COLLEGE OF ENGINEERING AND TECHNOLOGY

DEPARTMENT OF ELECTRICAL AND COMPUTER

ENGINEERING (POWER STREEM)
ASSIGNMENT OF ENTERPRENEUR SHIP
BUSSINESS PLAN FOR A CHICKEN BREADING AND
EGGS PRODUCTION

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Contents
Acknowledgement ....................................................................................................................4
Introduction ..............................................................................................................................5
Group Assignment business idea list .........................................................................................5
Macro screening ....................................................................................................................7
Micro screening .....................................................................................................................7
SWOT Analysis .....................................................................................................................8
A. Wood Product (Furniture) Manufacturing ..........................................................................8
Strengths ...............................................................................................................................8
Weaknesses ...........................................................................................................................8
Opportunities .........................................................................................................................9
Threats ...............................................................................................................................9
B. Wheat trading .......................................................................................................................9
Strengths ...............................................................................................................................9
Weaknesses ........................................................................... Error! Bookmark not defined.
Opportunities ......................................................................... Error! Bookmark not defined.
Threats .................................................................................. Error! Bookmark not defined.
c. Chicken breading and egg production .................................................................................. 10
Strengths ............................................................................... Error! Bookmark not defined.
Weaknesses ........................................................................... Error! Bookmark not defined.
Opportunities ......................................................................... Error! Bookmark not defined.
Threats .................................................................................. Error! Bookmark not defined.
1. Executive Summary ......................................................................................................... 10
2. Business Summary ........................................................................................................... 10
2.1 Company Summary ....................................................................................................... 11
2.2 Management Summary .................................................................................................. 11
3. Personnel plan, i.e. hiring plan and related costs ................. Error! Bookmark not defined.
Project management methodology ....................................................................................... 12
2.3 Products & Services ....................................................................................................... 12
4. Market Analysis Summary ............................................................................................ 13
5. Strategy & Implementation Summary.................................................................................. 13

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6. Financial Plan Summary ............................................................................................... 13
6.1 Actual Assumptions ....................................................................................................... 13
6.2 Understanding Analysis ................................................... Error! Bookmark not defined.
6.3 Source of Funds ............................................................................................................. 13
6.5 Profit and Loss Statements ............................................................................................. 13
6.6 Cash Flow Analysis ....................................................................................................... 14
6.7 Balance Sheet ................................................................................................................ 14
6.8 Business Ratios ................................................................ Error! Bookmark not defined.
6.9 Break-even analysis ......................................................... Error! Bookmark not defined.
6.10 Seasonality..................................................................... Error! Bookmark not defined.
6.11 Scenarios ....................................................................... Error! Bookmark not defined.
6.12 Risk Analysis .............................................................................................................. 15
8.2 Promotion Strategies ...................................................................................................... 15
9. Monitoring .......................................................................................................................... 15
Startup Decision .................................................................................................................. 15
SOLUTION 1 .................................................................................................................. 16
10. Appendices .........................................................................................................................................17

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Acknowledgement
First of all we would like to thank our teacher for his appreciation to prepare such a like
business plan. As a business management and entrepreneurship student we prepared business
plan for chicken farming as follow. In our document we contained cash flow statement balance
sheet and start up decision.

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Introduction
The primary value of your business plan will be to create a written outline that evaluates all
aspects of the economic viability of your business venture including a description and analysis
of your business prospects. We believe that preparing and maintaining a business plan is
important for any business regardless of its size or nature. But it will not ensure your success. If
you maintain a correct assessment of the changing economics of your business, your plan will
provide a useful roadmap as well as a financing tool. But if you have miscalculated the
potential, then your business plan could become a roadmap leading to failure.
Group Assignment business idea list
1. Baby Food Production Plant
2. Milk Powder Production
3. Animal Feed Making Plant
4. Cotton Blankets Making Plant
5. Socks Manufacturing Plant
6. Processing of Fruit-Based Drinks
7. Hotel and tourism (touring)
8. Textile
9. Wood products
10. Wheat trading
11. Chicken breading and egg production

