Debre Markos University, Burie Campus

Department of business administration

Post Graduate Program
Individual Assignment business plan for the Course
Entrepreneurship and Innovation Management
Course code: (612)
Assignment Title:- Business plan for fish farming
By: Amsalu yenew ID/NO DMU/152374

Submitted to: Semachew Zeleke (Phd)

April, 2023
Burie, Ethiopia

0
 Table of content page
Acknowledgments……………………………………….…………………2
1. Executive summary……………………………………………………...3
2. General business plan description ...………………………………........4
2.1 Name of Business and its legal form...….……..…………………….4
2.2 Mission statement ……......................................................................4
2.3 Business plan objectives ………....….…………….….………….….4
2.4 Location of the project ……….………………..…………………….5
3. Product description and application/production plan ….……….……...….6
4. Market study/market plan...…………………….….…..………………….6
4.1 Past Supply and Present Demand….................................................6
4.2 Projected Demand and Supply ……………….……….…………...6
4.3 Market Analysis …..........................................................................7
4.4 Marketing …....................................................................................7
4.5 Sales Plan ……………………………………………….…….…...7
4.6 Market Opportunities …………………………………………......8
4.7 Market treats ……………………………………………...…….….8
5. Technical Assistance………………………….………………….………….8
6. Project Timeline………….………………………………….……………...8
7. Estimated Project Costs and Revenue………………………….…….….....8
8 Financial analysis …………………………………………….……………...9
8.1 Fixed investment cost……………….…………….…………….….9
8.2 Production Cost……………….…………...………….……………9
8.3 Administrative and other cost per year…........................................9
8.4 Total revenue Forecast based on the appropriate data……….…….9
6. Conclusion……………………………………………………….……………12
7. Cited/ References……………………………………………….………..……13

1
 Acknowledgments
First of all I would like to thanks my teacher Semachew Zeleke/Phd/ for your
guidance and teaching to get knowledge from this course from this business plan.
I would like thank all library workers to support my assignment by internet
accesses. I would like to thanks my lovely friends for their support by every aspect
to do this assignment work. Finally, I wish to acknowledge the efforts and support
of those individuals and animal and fish resources office that led to the success of
this business plan.

2
 1. EXCUTIVE SUMMARY
Being an entrepreneur has always been a life-long dream for me. A business plan is a document
or a guide which outlines a proposed business objective, goals and aim as well as the method by
which it can be achieve. It helps us to predict the profitability, identify the potentials, weakness
of the business. it can also serve as a roadmap to keep one focus on the goals and objective.
(Haag 2013, 20.). Another writer describes a business plan to be a set of management decisions
that includes what a company will be doing to ensure success in the future, in its most basic form
it is the process where by a company makes decisions on what products or services to deliver.
Where, why and how. (Crego, Schiffrin & Kauss 2003, 1).

Fish farm is a new start-up business; the plan is about establishing fish farm in the area of
womberma worda, the worda, which provides suitable environment. My choice of business is
fish farming. It is right to ask the question why I have chosen fish farming, to under-stand this; it
is significant to know a few backgrounds on the choice of location for the fish farm: there are
streams so i can prepare artificial lake.

The business would serve as facility to utilize the everyday resources in the form of feed for fish
farm that usually ends up as cultural waste. On the other hand, it would generate employment for
the local inhabitants and more over would possibly cause cash inflow as well.

This project is environmental friendly and the risk associated with it is low, however, the project
will be managed by seasoned practitioners.

This Business plan envisages /thinks/ the establishment of the production of fish farming with a
capacity of 4 tones /40 kuntal/ per annum for the first year. The project will start by producing
75% of its capacity at the first year and then increase to 85% and 100 % in the second and third
year respectively. All the capital goods needed for this fish farming project will be obtained from
womberma worda animal and fish resources, through hire purchase agreement and labor and
training office by advertising this new business idea for any youth.

The demand for fish met through domestically produced by fish adaptation. The present demand
for fish is 4 tones as introduction year. The starting supply is projected to reach by myself.

