Do you want to start butchery business plan?
Do you want to start a butcher shop? Opening a butcher shop is not only an easy business venture but also very profitable. To make the most out of your startup and make it a success, you need to develop a business plan first.
Below we have provided an in-depth professional business plan of a butchery business startup, named ‘Meat & Meat,’ to help you make one for your business.
Executive Summary
Before you think about how to open a butcher shop, you will have to develop a comprehensive butcher shop business plan which will serve as a guide for you throughout your business journey.
2.1 The Business
Meat & Meat will be a licensed and ensured butchery shop located in the center of Harrisburg, Pennsylvania. Meat & Meat will be a one-stop shop to fulfill all the meat-related needs of the customer.
2.2 Management
The business will be solely owned and operated by Mike Kin been working in the meat industry for the last 15 years and is known for his exceptional management skills. Mike will hire a small team comprising of butchers, drivers, and assistants for operating and managing the shop.
2.3 Customers
Our customers will be the residential community living near our shop as well as different businesses like hotels, restaurants, and grocery stores. We will provide fresh and highest quality meat including beef, chicken, mutton, pork, and fish, all of which will meet the quality standards set by federal and state food authorities.
2.4 Target of the Company
Our target is to become the most trustworthy meat supplier of the city within six months of our launch and open five more shops by the end of the third year in different cities, as indicated in our butcher shop business plan.
Company Summary
3.1 Company Owner
Mike Kin doesn’t have a college degree but when it comes to business, he knows it all. Mike has been working in the meat industry ever since he graduated from high school. He had the opportunity to work in several national and international food processing brands.
Known for his business acumen and incredible management skills, Mike enjoys extensive contacts in the meat and food processing industry.
3.2 Why the Business is being started
Mike is starting a butcher shop business to enter the gigantic food processing industry. This startup will serve as the first step for him and would eventually pave the way for bigger initiatives.
Mike will be launching his first meat shop in Harrisburg and plans to open his outlets in five more cities within the next three years.
3.3 How the Business will be started
Meat & Meat will be launched in a 300 square foot shop located in the center of the city. The shop was previously in use as a grocery store, so it would be easily converted into a butcher shop business. The business plan for butcher shop developed by Mike dictates all the things which will be needed for the startup. They include a meat storage facility, meat packaging facility, meat transportation vehicles, woodwork for display, and furniture for Mike’s office and guests’ waiting room.
Mike made a contract with a slaughterhouse located in a suburban part of the city to provide an unending supply of meat. Negotiation with a slaughterhouse is important and must be done before starting a butcher shop business plan so that other things can be planned accordingly. The company’s financial experts have forecasted following costs for the start-up:
The detailed start-up information is as follows:
| Start-up Expenses | |
| Legal | $55,300 |
| Consultants | $0 |
| Insurance | $32,750 |
| Rent | $32,500 |
| Research and Development | $32,750 |
| Expensed Equipment | $32,750 |
| Signs | $1,250 |
| TOTAL START-UP EXPENSES | $187,300 |
| Start-up Assets | $0 |
| Cash Required | $332,500 |
| Start-up Inventory | $32,625 |
| Other Current Assets | $232,500 |
| Long-term Assets | $235,000 |
| TOTAL ASSETS | $121,875 |
| Total Requirements | $245,000 |
| START-UP FUNDING | $0 |
| START-UP FUNDING | $273,125 |
| Start-up Expenses to Fund | $11,875 |
| Start-up Assets to Fund | $15,000 |
| TOTAL FUNDING REQUIRED | $0 |
| Assets | $23,125 |
| Non-cash Assets from Start-up | $18,750 |
| Cash Requirements from Start-up | $0 |
| Additional Cash Raised | $18,750 |
| Cash Balance on Starting Date | $21,875 |
| TOTAL ASSETS | $0 |
| Liabilities and Capital | $0 |
| Liabilities | $0 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $0 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $0 |
| Capital | $0 |
| Planned Investment | $0 |
| Investor 1 | $332,500 |
| Investor 2 | $0 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $695,000 |
| Loss at Start-up (Start-up Expenses) | $313,125 |
| TOTAL CAPITAL | $251,875 |
| TOTAL CAPITAL AND LIABILITIES | $251,875 |
| Total Funding | $255,000 |
Products
Meat & Meat will be a one-stop shop for the customers to fulfill all their meat-related needs. The shop will provide fresh and highest quality meat, which meets all quality standards set by federal and state food authorities. According to Mike’s butchery business plan, his shop will provide the following products to its customers:
- Poultry: Chicken Kiev, Chicken Cordon Bleu, Cutlet, Kebab
- Lamb: Chop, Flank, Leg
- Pork: Boiling Bacon, Chop, Rasher, Sausage
- Beef: Filet Porterhouse Steak, Rib-Eye Steak, Roast Beef, T-Bone Steak, Mignon, Kebab, London Broil
- Fish: Salmon, Tuna, Shrimp
Marketing Analysis of Butchery Business
Note
The most important component of an effective business plan for a butcher shop is its accurate marketing analysis. Considering the importance of this phase, Mike acquired the services of marketing experts to help him. They helped him prepare a meat market business plan and also guide him how to start a butcher shop.
