Table of Content

    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.

    3 years profit forecast - Business Plan Sample for Butcher Shop

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    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:

    Startup Cost - butcher shop business plan

    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

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    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.

    Marketing Segmentation - Business Plan Sample 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

    Sales Monthly - butcher shop business plan

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    6.4 Sales Yearly

    Sales Yearly - Business Plan Sample for Butcher Shop

     

    6.5 Sales Forecast

    Our forecasted sales pattern, in accordance with our business plan for butchery, is given in the following column chart:

    Unit Sales - butcher shop business plan

    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:

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    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

    Brake-even Analysis - butcher shop business plan

     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

    Profit Monthly - Business Plan for Butcher Shop

    8.3.2 Profit Yearly

    Profit Yearly - Business Plan for Butcher Shop

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    8.3.3 Gross Margin Monthly

    Gross Margin Mouthly - Business Plan for Butcher Shop

    8.3.4 Gross Margin Yearly

    Gross Margin Yearly - Business Plan for Butcher Shop

    8.4 Projected Cash Flow

    butcher shop business plan

     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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