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 Sufficient Sufficient Competitors Knowhow Av
Business idea Demand Financial (%) to the idea era
Competitors Resources (%) (%) ge
(%) (%)
Baby Food 50 10 21 69 27
production plant
Milk Powder 12 12 45 78 14.
Production 25
Animal Feed 34 24 34 79 25.
Making Plant 75
Cotton Blankets 34 22 39 65 20.
Making Plant 5
Socks 45 34 38 45 32.
Manufacturing Plant 5
Processing of Fruit- 23 29 19 22 13.
Based Drinks 75
Hotel and 32 53 45 90 32.
Tourism(touring) 5
Textile production 45 3 23 25 12.
5
Wood 43 54 36 90 37.
Products(Furniture 75
work)
Wheat trading 46 60 39 90 40
Chicken breading 47 70 30 95 45.
and egg production 5

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Macro screening
NB: - Average= Sufficient Demand +Financial resources + Knowhow to the idea + (-
Competitors)
Based on the above macro screening evaluation criteria we removed Textile production plant
business idea. Now we are going to select 3 business ideas depending on micro screening
evaluation criteria.
Micro screening

Business idea Marketability Availability Availabilitie Availability of Average

(%) of qualified s of Row technology (%)
personnel material (%) (%)
(%)

Baby Food production 78 43 79 90 72.5

plant
Milk Powder 66 42 90 84 70.5
Production
Animal Feed Making 57 49 89 83 69.5
Plant
Cotton Blankets 80 25 96 76 69.25
Making Plant
Socks Manufacturing 89 49 92 78 77
Plant
Processing of Fruit- 65 22 89 88 66
Based Drinks
Hotel and Tourism 87 79 100 99 91.5

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(touring)
Wood Products 81 93 98 99 92.75
(Furniture work)
Wheat trading 95 99 97 98 97.25
Chicken breading and 96 100 99 99 98.5
egg production

SWOT Analysis
A. Wood Product (Furniture) Manufacturing
Strengths: %
1. Technical expertise----------------------------------------------------------------------------80%
2. Packaging---------------------------------------------------------------------------------------50%
3. new improvements of product ---------------------------------------------------------------20%
4. Good network with customers----------------------------------------------------------------50%
5. Managerial experience-------------------------------------------------------------------------40%
6. superior technology-----------------------------------------------------------------------------30%
7. Distribution system-----------------------------------------------------------------------------20%
8. Comparatively cheap price -------------------------------------------------------------------50%
9. Product durability-------------------------------------------------------------------------------85%
Strength in %=43.3
Weaknesses: %
1. No control of raw material -------------------------------------------------------90
2. lack of promotion skill-------------------------------------------------------------10
3. Limited product life----------------------------------------------------------------15
4. technological obsolescence -------------------------------------------------------15
5. Poor design of product -------------------------------------------------------------70
6. inexperienced mgrs./owners--------------------------------------------------------60
7. Weak selling effort-------------------------------------------------------------------60
8. lack of working capital---------------------------------------------------------------46
9. Comparatively high price ------------------------------------------------------------50
Weakness in %=46.2

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Opportunities: %
1. Few and weak competitors ------------------------------------------------------------------80
2. no such products in market--------------------------------------------------------------------10
3. scarcity of products locally---------------------------------------------------------------------20
4. Growing demand---------------------------------------------------------------------------------50
5. favorable government policy--------------------------------------------------------------------20
6. Technical assistance available------------------------------------------------------------------89
7. low interest on loans ---------------------------------------------------------------------------67
8. Access to cheap raw material-----------------------------------------------------------------45
9. adequate training opportunities---------------------------------------------------------------45

