BUSINESS PROPOSAL

FOR THE

ESTABLISHMENT OF A LAYER/EGG PRODUCTION

BUSINESS

BUSINESS NAME:

BUSINESS ADDRESS : PROVINCE,ZAMBIA

EXECUTIVE DIRECTOR: MR. S

CONTACT PHONE #: +260 97

EMAIL :

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1.0 EXECUTIVE SUMMARY

ENTERPRISES is a start up registered Cooperative that will specialize in

egg production in Namwala district of Southern Province in the Republic of
Zambia.The business is owned by Mr. and other cooperative members. He
will also serve as a Director for the farm and will perform all the management
functions such as strategic planning, organizing, controlling, coordinating,
decision making and general leadership for the business.

Located in Southern province, our targeted market is Livingstone and the

entire Southern Province, especially once we increase production. We
deliberately chose this area due to among other reasons population size and
near proximity to key markets Namwala, further, is predominantly into cattle
rearing and we want to start this unique business as eggs are a cheaper
source of protein. Unlike cattle farming, egg production has a quicker return
for the investment.

Though there are many players and high competition in this business, we are
not afraid of taking the risk and will not back out. We will devise strategies to
keep our business afloat and buoyant. Our quality of products,location and
our unmatched customer care will give us a competitive advantage. Further,
we will run our business using a Kaizen (continuous improvement approach).
The demand for eggs is not expected to plummet anytime soon, which is why
we will put plans in place to continue to explore all available market around
our targeted area where our business will be located. We are confident we will
be profitable within the first year of our inception and maximize the profits
after wards.

Our plan is to position our company to become one of the leading brands in
egg production in Southern Province and also to be among the top five within
our fourth anniversary.

This might look too tall a dream but we are confident this will surely come to
pass because we’ve done our research and feasibility studies and we are
enthusiastic and confident that Kitwe is the right place to launch this
business before spreading to other parts of Zambia.

This business plan looks at all the requirements needed to operationalize this
project with regard to cost of fixed assets, labour, purchases, (feeds, hens) and
overhead costs. All things being equal, we anticipate to commission the farm
in August 2022

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2.0 OUR MISSION STATEMENT

To build a food business entity that will precisely meet and exceed the needs
of our valued customers and prospective customers in our targeted area and
the nation at large.

3.0 VISION

To be amongst the top ten leading egg producers and distributors within our
fifth anniversary

4.0 CORE VALUES

❖ Integrity

❖ Professionalism

❖ Excellence

❖ Commitment

❖ Honesty

❖ Customer care

❖ Ethical

❖ Innovative

❖ Responsible

5.0 GOALS

❖ To secure a reputation of high quality products backed by a high calibre of

management
❖ To have unparalleled commitment to customer care/service

❖ To complete and deliver all our jobs on time and within budget

❖ To produce what the customer wants, not what we want

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6.0 OBJECTIVES

❖ We will put in place a number of objectives to get as performance

yardsticks.

These objectives will be smart in nature

S Specific
M Measurable
A Attainable
R Realistic
T Time bound

6.1 Short Team Objectives

❖ To create six (06 ) jobs at inception

❖ To make annual sales of K653,400 by August 2023

❖ Realizing a net profit of K212,560 by August 2023

❖ Creation of opportunities to outlets where we will supply our eggs

❖ Creation of business to suppliers of point of lay pullet hens and feed

❖ Contribution to national food security

6.2 Long term Objectives

❖ To expand our business and start supplying our products to corporate

customers e.g chain stores, restaurants, lodges, boarding schools
❖ To embark on capital projects e.g buying more fixed assets in 2023

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 ❖ Creation of five more jobs by October, 2024 as we increase our production
levels
❖ To have a hatchery by 2026

❖ To buy a delivery vehicle by 2025

❖ To integrate the poultry with piggery and fish Farming by 2027

7.0 BUSINESS LOCATION

We will be located in Namwala, Maala ward, Southern Province This is a

strategic location and is only a few minutes drive from the Central Business
District (CBD) of Namwala town center. The place is near key suppliers of
materials, has access to electricity, water and accessible by road. This
location is also near key markets such as Livingstone, Monze, Mazabuka

This strategic location will give us a competitive advantage and business

leverage.

