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.
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.
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.
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 within next 2 years of launch.
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 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 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:
The detailed start-up information is given below:
|Research and Development||$3,750|
|TOTAL START-UP EXPENSES||$173,125|
|Other Current Assets||$22,500|
|Start-up Expenses to Fund||$321,875|
|Start-up Assets to Fund||$495,000|
|TOTAL FUNDING REQUIRED||$0|
|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|
|Liabilities and Capital||$0|
|Accounts Payable (Outstanding Bills)||$0|
|Other Current Liabilities (interest-free)||$0|
|Additional Investment Requirement||$0|
|TOTAL PLANNED INVESTMENT||$495,000|
|Loss at Start-up (Start-up Expenses)||$173,125|
|TOTAL CAPITAL AND LIABILITIES||$321,875|
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 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.
The most important component of an effective fish farming business plan 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.
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.
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.
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:
|YEAR 1||YEAR 2||YEAR 3||YEAR 4||YEAR 5|
|Restaurants and Hotels||39%||17,342,322||18,243,455||20,422,655||23,482,867||25,221,433||15.32%|
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.
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 on fish 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
6.4 Sales Monthly
6.5 Sales Forecast
Our sales are forecasted as follows:
The detailed information about sales forecast is given in the following table:
|Unit Sales||Year 1||Year 2||Year 3|
|Crabs & Shrimps||802,370||815,430||823,540|
|TOTAL UNIT SALES||5,049,030||5,913,140||7,412,090|
|Unit Prices||Year 1||Year 2||Year 3|
|Crabs & Shrimps||$14.00||$12.00||$10.00|
|Crabs & Shrimps||$6,235||$7,230||$8,225|
|Direct Unit Costs||Year 1||Year 2||Year 3|
|Crabs & Shrimps||$0.70||$0.75||$0.80|
|Direct Cost of Sales|
|Crabs & Shrimps||$2,770||$6,920||$11,070|
|Subtotal Direct Cost of Sales||$29,410||$69,940||$110,470|
A detailed personnel plan is always needed before you think about how to start a fish farm. 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
|Year 1||Year 2||Year 3|
|General Dairy Farm Manager||$75,000||$85,000||$95,000|
|Administrators / Accountants||$43,000||$51,000||$59,000|
|Sales and Marketing Executives||$45,000||$52,000||$59,000|
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
|Year 1||Year 2||Year 3|
|Current Interest Rate||10.00%||11.00%||12.00%|
|Long-term Interest Rate||10.00%||10.00%||10.00%|
8.2 Brake-even Analysis
|Monthly Units Break-even||5530|
|Monthly Revenue Break-even||$15,974|
|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
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 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|
|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|
|SUBTOTAL CASH SPENT||$352,396||$395,489||$438,582|
|Net Cash Flow||$119,551||$138,167||$156,783|
8.5 Projected Balance Sheet
|Pro Forma Balance Sheet|
|Assets||Year 1||Year 2||Year 3|
|Other Current Assets||$1,000||$1,000||$1,000|
|TOTAL CURRENT ASSETS||$201,259||$237,468||$273,677|
|TOTAL LONG-TERM ASSETS||$980||$610||$240|
|Liabilities and Capital||Year 1||Year 2||Year 3|
|Other Current Liabilities||$0||$0||$0|
|SUBTOTAL CURRENT LIABILITIES||$9,482||$10,792||$12,102|
|TOTAL LIABILITIES AND CAPITAL||$198,839||$232,978||$267,117|
8.6 Business Ratios
|Year 1||Year 2||Year 3||INDUSTRY PROFILE|
|Percent of Total Assets|
|Other Current Assets||1.75%||2.02%||2.29%||27.40%|
|Total Current Assets||138.53%||150.99%||163.45%||54.60%|
|Percent of Sales|
|Selling, General & Administrative Expenses||74.29%||71.83%||69.37%||65.20%|
|Profit Before Interest and Taxes||26.47%||29.30%||32.13%||2.86%|
|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.|
|Accounts Receivable Turnover||4.56||4.56||4.56||N.A.|
|Accounts Payable Turnover||14.17||14.67||15.17||N.A.|
|Total Asset Turnover||1.84||1.55||1.26||N.A.|
|Debt to Net Worth||0||-0.02||-0.04||N.A.|
|Current Liab. to Liab.||1||1||1||N.A.|
|Net Working Capital||$120,943||$140,664||$160,385||N.A.|
|Assets to Sales||0.45||0.48||0.51||N.A.|
|Current Debt/Total Assets||4%||3%||2%||N.A.|
Illustrative business plan samples
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