Eyerusalem Takle Cattle

Pen Fattening

Business Plan

Owner :- Ms. Eyerusalem Takle

Location
Municipality:- Nagele Borena
Kebele :- 01

May, 2024
i. Summary of the project----------------------------------------------------------------1
ii) Introduction---------------------------------------------------------------------------------- 2
Mission and Objectives----------------------------------------------------------------------2
Mission------------------------------------------------------------------------------------------- 2
Objectives--------------------------------------------------------------------------------------- 2
Company Summary---------------------------------------------------------------------------2
Product/Services----------------------------------------------------------------------------2
Cattle for Fattening-------------------------------------------------------------------------3
Management and labor-------------------------------------------------------------------4
Target Market--------------------------------------------------------------------------------- 5
Profitability of cattle fattening business-----------------------------------------5
Competitive Advantage-------------------------------------------------------------------5
Operational plan-----------------------------------------------------------------------------6
Publicity And Advertising Strategy-------------------------------------------------6
SWOT Analysis---------------------------------------------------------------------------------- 7
FINANCIAL STATEMENTS AND PROJECTIONS-------------------------------8
Generating Funding / Startup--------------------------------------------------------8
Buyers/demand------------------------------------------------------------------------------9
Payback period------------------------------------------------------------------------------- 9
Sales Forecast--------------------------------------------------------------------------------- 9
Projected Profit And Loss--------------------------------------------------------------10
Projected Balance Sheet----------------------------------------------------------------11
Projected Cash Flow----------------------------------------------------------------------13
Long term credit reimbursement schedule-----------------------------------13

ii
 i. Summary of the project
Key Information Highlights

Project Owner Ms. Eyerusalem Takle

Project Title Cattle fattening
Project Area Negele Borena town, Kebele 01

Cost Of The Project (Loan

3,000,000
Amount)

1
ii) Introduction
Our company Eyerusalem Takle Cattle Pen Fattening intends to
fatten cattle in pens/feedlots. Cattle will be purchased from the
rural areas where it is cheap, and transported to our pen. We will
then feed the cattle for a period of 90 days. During this period, we
expect the cattle to increase in weight, and an increase in the
quality of the beef to super grade. We will then sell the cattle, and
make a profit. We will continuously do this throughout the year.

Mission and Objectives

Mission
Our mission is to provide healthy fattened cattle to customers at
affordable prices. We value our relationships with current and
future customers and hope to communicate our appreciation to
them through our outstanding, guaranteed product quality,
personal service, and efficient delivery.
Our commitment to our customers and our country will be reflected
through honest and responsible business. We will provide a safe,
friendly working environment for our employees.
Objectives
• Create jobs as we expand our operation

• Produce cattle with super grade beef

• To develop a sustainable farm, surviving off its own cash flow

Company Summary
Product/Services
Cattle beef fattening is a livestock production practice that involves
reducing the animal activity and feeding of beef cattle with a protein
balanced, high-energy diet for a period of 90 days under
confinement, thereby fattening the cattle more quickly to increase
live weights and improve degree of finish and thus obtain better
grades at the abattoir. Beef fattening enables the cattle to express

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fully their genetic potential for growth. Larger animals could also be
sold for more money in the market as they yield more meat.
Cattle for Fattening
The selection of the cattle is based on evaluating the potential for
beef fattening of different types of cattle in relation to the market
price of different grades of beef.
Factors to consider include breed of cattle, gender, maturity, type
and age. This is because different types of cattle respond differently
to the beef fattening process. Some cattle are more suitable for
cattle fattening than others. A major challenge is lack of funds to
buy cattle for beef fattening when prices are favorable which is lost
opportunity to make profit. If the wrong decision is made, losses
would be made before the start of the business.
Feed and nutrition
It’s very essential that the right quantity and type of feed is given to
cattle. The success of the business depends on the ability of the
cattle to gain weight and to produce high quality beef. These factors
are affected by the quality and quantity of feed. The proper feeding
techniques will ensure that the cattle will grow and utilize the feed
efficiently and produce good quality beef.
This will maximize the profits of the cattle fattening farming
business. Failing to properly feed the cattle will lead to losses. The
losses will be due to failure to meet the target slaughter weights and
beef quality grade. There are companies which sell cattle fattening
stock feeds.
These are complete, balanced feeds, which are designed for
fattening cattle in feedlots over 90 days.
The stock feeds are high energy fattening meals which contain all
the nutrients necessary for ad lib cattle pen fattening. We will also
make our own home made cattle beef fattening feeds.