8.0 BUSINESS DESCRIPTION

Business Name Cooperative

Business Director Mr.
Business Phone No/Email : +260 976
Business Address : district
Business Bank : In progress
Business Bank Account No. : In progress
TPIN In progress
Business Legal Document :

9.0 SOCIO ECONOMIC BENEFITS

Our business will have a number of trickle down effects in Livingstone

particularly and Zambia in general.
The following are some of the economic benefits that will accrue as a result of
our operation:

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 ❖ Job creation to our youths and women folk

❖ Tax contribution to the Republic of Zambia .Government needs this tax to

buy essential hospital drugs, build schools, construct roads, pay for
university student bursaries and other capital and revenue expenses for its
smooth operations
❖ Contribution to the Gross Domestic Products (GDP)

❖ Window of business opportunity to our suppliers of chicken feeds, fiexd

assets, trays and chicken hens
❖ Creation of hunger for other entrepreneurs to jump into the bandwagon
and emulate us
❖ Contribution to national food security

10.0 WHY US / KEYS TO SUCCESS

There being a number of competitions on the market, why would a customer

choose our products instead of the next door neighbor? Our keys to success
and why we believe we will win customers are fourfold:

❖ We will provide value for money products at affordable and flexible prices.
Coupled with that is total adherence to customer care
❖ Customer feedback we intend to take customer complaints and
complements as key information in continuously improving our business.
This kaizen philosophy will be encapsulated in whatever we do

The customer will be a key stakeholder and the very reason for our
existence

❖ We will devise a unique sales and marketing strategy that will be cheap but
produces astounding results
❖ We will offer delivery services to bulky buyers especially once we buy a
delivery vehicle

11.0 PRODUCT OFFERING

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 We will be keeping chickens for egg production for the time being with plans to
consider integrating the business by having a hatchery.

12.0 MARKET ANALYSIS

The demand for eggs in Livingstone is very high and is expected to continue
with the upswing for the foreseeable future. Although there are few players on
the market to carter for the growing demand, customers are not entirely
satisfied due to a number of reasons. One such reason is poor quality and
exaggerated prices. Further, Livingstone is predominantly a cattle production
district. Therefore, our business will be quite unique

Customers do not get value for money as they are compelled to buy small eggs
at prices that are not equal to the quality. Further, customers are powerless
and have little choice but to buy eggs at fixed prices. We want to come in and
make it convenient for our esteemed customers to get high quality and value
for money. With our coming on board, the other unfortunate issues of
inconsistent supplies and stock outs will be a thing of the past. This is so,
because we will be producing on a large commercial scale especially in our
second year.

With a good management system that puts costs to the minimal, we project to
be profitable within a year we commence the project, and will have much
healthier profits after year one. This is because the return on the investment
in this type of business is a bit longer but less expensive in years to come.

12.1 MARKET SEGMENTATION

The market is segmented into two:

❖ Individual customers

❖ Corporate customers

We are targeting both types of customers.

12.2 MARKET TRENDS

The business of egg production has been on the increase in Zambia.

This calls for the need to advance in modern farming techniques by

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 investing in technology and innovation so as to remain competitive.
Failure to do so has left many, such businesses sluggish.

We intend to be innovative and avoid “applying yesterday’s methods to

solve today’s challenges”.
To remain at the top, we intend to use modern technology that allows
good quality and increases production at normal costs (efficiency).These
new technological advancements also will reduce the possible risks of
diseases. The benefits of such technological advancements in farming
will outweigh the costs by far.

12.3 PRICING STRATEGY

Price being one of the four Ps of the marketing mix plays a key role in
any business survival and growth. We will offer strategic prices that are
slightly below what our competitors offer so that we quickly penetrate
the market. But all in all, our prices will be dependent on what is
obtainable on the market. We propose to sell a tray of eggs(30 eggs) at
k55

13.0 SALES AND MARKETING STRATEGIES

The modern business world is highly competitive and only businesses that
have strategies in place do survive and tick. We
are alive to this fact and we intend to put in place a number of sales and
marketing strategies.

The following will be some of our sales and marketing strategies:-

❖ Directly involve our prospective customers through word of mouth on our

product offering
❖ Introduce our business by writing introductory letters to prospective clients
such as restaurants, boarding schools, chain stores, lodges, hospitals and
other similar institutions
❖ Leverage on the interest via various online platforms e.g facebook, twitter,
whatsapp etc 75% of Zambians own cellular phones and have access to
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 mobile interest. We believe we will meet/reach and engage more people
online.
❖ Offer special services e.g discounts to loyal repeat and bulk buyers

❖ Listing our business in yellow pages/directories

❖ Use of flyers in strategic places where our potential customers can see what
we will be offering
❖ We intend to also advertise our business on local radio in the targeted area

14.0 COOPERATIVE BUSINESS OWNERSHIP

This business will be owned by Mr. who will also serves as the Director.
He has vast experience and will be assisted by qualified workers in poultry
and egg production.

The Director will perform all management functions such as planning,

organizing, directing, controlling, coordinating, leadership and decision
making for the company.

However, a “bottom up” management style will be applied, allowing inputs

from workers and customers in decision making. This will be done in order to
foster continuous improvement and quality. At our company we believe the
customer is part of management

15.0 HUMAN RESOURCES

At inception we will employ four (04) workers to help run the business. They
will be qualified and experienced workers in poultry from a recognized
institution. Our workers will be our greatest assets.