Opportunity in %=47.3

Threats: %
1. Rising raw materials costs --------------------------------------------------------------------78
2. too much competition --------------------------------------------------------------------------43
3. Raw materials shortages -----------------------------------------------------------------------40
4. piracy of skilled labor ---------------------------------------------------------------------------87
5. Natural disasters ----------------------------------------------------------------------------------10
6. Graft and corruption ------------------------------------------------------------------------------50
7. poor infrastructure -------------------------------------------------------------------------------65
8. Changing government regulations -------------------------------------------------------------21
Threats in %=49.25
B. Wheat trading
Strengths: %
1. Technical expertise-----------------------------------------------------------------------------90%
2. Packaging----------------------------------------------------------------------------------------78%
3. new improvements of product ----------------------------------------------------------------25%
4. Good network with customers----------------------------------------------------------------50%
5. Managerial experience-------------------------------------------------------------------------53%
6. superior technology----------------------------------------------------------------------------41%

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 7. Distribution system-----------------------------------------------------------------------------59%
8. Comparatively cheap price -------------------------------------------------------------------30%
9. Product durability------------------------------------------------------------------------------------
--85%
Strength in %=56.78
c. Chicken breading and egg production

Strength (%) Weakness Opportunity Treats (%) Total

(%) (% )
Wood 43.3 46.2 47.3 49.25 -4.85
product(furniture)
Wheat trading 56.78 25.1 60.99 30.5 62.17
Chicken breading 61.89 12.89 70.67 25.75 93.92
and egg
production

Table 1.4 SWOT analysis

Total = strength – weakness + opportunity – treats.
NB: - The negative sign indicates that the business is not appropriate to start.
Depending on table 1.4 Chicken breading and egg production is the best business idea to work
on. Because of its low treats and weakness as well as high opportunity and strength.
1. Executive Summary
Chicken farming is accomplished by a way of breading chicken for the purpose of food.Also
for an agriculture sector office in order to distribute for the farmers. We should select an
appropriate location for chicken farming before startup our business. We want to start our
business in Jigjiga Town. The reason why we select this business idea is that there is no many
number of competitors. So many people have not a positive attitude to start such a type
business.
1. Business Summary
Vision
The major vision of the company’s owner is to become a successful business man in this field.

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In addition to this our aim is to fill full what a customer needs which leads his business
achieved successfully.
2.1 Company Summary
Mission
First of all, employees who work on this business must have awareness on how to perform its
task which makes the business achievable.
A manager of the business must prepare work guideline on that the company directed. The
owner of the company must fulfill the necessary resources which are used to producing chicken
such as: - food, shelter, water, and incubator.
To startup the business all the necessary things which is appropriate to start the business must
be fill full.
The business type is sole-proprietary. Sectors which aimed to take care of such type of business
are agriculture.
2.2 Management Summary
Company legal structure looks like the following

General Manager

Operation staff Administrative

staff

Customer service
Sales - marketing

Chicken health
control and food
supplier Administrative

Other facility mgmt.

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Project management methodology
Like any human undertaking, projects need to be performed and delivered under certain
constraints. Traditionally, these constraints have been listed as scope, time, cost, schedule and
quality. These are also referred to as the "project management triangle".

2.3 Products & Services

Sales of Chicken
The primary income stream for the organization will come from the selling of chicken to plants
and slaughterhouses within the Business’s focused market. As stated in the executive
conclusion, the anticipated income generated from the selling of each lawn fed chicken will
produce roughly $10 of income.
Sales of Chicken and Eggs
Additionally, the service will also offer for the product sales of chicken to suppliers throughout
the Declares. Chicken and egg are in requirement on a yearlong foundation, and the Company
will be able to produce substantial income from selling top quality lawn chicken.

