Table of Content

    Сhicken farming business plan for starting your own business

    The chicken farming industry is bigger than you think. Americans consume a whopping 201 lbs. of chicken meat per head a year. The poultry industry is a $40.4billion giant. This is a business that is not going out of business anytime soon.

    To start this business, you will be needing a business plan for poultry farming which can tell you how to open a chicken farm. This document is a strategic business plan that can help you through all the stages of opening and successfully operating a chicken farm. Unlike a cattle feedlots business plan or a dairy farming business plan, this business can offer you more money.

    Executive Summary

    2.1 The Business

    Kiley Protein farm will be a registered and licensed meat and egg producer based in Kansas City Missouri. The business will act as a model for starting up a chicken farm.  The aim of this business will be to provide the best products.

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    2.2 Management of Chicken Farming Business

    In order to make sure that the business runs smooth and without any hiccup, Kiley Lawson, the owner of the business will hire 2 managers and a doctor. The managers will be responsible for procurement and sales, while the doctor will be the one looking after the operations of the farm. If you need to know how to start chicken farming, management is the first thing you need to learn. This is not like a business plan for bank as you need to be involved at all levels to make sure that the farm operates profitably.

    2.3 Customers of Chicken Farming Business

    Before we can explore more aspects of how to set up a poultry farm business, we need to see what the customers are that we are working with. The main customers of this business will be:

    • Chicken retailers in the area.
    • Hotels and restaurants.
    • Grocery stores that sell chicken.
    • End consumers.

    2.4 Business Target

    The target of this business is to make a name and get a considerable business share in the poultry market of the US. Here are some objective targets that we will try to meet:

    • Opening three more farms within 5 years of starting.
    • Starting to generate at least $29,200 in revenue per month by the end of three years.
    • Establishing a chicken meat and eggs brand that is trusted and reputable.

    Сhicken Farming Business Plan - 3 Years Profit Forecast

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    Document for raising debt funding from financial institutions to meet the expectations of the banks, SBA, and government agencies.

    Company Summary

    3.1 Company Owner

    Kiley Lawson will be the owner of the Kiley Protein Farm. Kiley has been a manager in a poultry farm for the last 5 years. She has got money in inheritance and now she wants to invest it in a good business. Having the funds and the experience in this field made her the perfect owner and chief executive of a poultry farming business.

    3.2 Why the Chicken Farming Business is being started?

    Kiley has noticed that there is a gap in the market. Kansas City is a big consumer of meat in the area but they have to import it from other cities as the production in the city cannot suffice the demand. Kiley wants to bridge this gap. This example of business plan for poultry farming will cover all the aspects there are about chicken farming and how Kiley will be filling the gap.

    3.3 How the Chicken Farming Business will be started?

    Step1: Planning

    The first thing you need for starting a poultry farm business is a plan for the business. In this phase, you need to conduct a survey to find out the demand of poultry products in the area and compare it to the production.

    This sample chicken farming business plan will cover how you can take advantage of the gap in the demand and supply and how you can make a name in the market.

    Step2: Establish a Brand

    The next step in setting up a chicken farm is establishing a brand. People prefer buying from a brand with a known name. So, as the poultry farm building starts coming out of the ground, you need to start the marketing effort to make the brand known.

    Step3: Building the Farm and Outlets

    The next step is building a farm and setting up sale points. At the start, Kiley is planning to make a farm capable of housing 5,000 chickens for meat and 2,000 layers for eggs. 2 farm outlets will be opened, one outside the farm and one in Downtown Kansas City.

    Step4: Going Online

    As people are shifting to online shopping, Kiley Protein will set up an online store for customers.

    Step5: Promote and Market

    Marketing effort will be started to make sure the people know there’s a new chicken producer in the town.