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 Duties and Responsibilities
❖ Feeding the chickens by administering necessary feeds and water

❖ Ensuring the poultry equipment and cages are spotlessly clean so as to

prevent diseases
❖ Picking and arranging eggs in trays on a daily bases

❖ Ensuring that the chickens are not overcrowded by measuring the

number of space as directed by the Director
❖ Doing errands e.g bringing in of feeds to the farm

❖ Any other duties as assigned by the Director

❖ Providing security for all assets

EMOLUMENTS / MONTHS

DESIGNATION QTY QUALIFICATION SALARY/ TOTAL

MONTH (K)
Farm Manager 01 Certificate in 2,000 2,000
Agriculture/Animal
health

Security Guards 01
Full grade 12 1,000 1,000
certificate
General Worker 02 Full Grade 12 1,000 2,000
Certificate with
knowledge in poultry
TOTAL WAGE BURDEN / MONTH 4,000

The total annual wage burden will therefore be K60,000. We will strive to
motivate our worker so that he becomes more goal congruent (putting the
interest of the company before self interest) and more productive. This will
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 also make him more willing to grow with the company and reduce incidents
of pilferage.

16.0 RISK SENSITIVITY

This business like any other business is also susceptible to a member of

potential risks, among them being the following:-

❖ Possible risk of disease outbreaks for the flocks

❖ The Russia Ukraine war could adversely affect our business as the world is
now a global village
❖ Current Covid 19 pandemic could adversely affect our business

❖ New technological advancements/threats

❖ External economic malaise/meltdown

❖ Change in consumer behavior

❖ Price wars with big produces. This may create unfair competition and eat
into the profit of a small starter (new business)

But, the risk of disease pandemic is negligible as we will ensure our competent
worker vaccinates and procures all flock from reliable and registered suppliers.
Our chickens will be fed on quality feeds that promote good health.

17.0 COMPETITOR/SWOT ANALYSIS

Within our targeted market of Southern Province are a number of players

involved in similar businesses. Therefore, we will not be operating in a
vacuum. To remain buoyant and competitive we will conduct a SWOT
(Strengths, Weaknesses, Opportunities and Threats) analysis.
A SWOT analysis is a business appraisal system of analyzing how a business
is doing in relation to its environment, the environment being its competitors
SW (Strengths and Weaknesses) are internal factors that affect a business e.g
a good location and poor customer care respectively.
OT (Opportunities and Threats) are external factors that affect a business
such as continuous demand and economic meltdown respectively.

Other macro environmental factors to consider are coined as:-

P Political
E Environmental
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S Social / Cultural Norms
T Technology
E Economical
L Legal Issues

17.1 SWOT ANALYSIS FOR US

STRENGTHS WEAKNESSES
▪ Good location ▪ New in the business with
no repeated customers
▪ Quality large eggs ▪ We can't lower prices
further
▪ Good customer care

OPPORTUNITY THREATS
▪ Continuous demand for the ▪ Price wars with big
eggs companies
▪ Room to grow production ▪ Importation of products

▪ ▪ High cost of feeds

▪ covid 19 and Russia

Ukraine war

17.2 SWOT ANALYSIS FOR ONE COMPETITOR (NAME WITHHELD FOR

CONFIDENTIALITY)

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 STRENGTHS WEAKNESSES
▪ Well established ▪ Poor location, away from key
market
▪ Qualified staff ▪ Produces small eggs at expensive
prices
▪ ▪ Inconsistent and on a small scale

OPPORTUNITY THREATS
▪ Continuous demand for ▪ Lacks the modern farming
eggs technology
▪ COVID 19 PANDEMIC

▪ Government restrictions

Our quality of products and good customer care coupled with affordable prices
will make us the number one choice to our customers.

We are therefore not afraid to take the business risk. Moreover, the demand
for eggs is ever skyrocketing and despite a number of players on the market,
customers still need more producers, especially with touch of quality.

18.0 OPERATING PLAN

All things being equal, we intend to commence production in August 2022. We

plan to begin with a batch of 1,000 point of lay brown pullet layers These will
be sourced from reliable suppliers and free of diseases. We will ensure that
they are at the peak age of 18 weeks and will immediately start laying eggs. A
proper feeding and vaccination program will be put in place to ensure our
chickens lay quality and consistent eggs that are of international
standards.Each will lay 1 egg per day. We project to produce 11,880 trays of
eggs per annum, translating to K653,400 in annual sales revenue

We will therefore be producing at least 1,000 eggs on a daily basis, thanks to a

good management regime that will be put in place.

