Kancora Boru

Cattle Pen Fattening

Owner :- Mr. Kancora Boru

Location
Municipality:- Nagele
Kebele :- 03

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TABLE OF CONTENT
EXECUTIVE SUMMARY ------------------------------------------------------------------------ 1

Mission and Objectives ------------------------------------------------------------------------------ 2

Mission ---------------------------------------------------------------------------------------------- 2

Objectives ------------------------------------------------------------------------------------------- 2

Company Summary ---------------------------------------------------------------------------------- 2

Product/Services ----------------------------------------------------------------------------------- 2

Cattle for Fattening -------------------------------------------------------------------------------- 2

Management and labor ---------------------------------------------------------------------------- 3

Target Market -------------------------------------------------------------------------------------- 3

Profitability of cattle fattening business --------------------------------------------------------- 4

Competitive Advantage ---------------------------------------------------------------------------- 4

Operational plan ----------------------------------------------------------------------------------- 4

Publicity And Advertising Strategy -------------------------------------------------------------- 4

SWOT Analysis -------------------------------------------------------------------------------------- 5

FINANCIAL STATEMENTS AND PROJECTIONS --------------------------------------- 6

Generating Funding / Startup -------------------------------------------------------------------- 6

Buyers/demand------------------------------------------------------------------------------------- 6

Payback period ------------------------------------------------------------------------------------- 6

Sales Forecast --------------------------------------------------------------------------------------- 6

Projected Profit And Loss ------------------------------------------------------------------------ 7

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EXECUTIVE SUMMARY
Our company Kancora Boru Cattle Pen Fattening intends to fatten cattle in pens/feedlots.

Cattle will be purchased from the rural areas where it is cheap, and transported to our pen.

We will then feed the cattle for a period of 90 days. During this period, we expect the cattle

to increase in weight, and an increase in the quality of the beef to super grade. We will then

sell the cattle, and make a profit. We will continuously do this throughout the year.

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Mission and Objectives
Mission
Our mission is to provide healthy fattened cattle to customers at affordable prices. We value our relationships
with current and future customers and hope to communicate our appreciation to them through our
outstanding, guaranteed product quality, personal service, and efficient delivery.
Our commitment to our customers and our country will be reflected through honest and responsible business.
We will provide a safe, friendly working environment for our employees.
Objectives
• Create jobs as we expand our operation

• Produce cattle with super grade beef

• To develop a sustainable farm, surviving off its own cash flow

Company Summary
Product/Services
Cattle beef fattening is a livestock production practice that involves reducing the animal activity and feeding
of beef cattle with a protein balanced, high-energy diet for a period of 90 days under confinement, thereby
fattening the cattle more quickly to increase live weights and improve degree of finish and thus obtain better
grades at the abattoir. Beef fattening enables the cattle to express fully their genetic potential for growth.
Larger animals could also be sold for more money in the market as they yield more meat.
Cattle for Fattening
The selection of the cattle is based on evaluating the potential for beef fattening of different
types of cattle in relation to the market price of different grades of beef.
Factors to consider include breed of cattle, gender, maturity, type and age. Thi s is because
different types of cattle respond differently to the beef fattening process. Some cattle are
more suitable for cattle fattening than others. A major challenge is lack of funds to buy cattle
for beef fattening when prices are favorable which is lost opportunity to make profit. If the
wrong decision is made, losses would be made before the start of the business.
Feed and nutrition
It’s very essential that the right quantity and type of feed is given to cattle. The success of
the business depends on the ability of the cattle to gain weight and to produce high quality
beef. These factors are affected by the quality and quantity of feed. The proper feeding
techniques will ensure that the cattle will grow and utilize the feed efficiently and produce
good quality beef.
This will maximize the profits of the cattle fattening farming business. Failing to properly
feed the cattle will lead to losses. The losses will be due to failure to meet the target slaughter
weights and beef quality grade. There are companies which sell cattle fattening stock feeds.

