Maintenance of Delivery Truck | $3,000 | $3,500 | $3,500 | $3,500 | $3,600 |
Utilities | $3,072 | $3,400 | $3,600 | $3,600 | $3,600 |
Insurance | $14,400 | $14,400 | $15,400 | $15,400 | $15,400 |
Payroll Taxes | $0 | $0 | $0 | $0 | $0 |
Postage | $180 | $180 | $190 | $190 | $210 |
Bank Charges | $240 | $240 | $240 | $240 | $240 |
Stable Renovation Expenses | $0 | $10,000 | $0 | $0 | $0 |
Accounting & Legal | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 |
Feed Dealers Permit | $15 | $15 | $15 | $15 | $15 |
Website Development | $1,500 | $0 | $300 | $0 | $200 |
Website hosting | $300 | $300 | $300 | $300 | $300 |
Online Payment Account Mgmt | $360 | $360 | $380 | $380 | $400 |
Sales Tax License | $25 | $25 | $25 | $25 | $25 |
Total Operating Expenses | $66,587 | $90,610 | $100,772 | $111,950 | $122,190 |
Profit Before Interest and Taxes | $37,959 | $24,708 | $59,935 | $78,462 | $99,156 |
EBITDA | $40,959 | $27,708 | $62,935 | $81,462 | $102,156 |
Interest Expense | $729 | $4,457 | $8,033 | $7,088 | $6,143 |
Taxes Incurred | $11,169 | $6,076 | $15,571 | $21,412 | $27,904 |
Net Profit | $26,061 | $14,176 | $36,332 | $49,962 | $65,109 |
Net Profit/Sales | 17.45% | 8.72% | 16.60% | 19.56% | 22.20% |
The cash flow projection for Latheethen Feeds, Inc. shows that provisions for ongoing expenses are adequate to meet the needs of the company, as the business generates sufficient cash flow to support operations and future expansions.
Cash flow projections are critical to our success. The monthly cash flow is shown in the illustration, with one bar representing the cash flow per month and the other representing the monthly balance. The annual cash flow figures are included here and in our Cash Flow table. Detailed monthly numbers are included in the Appendix.
Cash Flow shows the purchase of long-term assets as follows:
The table also shows the new loans required, and the projected repayment schedules.
Pro Forma Cash Flow | |||||
FY 2005 | FY 2006 | FY 2007 | FY 2008 | FY 2009 | |
Cash Received | |||||
Cash from Operations | |||||
Cash Sales | $149,386 | $162,582 | $218,884 | $255,396 | $293,232 |
Subtotal Cash from Operations | $149,386 | $162,582 | $218,884 | $255,396 | $293,232 |
Additional Cash Received | |||||
Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 | $0 | $0 |
New Current Borrowing | $15,000 | $0 | $0 | $0 | $0 |
New Other Liabilities (interest-free) | $0 | $0 | $0 | $0 | $0 |
New Long-term Liabilities | $0 | $135,000 | $0 | $0 | $0 |
Sales of Other Current Assets | $0 | $0 | $0 | $0 | $0 |
Sales of Long-term Assets | $0 | $0 | $0 | $0 | $0 |
New Investment Received | $0 | $0 | $0 | $0 | $0 |
Subtotal Cash Received | $164,386 | $297,582 | $218,884 | $255,396 | $293,232 |
Expenditures | FY 2005 | FY 2006 | FY 2007 | FY 2008 | FY 2009 |
Expenditures from Operations | |||||
Cash Spending | $31,000 | $45,000 | $63,000 | $73,000 | $82,000 |
Bill Payments | $75,770 | $103,070 | $116,585 | $129,680 | $143,333 |
Subtotal Spent on Operations | $106,770 | $148,070 | $179,585 | $202,680 | $225,333 |
Additional Cash Spent | |||||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 | $0 | $0 |
Principal Repayment of Current Borrowing | $9,167 | $5,833 | $0 | $0 | $0 |
Other Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 |
Long-term Liabilities Principal Repayment | $0 | $13,500 | $13,500 | $13,500 | $13,500 |
Purchase Other Current Assets | $0 | $0 | $0 | $0 | $0 |
Purchase Long-term Assets | $15,000 | $125,000 | $0 | $0 | $0 |
Dividends | $0 | $0 | $0 | $20,000 | $20,000 |
Subtotal Cash Spent | $130,937 | $292,403 | $193,085 | $236,180 | $258,833 |
Net Cash Flow | $33,449 | $5,179 | $25,799 | $19,216 | $34,399 |
Cash Balance | $33,976 | $39,155 | $64,953 | $84,169 | $118,569 |
The Balance Sheet shows healthy growth of net worth, and strong financial position. The monthly estimates are included in the Appendix. The balance sheet for Latheethen Feeds, Inc. is quite solid. We do not project any trouble meeting our debt obligations. Our management is strong enough and more than capable of keeping the business on track for total repayment of any obligations (loans).
Our major capital asset (the property and affixed buildings) is valued at about $170,000. Our current assets include all the mill equipment ($71,463) and the tractor ($4,000). These items will be purchased upon funding of the requested loan, for the amount of $100,000.
We (the new owners) will also be paying off some old personal debt that will allow us to lower our monthly personal expenses. This will enable us to work hard at growing the business and not have to worry about taking money out of the company for personal reasons. The payroll amounts forecasted will be more than sufficient to cover our personal income needs.
We will have a solid starting balance in the company account. This will allow us to start the business takeover with a security nest and will allow us to grow our cash balance at a more steady pace.
Our projected balance sheet is presented in the table below.
Pro Forma Balance Sheet | |||||
FY 2005 | FY 2006 | FY 2007 | FY 2008 | FY 2009 | |
Assets | |||||
Current Assets | |||||
Cash | $33,976 | $39,155 | $64,953 | $84,169 | $118,569 |
Inventory | $5,970 | $6,293 | $7,746 | $9,038 | $10,377 |
Other Current Assets | $75,463 | $75,463 | $75,463 | $75,463 | $75,463 |
Total Current Assets | $115,409 | $120,910 | $148,162 | $168,670 | $204,408 |
Long-term Assets | |||||
Long-term Assets | $185,000 | $310,000 | $310,000 | $310,000 | $310,000 |
Accumulated Depreciation | $42,089 | $45,089 | $48,089 | $51,089 | $54,089 |
Total Long-term Assets | $142,911 | $264,911 | $261,911 | $258,911 | $255,911 |
Total Assets | $258,320 | $385,821 | $410,073 | $427,581 | $460,319 |
Liabilities and Capital | FY 2005 | FY 2006 | FY 2007 | FY 2008 | FY 2009 |
Current Liabilities | |||||
Accounts Payable | $10,620 | $8,279 | $9,699 | $10,745 | $11,874 |
Current Borrowing | $5,833 | $0 | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 | $0 | $0 |
Subtotal Current Liabilities | $16,453 | $8,279 | $9,699 | $10,745 | $11,874 |
Long-term Liabilities | $0 | $121,500 | $108,000 | $94,500 | $81,000 |
Total Liabilities | $16,453 | $129,779 | $117,699 | $105,245 | $92,874 |
Paid-in Capital | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 |
Retained Earnings | $214,805 | $240,866 | $255,042 | $271,374 | $301,336 |
Earnings | $26,061 | $14,176 | $36,332 | $49,962 | $65,109 |
Total Capital | $241,866 | $256,042 | $292,374 | $322,336 | $367,446 |
Total Liabilities and Capital | $258,320 | $385,821 | $410,073 | $427,581 | $460,319 |
Net Worth | $241,866 | $256,042 | $292,374 | $322,336 | $367,446 |
Latheethen Feeds, Inc.’s projected business ratios are provided in the table below. The final column, Industry Profile, shows significant ratios for the Feed Store Industry, as determined by the Standard Industry Classification (SIC) Index code 5999-0803.
Ratio Analysis | ||||||
FY 2005 | FY 2006 | FY 2007 | FY 2008 | FY 2009 | Industry Profile | |
Sales Growth | 3.37% | 8.83% | 34.63% | 16.68% | 14.81% | 3.97% |
Percent of Total Assets | ||||||
Inventory | 2.31% | 1.63% | 1.89% | 2.11% | 2.25% | 38.92% |
Other Current Assets | 29.21% | 19.56% | 18.40% | 17.65% | 16.39% | 24.26% |
Total Current Assets | 44.68% | 31.34% | 36.13% | 39.45% | 44.41% | 79.54% |
Long-term Assets | 55.32% | 68.66% | 63.87% | 60.55% | 55.59% | 20.46% |
Total Assets | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
Current Liabilities | 6.37% | 2.15% | 2.37% | 2.51% | 2.58% | 43.26% |
Long-term Liabilities | 0.00% | 31.49% | 26.34% | 22.10% | 17.60% | 14.36% |
Total Liabilities | 6.37% | 33.64% | 28.70% | 24.61% | 20.18% | 57.62% |
Net Worth | 93.63% | 66.36% | 71.30% | 75.39% | 79.82% | 42.38% |
Percent of Sales | ||||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 69.98% | 70.93% | 73.42% | 74.56% | 75.48% | 33.23% |
Selling, General & Administrative Expenses | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 20.52% |
Advertising Expenses | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 2.10% |
Profit Before Interest and Taxes | 25.41% | 15.20% | 27.38% | 30.72% | 33.81% | 1.04% |
Main Ratios | ||||||
Current | 7.01 | 14.60 | 15.28 | 15.70 | 17.22 | 1.67 |
Quick | 6.65 | 13.84 | 14.48 | 14.86 | 16.34 | 0.65 |
Total Debt to Total Assets | 6.37% | 33.64% | 28.70% | 24.61% | 20.18% | 2.45% |
Pre-tax Return on Net Worth | 15.39% | 7.91% | 17.75% | 22.14% | 25.31% | 62.21% |
Pre-tax Return on Assets | 14.41% | 5.25% | 12.66% | 16.69% | 20.21% | 6.49% |
Additional Ratios | FY 2005 | FY 2006 | FY 2007 | FY 2008 | FY 2009 | |
Net Profit Margin | 17.45% | 8.72% | 16.60% | 19.56% | 22.20% | n.a |
Return on Equity | 10.78% | 5.54% | 12.43% | 15.50% | 17.72% | n.a |
Activity Ratios | ||||||
Inventory Turnover | 11.97 | 7.71 | 8.29 | 7.74 | 7.41 | n.a |
Accounts Payable Turnover | 8.13 | 12.17 | 12.17 | 12.17 | 12.17 | n.a |
Payment Days | 27 | 34 | 28 | 29 | 29 | n.a |
Total Asset Turnover | 0.58 | 0.42 | 0.53 | 0.60 | 0.64 | n.a |
Debt Ratios | ||||||
Debt to Net Worth | 0.07 | 0.51 | 0.40 | 0.33 | 0.25 | n.a |
Current Liab. to Liab. | 1.00 | 0.06 | 0.08 | 0.10 | 0.13 | n.a |
Liquidity Ratios | ||||||
Net Working Capital | $98,955 | $112,631 | $138,463 | $157,925 | $192,535 | n.a |
Interest Coverage | 52.05 | 5.54 | 7.46 | 11.07 | 16.14 | n.a |
Additional Ratios | ||||||
Assets to Sales | 1.73 | 2.37 | 1.87 | 1.67 | 1.57 | n.a |
Current Debt/Total Assets | 6% | 2% | 2% | 3% | 3% | n.a |
Acid Test | 6.65 | 13.84 | 14.48 | 14.86 | 16.34 | n.a |
Sales/Net Worth | 0.62 | 0.63 | 0.75 | 0.79 | 0.80 | n.a |
Dividend Payout | 0.00 | 0.00 | 0.00 | 0.40 | 0.31 | n.a |
Latheethen Feeds, Inc. is expected to grow at a steady pace. In conversations with other feed owners, this topic is already a common theme. Many feed stores are beginning to experience record breaking growth rates. This is an exciting time to purchase an already established and successful store in this market. As we expand our customer base, offer more products and bring the dreamed of equine boarding stable to life, we will be positioning Latheethen Feeds, Inc. amongst the elite dealers in the state of Michigan.
We will continuously review our business plan as we implement changes. By doing so we will ensure accuracy and stability. Our goal is to take over this great business, protect it, nurture it, and provide for it. Doing these things will enable us to grow and expand the business in a professional atmosphere.