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18.1 COST OF PURCHASES

Purchases will constitute the cost of:

❖ Point of lay hens (at the age of 18 months)

❖ Purchase of feeds

❖ Purchase of vaccines

❖ Purchase of egg trays

18.1.1 POINT OF LAY HENS

We will buy each hen from reliable suppliers at a market price of K130.
So the total cost of point of lay purchase is K130 x 1,000 = K130,000

18.1.2 FEEDS

Each chicken eats 120g/day

So 120g x 1,000 = 120,000 g
120,,000 g = 120 kilograms / day
1000g

So in one month the cost of feed is 120Kg x 30 days = 3,600kg.

in a year it is 3,600Kg x 12
= 43,200kg

In terms of 50Kg bags this translates to

43,200 = 864 by 50Kgs
50Kg

Each 50Kg is selling at a market price of K330

So, the total cost of feed per year is equal to 1l864 × K330
= K285,120

So, in a month the cost of feed is

K285,120= K23,760
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and per day it is K792

18.1.3 VACCINES

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 Estimated at K5,000/year

18.1.4 EGG TRAYS (empty ones)

K5 each
Each tray holds 30 eggs
So, 1,000 eggs
30

= 33 trays/day
So the cost of trays per day is 33 × K5 = K165
Cost of trays per month is 990 trays × K5 = K4,950
Cost of trays per year is 11,880 trays × K5 = K59,400

Summarised cost of purchases is:

❖ Point of lays K130,,000 (one off for 4 years)

❖ Feed K23,760

❖ Vaccines K5,000
TOTAL K158,760

Annual Purchases without including hens

Feed K285,120
Vaccines K5,000
TOTAL: K290,120

Money

18.2 PROJECTED SALES

PRICE / TRAY(K) NO. OF TRAYS TOTAL (K)

55 33 K1,815 per day
525 990 K54,440 per month
55 11,880 K653,400 annually

18.3 FIXED ASSET REQUIREMENTS

ITEM ESTIMATED COST (K)

Chicken building 40,000

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 Egg washer 5,000

Cages ×2 @ k15,000 30,000

Feeders × 8 @ k120 960
Drinkers × 8 @ k120 960
TOTAL 76,920

All the above assets except the chicken building can simply be called
equipment and their total is K36,920

18.3.1 DEPRECIATION ON FIXED ASSETS / ANNUM

ITEM COST DEPRECIATION DEPRECIATION NET USEFUL

(K) RATE COST BOOK LIFE
VALUE
Chicken 40,000 2% 800 39,200 50 years
building

Equipment 36,920 20% 7,384 29,536 5 years

TOTAL 76,920 8,184 68,736

Deprecation is calculated by the straight line method and the total cost is
K8,184

18.4 OVERHEAD COSTS / MONTH

ITEM ESTIMATED COST (K)

Electricity 400
Transport /Distribution 2,000
Communication 400
Administration 900
Marketing Cost 1,000
TOTAL 4,700

Annual overheads K56,400

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18.5 TOTAL PROJECT COST

ITEM ESTIMATED COST

FIXED ASSET REQUIREMENTS
Building 40,000

Equipment 36,920

INITIAL WORKING CAPITAL REQUIREMENTS

Salaries 5,000
Purchases 158,760
Overheads costs 4,700
PACRA 1,200

PRE-OPERATING EXPENSES
Feasibility study 4,000
Equipment transportation 2,800
TOTAL PROJECT COST 53,380
Added 5% imponderables/contingency 12,669
TOTAL PROJECT COST 266,049

18.7 FINANCIAL PROJECTIONS

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18.7.1 INCOME STATEMENT FOR THE YEAR ENDING AUGUST 2023

K
SALES 653,400
Less cost of goods sold:

Purchases 290,120
(106,920)
Gross Profit
290,280

LESS EXPENSES
Salaries 60,000
Overhead Costs 56,400
Depreciation 8,184
(124,584)

NET PROFIT BEFORE TAX 238,696

Tax (26,136
NET PROFIT AFTER TAX 212,560

After one year of trading our profit margin is at K212,560 which is 33%
of total annual sales. This will be a viable profitable business that will be
able to pay all its financial obligations on time and still remain
operational and liquid. Management will embark on an aggressive
marketing crusade that will see sales increase by 35% in 2024 and 45%
in 2025

BALANCE SHEET AS AT 31 AUGUST 2023

NONE CURRENT ASSETS COST DEPR COST NBV

Building 40,000 800 39,200

Equipment 36,920. 7,384 29,536
76,920. 8,184. 68,730

CURRENT ASSETS

Account receivable 35,000

Bank 179,000
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Cash in hand 3,500
217,500
LESS LIABILITIES

Account payable (25,500)

192,000
NET ASSET 260,730

CAPITAL 266,049
NET PROFIT 212,560
478,609
Dividends (217,879)
NET ASSETS 260,730

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