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Management and labor
The number of farm workers required depends on the size of the
farm. There might be the need for full time employees to manage
the herd. There is need for good technical knowledge of cattle
fattening techniques for success in the business, and good
management skills.
Management
A good management practice plays a key role in profit
maximization. Enlisting people in the technical know-how of the
business either by profession or by experience is essential. The staff
would include, but not be limited, to the following:
1. Chief Operating Officer: responsible for providing direction for
the business and evaluating the success of the organization
2. General Farm Manager: responsible for ensuring compliance
during project executions, carrying out risk assessments, ensuring
desired goals are achieved and overseeing the smooth running of
the daily farming.
3. Administrator / Accountant: responsible for preparing
financial reports, budgets and financial statements for the
organization. He/she would also develop financial forecast, risk
analysis reports and administer payrolls.
4. Cattle Ranch and Animal Manager / Supervisor: responsible
for managing the commercial breeding of cattle. He/she would work
closely with the General Manager to achieve the organizations’ goals
and objectives
5. Sales and Marketing Officer: responsible for handling business
research, market surveys and feasibility studies for clients. He/she
also documents all customer contact and information
6. Field Workers / Contract Staff: responsible for feeding cattle
as instructed by the supervisor, cleaning the ranches, changing the
water in the water troughs and feeding the cattle on a regular basis.
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 Table 1:- Manpower requirement
Monthl Total Annual
S N Qualificatio
Position y salary monthly salary in
N o n
in Birr salary Birr
BA in
4,000.0
1 General Manager 1 managemen 4,000.00 48,000.00
0
t
3,000.0 12,000.0 144,000.0
2 4 Unskilled
Cattle keeper 0 0 0
2,000.0
5 Guard 2 Unskilled 4,000.00 48,000.00
0
1 9,000.0 20,000.0 240,000.0
Total
1 0 0 0

Target Market
Naturally, the target market are those who are the end consumer of
livestock farm produce and also those who benefits from the
business value chain of the agriculture industry. Every household
consumes produce from livestock farms be it meat, milk, and the
skin (leather) used for bags, belts and shoes production et al. So
also a large chunk of manufacturing companies depends on
livestock farms for some of their raw materials.
Profitability of cattle fattening business
Cattle beef fattening is very profitable when done the right way. The
profitability of the cattle fattening farming business depends on the
buying price of the cattle, cost of the feed, price margin, feed
margin, feed conversion efficiency ratio, unit cost per kilogram
when selling. It is important to understand the mentioned margins
and conversion ratios so that financial losses are not made by
paying too much for the cattle.

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Competitive Advantage
In the Agricultural Industry Entrepreneurs are encouraged by the
government to embrace commercial farming. This is so because part
of the success of any nation is her ability to cultivate her own food
and also export foods to other nations of the world. This increase
the amount of competition in the industry to far greater heights.
Operational plan
The business is to be carried out all year round. So a lot of feeds
will be stocked that will suffice all year round. The feed which
include millet/guinea corn hulls, groundnut leaves, maize stalk etc.
are mostly cheap in the market and far cheaper when planted in the
farm. The mixture of the feed is done in such a way that cattle get
the required nutrient for proper weight gain. The cattle will be
bought in such a way that the selling interval will be 30 days i.e. a
certain number of cattle will be available each month for sale or
slaughter. In order to maximize profit, farming of the cattle feed
(groundnut, millet, guinea corn) will be done and stocked all year
round. The main produce will be sold and the groundnut leaves,
millet husk, guinea corn hulls will be kept for cattle consumption.
Publicity And Advertising Strategy
Any business that wants to grow beyond the corner of the street or
the city they are operating from must be ready and willing to utilize
every available means (conventional and non – conventional means)
to advertise and promote the business. We intend growing our
business which is why we have perfected plans to build our brand
via every available means.
We know that it is important to create strategies that will help us
boost our brand awareness and to create a corporate identity for
Cattle selling business. Below are the platforms you can leverage on
to boost our fattened cattle trading brand and to promote and
advertise our business;
• Encourage our loyal customers to help with Word of Mouth
mode of advertisement (referrals)