Long-term | ||||||||||
FY 2005 | FY 2006 | FY 2007 | FY 2008 | FY 2009 | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 | |
Sales | $149,386 | $162,582 | $218,884 | $255,396 | $293,232 | $0 | $0 | $0 | $0 | $0 |
Cost of Sales | $44,840 | $47,264 | $58,177 | $64,984 | $71,886 | $0 | $0 | $0 | $0 | $0 |
Gross Margin | $104,546 | $115,318 | $160,707 | $190,412 | $221,346 | $0 | $0 | $0 | $0 | $0 |
Gross Margin % | 69.98% | 70.93% | 73.42% | 74.56% | 75.48% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Operating Expenses | $66,587 | $90,610 | $100,772 | $111,950 | $122,190 | $0 | $0 | $0 | $0 | $0 |
Operating Income | $37,959 | $24,708 | $59,935 | $78,462 | $99,156 | $0 | $0 | $0 | $0 | $0 |
Net Income | $26,061 | $14,176 | $36,332 | $49,962 | $65,109 | $0 | $0 | $0 | $0 | $0 |
Current Assets | $115,409 | $120,910 | $148,162 | $168,670 | $204,408 | $0 | $0 | $0 | $0 | $0 |
Long-term Assets | $142,911 | $264,911 | $261,911 | $258,911 | $255,911 | $0 | $0 | $0 | $0 | $0 |
Current Liabilities | $16,453 | $8,279 | $9,699 | $10,745 | $11,874 | $0 | $0 | $0 | $0 | $0 |
Long-term Liabilities | $0 | $121,500 | $108,000 | $94,500 | $81,000 | $0 | $0 | $0 | $0 | $0 |
Equity | $241,866 | $256,042 | $292,374 | $322,336 | $367,446 | $0 | $0 | $0 | $0 | $0 |
Sales Forecast | |||||||||||||
Nov | Dec | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | ||
Sales | |||||||||||||
Equine Feed | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | |
Deer Feed | $2,800 | $2,800 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $2,800 | $2,800 | |
Livestock Feed | $7,200 | $8,900 | $6,400 | $6,300 | $6,600 | $7,200 | $8,654 | $8,200 | $7,900 | $8,600 | $9,300 | $8,092 | |
Misc. Products & Supplies | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | |
Boarding Stable | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Sales | $13,670 | $15,370 | $10,170 | $10,070 | $10,370 | $10,970 | $12,424 | $11,970 | $11,670 | $12,370 | $15,770 | $14,562 | |
Direct Cost of Sales | Nov | Dec | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | |
Corn, Oats, Molasses, Other Ingredients | $5,600 | $2,800 | $2,800 | $2,800 | $2,800 | $2,800 | $2,800 | $2,800 | $2,800 | $2,800 | $4,000 | $5,600 | |
Misc. Products & Supplies | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | |
Boarding Stable | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Bags, Ties, Pallets, Labels | $120 | $120 | $120 | $120 | $120 | $120 | $120 | $120 | $120 | $120 | $120 | $120 | |
Subtotal Direct Cost of Sales | $5,970 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $4,370 | $5,970 |
Personnel Plan | |||||||||||||
Nov | Dec | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | ||
Dennis | 0% | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 |
Kay | 0% | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 |
Extra Mill Operator | 0% | $0 | $0 | $0 | $0 | $0 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 |
Extra Store Help | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total People | 3 | 3 | 3 | 3 | 3 | 3 | 3 | 3 | 3 | 3 | 3 | 3 | |
Total Payroll | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 |
General Assumptions | |||||||||||||
Nov | Dec | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | ||
Plan Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |
Current Interest Rate | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | |
Long-term Interest Rate | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | |
Tax Rate | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | |
Other | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Pro Forma Profit and Loss | |||||||||||||
Nov | Dec | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | ||
Sales | $13,670 | $15,370 | $10,170 | $10,070 | $10,370 | $10,970 | $12,424 | $11,970 | $11,670 | $12,370 | $15,770 | $14,562 | |
Direct Cost of Sales | $5,970 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $4,370 | $5,970 | |
Other Costs of Goods | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Cost of Sales | $5,970 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $4,370 | $5,970 | |
Gross Margin | $7,700 | $12,200 | $7,000 | $6,900 | $7,200 | $7,800 | $9,254 | $8,800 | $8,500 | $9,200 | $11,400 | $8,592 | |
Gross Margin % | 56.33% | 79.38% | 68.83% | 68.52% | 69.43% | 71.10% | 74.48% | 73.52% | 72.84% | 74.37% | 72.29% | 59.00% | |
Expenses | |||||||||||||
Payroll | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | |
Advertising & Marketing | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $10 | |
Depreciation | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | |
Fuel | $629 | $672 | $542 | $539 | $547 | $562 | $598 | $587 | $579 | $597 | $682 | $652 | |
Maintenance of Delivery Truck | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | $250 | |
Utilities | $256 | $256 | $256 | $256 | $256 | $256 | $256 | $256 | $256 | $256 | $256 | $256 | |
Insurance | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | |
Payroll Taxes | 15% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Postage | $15 | $15 | $15 | $15 | $15 | $15 | $15 | $15 | $15 | $15 | $15 | $15 | |
Bank Charges | $20 | $20 | $20 | $20 | $20 | $20 | $20 | $20 | $20 | $20 | $20 | $20 | |
Stable Renovation Expenses | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Accounting & Legal | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | |
Feed Dealers Permit | $0 | $0 | $15 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Website Development | $500 | $500 | $500 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Website hosting | $25 | $25 | $25 | $25 | $25 | $25 | $25 | $25 | $25 | $25 | $25 | $25 | |
Online Payment Account Mgmt | 15% | $30 | $30 | $30 | $30 | $30 | $30 | $30 | $30 | $30 | $30 | $30 | $30 |
Sales Tax License | $0 | $0 | $25 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Operating Expenses | $5,375 | $5,418 | $5,328 | $4,785 | $4,793 | $5,808 | $5,844 | $5,833 | $5,825 | $5,843 | $5,928 | $5,808 | |
Profit Before Interest and Taxes | $2,325 | $6,782 | $1,672 | $2,115 | $2,407 | $1,992 | $3,410 | $2,967 | $2,675 | $3,357 | $5,472 | $2,784 | |
EBITDA | $2,575 | $7,032 | $1,922 | $2,365 | $2,657 | $2,242 | $3,660 | $3,217 | $2,925 | $3,607 | $5,722 | $3,034 | |
Interest Expense | $88 | $83 | $78 | $73 | $68 | $63 | $58 | $53 | $49 | $44 | $39 | $34 | |
Taxes Incurred | $671 | $2,010 | $478 | $613 | $702 | $579 | $1,005 | $874 | $788 | $994 | $1,630 | $825 | |
Net Profit | $1,566 | $4,690 | $1,116 | $1,429 | $1,637 | $1,350 | $2,346 | $2,040 | $1,838 | $2,319 | $3,803 | $1,925 | |
Net Profit/Sales | 11.46% | 30.51% | 10.97% | 14.19% | 15.79% | 12.31% | 18.88% | 17.04% | 15.75% | 18.75% | 24.12% | 13.22% |
Pro Forma Cash Flow | |||||||||||||
Nov | Dec | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | ||
Cash Received | |||||||||||||
Cash from Operations | |||||||||||||
Cash Sales | $13,670 | $15,370 | $10,170 | $10,070 | $10,370 | $10,970 | $12,424 | $11,970 | $11,670 | $12,370 | $15,770 | $14,562 | |
Subtotal Cash from Operations | $13,670 | $15,370 | $10,170 | $10,070 | $10,370 | $10,970 | $12,424 | $11,970 | $11,670 | $12,370 | $15,770 | $14,562 | |
Additional Cash Received | |||||||||||||
Sales Tax, VAT, HST/GST Received | 0.00% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
New Current Borrowing | $15,000 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Other Liabilities (interest-free) | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Investment Received | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Cash Received | $28,670 | $15,370 | $10,170 | $10,070 | $10,370 | $10,970 | $12,424 | $11,970 | $11,670 | $12,370 | $15,770 | $14,562 | |
Expenditures | Nov | Dec | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | |
Expenditures from Operations | |||||||||||||
Cash Spending | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | |
Bill Payments | $231 | $6,881 | $5,791 | $6,664 | $6,394 | $6,479 | $6,385 | $6,823 | $6,677 | $6,589 | $6,904 | $9,952 | |
Subtotal Spent on Operations | $2,231 | $8,881 | $7,791 | $8,664 | $8,394 | $9,479 | $9,385 | $9,823 | $9,677 | $9,589 | $9,904 | $12,952 | |
Additional Cash Spent | |||||||||||||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Principal Repayment of Current Borrowing | $0 | $833 | $833 | $833 | $833 | $833 | $833 | $833 | $834 | $834 | $834 | $834 | |
Other Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Long-term Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Purchase Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Purchase Long-term Assets | $15,000 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Dividends | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Cash Spent | $17,231 | $9,714 | $8,624 | $9,497 | $9,227 | $10,312 | $10,218 | $10,656 | $10,511 | $10,423 | $10,738 | $13,786 | |
Net Cash Flow | $11,439 | $5,656 | $1,546 | $573 | $1,143 | $658 | $2,206 | $1,314 | $1,159 | $1,947 | $5,032 | $776 | |
Cash Balance | $11,966 | $17,622 | $19,168 | $19,741 | $20,884 | $21,542 | $23,748 | $25,062 | $26,221 | $28,168 | $33,200 | $33,976 |
Pro Forma Balance Sheet | |||||||||||||
Nov | Dec | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | ||
Assets | Starting Balances | ||||||||||||
Current Assets | |||||||||||||
Cash | $527 | $11,966 | $17,622 | $19,168 | $19,741 | $20,884 | $21,542 | $23,748 | $25,062 | $26,221 | $28,168 | $33,200 | $33,976 |
Inventory | $8,904 | $5,970 | $3,300 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $4,370 | $5,970 |
Other Current Assets | $75,463 | $75,463 | $75,463 | $75,463 | $75,463 | $75,463 | $75,463 | $75,463 | $75,463 | $75,463 | $75,463 | $75,463 | $75,463 |
Total Current Assets | $84,894 | $93,399 | $96,385 | $97,801 | $98,374 | $99,517 | $100,175 | $102,381 | $103,695 | $104,854 | $106,801 | $113,033 | $115,409 |
Long-term Assets | |||||||||||||
Long-term Assets | $170,000 | $185,000 | $185,000 | $185,000 | $185,000 | $185,000 | $185,000 | $185,000 | $185,000 | $185,000 | $185,000 | $185,000 | $185,000 |
Accumulated Depreciation | $39,089 | $39,339 | $39,589 | $39,839 | $40,089 | $40,339 | $40,589 | $40,839 | $41,089 | $41,339 | $41,589 | $41,839 | $42,089 |
Total Long-term Assets | $130,911 | $145,661 | $145,411 | $145,161 | $144,911 | $144,661 | $144,411 | $144,161 | $143,911 | $143,661 | $143,411 | $143,161 | $142,911 |
Total Assets | $215,805 | $239,060 | $241,796 | $242,962 | $243,285 | $244,178 | $244,586 | $246,542 | $247,606 | $248,515 | $250,212 | $256,194 | $258,320 |
Liabilities and Capital | Nov | Dec | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | |
Current Liabilities | |||||||||||||
Accounts Payable | $0 | $6,689 | $5,568 | $6,451 | $6,178 | $6,266 | $6,157 | $6,600 | $6,458 | $6,362 | $6,574 | $9,586 | $10,620 |
Current Borrowing | $0 | $15,000 | $14,167 | $13,334 | $12,501 | $11,668 | $10,835 | $10,002 | $9,169 | $8,335 | $7,501 | $6,667 | $5,833 |
Other Current Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Subtotal Current Liabilities | $0 | $21,689 | $19,735 | $19,785 | $18,679 | $17,934 | $16,992 | $16,602 | $15,627 | $14,697 | $14,075 | $16,253 | $16,453 |
Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Liabilities | $0 | $21,689 | $19,735 | $19,785 | $18,679 | $17,934 | $16,992 | $16,602 | $15,627 | $14,697 | $14,075 | $16,253 | $16,453 |
Paid-in Capital | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 |
Retained Earnings | $205,465 | $214,805 | $214,805 | $214,805 | $214,805 | $214,805 | $214,805 | $214,805 | $214,805 | $214,805 | $214,805 | $214,805 | $214,805 |
Earnings | $9,340 | $1,566 | $6,256 | $7,372 | $8,801 | $10,439 | $11,789 | $14,135 | $16,175 | $18,013 | $20,332 | $24,136 | $26,061 |
Total Capital | $215,805 | $217,371 | $222,061 | $223,177 | $224,606 | $226,244 | $227,594 | $229,940 | $231,980 | $233,818 | $236,137 | $239,941 | $241,866 |
Total Liabilities and Capital | $215,805 | $239,060 | $241,796 | $242,962 | $243,285 | $244,178 | $244,586 | $246,542 | $247,606 | $248,515 | $250,212 | $256,194 | $258,320 |
Net Worth | $215,805 | $217,371 | $222,061 | $223,177 | $224,606 | $226,244 | $227,594 | $229,940 | $231,980 | $233,818 | $236,137 | $239,941 | $241,866 |
Inventory Detail | |||||||||||||
Nov | Dec | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | ||
Months of Inventory On-hand | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | |
Minimum Inventory Purchase | $500 | ||||||||||||
Inventory Balance | |||||||||||||
Beginning Inventory Balance | $8,904 | $5,970 | $3,300 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $4,370 | |
Less Inventory Used as COGS | $5,970 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $4,370 | $5,970 | |
Plus Inventory Purchase | $3,036 | $500 | $3,040 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $5,570 | $7,570 | |
Ending Inventory Balance | $5,970 | $3,300 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $3,170 | $4,370 | $5,970 |
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Why starting animal feed business plan.
before starting to talk about how to start animal feed business, let us first introduce animal feed and the animal feed market, what is animal feed? Animal feed is nothing but food consumed by livestock in the process of animal husbandry. The success of commercial livestock farming depends to a large extent on the consistent provision of the highest quality nutritious feed.
