Table of Content

    Do you want to start fish farm business?

    Are you thinking about starting a fish farming business? Well, the fish farming business is one of those businesses which yield extremely high profits as compared to their initial investments. But its startup is associated with a couple of problems, the biggest of which is its difficult planning in the initial stages.
    This business has got more constraints as compared to other businesses, that is why you need to develop a comprehensive business plan before moving towards its execution phase. To help you avoid all the trouble of making a plan yourself, we are providing a business plan for a fish farm startup ‘Fishland’ which is soon going to be launched.

    Executive Summary

    Our catfish farm business plan executive summary will provide you a summarized information of all next sections.

    2.1 The Business

    Fishland will be a licensed and insured fish farming company that will involve itself in commercial production of high quality and natural fish and aquaculture. Initially, we will raise and harvest aquaculture for the United States but within next ten years, we see ourselves as one of the leading global suppliers of fish and aquaculture.

    2.2 Management

    Fishland will be solely owned and operated by Frank Bob who has been associated with the fish farming industry for more than 30 years and has been associated with ‘American Seafoods’ as an Additional Production Manager for the last 7 years.

    2.3 Customers

    Initially, our customers will be the individual buyers, departmental stores, hotels, and restaurants located in Columbia but we hope to become a global fish producer by the end of next ten years.

    2.4 Target of the Company

    Our primary target is to become the best fish farming company of the Columbia within next 5 years of our launch and to recover the initial investment group for business plan within next 2 years of launch.

    Fish Farm Business Plan - 3 Years Profit Forecast

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    Company Summary

    3.1 Company Owner

    Fishland will be solely owned and operated by Frank Bob who has been associated with the fish farming industry for more than 30 years and had been associated with ‘American Seafoods’ as an Additional Production Manager for the last 7 years.

    3.2 Why the fish business is being started

    Currently, all fish farming companies are leaning towards artificial methods of farming. Although the production has significantly increased, but this increased production has compromised the quality and ‘naturality’ of produced fish.
    Bob is extremely passionate about fish farming and he can only make a difference in the currently used practices of fish farming by starting a fish farm business.

    3.3 How the fish business will be started

    The company will be started in an old vacant warehouse located in Columbia, South Carolina. In addition to the renovation work, the company will procure fifty 200-gallon tanks for breeding different kinds of aquaculture and fishes. Bob has forecasted following costs for expenses, assets, investment, and loans for the Start-up:

    Fish Farm Business Plan - Startup Coast
    The detailed start-up information is given below:

    Start-up Expenses  
    Legal $7,500
    Stationery etc. $6,250
    Brochures $6,875
    Consultants $0
    Insurance $3,750
    Rent $22,500
    Research and Development $3,750
    Expensed Equipment $63,750
    Signs $11,250
    Building Materials $27,500
    Building Labor $20,000
    TOTAL START-UP EXPENSES $173,125
    Start-up Assets $0
    Cash Required $118,750
    Start-up Inventory $5,625
    Other Current Assets $22,500
    Long-term Assets $175,000
    TOTAL ASSETS $321,875
    Total Requirements $495,000
    START-UP FUNDING $0
    START-UP FUNDING $173,125
    Start-up Expenses to Fund $321,875
    Start-up Assets to Fund $495,000
    TOTAL FUNDING REQUIRED $0
    Assets $203,125
    Non-cash Assets from Start-up $118,750
    Cash Requirements from Start-up $0
    Additional Cash Raised $118,750
    Cash Balance on Starting Date $321,875
    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 $312,500
    Investor 2 $0
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $495,000
    Loss at Start-up (Start-up Expenses) $173,125
    TOTAL CAPITAL $321,875
    TOTAL CAPITAL AND LIABILITIES $321,875
    Total Funding $495,000

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    Services for customers

    Before starting this venture, Bob asked himself, “how can I start fish farming business that will excel other established farms?” and the answer he got was, “by producing best quality fish.”
    Fishland is proud to say that it will only engage itself in the production of best quality and healthy aquaculture. Our main products include:

    • Ornamental fish (e.g. Goldfish and tropical fish)
    • Shellfish (e.g. Clams, oysters, crustaceans, mollusks and shrimp)
    • Finfish (e.g. Catfish, trout, tilapia, and minnows)
    • Other aquaculture (e.g. Seaweed, crabs, frogs, and turtles)

    Marketing Analysis of fish farm business

    A good approach before developing a business plan experts for this business is to find examples of a fish farming business pan and to go through fish farming business plan sample templates, like this one. In this way, you can easily plan all components of a good fish farming business plan.

    Note

    The most important component of an effective business plan for fish farming is its accurate marketing analysis that’s why Bob acquired the services of marketing experts to help him through this phase. It is only after this stage that a good business plan could have been developed.