5.1 Market Trends
As for a general trend, the market demand for butcher businesses is on the rise, mainly because of the rapidly growing fast food industry. According to recent statistics, there are more than 6,000 federally registered meat slaughtering and processing facilities in the United States. From restaurants to grocery stores, hotels to households, meat is an important food material for US citizens.
According to recent statistics, the US meant consumption was around 55% for red meat, 36.8% for poultry and 8.2% fish. These stats will be thoroughly considered while designing the market strategy of our meat retailing business.
5.2 Marketing Segmentation
Before starting a butcher shop business, it is extremely important for you to identify your target audience so that you can find ways to attract them towards you and convert them into your customers. Our marketing experts have identified the following type of target audience for our business for butcher shop.
The detailed marketing segmentation comprising of our target audience is as follows:
5.2.1 Local Community: The first category of our customers includes the community residing near our shop. The community includes both single and married persons and we have the right products for everyone. From red meat to chicken and fish, we will provide high-quality and fresh meat for all the non-veg members of the local community. We will also provide meat in ready-to-cook packaging.
5.2.2 Hotels & Restaurants: The second group of our target customers will be the hotels and restaurants located in the vicinity of our shop. Meat products are an essential offering of all hotels and restaurants so we can get a lot of business from this customer group.
5.2.3 Grocery Stores: The third category includes the grocery and convenience stores located near us. Many people prefer to shop everything from grocery stores and they usually don’t visit meat shops for the purpose. We will supply the chief portion of our ready-to-cook meat to this consumer group.
The detailed market analysis of our potential customers is given in the following table:
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Local Community | 32% | 11,433 | 13,344 | 16,553 | 18,745 | 20,545 | 13.43% |
| Hotels & Restaurants | 48% | 22,334 | 32,344 | 43,665 | 52,544 | 66,432 | 10.00% |
| Grocery Stores | 20% | 12,867 | 14,433 | 15,999 | 17,565 | 19,131 | 15.32% |
| Total | 100% | 46,634 | 60,121 | 76,217 | 88,854 | 106,108 | 9.54% |
Business Plan for Investors
5.3 Business Target
Our business targets are as follows:
- To become the most trustworthy meat supplier of the city within six months of our launch
- To recover the initial investment group for your business within one year of launch by increasing sales
- To open five more shops by the end of the third year in different cities, which will be decided later
5.4 Product Pricing
After considering the market demands, we have priced all our products in similar ranges as of our competitors. Though our prices will be the same, we will offer better quality meat to our customers that will meet all the standards of food authorities.
Strategy
Sales strategy is one of the most important components of a butcher shop business plan and hence it must be developed with great care. Sales strategy must be planned before you think about other details of how to start a butcher shop business because it will decide the success of your business.
6.1 Competitive Analysis
We will be facing a really tough competition because there are numerous butcher shops and meat providing facilities in our vicinity. However, we can out-perform our competitors by providing exceptional quality products. In addition to that, our excellent customer service would also help us retain our customers. Our location is the perfect location to start a butcher shop since it is almost in the center of the city.
6.2 Sales Strategy
We will deploy both new and tested sales strategies to target our customers. Some of the innovative strategies that we will use to attract, convert and retain our customers are as follows:
- Conducting health-related seminars, webinars, workshops, and conferences in different institutions to advance the importance of healthy meat. By these sessions, we will also advertise ourselves as the one-point stop to get all healthy meat.
- Advertising our meat shop in food magazines, TV stations, newspapers, and social media.