While U.S. farmers spend about $220 billion a year on animal feed, globally, the picture isn’t all that different in Europe, Central America, and Asia. In fact, a 2010 study by the United Nations Programme estimated that, By 2020, there will be more demand that will grow by 75%, making animal feed production a great business that you just need to plan correctly.
In India, animal feed production business is an ancillary service of the primary industry. Commercial production of high quality animal feed is a profitable business which gives the growth of the animal husbandry industry and population demanding more resources. As demand increases, the price of these feeds will rise steadily as well, benefiting business owners. Hence, the future prospects for the business look good as the demand for animal products is increasing.
so according to the above information, just thinking about how to start animal feed business plan on a small scale. Don’t worry about starting. We will guide you on all the details such as where to get training for your animal feed manufacturing business, what is a legal license and registration. Mandatory, how profitable is animal feed business, how much investment in animal feed business? and what equipment needed to start animal feed business. Of course, you can start your animal feed business plan anywhere: for example in USA, in India, in Nigeria, in South Africa, in Kenya, and in Philippines and so on.
how profitable is animal feed business? it is not fixed, generally, the annual profit of a small feed factory is directly linked to the annual production capacity. That is to say, the higher the annual output, the higher the annual profit. Usually, the annual output of a small feed factory can reach about 2,000 tons. If the profit is calculated in tons, then the profit in one year amounts to about $100,000-$150,000. This calculation is based on a small feed factory with an annual production of 2000 tons. If you invest in a larger factory, the prospects for profit in the animal feed business are significantly greater.so do you want to invest in an animal feed pellet production line ?
You need two types of capital to run any feed production business: fixed capital and working capital. You need to invest in fixed capital for manufacturing your product, which includes machinery, setting up plants, and similar expenses. Working capital is necessary for paying salaries, overhead, raw materials, transportation, storage, etc.
If you want to invest in a larger animal feed business, you will need approximately $70-1.5 million to start this business. Purchasing quality feed mixer machine and feed pellet mill from suppliers requires most of the money. After that, you must continually supply the ingredients needed to make your food. Please note that the approximate figures above refer to the supply of machinery and materials and do not include the location of the plant or the area where the business is established. Factories can often be located in rural areas at low cost.
But if you just want to invest in a smaller animal feed business, the starting barrier for a small feed mill is still low compared to the investment costs of a large feed mill , which often run into the millions. Typical investment costs are around $20,000 to $100,000. Of course, the costs are only estimates, and the exact costs are subject to the actual situation.
Small feed factories generally refer to the kind of production and processing factories that are similar to family workshops. The required site requirements are not high. You only need to purchase 1 feed crusher, 1 feed mixer, 1 feed pellet machine and 1 sealer, and then purchase some processing raw materials. Such as fish meal, corn, soybean, whey powder, rapeseed meal, etc., basically have the ability of feed production and processing. but if you invest in large feed factory, you need more equipment. you can check our list of feed mill machinery here.
1. need to know the specific procedures for setting up a factory.
this is the first step of how to start animal feed business plan, To open a small pellet production line , you need to go to the local industrial and commercial bureau for industrial and commercial registration, then obtain a production and operation license, and apply for a tax registration certificate at the taxation department. For the related procedures of tax exemption of products, it is generally recommended to apply for trademark registration at the county or provincial level in the industrial and commercial department, considering the protection of feed brands.
The location of the cattle feed business plan should be closest to the customer. Also, you need your business to be as close to suppliers as possible. The further away you are from your customers, the more you will have to pay for advertising and delivery. Generally, a small feed factory needs to have an independent factory area, the production workshop needs to meet the requirements of the production process, and the traffic should be convenient. Lighting, dust removal, ventilation and firefighting measures.
equipment is most importance in how to start animal feed business, equipment requirements are simple and efficient, with a focus on production performance that allows equipment manufacturers to select affordable parts and maintain easy-to-maintain service. Relatively speaking, the return on investment for feed mills is still relatively high. If we can continue to improve the quality of our products while working to build our team and do precise work in our local regional market, the outlook is still very promising.
Conduct market research on the livestock in your area and plan to provide your ideas to investors. Choose the most attractive areas to market your plan and calculate your revenue projections to set your initial market share.
It is critical to consider buying in bulk during the harvest season to get the highest prices for plant-based materials. Include this in your business plan. You will need to describe the sources of materials and possible suppliers after a market assessment.
Setting up a poultry feed mill business, what is the cost of a fish feed mill plant in india, fish feed extruder machine in spain, how to start fish farming business, 9 steps of setting up small fish feed plant, animal feed pellet production line, fish feed making machine in nigeria, fish feed making machine in pakistan, poultry feed production plant, fish feed machine price in bangladesh, fish feed extruder export to ghana, feed making machine price in kenya.
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The feed industry is quite competitive, established players enjoy economies of scale and if you are starting for animal feed production business, you need a thoroughly analysed plan to earn you an advantage for a good initial market share. This next article will provide every animal feed mill investor with some viable advice to help with business success.
Cost of Animal Feed Production Business Plan
The potential of the animal feed processing market is expanding as the global population continues to grow and the demand for meat and dairy products increases. According to Reports and Data, the global animal feed production market is expected to reach USD 536 billion by 2028, growing at an estimated CAGR of 4.3%. This reflects the strong for-profit nature of the market and offers vast business opportunities for animal feed mill plant investors.
Feed processing is the foundation of the farming industry and directly affects the production of meat, dairy products and eggs. Investing in efficient animal feed processing machines can significantly increase productivity, reduce costs and improve product quality.
The use of efficient feed making machines reduces the waste of raw materials and improves the nutritional value of the feed, thus increasing the daily weight gain of the animals . This means farmers can produce more meat and dairy products in the same amount of time.
There is a wide range of animal feed products, which are mainly categorized into pellet feeds, powder feeds, and liquid feeds . Pellet feed has a high market demand due to its balanced nutritional composition and easy storage and transportation. In addition, functional feeds (e.g. adding probiotics, enzymes, etc.) are gradually gaining favor among farmers, opening up new profit space.
According to market research, the initial investment in updating and upgrading equipment can generally be recovered within 3 to 5 years , after which higher profitability can be enjoyed. In an increasingly competitive market, the ability to keep production costs down and quality upgraded will have a direct impact on the profitability of animal feed factories.
Despite the promising market outlook, the animal feed mill production business also faces several challenges:
Analyze the potential of your chosen animal feed production line thoroughly. You need to narrow down to a specific market, manufacturing feeds for all animals may not be a good idea, production methods for fish feeds and pet feeds is no where close to that of poultry, pig and cattle feeds . To maximize success, focus on a specific animal feed segment rather than attempting to serve all markets. Specializing allows for more tailored production methods and equipment, meeting the distinct nutritional needs and quality standards of each animal type effectively.
The investment animal feed production business plan will focus on the plant and equipment as the biggest expenditure in the initial costs, you need to invest in high quality equipment to achieve quality feeds. Before setting a budget of feed mill and shopping for animal feed plant machines, you may need the advice of a feed plant engineering expert.
A good animal feed production business plan locates the feed production plant closest to the customers. You also want your site to be as close to your suppliers as possible, the further you move from your customers the higher your distribution cost and advertising cost .
It is important to plan for bulk buying in harvest seasons for plant based materials for the best prices, in your business plan, you need to consider your material source and possible suppliers after your market evaluation.
Low quality feeds in any market will push you out of business or may cause legal huddles for your startup, a strong formula for feeds will put a small budget for professional opinion in the setting up of the formula and employee training ,
From the animal feed mill layout and site selection to the design of the animal feed processing equipment, the installation process, and the experience of a successful feed processing plant project, it's all critical. An experienced feed mill engineering specialist can provide you with comprehensive support and services to ensure that every aspect is in line with best practice, helping you to enter the feed processing market and succeed. As an animal feed mill machine supplier with nearly 30 years' experience, ABC Machinery can customize a solution for you, whether you're a first-time investor or looking to upgrade. Contact us today for a free quote and professional consultation, and let us help your animal feed production business succeed!
With 25 years of industry experience, our company is dedicated to helping animal feed plant investors avoid risk. We provide animal feed processing equipment that undergoes strict quality control and EU CE certification to ensure that each feed production machine performs reliably and minimizes the risk of production interruption. Our R&D team continues to innovate with thicker steel plate bodies and high-efficiency pure copper core motors to improve equipment stability and energy efficiency.
We also offer customization services, including geographic, process and scale customization, to ensure that animal feed production lines are flexible and adaptable to market changes. At the same time, we provide comprehensive technical support and lifelong services, from market analysis to production training, to help investors master advanced technology and improve management efficiency.
With our integrated feed manufacturing solutions, investors can focus on market development and brand building without worrying about the stability and efficiency of the feed processing line. Our goal is to help feed business investors minimize risk and maximize return on investment through professional services and technical support. Contact us now and let's start the road to a profitable feed production business together.
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The animal feed production business can be initiated with proper planning and know-how about the right mixing formula. Most livestock farmers are always searching for the right food and food supplementary products for their farms. Several different livestock feeds need to serve different requirements legitimately.
1. market research.
In starting livestock feed production, mark et research is a must. You must quantify the demand and accordingly, you will need to select the product that you will produce. This business requires strategic planning and proper inventory management.
3. legal requirements and registrations.
in addition, check local, state, and national regulations regarding animal feed production. It is advisable to obtain the necessary licenses and permits to operate legally.
5. livestock feed manufacturing unit setup.
Livestock feed generally comes in two forms. One is powder form and another is pellet form. According to the product you will need to purchase the machinery. Select machinery according to the proposed capacity of the mill, the types of raw materials available, the types of livestock feed to be produced, and the characteristics of the power supply available.
Storage areas must be waterproof and well-ventilated, and protect against infestation by insects and vermin which can quickly cause substantial losses in weight.
Proper human resource planning is important. This business includes the activity of production, marketing, and admin. The manufacturing part also includes research & development activities. Keep only skilled and experienced manpower. For sales activity, you can also keep sales agents.
You must have a business website . It will help you fetch more customers and create a brand personality. List your product with a popular online marketplace like Amazon, eBay, etc.
Is the livestock feed business profitable.
The amplifying demand in the Asia Pacific market for feed additives, which is due to the rising meat production and export is proving to be an opportunity for this market.
The feeds to be fed are normally decided on the local supplies. Some of the widely used feeds for livestock are grasses, legumes, fodder plants, fruits, vegetables, root crops, cereals, and feeds of animal origin.
How can i ensure the quality of my animal feed, where can i source raw materials for animal feed production.
Look for reputable suppliers of grains, protein sources, and additives. Establish relationships with multiple suppliers to ensure a steady supply.
How can i expand my product line in the future, what are the key trends in the animal feed industry.
Some of the new trends include the development of sustainable and organic feeds, antibiotic-free options, and customized formulations for specific animal breeds.
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If you are thinking about starting an animal food business, you may have questions about what regulatory requirements would apply to your business. In addition to the Food and Drug Administration's (FDA's) requirements, your food business may have to comply with other federal, state, and local requirements. Some requirements apply to all animal food businesses, and some are specific to the type of animal food you are handling or making (for example, whether you are making medicated feed or have to register with FDA as a food facility).
If you are planning to start an animal food business, there are several steps you need to take before marketing your product in the United States, such as:
In addition to operating in the United States, some businesses may be interested in importing or exporting animal food products.