The principal raw materials required is fingerling fish which will be obtained from surrounding
lake areas like Bahirdar Tana and Abay (115km far away from project site). There for, the
required raw material need of the Project is completely satisfied by domestic suppliers. The total
investment cost of the project including working capital is estimated at 250000 birr. From the
total investment cost, the equal share (Birr 1300000 or 55% is accounted by fixed investment
cost that is rent land, canal preparation /pond/ and gard/keeper/place building. The initial
working capital is (Birr 120000 or 45%) that is used for administrative cost.

3
A total sum of 250000 (two handered fifty thouthend) is required for this project, the project
would break even at the end of the third production cycle which is about one and half year into
the project; at the end of the 3rd year the entrepreneur would have made a total sum of
1,620,000 (one million six hundred twenty birr) which is good business when we compared from
other business. The project can create employment for 3 persons. The establishment of such
farming will have high business saving effect and it learns to other youths. The project will also
create backward and forward linkage with other sectors of the economy and also generates
income for the Government in terms of tax revenue and payroll tax.

2. General business plan description

2.1 Name of Business and its legal form

The business will be known as Amsalu yenew fish farming enterprise. The type of business
ownership of this enterprise is privately owned business.

The purpose of the business is establishment of fish farming that will produce season 1, season 2
and season 3 within 4 month fish product. The customers come from shindi town and its
surrounding woreda’s and other woredas of west gojjam zone.

2.2 Mission Statement

 To provide quality fish farming, that ever expanding residential area surrounding area of
womberma worda west gojjam zone of Amhara region which are geographically nearest
to Burie town. The company focuses on providing quality fish with an emphasis on
customers’ satisfaction, as well as, based on any hotel, restaurants and any household
production process.
 To teach for any youth to be expanding business idea.

2.3 Business plan objectives

Fish farm is a new start-up business; the deriving objectives of the project are to produce 4 tons
of fish in to per annum and to make 75% of profit out of the annual operation of the work in each
season. To achieve these objectives the enterprise will develop fish products and distribute this
product with two quality grade. The demand is fish uses for meet. That distributes the
surrounding areas of the project site.

In addition the project also has the following additional derivative objectives to be realized
during the process:-

4
Short objectives:- to achieve which can be both financial and non-financial objectives. It is
SMART.

A. rent land, get necessary work place approvals on 2016 September

B. Build well designed 2 ponds and install water 0n 2016, September
C. Build gard place/keeper place near to the pond on 2016, September
D. Buy feed and necessary growth supplements on 2016, October
E. Buy 500 small kereso fish for first year by two pond on 2016, November
F. Hire and train 1 labor feed fishes and keep and start first season fish farming.

Medium and long-term objectives:

The above are short term objectives that help you get started.

A. expand 2 more plots of land and build 2 more concrete ponds after 3 year

B. Open another fish farm at womberma worda in the place of zingini stream and kotlane
stream

C. By engaging in the production of above mentioned of standard quality fish, the enterprise
will play important role in supplying the volume meet fish abroad.

D. To provide employment opportunity to the growing labor force of the Project area by
employing permanent employees and by creating job Opportunities for uncountable people who
will engage in the construction phase of the project and permanent employment opportunities
and

E. To contribute to the promotion of establishing similar enterprise in the town.

2.4 Location of the project

The proposed business will be established at womberma worda west gojjam zone, Amhara
region, which is 17 km far away from burie. The project is located at womberma worda sabadar
kebele fetam stream by preparing canal lake.

Located in a swamp or pond at fetam stream/river,

• The area is not subjected to flooding.

• The environment which is the most preferred for fish farming.

• There is round the year adequate supply of water.

• There is good road network access leading to the farm location.