    Сhicken Farming Business Plan - Startup Cost

    Start-up Expenses
    Legal $240,000
    Consultants $0
    Insurance $30,000
    Rent $30,000
    Research and Development $25,000
    Expensed Equipment $49,000
    Signs $4,100
    TOTAL START-UP EXPENSES $378,100
    Start-up Assets $340,000
    Cash Required $370,000
    Start-up Inventory $48,000
    Other Current Assets $230,000
    Long-term Assets $280,000
    TOTAL ASSETS $1,268,000
    Total Requirements $1,646,100
    START-UP FUNDING
    Start-up Expenses to Fund $378,100
    Start-up Assets to Fund $1,268,000
    TOTAL FUNDING REQUIRED $1,646,100
    Assets
    Non-cash Assets from Start-up $1,656,000
    Cash Requirements from Start-up $372,000
    Additional Cash Raised $39,000
    Cash Balance on Starting Date $35,000
    TOTAL ASSETS $2,102,000
    Liabilities and Capital
    Liabilities $29,000
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $37,000
    Other Current Liabilities (interest-free) $0
    TOTAL LIABILITIES $66,000
    Capital
    Planned Investment $1,646,100
    Investor 1 $0
    Investor 2 $0
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $1,646,100
    Loss at Start-up (Start-up Expenses) $389,900
    TOTAL CAPITAL $2,036,000
    TOTAL CAPITAL AND LIABILITIES $2,102,000
    Total Funding $1,646,100

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    Services

    The next thing needed to complete this chicken farming business plan template is deciding what services we will be providing. The main service we will provide will be the provision of class A poultry meat and eggs. However, as this is going to be an organic chicken farming business, here are some of the services we will be providing.

    • Provision of Organic Meat to the End Consumer will be the main service we will provide. The sales in this service might be low in volume but the high demand and price of organic meat will make it worth our while. We will only be selling organic meat from our own outlets.
    • Provision of Organic Eggs to the End Consumer will be the second service we will be providing. This is also a segment of the market with a low volume of sales but high profit margins.
    • Provision of Meat to Restaurants will be one of the bulk services we will be providing. These customers will not be high paying, but the volume of these sales will be high, making this part of the business profitable.
    • Provision of Meat and Eggs to Retailers will be another service that will attract a large volume of sales. We will provide the product to all retailers at a better price that the competition.

    Marketing Analysis of Chicken Farming Business

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    If you want to know how to write a business plan for a chicken farm, you need to run a thorough marketing analysis of the industry. If we look at the trends in the poultry industry, the consumption of meat in the US has been up by as much as 540% since 1940. This translates to a multibillion-dollar industry that has a scope for aggressive expansion just like a mushroom farming business plan.

    However, this must also be noted that starting a chicken business is not an easy feat to undertake. This is mainly because the industry already has a lot of well-reputed and established brands that are providing the services.

    Let’s explore more marketing factors related to this poultry farm business plan.

    5.1 Market Trends

    If you want to know how to open a chicken farm, you need to see the market trends. It can be seen that the chicken market has grown from $8.3 billion in 2008 to more than $40 billion in 2018. Experts are expecting another 300% growth in the sector by 2030. This means one thing; the business is a good one to enter.

    5.2 Marketing Segmentation

    The next part of this poultry farming business proposal is the marketing segmentation. Following are the main market segments that we will be targeting.

    Сhicken Farming Business Plan - Marketing Segmentation

    5.2.1 Restaurants and Hotels

    Our largest customers will be these. We will make agreements with them to be the sole suppliers of all their meat and eggs. This will make us a bunch of money and that too for a long period of time.

    5.2.2 Grocery Stores

    We’ll offer frozen meat products and eggs at the popular grocery store in the area. Once the brand makes a name for itself, this will become one of the most profitable segments of our market.

    5.2.3 End Consumer

    We will be opening two outlets to sell the product directly to the end consumer. This will not be a very profitable thing at the start but once we penetrate this segment of the market, we can make top dollar.

    5.2.4 Chicken and Egg Retailers

    We will provide our product to the retailers who have established sales and are selling product from other producers. We will offer it at a lower price to shift them to us.

    Market Analysis
    Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
    Restaurants and Hotels 34% 43,000 45,000 46,000 47,000 49,000 10.00%
    Grocery Stores 22% 25,000 26,000 28,000 29,000 31,000 10.00%
    End Consumer 19% 18,000 19,000 21,000 23,000 25,000 10.00%
    Chicken and Egg Retailers 25% 35,000 36,000 37,000 39,000 41,000 11.00%
    Total 100% 121,000 126,000 132,000 138,000 146,000 10%

    5.3 Business Target

    • To be a leading provider of meat and eggs in the US.
    • To expand the business worldwide in 10 years.
    • To establish a reputable brand of organic meat and eggs.
    • To be the best meat and eggs provider in the state of Missouri.
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    5.4 Product Pricing

    We will keep the prices low at the start to attract customers. This will be done for the first six months. Once we get customers and make a name of the brand then we can increase the prices gradually and adjust them where there is the perfect balance of sales volume and profit margin.