The chart, below, gives you a snapshot of the requirements based on the three most common animal food business scenarios: in-home businesses, on-farm businesses, and commercial businesses. The chart is divided into three sections:
Each requirement is hyperlinked to its corresponding section on this page, so you can easily find the information you need as you start your business. If you need more information, you can find the FDA’s Center for Veterinary Medicine (CVM) email and phone contact information at the bottom of the page.
Requirements that Apply to All Food Businesses | In-home Business | On-Farm Business | Other Businesses/Industry |
---|---|---|---|
yes | yes | yes | |
yes | yes | yes | |
yes | yes | yes | |
yes | yes | yes | |
no | no | yes | |
no | no | yes |
Requirements that Apply if You’re Required to Register as a Food Facility | Description |
---|---|
If you are a very small business you must submit a qualified facility attestation to be exempt from certain requirements of the Preventive Controls for Animal Food during your initial food facility registration and subsequent biennial renewal. | |
Requirements for manufacturing, processing, packing, and holding animal food under current good manufacturing practice (CGMP) and a food safety plan for all businesses that must register as a food facility. | |
Requirements for when registered food facilities must notify FDA that a food (including animal food) may cause serious adverse health consequences (e.g., illness, injury), or death to humans or animals. |
Certain Activities with Additional Requirements | Activity applies to: |
---|---|
Businesses and farms manufacturing, processing, packing, or holding medicated feed. | |
Veterinarians, clients (animal caretakers), manufacturers, and distributors authorizing, manufacturing, distributing, or using medicated feed with a veterinary feed directive (VFD) marketing status. | |
Businesses manufacturing shelf stable low-acid foods in hermetically sealed container, such as pet food in a can or an airtight pouch. | |
Businesses involved in the transportation of animal food, such as shippers, receivers, loaders, and carriers who transport food in the United States by motor or rail vehicle. | |
Businesses that are handling animal food for ruminants, such as cows, sheep, and goats, or handling brain and spinal cord tissue from cattle 30 months of age or over intended for food for any species. | |
Businesses importing animal food into the United States or exporting animal food from the United States. |
Adulteration.
All animal food must meet the requirements in the Federal Food, Drug, and Cosmetic Act (FD&C Act), which prohibits the adulteration of animal food. Common reasons an animal food may be considered adulterated include:
You can find the full legal definition of adulterated food in the U.S. Code (21 U.S.C. 342 codifies the adulteration provisions in section 402 of the FD&C Act) and information about contaminants in animal food on the FDA website.
What is the difference between the FD&C Act and the United States Code (U.S.C.)?
When Congress passes and the President signs a law, they publish it as an “Act.” The Federal Food, Drug, and Cosmetic (FD&C) Act is the foundational law that establishes FDA regulation of certain products and businesses. Congress makes changes to the law by amending it. For example, the Food Safety Modernization Act (FSMA) amends the FD&C Act by adding in new requirements.
The Office of the Law Revision Counsel compiles these Acts and amendments to the law, organizing them by subject, into something called the United States Code (U.S.C.). The U.S.C. contains only the current enacted law. As a result, you may see a reference to Section 402 of the FD&C Act, which is the section on food adulteration, or you might see a reference 21 U.S.C. 342, which is the same information as compiled into the U.S.C. FDA has a helpful explanation about the FD&C Act and U.S.C. at: Federal Food, Drug, and Cosmetic Act (FD&C Act) .
Under the FD&C Act, anything that’s added to or becomes part of an animal food, directly or indirectly, must either be approved as a food additive or it must be considered Generally Recognized as Safe (GRAS) for that use . Approved food additives and ingredients that are GRAS are limited to specific uses. Some ingredients may be safe when used one way, but not safe when used in other ways. For example, xylitol is an artificial sweetener that is an approved food additive for use in human foods, but can be extremely toxic to dogs, and therefore not acceptable for use in dog food .
In addition to federal regulations, the Official Publication of the Association of American Feed Control Officials (AAFCO) contains a list of animal food ingredients and their definitions, a list of approved animal food additives, and a list of ingredients that are considered GRAS for specific uses. Many of the ingredients in the AAFCO Official Publication, however, are not approved food additives and may not meet the criteria needed to be recognized as GRAS for those uses. FDA recognizes the list of ingredients in the Official Publication for their marketing and sale in the U.S. under an exercise of enforcement discretion provided there are no safety concerns with the listed ingredients.
You can find more information about animal food ingredients and additives and how FDA regulates them on the Ingredients and Additives webpage .
Labeling for animal foods marketed in the United States must comply with current federal and state regulations. The FD&C Act defines "labeling" as all labels and other written, printed, or graphic matter upon any article or any of its containers or wrappers, or accompanying such articles. Labeling can include promotional websites, promotional brochures, promotional pamphlets, testimonials, product information sheets, books, etc.
Labels must comply with animal food labeling requirements listed in 21 CFR part 501 , which requires the label to include:
Medicated feed has additional federal labeling requirements. When a Type A medicated article is approved by FDA, the company that makes the article is required to create a model “Blue Bird Label” to guide manufacturers of medicated animal feeds when preparing final printed feed labels. Information from that Blue Bird Label must appear on any medicated feeds made with that Type A medicated article. You can find more information about medicated feed labels on our Blue Bird Labels webpage .
Labeling must also comply with the Federal Food, Drug, and Cosmetic Act's misbranding provisions . In general, a product is misbranded if it does not have required information on the labeling or if it is false or misleading. A label is false or misleading if it contains information that is not true or could confuse consumers, such as implying that an animal food has more of a beneficial ingredient than what is actually included in the animal food.
For state labeling requirements, the best source of information is AAFCO . To promote uniform labeling requirements across all U.S. states and territories, AAFCO developed a set of “Model Regulations for Pet Food and Specialty Pet Food,” which can be found in AAFCO’s Official Publication . Since the AAFCO “Model Regulations” are consistent with Federal requirements, they are a useful resource for information on the regulation of pet food.
You can find more information about animal food regulation (including pet food ), marketing, and labeling on FDA’s website.
In addition to meeting federal requirements, your animal food business may also have to follow certain state regulatory requirements. The AAFCO webpage has detailed information about your state’s regulatory requirements for animal food. You can find other useful resources for animal food businesses on their Industry webpage . Additional information about starting a pet food business and state requirements can be found on AAFCO’s The Business of Pet Food site.
If your company manufactures, processes, packs, or stores an animal food in the United States, you must register as a food facility, unless an exemption applies to your business. The below webpages will help you determine if you must register as a food facility and if so, how to complete a food facility registration and get your unique facility identifier.
Some animal food businesses meet the definition of a “ qualified facility ,” typically because they are very small businesses. A qualified facility is generally a business that, because of its very small size, is required to meet only modified requirements under the FDA Food Safety Modernization Act (FSMA) Preventive Controls for Animal Food (PCAF) regulation . These businesses must “attest,” or affirm, to FDA that they are qualified facilities on their food facility registrations.
CVM’s website has more information about how to determine whether your business is a qualified facility , current inflation adjusted cut offs for qualified facilities , and answers to frequently asked questions .
If you manufacture, process, pack, transport, distribute, receive, hold, or import animal food in the United States, you must keep records of the receipt and distribution of animal food, unless an exemption applies to your business.
If you are a business that manufactures, processes, packs, or holds the animal food (not for transportation), you must establish and maintain the records for all food you receive and distribute . Generally, these requirements include records that establish:
Transporters of animal food also are required to maintain records that establish information regarding the transportation of the food.
For animal food, receipt and distribution records must be retained for a period of 1 year .
Preventive controls for animal food (pcaf).
The FSMA Current Good Manufacturing Practice, Hazard Analysis, and Risk-based Preventive Controls for Food for Animals regulation in 21 CFR part 507 is commonly referred to as the PCAF regulation or part 507. The PCAF regulation has two primary parts, the current good manufacturing practice (CGMP) requirements and the hazard analysis and risk-based preventive controls (PC) requirements. The PCAF regulation also addresses related personnel, training, and recordkeeping requirements (See 21 CFR part 507, subparts A and F ). The PCAF requirements apply to all facilities that must register with the FDA unless they fall under an exemption . There are also exemptions , or modified requirements for warehouses or other businesses that only store packaged animal food that is not exposed to the environment.
If your animal food business is required to register as a food facility, you are required to file a report with FDA’s Reportable Food Registry (RFR) whenever you have an instance of a “reportable food.” A “reportable food” is a food for which there is a reasonable probability that the use of, or exposure to, an article of food will cause serious adverse health consequences or death to humans or animals. For example, this could be an animal food that is contaminated with something that would cause the animal eating it to get sick, such as disease-causing bacteria, or the food could contain something that would harm the animal, like pieces of plastic that could pose a choking hazard. Reportable food also includes animal food that could cause people to get sick, either from handling the animal food or from consuming milk, meat, eggs, or other animal products from the animal that ate the animal food. If you have a reportable food, you must file a report as soon as possible, but no later than 24 hours after you have identified that the animal food is a “reportable food.”
The Reportable Food Registry webpage has detailed information about these requirements.
Medicated feed mill licensing and cgmps.
Medicated Feed Mill Licensing and Drug Establishment Registration
If you are an animal food business that manufactures or processes medicated feeds, you may need an FDA-approved medicated feed mill license and drug establishment registration if you make the following types of feed :
If you use drugs from Categories I and II in a combination drug product, the Category II requirements apply to the entire combination drug product (21 CFR 558.4(e)). You need a medicated feed mill license and drug establishment registration to make the combination drug product from a Type A medicated article.
Whether or not you are required to have a feed mill license and drug establishment registration determines what Medicated Feed Mill Current Good Manufacturing Practice requirements in 21 CFR part 225 apply at your facility.
CVM’s Medicated Feeds webpage has more information and resources on medicated feed mill licensing and drug establishment registration, including the forms and instructions for submitting a medicated feed mill application and a link to drug establishment registration information.
If you are a distributor of medicated feeds containing veterinary feed directive (VFD) drugs, you must send a one-time notification to FDA (21 CFR 558.6(c)(5)) . A VFD drug is intended for use in animal feeds. VFD drugs can only be used under the professional supervision of a licensed veterinarian. CVM’s website has information about what you must include in the notification and how and where to submit it.
To view the current VFD Distributor Notification List, which lists the names and addresses of businesses that distribute VFD medicated feeds, visit the Medicated Feeds section of the Animal Drugs @ FDA home page. You can view the list as a PDF or as an Excel spreadsheet. You can sort the Excel spreadsheet by distributor name or state. FDA updates the lists when new notifications are processed.
In addition to the notification, you must also follow the VFD requirements. These requirements cover authorizations from veterinarians to use VFD feed, manufacturers and distributors who manufacture and distribute VFD feed, and clients or animal producers who use VFD feed. The regulation includes general requirements in 21 CFR 558.6(a) that apply to all three roles, as well as more specific requirements for authorizing veterinarians in 21 CFR 558.6(b) and for VFD distributors in 21 CFR 558.6(c). You can find more information about these requirements on CVM’s webpage:
If your animal food business thermally processes low-acid foods packaged in hermetically sealed (airtight) containers, commonly called low-acid canned foods (LACF), you must follow the LACF requirements . Although some airtight containers (like pouches or trays) used to thermally process low-acid foods are not considered cans, we continue to use the term “low-acid canned foods” and its abbreviation (LACF) as a shorthand description. If your business makes these types of products, you must register your business as a Food Canning Establishment and file scheduled processes with FDA for each product you make. A scheduled process is the process you select as adequate under the conditions of manufacture for a given product to achieve commercial sterility. This process may be in excess of that necessary to ensure destruction of microorganisms of public health significance, and shall be at least equivalent to the process established by a competent processing authority to achieve commercial sterility (21 CFR 113.3(r)).
FDA’s website contains more information about LACF requirements and acidified requirements. Note that the information on this page covers both LACF requirements and acidified food requirements. LACF requirements apply to both human and animal food, but acidified requirements apply only to human food.
The Sanitary Transportation of Human and Animal Food (ST) regulation in 21 CFR part 1, subpart O, explains the steps that shippers, loaders, motor or railroad carriers, and receivers must take to ensure the safety of food during transport. Ways that food can become unsafe during transport include:
The regulation is broken down into sections including General Provisions, Vehicles and Transportation Equipment, Transportation Operations, Training, Records, and Waivers. The Sanitary & Transportation Guidance Documents & Regulatory Information webpage has links to the different regulations and guidance documents you need.
If your animal food business handles “prohibited materials,” which are materials that could cause the spread of BSE disease through animal food, then you must follow the BSE requirements for handling these materials as part of your business.