5
 3. Product description and application/production plan
Fish is an animal that uses for food item, which is finely used for food only. There are different
types of fish but the enterprise wants <<kereso>> type of fish that is adaptable at any place.
The basic application of the fish production is for food. This is highly demand by commercial
fish farms in the town which are hotels, restaurants, households and Operating in the town in
many sizable numbers. It is used for man fattening and highly protein as one of basic feeds
especially it is very use full for child development or for balanced diet. Additionally, house
needs to be built to prevent the fish. It needs to be surrounded by compacted. The area must be
kept free of weeds, scrap and any other object or obstacle. The farm will be located at about 10
by 10 meters connecting to the fish canal/pond/ and 1.5 meter deep highest. Lastly, the
canal/pond/ have inlet and outlet full water will be concrete to enable the ease of cleaning and
disinfection. Water is an importance aspect of fish farming. Without water there is no fish, which
should already be made available in the location and ensure proper treatment to the water storage
facilities. So within this pond one pond/canal will produce 250 up to 350 fish. Due to this reason
by 3 seasons I will supply above 2000 fish within three year by one pond only. But my business
plan starts by two ponds so, I will supply mare than 4000 fishes.
4. Market study/market plan
4.1 Past Supply and Present Demand
Fish farm is a new start-up business, the proposed target market are families/households,
restaurants, hotels, students, fast food eater and event planners. The mission is to adapt new
quality of fish product while ensuring affordability and availability as well as to create an
excellent customer relationship.
In Ethiopia, the rural population is not used to consume fish for food. And my surrounding area
also not knows about fish food. But fish is very useful for mental development, high protein
content and child development. Some people were not known what fish is. So by adapting this
useful animal as an enterprise I want to advertise this, adapt this and get profit by selling for
hotels, and any individuals.
The establishment of a fish farm is a business which has a lot of implications on the economy.
The business will positively affect both the host community which could be a primary source of
labor as well as the economy of the nation at large. Below are some of the effects which can be
generated through the establishments of the business.

4.2 Projected Demand and Supply

The demand for fish farm is mainly determined by the growth rate of population and the per
capita consumption of the people. Increase application of fish by increasing the attitude of the
people to know the use of fish. Regarding the supply of product and auto service at the project
site there is no demand and also there is no supply. Therefore, there will be big gap between
projected demands and supply.

6
Table 1: projected demand and supply for fish product (tons) (2014, 2015 e.c]

Year Projected Projected Un satisfied Demand

Demand at Supply at
womberma womberma
2014 No No 100 % Un satisfied
need in the people
2015 No No 100% Un satisfied need
in the people

The projection of the future demand made based on the forecasted national demand of fish as the
fish demand is not only limited to some parts of the country. However, the demand of the fish
from the context of the all Ethiopia may give additional insight to note the availability of room or
demand for additional fish product.

4.3 Market Analysis

The target customers for fish are:

• Households,
• Hotels,
• Restaurants
• Fast food eater and
• Pharmaceutical companies.

Initially the project will focus on local market, depending upon its successful operation it would
be market in other customer groups of the womberma worda and shindig town people and any
youth.

4.4 Marketing
The marketing of Fish follows the traditional channels of distribution. Generally, fish are
distributed in the market through by advertising and adapting house to house, by moving place to
place and creating one fish market place. The role of supporting office, that is work and labor
office and animal and fish resource office will identify buyers and negotiate the price. Fish are
transported to the urban market and are sold to fish shop/market place/. Although collection and
handling of fish has improved with the use of horse vehicles, but it is an established fact that
greater the distance between the farm and consumer, more complicated will be marketing system
including their collection, handling and transportation to the middlemen or consumer as per
perishable nature of the product.

7
 4.5 Sales Plan
This business is very new in our woreda so, after the product is produced the entrepreneur will
use different selling approach:-

 Adapting customers will give more time for sales. It is the first work of selling approach.
 Payment Options – Cash and bank transfer
 Credit Sales – We do sell on credit i.e. it is good for adaptation.
 Discounts – not free delivery but there is discount
 Advertising

4.6 Market Opportunities

Following are some major opportunities for the proposed project:

 Most children that grow with low protein intake end up malnourished and low intelligent
quotient. Fish remains the most acceptable and healthy source of protein for human
consumption, but this essential product is not readily available in our local content to
address the demand of our ever increasing population.

• Diversified demand of the product from the food industry and medicine.

• Availability of abundant raw material. All raw materials like small fish, there food/any waste
material, water and all raw materials are excess.

• Lack of specialized producer, there is no other competitor and the use of fish for health is very
essential.