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 • Advertise our grain selling business in relevant magazines
(agriculture and food related magazines), local newspaper,
local TV stations and local radio station
• Promote our Grain trading business online via our official
website
• Leverage on the internet and social media platforms like;
Instagram, Facebook , twitter, et al to promote our
commercial farm business
SWOT Analysis
The need to conduct a proper SWOT analysis cannot be over
emphasized for the success of the business. We know that if we get
it right from the onset, we would have succeeded in creating the
foundation that will help us build a standard cattle fattening
business that will favorably compete with leading cattle rearing /
livestock farms in Guji zone and Oromia. As a cattle fattening
business, we look forward to maximizing our strength and
opportunities and also to work around our weaknesses and threats.
Here is a summary from the result of the SWOT analysis conducted:
STRENGTHS
Healthy relationships with loads of major players (agriculture
merchants) in the livestock farming industry; both suppliers and
buyers within and outside the area.
The owner is so energetic and passionate about the business and
willing to do whatsoever to make sure it succeeds. The closeness
and commitment creates a large positive driving force towards it
success.
Experienced hands in cattle rearing / livestock farming industry in
the payroll.
WEAKNESSES

• Limited Capital

• High feed costs

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• Little negotiation power with customers

OPPORTUNITIES
Rising beef demands- As the population is rising, so also the
demand of beef.
Government support-The government’s campaign on promoting
indigenous farm output is an added advantage.
Easy access to market-The proximity to market will play a key role
in the success of the business.
THREATS
Economic Downturns-The current state of economy might reduce
the purchasing power of most intending buyers.
Weather and natural disasters-Bad weather and natural disasters
(draughts, epidemics) that could greatly affect the cattle.
Increased competition-A new competitor (i.e. a commercial farm
that rear same animals) as our cattle ranch within same location.

FINANCIAL STATEMENTS AND PROJECTIONS

This cattle fattening business will hopefully be financed with a
loan/grant from the bank and the payback period is estimated to be
one year.
Generating Funding / Startup
No doubt raising start – up capital for a business might not come
cheap, but it is a task that an entrepreneur must go through. It is a
private owned business and it will be financed by the owner of the
cattle ranch.

• Generate part of the start – up capital from personal savings .

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• Generate a larger chunk of the startup capital from the bank (loan
facility).

Sales/maturity
The sale of the fattened cattle will be sold monthly likewise the
purchase of more cattle in order to keep uniform format revenue
and purchase flow.
Buyers/demand
The demand for beef is a continuous and essential one. It’s a
necessity and as vital and grains and vegetables in every household.
This makes the business more inviting and less stressful. The
buyers will be local butchers and market men from the local and
modern markets. The selling point will be in the local market and
larger cities like Adama with competing bid for higher prices.
Payback period
The payback period will be one year. The first three months will not
count because it takes three months to transform a malnourished
cattle to a healthy fattened cattle.
Sales Forecast
We have been able to critically examine the cattle fattening
industry and we have analyzed our chances in the industry and we
have been able to come up with the following sales forecast. The
sales projections are based on past performance and information
gathered on the field and some workable assumptions as well with
respect to the nature of business that we run.
Sales Forecast Year