    Marketing Strategy

    Note

    It is of cardinal importance to make a strong marketing strategy if you have to establish a profitable chicken farming business. Your poultry marketing plan needs to focus on the strengths you have over the competition. The main advantage Kiley Protein has is that they are providing organic meat and eggs, something not many of the others are providing.

    Let’s see how this sample business proposal for poultry farming covers the marketing part.

    6.1 Competitive Analysis

    1. We are one of the very few businesses in the area providing organic meat and eggs. This is the biggest competitive advantage that we have.
    2. We will provide meat in varieties. Boneless, leg pieces, minced meat, will all be offered as different products.
    3. We will make deals with bulk customers and make long term agreements with them to be their sole suppliers.

    6.2 Sales Strategy

    • We will use YouTube and Facebook ads to advertise out product and highlight how are we better.
    • We will send salespersons to large customers (hotels and fast-food chains) to sign long term agreements.
    • For the average customer, we will offer discounted rates and lucky draws on every purchase to attract sales.

    6.3 Sales Monthly

    Сhicken Farming Business Plan - Sales Monthly

    6.4 Sales Yearly

    Сhicken Farming Business Plan - Sales Yearly

    6.5 Sales Forecast

    Сhicken Farming Business Plan - Unit Sales

    Sales Forecast
    Unit Sales Year 1 Year 2 Year 3
    Provision of Organic Meat to End Consumer 40,000 42,400 44,944
    Provision of Organic Eggs to End Consumer 38,000 40,280 42,697
    Provision of Meat to Restaurants 46,000 48,760 51,686
    Provision of Meat & Eggs to Retailers 48,000 50,880 53,933
    TOTAL UNIT SALES 172,000 182,320 193,259
    Unit Prices Year 1 Year 2 Year 3
    Provision of Organic Meat to End Consumer $42.00 $48.72 $56.52
    Provision of Organic Eggs to End Consumer $32.00 $37.12 $43.06
    Provision of Meat to Restaurants $55.00 $63.80 $74.01
    Provision of Meat & Eggs to Retailers $66.00 $76.56 $88.81
    Sales
    Provision of Organic Meat to End Consumer $1,680,000.00 $2,065,728.00 $2,540,019.15
    Provision of Organic Eggs to End Consumer $1,216,000.00 $1,495,193.60 $1,838,490.05
    Provision of Meat to Restaurants $2,530,000.00 $3,110,888.00 $3,825,147.88
    Provision of Meat & Eggs to Retailers $3,168,000.00 $3,895,372.80 $4,789,750.39
    TOTAL SALES $8,594,000.00 $10,567,182.40 $12,993,407.48
    Direct Unit Costs Year 1 Year 2 Year 3
    Provision of Organic Meat to End Consumer $40.00 $46.00 $51.00
    Provision of Organic Eggs to End Consumer $30.00 $34.00 $40.00
    Provision of Meat to Restaurants $53.00 $60.00 $70.00
    Provision of Meat & Eggs to Retailers $64.00 $73.00 $84.00
    Direct Cost of Sales
    Provision of Organic Meat to End Consumer $1,600,000.00 $1,950,400.00 $2,292,144.00
    Provision of Organic Eggs to End Consumer $1,140,000.00 $1,369,520.00 $1,707,872.00
    Provision of Meat to Restaurants $2,438,000.00 $2,925,600.00 $3,617,992.00
    Provision of Meat & Eggs to Retailers $3,072,000.00 $3,714,240.00 $4,530,355.20
    Subtotal Direct Cost of Sales $8,250,000.00 $9,959,760.00 $12,148,363.20

    Personnel plan

    This business plan for poultry farm pdf also covers the staff that will be needed to run the farm and all of its operations. Just like a pig farming business plan, this business also needs quite a bit of staff to keep the farm running.