4.7 Market threats

The proposed project will be facing the following threat:

 Substitute’s availability example by hen

 Price fluctuations.
 No know about preparation of fish meat and how to eat fish.
 Fish is very sensitive to manage and a slight mistake could result to degenerated growth
of your fish or even death which may cause massive revenue loss.
 Water Contamination: fish into the ponds could cut off oxygen flow to the fingerlings
 Quality of Fingerlings: Poor quality fingerlings may die or even fail to grow and this
would result in a loss of investment.
 Setting up fish farm is capital intensive, much more than that of poultry. Setting up fish
farm requires more careful planning and much capital input.
 Failure of water supply: Breakage of water supply is potentially dangerous to the fish and
if such occurs, there are great tendencies of the fishes dying.

8
 5. Technical Assistance
Human resources capabilities are key of the successful execution of this enterprise, the enterprise
team consists of people with relevant qualifications and experience in the fish farm from animal
and fish resource office.

Detailed below are the list of the resources and their capabilities.

• Amsalu yenew – entrepreneur/ manager

 One keeper/gard
 One purchaser /as introductory is enough
6. Project Timeline

The project will start 2016 e.c for 3 consecutive years in all season. It will be continuing depends
on the projects feasibility and profitability.

7. Estimated Project Costs and Revenue

Total Capital Outlay: The project will require a total capital for starting outlay of 250000 birr.
The revenue will forecast within three year will be 1,620,000 birr.

8. Financial analysis
The financial analysis of the fish farming project is based on the data presented in the previous
chapters and the following assumptions:-
 Production place Construction period 3 month
 Source of finance 70 % loan from Tsedey bank and 30% from the owner.
 Bank interest 17 %
 Work in progress 1 day
 Accounts payable 30 days /loan
 The total fixed investment cost of the project 130000 birr.

8.1 Fixed investment cost

Plant Machinery, Equipment and keeping place construction material-----------25000 birr
Building & Construction of 2 ponds--------------------------------------------------75000 birr
Land rent 20×20 meter land------------------------------------------------------for one year 30000 birr
Total -----------130,000 birr

9
 8.2 Production Cost
Annual production cost at maximum product target per year (4 tons or 40 kuntal per year supply
fish product).

8.3 Administrative and production cost per year

1 Raw Material and Inputs like fish food and fingerling fish -------10000 birr
2 Utilities and transportation------5000 birr
3 Maintenance and Repair like pond and keeper place-------- 10000 birr
4 Manpower Expenditures (Direct labor salary) ---------90000 birr
5 Administration Costs-------- 2000 birr
6. Operating expense cost---------3000 birr
Total Production Cost --- 120,000 birr
* Administrative cost includes salaries and wages, social costs and telecom used by
administrative staff etc.

8.2 Total revenue Forecast based on the appropriate data

By assuming that the project will operate and achieve the planned targets of outputs for the
forecasted periods, sales and revenue are extrapolated based on the same assumptions as that of
production projection. With these assumptions, all products in every season there is continuous
supply of raw materials of fish the maximum achievable production capacity is converting 4 tons
per year these capacity realized by producing 75%,85% and 100 % of its maximum achievable
capacity during 1st, 2nd, 3rd year of production respectively. Therefore, based on these
assumptions the sales and revenue are forecasted for the coming 3 years are presented as follow.

10
 8.2.1 Sales revenue and cost plan/forecast/
Num Description Unit Project year
ber Descriptio of fish First year Second year Third year
n and ponds
1 Fish product Birr 225,000 birr = 250 270,000 birr = 300 315,000 birr
Sales by fish×150 fish =350fish
pond one birr×3/season ×150 birr × 3 / ×150 birr
season × 3 season
2 Fish product Birr 225,000 birr = 250 270,000 birr = 300 315,000 birr =
Sales by fish×150 fish 350fish ×150
pond two birr×3/season ×150 birr × 3 / birr
season × 3 season
Total sale 2 ponds Birr 450000birr 540000 birr 630000 birr 1,620,00
0 birr
3 Direct Birr 141,000 141,000 141,000 423,000
martial
cost

4 Direct Salary Birr 90,000 90000 90000 270,000

labor cost

5 Indirect Birr 11,000 11,000 11,000 33,000

cost

6 Gross Birr 200,000 290,000 380,000 870,000

profit
Business /35%-18000/ Birr 52000 83500 115000 250500
profit tax

8.3. Profitability

The annual production at maximum production target is estimated at Birr 450000 up to 630000
birr. According to the projected income statement, the project will start generating profit on the
first year of operation. Important ratios such as profit to total sales, gross profit to equity (Return
on equity) the average will be 80% gross profit. So the total gross profit will be 870000 birr.
Regarding the source of finance, the project owner will cover 30% of the total investment cost
and 70% of the remaining part of the investment to be solicited from the financial institutions in
term of midterm loan.