- Offering a 20% discount on all our products for the first three months of our launch.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
Our forecasted sales pattern, in accordance with our business plan for butchery, is given in the following column chart:
The detailed sales forecast is given in the following table:
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Lamb & Beef | 1,887,030 | 2,680,320 | 2,588,240 |
| Poultry | 802,370 | 815,430 | 823,540 |
| Pork | 539,320 | 770230 | 1,002,310 |
| Fish | 265,450 | 322,390 | 393,320 |
| TOTAL UNIT SALES | 3,494,170 | 4,588,370 | 4,807,410 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Lamb & Beef | $140.00 | $150.00 | $160.00 |
| Poultry | $600.00 | $800.00 | $1,000.00 |
| Pork | $700.00 | $800.00 | $900.00 |
| Fish | $650.00 | $750.00 | $850.00 |
| Sales | |||
| Lamb & Beef | $2,149,800 | $2,784,000 | $3,383,200 |
| Poultry | $120,050 | $194,500 | $268,500 |
| Pork | $50,110 | $71,600 | $93,000 |
| Fish | $139,350 | $194,600 | $249,850 |
| TOTAL SALES | |||
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Lamb & Beef | $0.70 | $0.80 | $0.90 |
| Poultry | $0.40 | $0.45 | $0.50 |
| Pork | $0.30 | $0.35 | $0.40 |
| Fish | $3.00 | $3.50 | $4.00 |
| Direct Cost of Sales | |||
| Lamb & Beef | $989,300 | $1,839,000 | $2,679,700 |
| Poultry | $66,600 | $119,900 | $173,200 |
| Pork | $17,900 | $35,000 | $52,100 |
| Fish | $19,400 | $67,600 | $115,800 |
| Subtotal Direct Cost of Sales | $1,294,100 | $1,699,400 | $2,104,700 |
Personnel plan
It is highly advisable to prepare a personnel plan before you think about how to set up a butchery business since it is one of the biggest contributing factors of the success of any business. Preparing it well ahead allows you to make better choices in other aspects.
The personnel plan for Meat & Meat is as follows:
7.1 Company Staff
Mike will act as the CEO of the company and will initially hire following people on renewable contracts of one year:
- 1 Manager to manage the overall operations
- 2 Cashiers to receive cash from the people
- 2 Accountants to maintain financial records
- 4 Sales Executives responsible for marketing and advertising the butcher shop
- 10 Butchers for meat processing
- 6 Packaging Assistants for meat packaging
- 5 Drivers for transportation purposes
- 8 Cleaners for cleaning purposes
7.2 Average Salary of Employees
The average salary of employees is as follows:
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Manager | $85,000 | $95,000 | $105,000 |
| Cashiers | $152,000 | $159,000 | $166,000 |
| Accountants | $145,000 | $152,000 | $159,000 |
| Sales Executives | $210,000 | $240,000 | $270,000 |
| Butchers | $550,000 | $650,000 | $750,000 |
| Packaging Assistants | $410,000 | $440,000 | $480,000 |
| Drivers | $50,000 | $55,000 | $60,000 |
| Cashiers | $187,000 | $194,000 | $201,000 |
| Total Salaries | $760,000 | $890,000 | $1,020,000 |
Financial Plan
The final thing to do before you think about how to start a meat market is to develop a comprehensive financial plan which will cover the detailed costs of your startup. It should include all the costs starting from the rent of the shop to the costs incurred on the procurement of inventory. Before starting his butchery business, Mike acquired the services of financial experts to develop a business plan for butcher shop. The financial plan developed with their help is as follows:
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 10.00% | 11.00% | 12.00% |
| Long-term Interest Rate | 10.00% | 10.00% | 10.00% |
| Tax Rate | 26.42% | 27.76% | 28.12% |
| Other | 0 | 0 | 0 |
8.2 Brake-even Analysis
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 10.00% | 11.00% | 12.00% |
| Long-term Interest Rate | 10.00% | 10.00% | 10.00% |
| Tax Rate | 26.42% | 27.76% | 28.12% |
| Other | 0 | 0 | 0 |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $309,069 | $385,934 | $462,799 |
| Direct Cost of Sales | $15,100 | $19,153 | $23,206 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $15,100 | $19,153 | $23,206 |
| Gross Margin | $293,969 | $366,781 | $439,593 |
| Gross Margin % | 94.98% | 94.72% | 94.46% |
| Expenses | |||
| Payroll | $138,036 | $162,898 | $187,760 |
| Sales and Marketing and Other Expenses | $1,850 | $2,000 | $2,150 |
| Depreciation | $2,070 | $2,070 | $2,070 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $4,000 | $4,250 | $4,500 |