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    7.1 Company Staff

    • Kiley Lawson will be the owner and the CEO of the chicken farming business.
    • 2 Managers for procurement and sales.
    • 1 Doctor to run the farm.
    • 8 Handlers to feed and look after the chicken.
    • 3 Drivers for the delivery trucks.
    • 4 Salesmen to tun the outlets.
    • 4 Delivery boys to deliver the online orders.

    7.2 Average Salary of Employees

    Personnel Plan
    Year 1 Year 2 Year 3
    Procurement Manager $13,000 $14,300 $15,730
    Sales Manager $13,000 $14,300 $15,730
    Doctor $12,000 $13,200 $14,520
    Handlers $77,000 $84,700 $93,170
    Drivers $21,000 $23,100 $25,410
    Salesmen $35,000 $38,500 $42,350
    Delivery Boys $28,000 $30,800 $33,880
    Total Salaries $199,000 $218,900 $240,790

    Financial Plan

    The next thing this start chicken farming business plan needs to cover is the financial plan, an estimate of all the costs involved in setting up this business. Just like a goat farming business plan, we need to have an estimate before we start it.

    Here are the costs that the owner will have to arrange:

    • The cost of setting up the farm and procuring the machinery.
    • The salaries of the staff of the farm for the first 6 months.
    • The cost of food for the chicken for the first lot (40 days).
    • The cost of setting up outlets to sell the product.
    • The cost of promoting the business.
    • The cost of buying vehicles to transport the product to the market.
    • The money needed to create an online store.

    8.1 Important Assumptions

    General Assumptions
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 8.21% 8.22% 8.24%
    Long-term Interest Rate 8.35% 8.41% 8.45%
    Tax Rate 23.50% 24.40% 25.10%
    Other 0 0 0

    8.2 Break-even Analysis

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    Break-Even Analysis
    Monthly Units Break-even 5339
    Monthly Revenue Break-even $131,440
    Assumptions:
    Average Per-Unit Revenue $234.00
    Average Per-Unit Variable Cost $0.65
    Estimated Monthly Fixed Cost $163,300

    8.3 Projected Profit and Loss

    Pro Forma Profit And Loss
    Year 1 Year 2 Year 3
    Sales $8,594,000 $10,567,182 $12,993,407
    Direct Cost of Sales $8,250,000 $9,959,760 $12,148,363
    Other $0 $0 $0
    TOTAL COST OF SALES $8,250,000 $9,959,760 $12,148,363
    Gross Margin $344,000 $607,422 $845,044
    Gross Margin % 4.00% 5.75% 6.50%
    Expenses
    Payroll $199,000 $218,900 $240,790
    Sales and Marketing and Other Expenses $120,000 $122,000 $124,000
    Depreciation $2,231 $2,300 $2,400
    Leased Equipment $0 $0 $0
    Utilities $2,900 $3,000 $3,100
    Insurance $1,900 $2,000 $2,100
    Rent $3,000 $3,100 $3,200
    Payroll Taxes $28,000 $29,000 $30,000
    Other $0 $0 $0
    Total Operating Expenses $357,031 $380,300 $405,590
    Profit Before Interest and Taxes ($13,031) $227,122 $439,454
    EBITDA ($13,031) $227,122 $439,454
    Interest Expense $0 $0 $0
    Taxes Incurred ($2,606) $45,424 $87,891
    Net Profit ($10,425) $181,698 $351,563
    Net Profit/Sales -0.12% 1.72% 2.71%

    8.3.1 Profit Monthly

    Сhicken Farming Business Plan - Profit Monthly

    8.3.2 Profit Yearly

    Сhicken Farming Business Plan - Profit Yearly

    8.3.3 Gross Margin Monthly

    Сhicken Farming Business Plan - Gross Margin Monthly

    8.3.4 Gross Margin Yearly

    Сhicken Farming Business Plan - Gross Margin Yearly

    8.4 Projected Cash Flow

    Сhicken Farming Business Plan - Projected Cash Flow

    Pro Forma Cash Flow
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $52,000 $56,160 $60,653
    Cash from Receivables $15,000 $16,200 $17,496
    SUBTOTAL CASH FROM OPERATIONS $67,000 $73,030 $78,872
    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 $70,000 $74,000 $79,000
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $34,000 $35,000 $36,000
    Bill Payments $17,000 $19,000 $21,000
    SUBTOTAL SPENT ON OPERATIONS $51,000 $54,000 $57,000
    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 $52,000 $56,160 $60,653
    Net Cash Flow $16,000 $17,000 $18,000
    Cash Balance $25,000 $26,000 $27,000