Sales Year1 Year2 Year3

Fattened cattle
12,530,200 13,783,220 15,161,542
sales

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 Total Sales 12,530,201 13,783,221 15,161,543
N.B: This projection is done based on past performance, what is obtainable in
the industry and with the assumption that there won’t be any major economic
meltdown that can impact negatively on household spending, bad weather cum
natural disasters (draughts, epidemics), and unfavorable government policies
Projected Profit And Loss
Given the continuing scarcity of Fattened cattle in the region we can
confidently project that we will be able to sell all the cattle bought
and fattened in each of the three seasons.
Table:- Profit and Loss
Year 1 Year 2 Year 3
Sales 12,530,201.00 13,783,221.10 15,161,543.21
Direct Cost of Sales 5,012,080.40 5,513,288.44 6,064,617.28
Other Costs of Sales
(Cattle feed)
Cereal straws/stovers 650,000.00 715,000.00 786,500.00
Wheat milling by product 3,650,000.00 4,015,000.00 4,416,500.00
Total Cost of Sales 9,312,080.40 10,243,288.44 11,267,617.28
Gross Margin 3,218,120.60 3,539,932.66 3,893,925.93
Expenses
Salary and Wages 240,000.00 264,000.00 290,400.00
Depreciation 200,000.00 200,000.00 200,000.00
Marketing/Promotion 5,500.00 6,500.00 8,000.00
Utilities 20,000.00 25,000.00 31,000.00
Loading 130,000.00 135,000.00 154,000.00
Transportation 500,000.00 560,000.00 630,000.00
Interest Expense 283,498.16 283,498.16 283,498.16
Total Operating Expenses 1,378,998.16 1,473,998.16 1,596,898.16
Profit Before Taxes 1,839,122.44 2,065,934.50 2,297,027.77

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Taxes 533,736.73 601,780.35 671,108.33
Net Profit 1,305,385.71 1,464,154.15 1,625,919.44

Projected Balance Sheet

2024 2025 2026

ASSETS
Current Assets:
Cash 1,505,385.71 1,664,154.15 1,825,919.44
Accounts Receivables 15,000.00
15,000.00 15,000.00
Prepaid Expenses 15,000.00 15,000.00 15,000.00
Employee Advances - - -
Temporary Investments - - -
Total Current Assets 1,535,385.71 1,694,154.15 1,855,919.44

Fixed Assets:
Land 500,000.00 500,000.00 500,000.00
Buildings 3,500,000.00 3,325,000.00 3,150,000.00
Furniture and Equipment 500,000.00 475,000.00 450,000.00
Less: Accumulated
Depreciation (200,000.00) (400,000.00) (600,000.00)
Total Fixed Assets 4,300,000.00 3,900,000.00 3,500,000.00

Other Assets:
Other Assets - - -
Total Other Assets - - -

TOTAL ASSETS 5,355,919.44

5,835,385.7 5,594,154.1
1 5

LIABILITIES
Current Liabilities:
Accounts Payable 80,000.00 80,000.00 80,000.00
Business Credit Cards - - -
Sales Tax Payable 533,736.73 601,780.35 671,108.33
Payroll Liabilities 18,000.00 18,000.00 18,000.00
Other Liabilities 120,000.00 120,000.00 120,000.00

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Total Current Liabilities 889,108.33
751,736.73 819,780.35

Long-Term Liabilities:
Long term debt
Total Long-Term Liabilities -
- -

EQUITY
Capital Stock/Partner's -
Equity - -
Opening Retained Earnings 1,305,385.71 1,464,154.15 1,625,919.44
Investment Capital 2,720,891.67
3,658,263.27 3,190,219.65
Owner's Draw 120,000.00
120,000.00 120,000.00
Total Equity 4,466,811.11
5,083,648.98 4,774,373.80

TOTAL LIABILITIES & 5,355,919.44

EQUITY 5,835,385.7 5,594,154.1
1 5

Projected Cash Flow

Description Project Life years

2024 2025 2026

INFLOW
Net sales revenue 3,218,120.60 3,539,932.66 3,893,925.93
TOTAL INFLOWS 3,218,120.60 3,539,932.66 3,893,925.93
OUTFLOWS
Operating cost 895,500.00 990,500.00 1,113,400.00
Interest expense 283,498.16 283,498.16 283,498.16
Income tax 533,736.73 601,780.35 671,108.33
TOTAL OUTFLOWS 1,712,734.89 1,875,778.51 2,068,006.49
NET CASH FLOW 1,505,385.71 1,664,154.15 1,825,919.44

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Long term credit reimbursement schedule
perio
No. Interest Principal Balance
d
1 2024
313,694.18 541,971.26 2,458,028.7
4
2 2025
324,378.96 852,161.02 1,605,867.7
2
3 2026
167,673.60 1,008,866.3 512,792.95
8
4 2027
14,733.50 413,099.34 -

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