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These are complete, balanced feeds, which are designed for fattening cattle in feedlots over
90 days.
The stock feeds are high energy fattening meals which contain all the nutrients necessary for
ad lib cattle pen fattening. We will also make our own home made cattle beef fattening feeds.
Management and labor
The number of farm workers required depends on the size of the farm. There might be the
need for full time employees to manage the herd. There is need for good technical knowledge
of cattle fattening techniques for success in the business, and good managem ent skills.
Management
A good management practice plays a key role in profit maximization. Enlisting people in the
technical know-how of the business either by profession or by experience is essential. The
staff would include, but not be limited, to the following:
1. Chief Operating Officer: responsible for providing direction for the business and
evaluating the success of the organization
2. General Farm Manager: responsible for ensuring compliance during project executions,
carrying out risk assessments, ensuring desired goals are achieved and overseeing the smooth
running of the daily farming.
3. Administrator / Accountant: responsible for preparing financial reports, budgets and
financial statements for the organization. He/she would also develop fi nancial forecast, risk
analysis reports and administer payrolls.
4. Cattle Ranch and Animal Manager / Supervisor: responsible for managing the commercial
breeding of cattle. He/she would work closely with the General Manager to achieve the
organizations’ goals and objectives
5. Sales and Marketing Officer: responsible for handling business research, market surveys
and feasibility studies for clients. He/she also documents all customer contact and
information
6. Field Workers / Contract Staff: responsible for feeding cattle as instructed by the
supervisor, cleaning the ranches, changing the water in the water troughs and feeding the
cattle on a regular basis.
Target Market
Naturally, the target market are those who are the end consumer of livestock farm p roduce
and also those who benefits from the business value chain of the agriculture industry. Every
household consumes produce from livestock farms be it meat, milk, and the skin (leather)

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used for bags, belts and shoes production et al. So also a large ch unk of manufacturing
companies depends on livestock farms for some of their raw materials.
Profitability of cattle fattening business
Cattle beef fattening is very profitable when done the right way. The profitability of the
cattle fattening farming business depends on the buying price of the cattle, cost of the feed,
price margin, feed margin, feed conversion efficiency ratio, unit cost per kilogram when
selling. It is important to understand the mentioned margins and conversion ratios so that
financial losses are not made by paying too much for the cattle.
Competitive Advantage
In the Agricultural Industry Entrepreneurs are encouraged by the government to embrace
commercial farming. This is so because part of the success of any nation is her ability to
cultivate her own food and also export foods to other nations of the world. This increase the
amount of competition in the industry to far greater heights.
Operational plan
The business is to be carried out all year round. So a lot of feeds will be stock ed that will
suffice all year round. The feed which include millet/guinea corn hulls, groundnut leaves,
maize stalk etc. are mostly cheap in the market and far cheaper when planted in the farm.
The mixture of the feed is done in such a way that cattle get the required nutrient for proper
weight gain. The cattle will be bought in such a way that the selling interval will be 30 days
i.e. a certain number of cattle will be available each month for sale or slaughter. In order to
maximize profit, farming of the cattle feed (groundnut, millet, guinea corn) will be done and
stocked all year round. The main produce will be sold and the groundnut leaves, millet husk,
guinea corn hulls will be kept for cattle consumption.
Publicity And Advertising Strategy
Any business that wants to grow beyond the corner of the street or the city they are operating from must be
ready and willing to utilize every available means (conventional and non – conventional means) to advertise
and promote the business. We intend growing our business which is why we have perfected plans to build
our brand via every available means.
We know that it is important to create strategies that will help us boost our brand awareness and to create a
corporate identity for Cattle selling business. Below are the platforms you can leverage on to boost our
fattened cattle trading brand and to promote and advertise our business;
• Encourage our loyal customers to help with Word of Mouth mode of advertisement (referrals)
• Advertise our grain selling business in relevant magazines (agriculture and food related magazines),
local newspaper, local TV stations and local radio station
• Promote our Grain trading business online via our official website
• Leverage on the internet and social media platforms like; Instagram, Facebook , twitter, et al to
promote our commercial farm business

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SWOT Analysis
The need to conduct a proper SWOT analysis cannot be over emphasized for the success of the business.
We know that if we get it right from the onset, we would have succeeded in creating the foundation that will
help us build a standard cattle fattening business that will favorably compete with leading cattle rearing /
livestock farms in Guji zone and Oromia. As a cattle fattening business, we look forward to maximizing our
strength and opportunities and also to work around our weaknesses and threats. Here is a summary from the
result of the SWOT analysis conducted:
STRENGTHS
Healthy relationships with loads of major players (agriculture merchants) in the livestock farming industry;
both suppliers and buyers within and outside the area.
The owner is so energetic and passionate about the business and willing to do whatsoever to make sure it
succeeds. The closeness and commitment creates a large positive driving force towards it success.
Experienced hands in cattle rearing / livestock farming industry in the payroll.
WEAKNESSES

• Limited Capital

• High feed costs

• Little negotiation power with customers

OPPORTUNITIES
Rising beef demands- As the population is rising, so also the demand of beef.
Government support-The government’s campaign on promoting indigenous farm output is an added
advantage.
Easy access to market-The proximity to market will play a key role in the success of the business.
THREATS
Economic Downturns-The current state of economy might reduce the purchasing power of most intending
buyers.
Weather and natural disasters-Bad weather and natural disasters (draughts, epidemics) that could greatly
affect the cattle.
Increased competition-A new competitor (i.e. a commercial farm that rear same animals) as our cattle ranch
within same location.