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 1. Market Analysis Summary
Based on the current situation the supplier is not as equal as the demand. That is as we
mentioned earlier the number of competitor is small in number this instantiates us to start this
business. Besides this we must need to forecast for the future that business looks like in order to
satisfy the customer hobbies.
5. Strategy& Implementation Summary
We must have an ability to communicate to the customer well to sell the product as we intend.
We must sell the product according to the quality of the product.
6. Financial Plan Summary
6.1 Actual Assumptions
• We will have a yearly income amount of growth of 20% per season.
• We will obtain $146,295 of debt resources to create the company.
6.3 Source of Funds
Our source of funds is primarily family donation. As a fund raiser we useIMX organizer office
of JIGJIGA and some fund raising organization.
6.5 Profit and Loss Statements
JIGJIGA Chicken farming
Cash flow statement
For the year 2009
Sales -----------------------------------------------------------------------------------------$10,000
Less: Cost of Gods sold----------------------------------------------------------------------$6
Gross profit -------------------------------------------------------------------------------------$7,890
Less: other expenses
Farming place rent -----------------------------------------------------------------------------$3
Selling and administration---------------------------------------------------------------------$5
Depreciation of office equipment -------------------------------------------------------------$20
Staff salaries--------------------------------------------------------------------------------------$2,000
Operation profit ----------------------------------------------------------------------------$6,000
Less interest expenses------------------------------------------------------------------------$45
Less tax (5%) ----------------------------------------------------------------$250
Net profit after tax----------------------------------------------------------------------------- $21,561

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 6.6 Cash Flow Analysis
JIGJIGA Chicken farming
Cash flow statement
For the year 2009
Cash flow from operating activities

Cash received from customer--------------------------------------------------------$8,000

Payment to employees -----------------------------------------------------------------$2,000
Payment for administrative expenses----------------------------------------------------$1,200
Net cash flow of operating ------------------------------------------------------------------$4,800
Cash flow from investing activities
Cash paid for acquisition of plant asset--------------------------------------------------------$7,000
Cash received from sale of plant asset ---------------------------------------------------------$2,000
Net cash flow from investing---------------------------------------------------------------------$5,000
Cash flow from financing activity
Cash received from long term dept. --------------------------------------------------------------$7,000
Cash paid for dividend ------------------------------------------------------------------------------$400
Cash received from sale of common stock-------------------------------------------------------$1,986
Net cash flow from financial activities –----------------------------------------------------------$8,586
Net increase in cash and cash equivalent during 2007 -----------------------------------------$18,386
Cash and cash equivalent Jan 2007----------------------------------------------------------------$8,000
Cash and cash equivalent Jan 2008 ---------------------------------------------------------------$26,386
6.7 Balance Sheet
JIGJIGA Chicken farming
Balance sheet statement
For the year 2008
Asset • $6000
Current assets: • Total$6000
• 10,500
• Total $10,500 Total: 16,100
Fixed assets:

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 Liabilities • $5000
Current liabilities: Owner’s Equity:
• $400 • $10,00
• Total $1,500 • Tt 10,000
Long-Term Liabilities: Total 16,500

6.12 Risk Analysis

- competitor will may come up with new species of better product
- commercial issues –
• sales will decrease during fasting
• prices will be decrease in case that competitor will come up with
new species of better meat product chicken,
• deliveries -
- operations - IT, technology or production failure
- staff - skills, availability and costs may be one of our business risk
8.2 Promotion Strategies
We plan on using a variety of selling techniques that will allow the Jigjigato easily focus on
buyers within the focus on audience. These techniques consist of traditional print ads and ads
placed on Google on the Internet. Below is a information of how the organization plans to
promote its solutions to the community. The Jigjiga Town will also use an online technique.
This is very important as many people looking for regional solutions, such as chicken plants,
now the Internet to conduct their initial searches. We will register the Jigjiga with online portals
so that prospective clients can easily reach the organization.
9. Managing
Startup Decision
1. Market Research Essence:
Year 2000 2001 2002 2003 2004 2005 2006 2007
QDD ( 90 86 102 109 100 110 120 130
‘000’
units)