| Insurance | $1,800 | $1,800 | $1,800 |
| Rent | $6,500 | $7,000 | $7,500 |
| Payroll Taxes | $34,510 | $40,726 | $46,942 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $188,766 | $220,744 | $252,722 |
| Profit Before Interest and Taxes | $105,205 | $146,040 | $186,875 |
| EBITDA | $107,275 | $148,110 | $188,945 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $26,838 | $37,315 | $47,792 |
| Net Profit | $78,367 | $108,725 | $139,083 |
| Net Profit/Sales | 30.00% | 39.32% | 48.64% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $40,124 | $45,046 | $50,068 |
| Cash from Receivables | $7,023 | $8,610 | $9,297 |
| SUBTOTAL CASH FROM OPERATIONS | $47,143 | $53,651 | $59,359 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $47,143 | $53,651 | $55,359 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $21,647 | $24,204 | $26,951 |
| Bill Payments | $13,539 | $15,385 | $170,631 |
| SUBTOTAL SPENT ON OPERATIONS | $35,296 | $39,549 | $43,582 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $35,296 | $35,489 | $43,882 |
| Net Cash Flow | $11,551 | $13,167 | $15,683 |
| Cash Balance | $21,823 | $22,381 | $28,239 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $184,666 | $218,525 | $252,384 |
| Accounts Receivable | $12,613 | $14,493 | $16,373 |
| Inventory | $2,980 | $3,450 | $3,920 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $201,259 | $237,468 | $273,677 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $12,420 | $14,490 | $16,560 |
| TOTAL LONG-TERM ASSETS | $980 | $610 | $240 |
| TOTAL ASSETS | $198,839 | $232,978 | $267,117 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $9,482 | $10,792 | $12,102 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $9,482 | $10,792 | $12,102 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $9,482 | $10,792 | $12,102 |
| Paid-in Capital | $30,000 | $30,000 | $30,000 |
| Retained Earnings | $48,651 | $72,636 | $96,621 |
| Earnings | $100,709 | $119,555 | $138,401 |
| TOTAL CAPITAL | $189,360 | $222,190 | $255,020 |
| TOTAL LIABILITIES AND CAPITAL | $198,839 | $232,978 | $267,117 |
| Net Worth | $182,060 | $226,240 | $270,420 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | 4.35% | 30.82% | 63.29% | 4.00% |
| Percent of Total Assets | 4.35% | 4.71% | 5.80% | 9.80% |
| Accounts Receivable | 5.61% | 4.71% | 3.81% | 9.70% |
| Inventory | 1.85% | 1.82% | 1.79% | 9.80% |
| Other Current Assets | 1.75% | 2.02% | 2.29% | 27.40% |
| Total Current Assets | 138.53% | 150.99% | 163.45% | 54.60% |
| Long-term Assets | -9.47% | -21.01% | -32.55% | 58.40% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.68% | 3.04% | 2.76% | 27.30% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 25.80% |
| Total Liabilities | 4.68% | 3.04% | 2.76% | 54.10% |
| NET WORTH | 99.32% | 101.04% | 102.76% | 44.90% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 94.18% | 93.85% | 93.52% | 0.00% |
| Selling, General & Administrative Expenses | 74.29% | 71.83% | 69.37% | 65.20% |
| Advertising Expenses | 2.06% | 1.11% | 0.28% | 1.40% |
| Profit Before Interest and Taxes | 26.47% | 29.30% | 32.13% | 2.86% |
| Main Ratios | ||||
| Current | 25.86 | 29.39 | 32.92 | 1.63 |
| Quick | 25.4 | 28.88 | 32.36 | 0.84 |
| Total Debt to Total Assets | 2.68% | 1.04% | 0.76% | 67.10% |
| Pre-tax Return on Net Worth | 66.83% | 71.26% | 75.69% | 4.40% |
| Pre-tax Return on Assets | 64.88% | 69.75% | 74.62% | 9.00% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 19.20% | 21.16% | 23.12% | N.A. |
| Return on Equity | 47.79% | 50.53% | 53.27% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 4.56 | 4.56 | 4.56 | N.A. |
| Collection Days | 92 | 99 | 106 | N.A. |
| Inventory Turnover | 19.7 | 22.55 | 25.4 | N.A. |
| Accounts Payable Turnover | 14.17 | 14.67 | 15.17 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 1.84 | 1.55 | 1.26 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | 0 | -0.02 | -0.04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $120,943 | $140,664 | $160,385 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.45 | 0.48 | 0.51 | N.A. |
| Current Debt/Total Assets | 4% | 3% | 2% | N.A. |
| Acid Test | 23.66 | 27.01 | 30.36 | N.A. |
| Sales/Net Worth | 1.68 | 1.29 | 0.9 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
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