Prohibited materials include, but are not limited to, ruminant (e.g., cattle, sheep, and goat) meat and bone meal, organs, and offal. The most common prohibited material found in animal food is meat and bone meal that comes from cattle. You can find more information about prohibited materials on CVM’s Bovine Spongiform Encephalopathy (BSE) webpage .
Prohibited materials are commonly handled at businesses such as renderers, protein blenders, commercial animal feed manufacturers, distributors (including retailers), transporters of animal feed and animal food ingredients, and on-farm animal feed mixers. Although ruminant feeders are unlikely to handle prohibited materials, it is important they are aware of the requirements and know what to avoid. The regulations (21 CFR 589.2000) define several of these business types.
There are two FDA regulations that focus on preventing the spread of BSE through animal food.
The “Animal Proteins Prohibited from Use in Animal Feeds” regulation in 21 CFR 589.2000 was created to prevent BSE from spreading through animal food. This regulation prohibits using certain tissues from mammals in animal food for ruminants (e.g., cattle, sheep, goats). You can find more information about this regulation on CVM’s ruminant feed inspections webpage.
The “Cattle Materials Prohibited in Animal Food/Feed (CMPAF)” regulation in 21 CFR 589.2001 prohibits using the brains and spinal cords from cattle 30 months of age and older in any animal food, including all types of livestock and poultry feed and pet food. The regulation is age-specific because cattle in this age range are at the highest risk for BSE. In BSE-infected cattle, the brain and spinal cord contain most (about 85%) of the infectious materials that could cause the spread of BSE. This regulation is intended to remove these tissues from the animal food chain entirely, thus greatly reducing the potential for inadvertent cross-contamination. Removing these tissues from the animal food chain prevents cross-contamination or accidental or intentional misfeeding. The regulation mainly applies to renderers and slaughter facilities because it focuses on removing the brains and spinal cords from animal carcasses, which is an activity typically performed at these facilities.
You can find CVM BSE Guidances , the Feed Ban Enhancement , and other requirements for BSE on the CVM BSE webpage .
Importing animal food.
General FDA Imports Information
Imported animal food, including medicated feed products, must meet the requirements of The Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (the Bioterrorism Act). This law requires animal food producing facilities to register with FDA and to file "prior notice" for each shipment of imported food before it arrives at a U.S. port of entry. The FDA website has more detailed information about facility registration and prior notice requirements.
If you have questions, or you need help with registering your facility or with filing prior notice, please contact the FDA’s Industry Systems Help Desk experts Monday to Friday from 7:30 am to 11:00 pm EST
In addition to FDA requirements, you may need to satisfy U.S. Customs and Border Protection (CBP) requirements. You can find CBP’s requirements on the U.S. Customs and Border Protection website .
FDA can examine shipments of regulated products whenever they are offered for entry at a U.S. Port of Entry . FDA will detain products that violate FDA law and regulations. Products that cannot be brought into compliance with the law will be refused. Refused products must be exported or destroyed under CBP supervision. Even if FDA did not examine a regulated product at the time of entry, the product must still comply with U.S. laws and regulations when it is in the U.S.
The following FDA webpages have more detailed information about importing products into the U.S.:
Foreign Supplier Verification Program (FSVP)
The Foreign Supplier Verification Program (FSVP) regulation in 21 CFR part 1, subpart L , applies to U.S. importers of human and animal food. Under the FSVP, an importer is the U.S. owner or consignee of a food offered for import into the United States. If there is no U.S. owner or consignee, the importer is the U.S. agent or representative of the food’s foreign owner or consignee at the time of entry, as confirmed in a signed statement of intent. You can find more information about whether the FSVP regulation applies to you on the Am I Subject to FSVP? fact sheet.
Importers of animal food must have an FSVP in place. The FSVP requires importers to verify that the processes and procedures their foreign suppliers are using to make animal food give the same level of public health protection that the PCAF regulation does and ensures that the supplier’s animal food is not adulterated. Importers must:
You can find more information about the FSVP rule, including information on compliance dates, on the FDA FSMA Final Rule on Foreign Supplier Verification Programs (FSVP) for Importers of Food for Humans and Animals webpage .
Some animal food businesses will export their animal food to other countries. You can find more information about the requirements for exporting animal food, including the types of export certificates an animal food business can request on CVM’s Exporting—Animal Feed and Animal Drugs webpage .
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Table of contents, cattle feed formulation, setup cattle feed processing plant, importance of nutrients for cattle, cattle feed ingredients and nutrition, compound cattle feed, how compound cattle feed is manufactured, raw materials for cattle feed manufacturing, investment for animal feed production business, factors for starting cattle feed production business plan, fodder for cattle, steps for starting a cattle feed production business, tips for feeding dairy cattle, market potential and marketing of your cattle feed, importance of cattle feed in milk production, recommendations for feeding cattle feed, packing, marking, and labeling cattle feed.
Cattle Feed Business Plan
Hello friends, we are here with a new topic called “ Cattle Feed Business Plan “. A livestock feed production business is a profitable business if it is located in an area where considerable numbers of livestock farms exist. Animal feed referred to a food item that is consumed by domestic animals. Livestock farmers are always looking for formulated food that is somewhat necessary for the proper growth and nourishment of livestock. In this article we also covered the below topics about cattle feed business;
The animal feed industry deals with food given to animals in cattle, poultry animals, and aquaculture sectors as part of animal husbandry. The feed industry enjoys economies of scale and if you are starting for animal feed production business, you want a thoroughly analyzed plan to earn you an advantage for a good initial market share.
Cattle feed encompasses various types of forages like grass, legumes, silage which is mainly used as dairy cattle feed along with soy, grain, and other elements. Cattle feed is an edible and rich source of nutrients for growing, milk-producing, and pregnant cattle. Then, the maximum share of cattle feed production is held by the southern parts of India. So, the cattle feed production business is profitable.
Farmers face several challenges when caring for cattle, including providing more feed to them. Then, they have to order bulk supplies and distribute feed evenly among many cattle. The global cattle feed market is intended to supplant the older model and farmers have a chance to keep their cattle healthy. The developing world is pushing up demand in several ways.
To setting up a cattle feed processing plant or starting cattle feed manufacturing business you have to make a complete business plan, make a customized feed mill layout design. The cattle feed market has been segmented based on feed ingredients like corn, soybean meal, wheat, oilseeds, and other ingredients.
The formulation of cattle feed mainly depends on the several of cattle, milk yield, and dairy ration, etc. While formulating the cattle feed, the availability of the basic raw materials must be kept in mind.
“Cattle feed” means any ground, pelleted, mixture feed, balanced for nutrients intended for the cattle feeding;
(i) Calf starter meal from the age of approximately 8 weeks and up to approximately 26 weeks and calf growth meal from the age of about 26 weeks and up to approximately 108 weeks;
(ii) Compounded cattle feed for cattle and buffaloes from the age of approximately above 108 weeks;
(iii) Proprietary feeds developed through the purpose of increasing productivity and reducing the cost of milk production, which include bypass protein feed, and mineral salt lick, etc.
(vi) Straw-based feed, manufactured by using food crops byproducts along with other feed ingredients.
Setting up cattle feed processing units can take benefits of this trend to make money easily. It doesn’t need a huge budget. There are two most important points to be considered when setting up a livestock feed production mill or starting livestock feed manufacturing, one is the feeding ingredients, you best have the unique formula, the second is the advanced feed processing equipment and technology.
Good cattle feed formula – Decide what nutrients a specific animal needs, gain weight, and stay healthy. Come up with a breakdown of livestock feed formulation based on livestock variety and additives like vitamins, amino acids, enzymes, minerals, then decide what to produce, for example, if it is cattle feed, will consider it be beef cattle feed or dairy feed?
Purchase the Cattle Feed Ingredients – Based on the cattle feed formula you have decided to use, and get the ingredients.
The machinery you need is determined by the feed you want to produce. Some of the essential cattle feed processing equipment are grinder, mixer, pelleting machine, freezer, weight scale, packaging bags, etc., are important to complete cattle feed production factory.
By using well-balanced nutrients for cattle can maximize profits. An animal’s diet must have the essential nutrients in appropriate amounts and ratios. The nutrients for cattle that are basic to good cattle nutrition, and use well-balanced feeds succeed in supplying these nutrients. Though, to better understand how feeds are used, it is important to understand the digestion process in animals.
Cattle need proper nutrient feed for maintaining good health and better milk yield. Some essential feed ingredients are a good nutrient supplement to cattle for promoting growth. Some of the important cattle feed ingredients include corn, wheat, soya bean, and other grains. Grains are mainly considered as the best cattle feed as it has high nutritional content such as proteins, minerals, vitamins, carbohydrates, and fiber, etc. Normally, wheat is a digestible source of nutrients added to cattle feed ingredients for maintaining a proper digestion process.
Proper intake of these cattle feed ingredients helps in maintaining health and promotes a high yield of milk. Also, these ingredients help in the physical development of the cattle.
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Compound cattle feed is a mixture of several concentrate feed ingredients in suitable proportion. The commonly used feed ingredients in compound cattle feed are grains, brans, protein meals or cakes, agro-industrial by-products, minerals, and vitamins.
In India there are only two types of compound cattle feeds are manufactured for adult animals. National Dairy Development Board (NDDB) promotes the use of different compound feeds like calf starter, calf growth meal, feed for high yielding animals, feed for low yielding animals, buffalo feed, and feed for dry pregnant animals, etc.
Firstly, feed ingredients are taken in a batch mixer from the raw material storage godown. After mixing, all raw materials are ground to a uniform particle size of about 3 mm. The ground material is further mixed. Materials used in feed formulation in smaller quantities like vitamins, minerals, urea, calcite powder, and common salt, etc., are mixed in a ribbon mixer using proper diluents and stored in one of the storage bins.
Ground material and molasses are mixed in a twin-screw type mixer. Usually, molasses are added by 10% in cattle feed, if the cost is very high, some sweetening agent could be used in place of molasses. Molasses feed is mixed with the dry steam before pelleting. The temperature level of steamed feed is in the range of 75-80°C. Though, steamed feed is converted to pellets by passing it through a cylindrical die and then press roller. Generally, an 8 mm die is used for the production of pelleted feed.
The important raw materials for cattle feed are Wheat bran, Groundnut extraction (or cake), Rice bran extraction or cottonseed bran, Maize, Cottonseed, Molasses, Salt, Calcium carbonate, Mineral mixture, and Vitamin mix, etc.
Cattle feed contains grains, brans, cakes, mineral mixtures, and vitamins as a protein source, energy, minerals, and vitamins. Also, additives loaded with vitamins, minerals, acidifiers, antibiotics, amino acids, enzymes, and antioxidants boost the cattle yielding capacity.
The animal feed production business demands two types of capital investment and they are of the following;
The above types of Animal Feed Production Business can be explained in the below;
Fixed Capital – It is defined as a one-time investment that consists of fixed money and no need to invest again and again
Working Capital – Working Capital includes the following;
1. The Target market
Analyze the potential of your selected production line thoroughly.
2 . A Detailed Market Research
Do market research on the cattle in your local area; and if you are planning to sell your plan to investors, you have to explain the uniqueness of a specific plan as compared to existing players. Select the most attractive segment in the area with your revenue projections by establishing your basic achievable market share.
3. Equipment and Personnel
The cattle feed production business investment will focus on the business equipment. Also, you could invest in customized equipment for your needs which will call for more investment, use expert advice on the feed plant machinery you need before budgeting.
4. Location
A location for the cattle feed production business plan is closest to the customers. Also, you want your site to be as close to your suppliers as possible, the further you move from your customers the higher your distribution cost and advertising cost.
5. Raw Materials and Suppliers
It is very important to plan for bulk buying in harvest seasons for plant-based materials for the best prices, in your business plan; you want to explain the material source and possible suppliers after your market evaluation.
6. Feed Formula
Low-quality feeds in any market will push you out of business or can cause legal hurdles for your startup business.
You can start a cattle feed business with a small amount of capital also but you need to follow some basic steps before getting started.
The cattle feed industry is a major ingredient of the animal feed industry. The cattle feed manufactures are using increasingly modern methods to incorporate best practices. The cattle feed industry has got high growth potential, given that India is the world’s leading milk producer and production. The demand outlook will need dairy companies to step up production and get higher animal yields on the back of superior feed and nutrition.
Step 1) Do a Market Research
Firstly, you need to do thorough research on your local market. At first, you must identify the demand of the livestock farmers in your area and then select a particular category of animal feed with which you will continue further. The other important aspect is to look at competitors who are formulating the same type of animal feed. By considering their strengths and faults in the businesses, you can prepare a solid strategy to stake up against them. Then, you can talk to other business owners who are not in competition with you or doing business in another region.