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FINANCIAL STATEMENTS AND PROJECTIONS
This cattle fattening business will hopefully be financed with a loan/grant from the bank and the payback
period is estimated to be one year.
Generating Funding / Startup
No doubt raising start – up capital for a business might not come cheap, but it is a task that an entrepreneur
must go through. It is a private owned business and it will be financed by the owner of the cattle ranch.

• Generate part of the start – up capital from personal savings .

• Generate a larger chunk of the startup capital from the bank (loan facility).
Sales/maturity
The sale of the fattened cattle will be sold monthly likewise the purchase of more cattle in order to keep
uniform format revenue and purchase flow.
Buyers/demand
The demand for beef is a continuous and essential one. It’s a necessity and as vital and grains and vegetables
in every household. This makes the business more inviting and less stressful. The buyers will be local butchers
and market men from the local and modern markets. The selling point will be in the local market and larger
cities like Adama with competing bid for higher prices.
Payback period
The payback period will be one year. The first three months will not count because it takes three months to
transform a malnourished cattle to a healthy fattened cattle.
Sales Forecast
We have been able to critically examine the cattle fattening industry and we have analyzed our chances in
the industry and we have been able to come up with the following sales forecast. The sales projections are
based on past performance and information gathered on the field and some workable assumptions as well
with respect to the nature of business that we run.

Sales Forecast Year

Sales Year1 Year2 Year3

Fattened cattle sales 10,800,000 11,300,000 12,300,000

Total Sales 10,800,000 11,300,000 12,300,000

N.B: This projection is done based on past performance, what is obtainable in the industry and with the
assumption that there won’t be any major economic meltdown that can impact negatively on household
spending, bad weather cum natural disasters (draughts, epidemics), and unfavorable government policies

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Projected Profit And Loss
Given the continuing scarcity of Fattened cattle in the region we can confidently project that we will be able
to sell all the cattle bought and fattened in each of the three seasons.

Table:- Profit and Loss

Year 1 Year 2 Year 3
Sales 10,800,000.00 11,300,000.00 12,300,000.00

Direct Cost of Sales 3,600,000.00 3,900,000.00 4,000,000.00

Other Costs of Sales (Cattle feed)

Cereal straws/stovers 530,000.00 620,000.00 730,000.00

Wheat milling by product 3,400,000.00 3,500,000.00 3,900,000.00

Total Cost of Sales 7,530,000.00 8,020,000.00 8,630,000.00

Gross Margin 3,270,000.00 3,280,000.00 3,670,000.00

Expenses

Salary and Wages 98,000.00 112,000.00 127,000.00

Depreciation 50,000.00 45,000.00 40,000.00

Marketing/Promotion 5,500.00 6,500.00 8,000.00

Utilities 20,000.00 25,000.00 31,000.00

Loading 130,000.00 135,000.00 154,000.00

Transportation 500,000.00 560,000.00 630,000.00

Interest Expense 283,371.09 283,371.09 283,371.09

Total Operating Expenses 1,086,871.09 1,166,871.09 1,273,371.09

Profit Before Taxes 2,183,128.91 2,113,128.91 2,396,628.91

Taxes 746,095.12 721,595.12 820,820.12

Net Profit 1,437,033.79 1,391,533.79 1,575,808.79

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Table Cash Flow

Cash Inflow Year 1 Year 2 Year 3

Opening balance 1,437,033.79 1,391,534 1,575,809
Investment Capital 10,077.00
Total sales 15,000,000 16,500,000 17,100,000
Total Cash Inflow 16,447,111 17,891,534 18,675,809

Table Long term credit reimbursement schedule

No. Period Interest Principal Balance

1 Nov-22 42,500.00 231,114.26 2,768,885.74

2 Dec-22 39225.88 234,388.38 2,534,497.36

3 Jan-23 35905.38 237,708.88 2,296,788.48

4 Feb-23 32537.84 241,076.42 2,055,712.06

5 Mar-23 29122.59 244,491.67 1,811,220.39

6 Apr-23 25658.96 247,955.30 1,563,265.09

7 May-23 22146.26 251,468.00 1,311,797.09

8 Jun-23 18583.79 255,030.47 1,056,766.62

9 Jul-23 14970.86 258,643.40 798,123.22

10 Aug-23 11306.75 262,307.51 535,815.71

11 Sep-23 7590.72 266,023.54 269,792.17

12 Oct-23 3822.06 269,792.16 0