    After identifying and analyzing the trends of this business, he developed an effective marketing strategy for developing his catfish farming business plan.

    Business Plan for Investors

    5.1 Market Trends

    According to a report from the Food and Agriculture Organization of the United Nations, global fisheries and aquaculture production was more than 158 million tonnes as of 2012. A surging demand for food has resulted in an increased demand for farmed fish. The global aquaculture industry has grown exponentially over the past five decades. In 1960, fish farming production was about 1.6 million tonnes. But by 2012, the production was more than 66 million tonnes.
    Similarly, seafood is one of the most popular foods of the US citizens making it the largest seafood consumer in the world after China. According to the annual Fisheries of the United States Report released by NOAA, Americans seafood consumption was about 15.5 pounds of fish and shellfish per person in 2015. But the most interesting facts is that over 90% of the seafood consumed in the US is imported from other countries around the world. That is why the fish farming industry has a lot of potential in the US and can be immensely profitable provided that you plan it successfully.

    5.2 Marketing Segmentation

    Our marketing experts have identified the following type of target audience which can become the potential customers of our products.

    Fish Farm Business Plan - Market Segmentation

    The detailed marketing segmentation comprising of the company’s target audience is as follows:

    5.2.1 Individual Buyers:

    Fishland will open a small retail location in its initial phase, in the first year of its startup. The retail store will be located in the main commercial district of Columbia city. Through this retail location, we hope to target the individual buyers residing in the nearby areas. Nearly all of the community is financially established and can easily spend their money for buying our fresh and natural fish.

    5.2.2 Departmental Stores:

    We will supply our canned products to various other departmental stores and malls. These departmental stores will make up the bulk of company’s customers and more than half of our aquaculture will be sold to them.

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    5.2.3 Restaurants and Hotels:

    Fishland will also supply its products to various restaurants and hotels on a regular basis throughout the year. These restaurants will become our biggest consumer after the departmental stores.
    The detailed market analysis of our potential customers is given in the following table:

    Market Analysis
    YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
    Potential Customers Growth CAGR
    Individual Buyers 21% 2,534,433 3,343,344 1,536,553 5,343,745 6,524,545 13.43%
    Departmental Stores 40% 7,232,334 8,432,344 9,456,665 9,985,544 10,546,432 10.00%
    Restaurants and Hotels 39% 17,342,322 18,243,455 20,422,655 23,482,867 25,221,433 15.32%
    Total 100% 24,574,656 26,675,799 29,879,320 33,468,411 35,767,865 9.54%

    5.3 Business Target

    We aim to become the best fish farming company of Columbia within next five years of our startup. Our two main business targets to be achieved as milestones over the course of next three years are as follows:

    • To balance the initial cost of the startup with earned profits by the end of the first year
    • To achieve the net profit margin of $10k per month by the end of the first year, $15k per month by the end of the second year, and $25k per month by the end of the third year

    5.4 Product Pricing

    After considering the market demands, we have priced all our products in the similar ranges as of our competitors. The reason behind our pricing policy is to achieve the minimum attractive rate of return which would not be possible in case of offering our services at lower or higher prices.

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    Strategy

    After marketing analysis, sales strategy is the second most important component of a business plan so make sure to develop it before you think about how to start a fish farming business or even how to write a business plan for catfish farming business.

    6.1 Competitive Analysis

    Fishland will have various competitors ranging from small private farms to multinational organizations. Our competitors may have established businesses but no one will surpass us when it comes to the quality of our products. Our main competitive edge will be the ‘naturality’ of our products which is lacked by nearly all other manufacturers.

    6.2 Sales Strategy

    In addition to implementing the usual sales strategies, we will focus on the following two things:

    • We will create awareness among people about the benefits of seafood by conducting seminars and webinars.
    • We will advertise ourselves in magazines, newspapers, TV stations, and social media.

    6.3 Sales Yearly

    Fish Farm Business Plan - Sales Yearly

    6.4 Sales Monthly

    Fish Farm Business Plan - Sales Monthly

    6.5 Sales Forecast

    Our sales are forecasted as follows:

    Fish Farm Business Plan - Unit Sales

    The detailed information about sales forecast is given in the following table:

    Sales Forecast      
    Unit Sales Year 1 Year 2 Year 3
    Ornamental fish 1,872,330 2,360,320 2,588,240
    Shellfish 1,435,320 1,250,430 1,762,450
    Finfish 539,320 770230 1,002,310
    Sea weed 265,450 322,390 393,320
    Crabs & Shrimps 802,370 815,430 823,540
    Other Aquaculture 134,240 394,340 842,230
    TOTAL UNIT SALES 5,049,030 5,913,140 7,412,090
    Unit Prices Year 1 Year 2 Year 3
    Ornamental fish $1.40 $1.50 $1.60
    Shellfish $6.00 $8.00 $10.00
    Finfish $7.00 $8.00 $9.00
    Sea weed $6.50 $7.50 $8.50
    Crabs & Shrimps $14.00 $12.00 $10.00
    Other Aquaculture $11.50 $13.00 $14.50
    Sales
    Ornamental fish $21,480 $27,400 $33,320
    Shellfish $12,050 $19,450 $26,850
    Finfish $5,011 $7,160 $9,309
    Sea weed $13,935 $19,460 $24,985
    Crabs & Shrimps $6,235 $7,230 $8,225
    Other Aquaculture $22,950 $36,550 $50,150
    TOTAL SALES
    Direct Unit Costs Year 1 Year 2 Year 3
    Ornamental fish $0.70 $0.80 $0.90
    Shellfish $0.40 $0.45 $0.50
    Finfish $0.30 $0.35 $0.40
    Sea weed $3.00 $3.50 $4.00
    Crabs & Shrimps $0.70 $0.75 $0.80
    Other Aquaculture $3.00 $3.50 $4.00
    Direct Cost of Sales
    Ornamental fish $9,830 $18,300 $26,770
    Shellfish $6,660 $11,990 $17,320
    Finfish $1,790 $3,500 $5,210
    Sea weed $1,940 $6,760 $11,580
    Crabs & Shrimps $2,770 $6,920 $11,070
    Other Aquaculture $6,420 $22,470 $38,520
    Subtotal Direct Cost of Sales $29,410 $69,940 $110,470

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    Personnel plan

    A detailed personnel plan is always needed in catfish business proposal. The personnel plan of Fishland is as follows:

    7.1 Company Staff

    Bob will act as the Chief Executive Officer of the company. The company will initially hire following people:

    • 1 General Manager to manage the overall operations of the farm
    • 2 Administrators / Accountants to maintain financial records
    • 2 Engineers responsible for operating/maintaining packing processes and machinery at farm
    • 4 Sales and Marketing Executives responsible for creating brand image and discovering new ventures
    • 20 Field Employees for operating farm
    • 4 Drivers to transport products to various retail locations, hotels, and restaurants
    • 1 Store Manager to manage, operate and maintain the retail store

    7.2 Average Salary of Employees

     Personnel Plan      
    Year 1 Year 2 Year 3
    General Dairy Farm Manager $75,000 $85,000 $95,000
    Administrators / Accountants $43,000 $51,000 $59,000
    Engineers $54,400 $67,400 $87,400
    Sales and Marketing Executives $45,000 $52,000 $59,000
    Field Employees $210,000 $240,000 $280,000
    Drivers $30,000 $33,000 $38,000
    Store Manager $10,000 $12,000 $15,000
    Total Salaries $467,400 $540,400 $633,400

    Financial Plan

    Bob has developed the following financial plan with the help of financial experts, which outlines the financial development of Fishland over the next three years. The financial plan should also be developed before you think about how to start a fish farm business. Bob will solely finance the company and no equity funding or outside loan will be required unless the company expands faster than forecasted.

    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

    Fish Farm Business Plan - Brake-even Analysis

     Brake-Even Analysis  
    Monthly Units Break-even 5530
    Monthly Revenue Break-even $15,974
    Assumptions:
    Average Per-Unit Revenue $26.87
    Average Per-Unit Variable Cost $0.89
    Estimated Monthly Fixed Cost $19,641

    8.3 Projected Profit and Loss

    8.3.1 Profit Monthly

    Fish Farm Business Plan - Profit Monthly

    8.3.2 Profit Yearly

    Fish Farm Business Plan - PROFIT YEARLY

    8.3.3 Gross Margin Monthly

    Fish Farm Business Plan - GROSS MARGIN MONTHLY

    8.3.4 Gross Margin Yearly

    Fish Farm Business Plan - GROSS MARGIN YEARLY

    8.4 Projected Cash Flow

    Fish Farm Business Plan - Projected Cash Flow Diagram

     Pro Forma Cash Flow      
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $401,024 $453,046 $505,068
    Cash from Receivables $70,923 $80,610 $90,297
    SUBTOTAL CASH FROM OPERATIONS $471,943 $533,651 $595,359
    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 $471,943 $533,651 $595,359
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $216,457 $242,204 $267,951
    Bill Payments $135,939 $153,285 $170,631
    SUBTOTAL SPENT ON OPERATIONS $352,396 $395,489 $438,582
    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 $352,396 $395,489 $438,582
    Net Cash Flow $119,551 $138,167 $156,783
    Cash Balance $218,523 $252,381 $286,239

    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
    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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