Step 2) Prepare a Comprehensive Business Plan
Then, you should craft an effective business plan to get success in this venture. You want to consider every aspect involved in the business like your business objective and the scale of business operations, start-up expenses, financial and marketing plan, etc. As you have already decided the category of livestock for which you want to provide feed, you want to study the food necessities of the group of animals for which you desire to produce.
Step 3) Feed Formulation
There is a specific formula of cattle feed for each type of animal and you have to identify the right one for the feeds you are going to produce. If it is not properly formed by mixing the raw materials in an exact ratio, you will lose customers as they would not get expected results after using this feed. To find out the right cattle feed formulation, you should gain knowledge of the dietary needs of the animals you want to manufacture.
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Because of the intensive cattle development program which has already been taken on hand by the State Government, the success of these development projects depends mainly on the availability of well-balanced cattle feed. Cattle feed envisages the future scope for the development of this industry. The demands for milk and meat is increasing in most of the world and therefore the farmers are now more concerned over the health and yield of the cattle which is serving the global cattle feed market development.
There are many ways you can adopt for marketing of cattle feed;
By establishing cattle feed processing plant and start cattle feed-making business can be huge potential to get profits in the feed business.
Cattle feed mainly contains protein, energy, minerals, and vitamins required for the growth, maintenance, and animal milk production. Also, it is useful to feed extra cattle feed to pregnant animals for proper development.
Milk production as well as the fat content of milk increases reproductive efficiency. Milking cattle should be fed about 2 kg of compound feed for body maintenance and also 400 g to cows for every liter of milk produced.
(1) Every holder of a registration certificate shall comply with the below requirements;
(2) Each bag in which cattle feed is packed shall have a printed leaflet, format of which shall be approved by the Registering Authority, and this indicating batch number, date of manufacture, address of the manufacturer, feed ingredients used in manufacturing cattle feed, vitamins, feed supplements added with their proportions and other particulars as may be stipulated by the Expert Committee.
(3) The leaflet shall contain a declaration about the non-use of certain mineral salts as stipulated by the Expert Committee.
(4) The labels or marks shall not contain any statement, claim, design, or device which is false or misleading in any particulars concerning the cattle feed and also mineral mixture contained in a package or the value of such feed;
(5) No person shall manufacture Proprietary cattle feed without the prior written approval of the Registering Authority.
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Interested to start . Please help
good read…well briefly explained,
Can you help me pet feed formulation pls
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Are you starting a feed store business? The demand for high-quality animal feed has never been higher. Starting a feed store business can be a fulfilling and profitable venture. However, it's important to have a solid business plan in place to ensure the success of your business. Our Feed Store Business Plan Template & Guidebook is designed to help you easily create a comprehensive business plan for your feed store business. This guidebook provides step-by-step instructions on how to create each section of your business plan, as well as helpful tips and examples to ensure that your plan is thorough and effective. With our template and guidebook, you can confidently put together a solid business plan to help you achieve your feed store business goals.
Get worry-free services and support to launch your business starting at $0 plus state fees.
1. describe the purpose of your feed store business..
The first step to writing your business plan is to describe the purpose of your feed store business. This includes describing why you are starting this type of business, and what problems it will solve for customers. This is a quick way to get your mind thinking about the customers’ problems. It also helps you identify what makes your business different from others in its industry.
It also helps to include a vision statement so that readers can understand what type of company you want to build.
Here is an example of a purpose mission statement for a feed store business:
A feed store business could have the following purpose mission statement: "Our purpose is to provide high-quality, affordable animal feed and supplies to support the health and well-being of pets and livestock. We are committed to offering a wide range of products and expert advice to help our customers make informed choices for their animals. Through our dedication to exceptional customer service and our commitment to supporting local farmers and ranchers, we aim to be the go-to destination for all of our customers' animal-related needs."
The next step is to outline your products and services for your feed store business.
When you think about the products and services that you offer, it's helpful to ask yourself the following questions:
You may want to do a comparison of your business plan against those of other competitors in the area, or even with online reviews. This way, you can find out what people like about them and what they don’t like, so that you can either improve upon their offerings or avoid doing so altogether.
If you don't have a marketing plan for your feed store business, it's time to write one. Your marketing plan should be part of your business plan and be a roadmap to your goals.
A good marketing plan for your feed store business includes the following elements:
Next, you'll need to build your operational plan. This section describes the type of business you'll be running, and includes the steps involved in your operations.
In it, you should list:
To run a feed store, you'll need a variety of equipment and supplies, as well as a few permits. Here's a quick rundown of what you'll need:
Overall, running a feed store requires a mix of equipment, supplies, and permits to ensure that you can provide the products your customers need.
The second part of your feed store business plan is to develop a management and organization section.
This section will cover all of the following:
This section should be broken down by month and year. If you are still in the planning stage of your business, it may be helpful to estimate how much money will be needed each month until you reach profitability.
Typically, expenses for your business can be broken into a few basic categories:
Startup Costs
Startup costs are typically the first expenses you will incur when beginning an enterprise. These include legal fees, accounting expenses, and other costs associated with getting your business off the ground. The amount of money needed to start a feed store business varies based on many different variables, but below are a few different types of startup costs for a feed store business.
Running & Operating Costs
Running costs refer to ongoing expenses related directly with operating your business over time like electricity bills or salaries paid out each month. These types of expenses will vary greatly depending on multiple variables such as location, team size, utility costs, etc.
Marketing & Sales Expenses
You should include any costs associated with marketing and sales, such as advertising and promotions, website design or maintenance. Also, consider any additional expenses that may be incurred if you decide to launch a new product or service line. For example, if your feed store business has an existing website that needs an upgrade in order to sell more products or services, then this should be listed here.
A financial plan is an important part of any business plan, as it outlines how the business will generate revenue and profit, and how it will use that profit to grow and sustain itself. To devise a financial plan for your feed store business, you will need to consider a number of factors, including your start-up costs, operating costs, projected revenue, and expenses.
Here are some steps you can follow to devise a financial plan for your feed store business plan:
Why do you need a business plan for a feed store business.
A business plan is a document that outlines the goals and objectives of a business, as well as the strategies and tactics that will be used to achieve those goals. It is important to have a business plan for your feed store business because it helps to focus the efforts of the company, communicate the business's goals and objectives to potential investors, and provide a roadmap for the business to follow. Additionally, a business plan can be used to help secure funding from investors or lenders, who will want to see that the business has a solid plan in place before they provide funding.
To build a business plan for your feed store business, start by researching your industry, competitors, and target market. Use this information to define your business's goals and objectives, as well as the strategies and tactics that you will use to achieve those goals. Next, create a financial plan that outlines your projected income, expenses, and profit. This should include a projected income statement, cash flow statement, and balance sheet. Once you have all of this information, you can use it to create a comprehensive business plan that outlines the goals and objectives of your business, as well as the strategies and tactics that you will use to achieve those goals. A well-written feed store business plan contains the following sections: Purpose, Products & Services, Marketing Plan (including Marketing Strategy), Operations/Management Plan (including Operations/Management Strategy), Financial Plan (including Financial Forecasts), and Appendixes.
Yes, you can write a feed store business plan yourself. Writing a business plan is a valuable exercise that can help you clarify your business idea, identify potential challenges and opportunities, and develop a roadmap for success. While there are many resources and templates available to help you write a business plan, the process of creating one is ultimately up to you.
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Through meticulous research and firsthand experience, I uncover the essential steps, software, tools, and costs associated with launching and maintaining a successful business. By demystifying the complexities of entrepreneurship, I provide the guidance and support needed for others to embark on their journey with confidence.
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Home » Business Plans » Agriculture Sector » Agro-Allied
Are you about starting a livestock feed mill? If YES, here is a complete sample livestock feed mill business plan template & feasibility report you can use for FREE .
Okay, so we have considered all the requirements for starting a livestock feed mill business . We also took it further by analyzing and drafting a sample livestock feed mill business marketing plan template backed up by actionable guerrilla marketing ideas for livestock feed mills. So let’s proceed to the business planning section.
Starting a livestock feed mill business can be regarded as a big and lucrative business especially if you are grounded in managing a business and are able to use the dynamics to run your business successfully. For your business to be however successful, you might need to locate your livestock feed business in an area where there is an abundance of livestock as well as agricultural inclined customers.
Depending on the kind of customers you are likely to have, you might need to custom mix the feed from your feed mill so that you can deliver the feed products to your customers. While the livestock feed business might be one where you would need to supplement your income with other revenue generating sources, it is still a good business to start up.
Before starting this kind of business however, you would need to consult a business consultant who would be in the best position to let you know how successful your business is likely to be. Another aspect that is very important when starting any business is having a business plan.
Writing a business plan might look intimidating especially regarding the aspect that deals with finances. There are however options available if you want a comprehensive business plan for your business.
The options are seeking the services of a business plan writer to write out a good business plan for you or going online to seek for free business plan templates to act as a guide to writing your own business plan. It is for this reason that a sample livestock feed mill business plan template has been prepared below;
1. industry overview.
The economic value of animal agriculture in the united states of America is very huge as it has provided more than 2.3 million jobs for the economy. The monetary value amounts to $440.7 billion, with $21 billion from household incomes.
There are nearly 6,000 feed mills in the United States of America and out of this number nearly 950 produce feeds that are medicated in nature, while nearly 545 produce pet foods. The raw materials used in producing feeds are corn, barley, wheat, oats, sorghum, soybean meal, corn silage production, hay, and alfalfa.
The livestock feed industry is valued at $32 billion annually. However, this industry has experienced a slow decline between the periods of 2011 and 2015, as there have been dramatic spikes in the prices o ffeeds and also increased demand from wholesale farm suppliers.
Globally though, the rise in population has caused an increase in meat demand which has also caused more feed mills to produce feeds to meet with the growing demand by livestock farmers. The revenue for the periods of 2016 to 2022 is therefore expected to increase.
Most livestock feed mills have been established close to where the source of raw materials and major transportation hubs are so as to have less operating costs and therefore offer feeds cheaper to its various customers. The past five years has seen top manufacturers in this industry concentrate most of their operations in a small number of sites using automatic equipment and a continuous operation that produces significant economies of scale.
Most of the products produced are often transported in bulk to the various destinations across the country. The population growth trend is consistent with the increasing trends across other industries in the food and agricultural sector.
Livestock Feeds and Mo Inc is a leading and standard livestock feed mill business located here in San Antonio – Texas in the United States of America with an aim to cater to various customers in the agriculture industry. We intend to produce quality livestock feeds for our various customers not only here in San Antonio but all over the United States of America as well.
We however intend to ensure that we create multiple sources of income by offering products and services such as feed delivery merchandise, agricultural educational programs, boarding stables, consultancy and advisory services and agricultural tools and implements.
Our vision is to ensure that we offer our customers’ feeds on time for their livestock without compromising on the quality of the feed. We intend to become the preferred livestock feed business here in San Antonio – Texas and amongst the top three in the United States of America by 2022.
As we are in business to favorably compete against other livestock feed mill businesses, we intend to go the extra mile in ensuring that we get the finest professionals that will ensure that we are able to attain all our goals and objectives.
Our management team were carefully picked by the chief executive officer due to not only their experience and capability but also due to the understanding of our corporate goals and policies as well as an intention of ensuring that they are committed and willing to ensure that these goals are achieved.
Our employees work in an environment that is not only easily accessible but also conducive as well. We will ensure that our employees are well paid and that they receive great welfare and incentive packages that will boost their morale and make them become more dedicated to ensuring that all our goals and objectives are achieved.
We will also ensure that our employees are well trained in line with industry trends. We will also ensure that they attend seminars and conferences that will not only make them have enhanced skills but also improve the productivity rate of the organization.
Finally, our Chief Executive Officer, Mr. Benteen Calder and his wife have the needed experience and management expertise that will not only boost the growth of our organization but also ensure that we sustain and expand our business at a pace suitable for us.
Livestock Feeds and Mo Inc intends to deal in livestock feeds by setting up livestock feed mills that will see us being able to cater to all the needs of our various customers here in San Antonio – Texas.
However, because we do not intend to be entirely dependent on one source of income, we intend to create multiple sources of income that will be in line with our core service. We will sell agricultural tools and implements, offer agricultural educational programs as well as consultancy and advisory services.
We intend to through this make as much profits as we can from the agribusiness sector in the agriculture industry and according to the permissible laws of the United States of America. Our products and services include;
Our Business Structure
Building the right business structure is very important to us as a business especially as we intend to stand out in the industry and compete favorably against our competitors.