    8.5 Projected Balance Sheet

    Pro Forma Balance Sheet
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $268,000 $300,160 $330,176
    Accounts Receivable $22,000 $24,640 $27,695
    Inventory $3,900 $4,368 $4,900
    Other Current Assets $1,000 $1,000 $1,000
    TOTAL CURRENT ASSETS $288,000 $322,560 $362,557
    Long-term Assets
    Long-term Assets $10,000 $10,000 $10,000
    Accumulated Depreciation $16,000 $17,920 $20,160
    TOTAL LONG-TERM ASSETS $21,000 $23,520 $26,460
    TOTAL ASSETS $291,000 $325,920 $366,660
    Liabilities and Capital Year 4 Year 5 Year 6
    Current Liabilities
    Accounts Payable $17,700 $19,824 $22,282
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $15,020 $16,822 $18,908
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $13,000 $14,560 $16,365
    Paid-in Capital $28,000 $30,000 $30,950
    Retained Earnings $52,000 $56,680 $62,348
    Earnings $190,000 $207,100 $227,810
    TOTAL CAPITAL $270,000 $294,300 $323,730
    TOTAL LIABILITIES AND CAPITAL $283,000 $325,920 $366,660
    Net Worth $282,000 $307,380 $338,118

     

    8.6 Business Ratios

    Ratio Analysis
    Year 1 Year 2 Year 3 INDUSTRY PROFILE
    Sales Growth 7.24% 8.02% 8.89% 3.00%
    Percent of Total Assets
    Accounts Receivable 9.22% 10.22% 11.32% 9.80%
    Inventory 5.40% 5.98% 6.63% 9.90%
    Other Current Assets 2.14% 2.37% 2.63% 2.40%
    Total Current Assets 150.10% 151.00% 152.00% 158.00%
    Long-term Assets 11.50% 11.55% 11.57% 12.00%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 4.93% 4.97% 5.02% 4.34%
    Long-term Liabilities 0.00% 0.00% 0.00% 0.00%
    Total Liabilities 7.62% 7.68% 7.75% 7.38%
    NET WORTH 100.83% 101.64% 102.57% 110.00%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 94.90% 97.46% 100.19% 99.00%
    Selling, General & Administrative Expenses 94.80% 97.36% 100.09% 97.80%
    Advertising Expenses 1.55% 1.59% 1.64% 1.40%
    Profit Before Interest and Taxes 42.00% 43.13% 44.34% 33.90%
    Main Ratios
    Current 34 35 36 32
    Quick 34 34.4 35.26 33
    Total Debt to Total Assets 0.17% 0.18% 0.17% 0.40%
    Pre-tax Return on Net Worth 72.66% 73.00% 74.00% 75.00%
    Pre-tax Return on Assets 94.80% 99.54% 104.52% 111.30%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 33.01% 34.03% 35.09% N.A.
    Return on Equity 55.02% 56.73% 58.48% N.A.
    Activity Ratios
    Accounts Receivable Turnover 7.7 7.8 7.8 N.A.
    Collection Days 100 100 100 N.A.
    Inventory Turnover 31.2 32.76 33 N.A.
    Accounts Payable Turnover 15.1 16 16.5 N.A.
    Payment Days 27 27 27 N.A.
    Total Asset Turnover 2.5 2.5 2.6 N.A.
    Debt Ratios
    Debt to Net Worth -0.04 -0.03 -0.04 N.A.
    Current Liab. to Liab. 1 1 1 N.A.
    Liquidity Ratios
    Net Working Capital $240,900 $254,390 $268,636 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0.85 0.87 0.87 N.A.
    Current Debt/Total Assets 1% 0% 0% N.A.
    Acid Test 28.12 29 29.09 N.A.
    Sales/Net Worth 2.1 2.1 2.1 N.A.
    Dividend Payout 0 0 0 N.A.

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