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 a. Selling expenses is expected to be 10% of the sales.
b. Operating expenses is at an average of $6000 (expected variance is +/- 2%)
c. Forecasted sales is expected to vary by +/- 3%
d. Interest rate on funds: 5% (not expecting a variation in the coming 3 years)

2. Other details:
a. Expected market share: 20%
b. Expected selling price: $6
c. Funds mobilized:
➔Long-term loan: $4,000
Our suggestion based on the available information

SOLUTION 1
Step 1: Estimating possible demand in the year 2008
Using time series analysis we can estimate the demand for product in the year 2008
General equation for time series analysis: y = a + bx Where,
y is the value to be forecasted (in this example it is the Quantity Demanded of 2008
x is the periodic deviation for the year to be forecasted (in this example it is the periodic
deviation of 2008)
a = ∑Y/N
b = ∑XY/∑X2
Y represents the known values of the variables (here it is the known values of Qty Demanded)
X represents periodic deviations of known observations (here it is for the years from 2000 up to
2007)
N = Total number of observations
QTY
YEARS (Y) X XY X2
200 90 -4 -360 16
2001 86 -3 -258 9

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 2002 102 -2 -204 4
2003 109 -1 -109 1
N = 8, x 2004 100 1 100 1 = 5, ∑Y = 847, ∑XY =271,
∑X2 =60 2005 110 2 220 4
a = 2006 120 3 360 9 847/8 =105.88
b = 2007 130 4 520 16 271/60 =4.51
y = SUM 847 271 60 105.88 + (4.51 x5) =128.43
Hence, expected quantity demanded
during 2008 is128, 430 units
Taking the variance into consideration sales could be between 115,587 units and 141,273 units
Step 2: Adverse scenario
a. Expected sales in units would be 20% of 115,587 units at an adverse scenario (based on
expected market share) = 23,117.4units
Sales in dollars = 23,117.4 x 6 = 138,704.4 or $138,704
b. Selling expenses is expected to be 10% of the sales value = 13,870 = $13,870
c. Operating Expenses (average) $6000 with a variance of +/-2%
At adverse situation expenses would be at the higher end. Hence, we consider the 3%
higher to the average operating expenses.
I.e. 6000 + 120= $6120
d. Interest Expenses = 5% on 4,000 = $400
Step 3: Favorable scenario
a. Expected sales in units would be 20% of 141,273 units at an favorable scenario (based
on expected market share) = 28254.6 units
Sales in dollars = 28254.6 x6 = 169,527.6 or $169,528
b. Selling expenses is expected to be 10% of the sales value =16,952.8 = $16,953
c. Operating Expenses (average) $5000 with a variance of +/-2%
At favorable situation expenses would be at the lower end. Hence, we consider the 3%
lower to the average operating expenses.
i.e. 6000 - 120= $5880
d. Interest Expenses = 5% on 4,000 = $400
Step 4: Adverse P&L Account

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PARTICULARS AMOUNT AMOUNT
Sales 138,704
Less: Selling expenses 13,870
Gross Profit 124,834
Less: operating Expenses 6120
Operating Profit 118,714
Less: Interest Expenses 400
Net profit 118,314

* There is net profit expected at $118,314

Step 4: Favorable P&L Account

PARTICULARS AMOUNT AMOUNT
Sales 169,528
Less: Selling expenses 16,953
Gross Profit 152,575
Less: operating Expenses 5880
Operating Profit 146,695
Less: Interest Expenses 400
Net profit 146,295

There is a net profit of $146,295

10. Appendices
Include details and studies used in your business plan; for example:
• Brochures and advertising materials
• Industry studies
• Blueprints and plans

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• Maps and photos of location
• Magazine or other articles
• Detailed lists of equipment owned or to be purchased
• Copies of leases and contracts
• Letters of support from future customers
• Any other materials needed to support the assumptions in this plan
• Market research studies
• List of assets available as collateral for a loan
Case Conclusion:
Our proposal (plan/idea) is advised to start this business based on the given information. It is
due to the presence of net profit even in the adverse scenario.

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