We are therefore willing to go the extra mile in ensuring that we make plans and build structures and processes that will enable us to build the right business structure that will make our business become one to be reckoned with. We intend to do all we can to ensure that we employ competent and proficient hands to handle all the various positions and roles that will enable our company achieve its vision and objectives.
We will ensure that our management team thoroughly understand their roles and delegate duties when necessary in order for the company to move forward and grow.
Even though running a conventional livestock feed mill business might be simpler for us as a start-up, we would not be running something conventional and this is due to the various additional services and products that we will sell in order to have multiple sources of income.
Therefore, below is the business structure that we will build at Livestock Feeds and Mo Inc;
Chief Executive Officer
Feed Mill Production Manager
Admin and Human Resources Manager
Accountant/Cashier
Machine Operators
Store Manager
Front Desk Officer
Marketing and Sales Team
Truck Driver
Security Guard
Starting a livestock feed mill here in San Antonio might look like an easy business to start up, but there are several factors that we need to take into consideration; which is why we have engaged the services of a business consultant to look through our business concept and determine if we had what it takes to make it in this business.
The business consultant used our strengths, weaknesses, opportunities and threats to determine if we were likely to make it in this business. Therefore the SWOT analysis that was conducted on behalf of Livestock Feeds and Mo Inc are;
We have several strengths going forward in this business. Our location for one in San Antonio – Texas is very strategic as it allows our customers to easily access us conveniently. The fact that we are also offering other services in addition to our core service is another strength for us.
We have also employed employees that are not only proficient but also highly experienced and understand how best to grow our business from a start-up to a force that will be reckoned with nationally. Finally, our chief executive officer is highly experienced and possess all the attributes needed to make our business not only stand out and compete favorably against our competitors but also succeed in this business as well.
Due to the fact that we are relatively a new business, there are several weaknesses we are battling with such as low finances to run all the services we intend to run as well as few staff strength. Also, the fact that we are still unknown will mean we will need to deploy strategies that will likely make us become more visible to our target market.
The fact that not only livestock farmers make use of livestock feeds is a great opportunity for us in this business. We are however conducting more market researches that will allow us be aware of the more opportunities available to our business.
The threats that we are likely to face when starting or running this business will result from having another competitor offering the same services arriving in the same location as us; also, an economic downturn will likely cause livestock farmers to want to produce their own feeds, thereby not allowing them to patronize us as they should.
The livestock feed mill industry consists of animal feed producers who make food for livestock. Materials that are often used are remnants of flour milling, sugar production as well as other food materials that are integral to the production of livestock feed.
The activities in this industry usually include cubed alfalfa, cattle feeds, barley feeds, chicken feed , turkey feed, swine feed, cubed hay, dairy cattle feed, and custom grain grinding for animal feed. In most animal feed businesses, generating revenue is usually from diversification of products and services. This is so as to achieve substantial growth.
As long as there is livestock farming, there will always be those who demand feeds for their livestock. While on the average we would be catering to livestock farmers, we cannot categorically say that these will be only those that we will cater to, which is why we would be conducting a market research to enable us determine who our target market is so that we would have an idea of the marketing strategies that we would create in order for it to be effective.
Another reason for conducting this market research is so that we would also have an idea of what our intending target market would be expecting from us. From our findings, we are in business to sell our products and offer our services to the following groups of people;
Our competitive advantage
Our intention of starting a livestock feed mill business is so as to offer our various customers quality livestock feeds on time without compromising on the quality of these feeds. We intend to become the preferred livestock feed business here in San Antonio – Texas and amongst the top three in the United States of America by 2022.
However in order for us to be able to achieve this, we intend to lay out strategies that will allow us compete favorably against our competitors.
We are going to ensure that we build feed mills that will be able to meet all the demands from our various customers. Our intention of building these feed mills is so that no matter what demands will be made, we would still be able to meet them.
Another competitive advantage that we will have over our competitors is the vast experience of our management team. Our management team is filled with professionals who understand the industry thoroughly and know how best to ensure that our business is able to attain all its goals and objectives.
Our management team also understand how best to communicate our policies to other employees in such a way as to ensure that everyone is carried along.
Our employees are those that are not only proficient but also capable and dedicated in carrying out all the needed tasks with as little supervision as possible. Our employees have also adopted an excellent customer culture that ensures that all our customers are always attended to and earn a high sense of satisfaction that will allow us retain a high percentage of these customers.
Finally, we intend to ensure that all our employees are well paid, better than other employees in similar start-ups such as ours here in San Antonio.
We also intend to give them great welfare and incentive packages that will ensure that they remain motivated to working for our company. We will also ensure that our employees undergo the necessary training that will enhance their skills and boost productivity for our business.
Livestock Feeds and Mo Inc is a livestock feed mill business that intends to offer livestock feed to all our various customers with the sole aim of generating revenue and maximizing profit in the agriculture cum agri-business industry here in the United States of America.
We are going to also offer additional services to our wide range of customers that will see us generate more income and make more profit. We at Livestock Feeds and Mo Inc therefore intend to generate income by selling the following;
The livestock feed business is one that will always be in demand due to the fact that there are more than enough livestock farmers and others who use livestock feed for purposes that are important. San Antonio is one of the largest cities in Texas with a population of more than 1.5 million citizens, with about 30% into livestock farming.
The location therefore has us well positioned to cater to all our intending and existing customers. This also has us confident of the fact that we would not only generate enough revenue but that we will break even and make profit in our first year of business that will grow and sustain our business.
We have also taken a critical look at the agricultural cum agribusiness industry in order to analyze our chances at making it in the business we intend to start up. The sales forecast we therefore came up with is one that was gotten after using several assumptions and data from similar start-ups such as ours here in San Antonio – Texas.
Below therefore are the sales projections for Livestock Feeds and Mo Inc based on certain statistics and data used;
N.B : It should be noted that the above sales forecast was done based on the statistics obtained from the industry and on the assumptions that there won’t be any major economic meltdown that would see farmers preparing their own feed and that no competitor would be arriving at the same location as ours during this three year period. Should any of the assumptions or data change, there would be an increase or decrease in the stated figures.
Because we intend to sustain and grow our livestock feed mill business, we would take our marketing goals very seriously in order to ensure that we deliver on our corporate goals and objectives. Marketing for us is a means of generating revenue as well as creating awareness for our products and services.
In order therefore to create the right marketing strategies that would suit our business, we intend to therefore conduct a market survey that will allow us understand who our target market is, what they want from us, and how best to penetrate the available market and position our business to grow and effectively compete against its competitors.
We would be using detailed data and information that was gotten from similar businesses such as ours here in San Antonio – Texas.
We would be engaging the services of a reputable marketing consultant who understands the industry well to help us craft effective marketing strategies that will allow our livestock feed business to win a large share of the target market not only here in San Antonio but throughout the United States of America as well.
We also intend to ensure that our marketing and sales team ensures that marketing strategies crafted fully align with our corporate sales goals and vision. Our marketing team have been empowered to modify or remove marketing strategies that are not deemed effective in helping achieve our intended goals and objectives.
Therefore, Livestock Feed and Mo Inc will adopt the following sales and marketing approach in order to sell its products to its various customers;
Publicity is not only a way of creating awareness but also ensuring that a business generates revenue that will help grow and boost the business. Having the right publicity for our business is therefore important as we intend to create awareness within our target market for existing and new customers that will positively communicate our business and project our brand positively.
We will therefore engage the services of a publicity consultant here in San Antonio who thoroughly understands the agribusiness sector of the agricultural industry to help us create publicity strategies that would allow our business stand out and make us to be able to compete favorably against similar competitors here in San Antonio.
The publicity strategies that we will use to promote and communicate our brand are;
Setting a price for our livestock feed as well as other products and services that we would be offering at Livestock Feeds and Mo Inc is very important because we do not want to set a price that will allow us run at a loss or chase our customers away.
Therefore before setting our price, we would be making some consideration on certain factors such as what it would cost us to produce these feeds, our overhead expenses, what our nearest competitors are offering and the size of the feeds.
Because we however are a new business and want to ensure we get a large share of the market, we would be offering our customers a price discount on our products and services in order to create awareness for our business and attract more customers.
The price discount strategy has been carefully reviewed by us and while we might be running on a low profit margin during this period, we would however not be running at a loss.
Because we always want the best for our customers, we at Livestock Feeds and Mo Inc have come up with different payment options that would suit all our diverse customers and whatever preferences they might have. The payment options that we will therefore make available at Livestock Feeds and Mo are;
The livestock feed mill business is one that requires certain equipment and structures in place, which will take a chunk of the start-up capital in order for it to be referred to as a standard business. Therefore, we intend to spend the bulk of our capital in getting the raw materials for the feed, constructing a feed mill, getting a truck, buying a land and paying the salaries of employees.
The key areas where we intend to spend our start-up capital on are;
From the above analysis, we would need the sum of $486,500 to be able to set up and run a standard livestock feed mill business here in San Antonio – Texas. It should be noted that the bulk of the capital will go into buying a land and building several facilities on it, procuring a delivery and an errand truck, getting start-up inventory and setting up a feed mill and also paying the salaries of employees and utility bills for the first six months.
Generating Funding/Startup Capital for Livestock Feeds and Mo Inc Business
Livestock Feeds and Mo Inc is a family business that is financed, owned and run by Benteen Calder and his wife. Since this is a family owned business, the couple does not intend to seek for external business partners and due to this, they have decided to restrict the sourcing of their start-up capital to just few sources.
The areas where we therefore intend to source for our start-up capital from are;
N.B : We were able to generate about $56,000 from our personal savings and sale of stocks. We won a grant of $200,000 from the federal government to use in starting our business and we approached the bank for the sum of $230,000 to be repaid in 10 years at the rate of 3% per annum.
All the documents concerning the loan has been approved and signed on and we have been told that the amount will be credited to our business account before the week runs out.
The sustainability of a business depends on what plans are being put in place to ensure that the business survives for a long time. We intend to have our livestock feed mill business exist for a long time and so we will ensure that certain factors that will allow our business to remain long in existence and grow are not taken for granted.
We will ensure that we build a sound business structure, carrying out intensive publicity and also re-invest in our business.
Building the right business structure is very important to us and as such we do not mind going the extra mile to ensure that we get employees that are not only experts but committed and dedicated to ensuring that they put in their best to see our livestock feed mill business grow.
Our employees all come with experience and understand how things are done in the industry in order to make sure a business like ours grow.
We intend to make sure that our employees are not only well paid and have the best incentive and welfare packages but that they are also allowed to go for training that would not only enhance their skills but boost productivity for our livestock feed mill business as well.
Our management team understands well the philosophies our company run on and know how best to ensure that policies are implemented for the good and growth of the business. In order to ensure that we receive the right awareness for our business whilst also generating revenue, we intend to engage in massive publicity.
To achieve this, we will engage the services of a reputable publicity consultant here in San Antonio, who understands the industry and will therefore craft the right publicity strategies that will not only boost our business and positively communicate our brand, but will allow us stand out and compete favorably against our competitors.
Due to the fact that we do not intend to continually use external sources of revenue always, we will ensure that we re-invest 30 percent of our earnings right back into the business.
We have set plans and structures in place that will ensure that this is always carried out no matter who is in charge of our financial. These are the three factors that we intend to engage in so as to sustain and expand our livestock feed mill business here in San Antonio – Texas.
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Find out how growth in organic Russian crop production will likely lead to an uptick in organic livestock production.
Russia is diligently trying to become the world’s organic superpower, even though an average domestic consumer is unwilling to overpay for products claimed to be cleaner than traditional products.
The existence of organic standards in Russia must unravel the agricultural industry’s hidden potential, Russian Prime Minister Dmitry Medvedev claimed in 2018, after signing an organic farming bill, which paved the way for the government to start working on detailed rules of the organic industry’s operation.
Russia has plenty of agricultural land, which has not been spoiled by using poisonous agricultural chemicals, Medvedev said at the time. This land would be suitable for growing organic crops to produce organic meat, which was in high demand worldwide, he added.
In the next few years, with the help of the organic farming bill, Medvedev predicted that Russian agricultural producers would overtake a 10% to 25% share of the global organic food market.
The global organic food and beverages market in 2019 was approximately US$220 billion, research conducted by Facts & Factors showed. The market is expected to grow at a CAGR of 16% and is anticipated to reach around US$620 billion by 2026, the researchers forecasted.
Russia exported agricultural products for US$30.6 billion in 2020, compared with US$25.6 billion in the previous year. If Medvedev’s forecast is destined even partly to come true, it could multiply the Russian agricultural export’s value.
A growing number of Russian producers have certified their products as organic, and even more are on the way, the Russian organic farming union estimated.