11
 8.4 Three years projected cash flow statement
Cash flow statement

Item Year 1 Year 2 Year 3

Cash inflow from sales 450000 540000 630000
Operating expenses 3000 3000 3000
Fingerling 10000 10000 10000
Labor salary 90000 90000 9000
Maintenance and Repair like pond 10000 10000 10000
and keeper place
Feed Utility and transportation 5000 5000 5000
Administrative cost 2000 2000 2000
2 ponds building cost 75000 75000 75000
Gard/keeper place building 25000 2500 2500
20 by 20 meter land rent cost 30000 30000 30000
Total outflow 250000 250000 250000
Cash balance 200000 290000 380000
Tax/ 35%-18000/ 52000 83500 115000
Net profit 148000 206500 265000

Break-even point
Break-even point = Total fixed cost /average unit cost- unit variable cost

Total means total fixed cost = 130000 birr

Average unit price =540000 birr

Unit variable cost = 150000 birr

130000/540000-150000 =0.33/ total revenue and total cost is equal from this point

Net present value of the project at 8.5% is almost 269288.7 and Internal rate of the project is
55.844% so Npv positive or greater than 0, and then bank deposit in current time by time deposit
maximum 8.5 % in this project IRR is 55.844 this is attractive project

12
12. CONCLUSION

Like several other agribusinesses that have great potentials for both scale and Profitability
starting fish farming in our woreda or across regions is a great agribusiness to start up if executed
at the right scale. I also know that fish farming in my surrounding area is one of the most
profitable agribusiness to venture into, and as such, investing in the agribusiness is a smart
decision to make, especially with its local demand for food purpose.

A good business plan helps entrepreneurs to concentrate on the necessary steps that will enhance
business success, both short-term and long-term objective (Crego et al. 2003, 2.). It enables the
manager to make better business decision in the future drawing up a business plan is a process
that require deep thinking, this process requires one to think vigorously about the major
components of one’s business before getting started which at the end of this process, it helps to
find answers to majority all the important and critical business questions and make decisions
ahead of time.

Fish farm is a new start-up business; the plan is about establishing fish farm in the area of
womberma worda, the worda, which provides suitable environment. My choice of business is
fish farming. It is right to ask the question why I have chosen fish farming, to under-stand this; it
is significant to know a few backgrounds on the choice of location for the fish farm: there are
streams so i can prepare artificial lake.

This Business plan envisages /thinks/ the establishment of the production of fish farming with a
capacity of 4 tones /40 kuntal/ per annum for the first year. The project will start by producing
75% of its capacity at the first year and then increase to 85% and 100 % in the second and third
year respectively. All the capital goods needed for this fish farming project will be obtained from
womberma worda animal and fish resources, through hire purchase agreement and labor and
training office by advertising this new business idea for any youth.

The principal raw materials required is fingerling fish which will be obtained from surrounding
lake areas like Bahirdar Tana and Abay. There for, the required raw material need of the Project
is completely satisfied by domestic suppliers. The total investment cost of the project including
working capital is estimated at 250000 birr. From the total investment cost, the equal share (Birr
1300000 or 60% is accounted by fixed investment cost that is rent land, canal preparation /pond/
and gard/keeper/place building. The initial working capital is (Birr 120000 or 40%) that is used
for administrative cost.

A total sum of 250000 (two handered fifty thouthend) is required for this project, the project
would break even at the end of the third production cycle which is about one and half year into

13
the project; at the end of the 3rd year the entrepreneur would have made a total sum of
1,620,000 (one million six hundred twenty birr) which is good business when we compared from
other business. The project can create employment for 3 persons.

14