“Organic livestock is developing in Russia is not as fast as organic crop production,” said Sergey Korshunov, chairman of the organic farmers union, admitting that there is no official statistical data indicating how much organic feed is produced in the country.
“In the Western countries, this [producing feed from organic grain] is a trend. Feed crops account for the main share of the Russian organic export, with the demand is strongly exceeding the supply,” Korshunov said.
Organic milk, broiler meat and egg production are believed to be the most promising segments, according to Korshunov.
“In the Russian cities with a population above [one] million, some customers are ready to overpay for the organic dairy products,” Korshunov said.
However, in the current economic conditions, the Russian organic food market remains tiny. In 2020, the Russian organic farmers union estimated that the production cost of organic food was 20% to 25% above the industry’s average, while growing a broiler on organic feed would cost farmers 35% to 50% more.
On the other hand, the potential margins are also very attractive. In 2020, the average price of broiler carcasses in Moscow stood at RUB200 (US$2.78) per kg. In the case of organic broilers, it reached RUB800 per kg, the Russian Gazette, the Russian government’s official publication, estimated. Still, organic broilers could be found only in a limited number of Moscow and St. Petersburg stores, and the reasons are quite obvious.
As much as 37% of Russian citizens have little money to spare on food, a research conducted by the Russian bank Otrkitie in 2021 showed. In Central Russia, this figure reached 47%, while in Siberia it was 43%. During the past few years, Russia has been suffering from poverty, with almost 14 million citizens having incomes described as extremely low.
Only 7% of Russians said they could buy what they needed in necessary quantities, Otrkitie reported.
Another research conducted by the Russian think tank SBS Consulting showed that only 1% of Russian citizens purchased organic products. However, the demand for organic food was projected to grow on average by 26% per year. Entering this segment, agricultural producers could count for a record-breaking margin of 300%, SBS Consulting estimated.
The main prospects of the Russian organic food export lie on the West in the European Union, the U.S., and other wealthy countries, local analysts said. Russia exports poultry to Asia, Africa, and the Commonwealth of Independent States (CIS) region, where organic standards are not driving consumer demand yet. However, Western countries already have well-developed organic industries.
The U.S. provides 43% of the world’s organic food. It is followed by Germany with 11%, France with 9%, China with 8%, and Canada with 3%, SBS Consulting estimated. Only 1.4% of the world’s arable land is used for organic farming, although in some particular countries, this figure reaches 10%, SBS Consulting said.
In Russia, 44% of agricultural land, or 97.2 million hectares, is not used at all, the Russian external trade academy estimated. This land is primarily located in remote territories with poorly developed infrastructure and those previously covered by permafrost, where production costs are high just as well as risks. The development of the organic industry could help Russian farmers developing these areas.
For many years, the organic industry in Russia has been hampered by the wide presence of counterfeit products, as any farmer or agricultural holding was free to label his product as organic, even though it was not so.
Things changed in 2020 when the Russian sanitary watchdog Rospotrebnadzor got the authority to control the compliance with organic standards on the domestic market. Several fines issued by the regulator pushed dozens of producers to change their labels urgently. On this background, some companies announced huge investments into organic projects.
In early 2020, Russia’s biggest milk producer, EkoNiva, disclosed plans to launch the first Russian organic beef production. Sergey Lyakhov, general director of EkoNiva’s Siberian branch, estimated that the company could sell organic beef by 30% to 35% above the average market price. Lyakhov added that it might take a couple of years to convert beef farms to organic standards.
In October 2019, EkoNiva launched organic milk production with the supplies limited to hypermarkets in Moscow and Kaluga oblast. The output in this segment was rather low, limited to 1,150 liters per day.
More importantly, EkoNiva disclosed plans to file for international certification, including under the European standards. If successful, the company could begin exporting organic beef at very attractive prices.
“International recognition is paramount for the Russian organic industry,” commented a source on the Russian market who wished not to be named. “If limited with the size of the domestic market, it would not grow — no matter who says what. Its prospects lie on the global market, primarily in the European Union, but a complicated political situation and a lack of trust in the Russian state control system among European regulators are likely to become problems in the foreseeable future,” the source added.
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The European Union (EU), through SNV Ghana, has assisted Andrew Abuska – Founder of Eye of the Brain EcoFeeds – to inaugurate an animal feed and organic fertiliser production facility.
The support aims to help Eye of the Brain EcoFeeds strengthen the agricultural landscape in Akotosu in the Sekyere Kumawu district of Ashanti Region and beyond, by combining innovation, sustainable practices and strategic partnerships.
The facility currently produces about 100 bags of feed and organic fertiliser daily, and hopes to expand in coming months.
Through the EU assistance, Mr. Abuska received a matching grant of GH₵135,000 from the GrEEn Project implemented by SNV Netherlands Development Organisation at the maiden GrEEn Innovation Challenge – after completing a rigorous six-month Incubation Programme facilitated by Recycle-Up, a hub-partner of the project.
The training provided Mr. Abuska with valuable knowledge and skills in various aspects of entrepreneurship, financial management and how to set up business structures to attract investments, among others.
Sharing his experience with B&FT during the ‘Eye of the Brian Ecofeeds’ factory-opening ceremony, Mr. Abuska disclosed that he was trained how to create a thriving green business and manage company finances. He was also guided through developing and pitching his business plan, as well as how to retain clients and secure investors.
Following the training, Mr. Abuska decided to focus on recycling organic waste from household and agro waste, and use them to nurse nutritious maggots to be used in producing pellets and feed for fish and poultry. He acquired a six-plot land with the grant award, where he has built a facility to increase production and storage of his organic feeds.
Using the grant, Andrew Abuska has also purchased machines such as a grinder, pelletiser, heating and frying machines; drilled a borehole for a reliable water supply, and ensured stable electricity connections to power his machines, allowing for efficient and uninterrupted production processes.
Previously, Mr. Abuska faced challenges in meeting demand for his feed due to limited production capacity. According to him, he used to produce about 10-15 bags of feed and fertiliser daily. However, with the EU’s financial support his daily production capacity has increased to 100 bags. As a result he now supplies feed and fertiliser to more farmers – with plans to expand across the country, targetting over 1,000 farmers.
According to him, aside from producing organic feed and fertiliser for farmers, he is working on an integrated farm as well.
“The money given to me by SNV and the EU has enabled me to purchase land and machinery to increase production of my organic feed to supply farmers. Aside from this, I’m currently working on setting up an integrated farm so I can have a fish-pond, piggery and livestock to diversify my income.” he said.
Senior Incubation and Acceleration Advisor at SNV Ghana, Genevieve Parker-Twum, applauded the work and growth of Andrew Abuska’s business. She then elaborated that the GrEEn project will give support to innovative, sustainable businesses created by young people.
“Under the GrEEn Incubation Programme, we have provided business advisory services to over 100 green SMEs; and among these, we come across businesses that are not only sustainable but also have the capacity to create jobs for young people.
“For the GrEEn Innovation Challenge, that’s one of our focuses – the capacity to create jobs when we are awarding matching grants. SNV believes that if we support businesses like this, we help develop the local economy and provide jobs to boost livelihoods,” she stated.
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The investment costs for setting up an animal feed business can vary depending on the scale of the operation. According to Pelletizer Mill, the estimated investment costs for a small feed mill range from $20,000 to $100,000, while larger feed factories can require investments ranging from $70,000 to $1.5 million.
But for dedicated entrepreneurs this steadily growing sector holds long-term profit potential. 4. Form a Legal Business Entity. When establishing a new animal feed venture, one of the first legal steps is selecting an ownership structure that provides liability protections while easing future expansion plans.
9. Manufacturing Process. The manufacturing process for animal feed involves several steps: Ingredient Preparation: Clean, sort, and grind the ingredients to the desired particle size for uniform mixing. Mixing: Combine the ingredients in the appropriate proportions to create a well-balanced feed mixture.
The global animal feed market is on a growth trajectory, with a projected CAGR of 4.5%, anticipated to reach $460 billion by 2027. This growth is driven by increasing meat consumption and the rising adoption of high-quality animal nutrition products worldwide. Therefore, when considering investing in an animal feed pellet production project ...
Poultry farming is a popular and profitable sector in the animal industry. With the right business plan, establishing a poultry feed pellet plant can be a lucrative venture. Identify your target market, the types of feed required, and the production capacity of your plant. Determine the required machinery, raw materials, and other inputs.
According to the same source, farm supplies and raw materials wholesalers currently sell over $62,000,000 of goods per year. Of these, only 843 of these were selling poultry and livestock feeds mixed on location. With total sales of $8,141,368, businesses like ours sold an average of $9,658 in goods each, per year.
1. Need to know the specific procedures for setting up a factory. this is the first step of how to start animal feed business plan, To open a small pellet production line, you need to go to the local industrial and commercial bureau for industrial and commercial registration, then obtain a production and operation license, and apply for a tax ...
Business plan: manufacturing and selling animal feed proposal, 2020 Matta Paung Ku Producer Organisation operates in Ma Yin village, which is in the Ma Zaw tract, 43 miles from Myeik township. Access to the village is from the junction of Ma Zaw Road and Pyin Gyi Road. Most people in Ma Yin farm highland crops and rear pigs. Some households ...
The animal feed market is projected to grow at a CAGR of 4.90% to reach US$460.322 billion by 2026, from US$345.434 billion in 2020. Animal feeds are referred to as those products which are responsible for improving animals' health. The feed is given in various doses depending on the animal.
The most important concern in running an animal feed mill is cost. Building an animal feed plant involves key decisions about equipment selection and investment that directly affect the overall cost of animal feed mill. Data show that investment in animal feed processing equipment typically accounts for 30 to 50% of the total cost of plant ...
6 Factors for Starting Animal Feed Production Business Plan. 1. Target market. Analyze the potential of your chosen animal feed production line thoroughly. You need to narrow down to a specific market, manufacturing feeds for all animals may not be a good idea, production methods for fish feeds and pet feeds is no where close to that of poultry ...
This document will serve as a roadmap for the successful implementation and operation of your animal feed factory project.The business plan should include: Executive Summary: A concise overview of ...
1. Market Research. In starting livestock feed production, mark et research is a must. You must quantify the demand and accordingly, you will need to select the product that you will produce. This business requires strategic planning and proper inventory management. 2. Create an Animal Feed Production Business Plan.
If you are planning to start an animal food business, there are several steps you need to take before marketing your product in the United States, such as: Submitting the appropriate registration ...
Investment in an Animal Feed Manufacturing Business. There are two kinds of capital to run a feed production company: Working capital and fixed capital. Working capital is to pay salary and daily expenses, raw materials storage, transport and more. You will need between ₹7-15 lakhs for starting your business.
The animal feed industry deals with food given to animals in cattle, poultry animals, and aquaculture sectors as part of animal husbandry. The feed industry enjoys economies of scale and if you are starting for animal feed production business, you want a thoroughly analyzed plan to earn you an advantage for a good initial market share.
Learn how to write a business plan for your feed store business in just 7 steps. Also, download your business plan guides & templates needed. Start. Business Steps. ... "Our purpose is to provide high-quality, affordable animal feed and supplies to support the health and well-being of pets and livestock. We are committed to offering a wide ...
Cost of hiring a business consultant - $2,000. Operational cost for the first six months which would include employee salaries and payment of bills - $150,000. Start-up inventory (raw materials and packaging) - $50,000. Constructing of feed mills to produce livestock feed - $10,000.
animal feed business plan 162.doc - Free download as Word Doc (.doc), PDF File (.pdf), Text File (.txt) or read online for free. Scribd is the world's largest social reading and publishing site.
Animal feed mill with the production capacity of 600 tons/day. The feed mill produciton range covers not only healthy and ecological full-ratio animal feeds and concerntrates, but also it deals with premium-class products like prestarter (4 -49 days) and starter (50-70 days) feeds, designed for swine. ...
Learn how Russian animal feed producers are dealing with the COVID-19 pandemic and forecasts for declining animal protein production. ... With some minor exceptions, all farms, feed mills, slaughterhouses and processing plants were allowed to continue business as usual, while adhering to enhanced sanitary measures to protect its staff ...
In 2020, the Russian organic farmers union estimated that the production cost of organic food was 20% to 25% above the industry's average, while growing a broiler on organic feed would cost farmers 35% to 50% more. On the other hand, the potential margins are also very attractive. In 2020, the average price of broiler carcasses in Moscow ...
0. The European Union (EU), through SNV Ghana, has assisted Andrew Abuska - Founder of Eye of the Brain EcoFeeds - to inaugurate an animal feed and organic fertiliser production facility. The support aims to help Eye of the Brain EcoFeeds strengthen the agricultural landscape in Akotosu in the Sekyere Kumawu district of Ashanti Region and ...