Africa Do Business Ltd (Uganda)

Email: africadobusiness.com
Website: www.africa-do-business.com

Soya Micro-Enterprise
Business Model with Soya Milk Making Machines
Electric Blender Soya Bean Grinder Soya Milk Maker /
and Separator SoyCow

- Voltage: 220V/50Hz - Voltage: 220V/50Hz - Voltage: 220V/50Hz

- Power: 1.2KW - Power: 1.1KW
- Production Capacity: 50-100 liters a - Production Capacity: 100-
day 200 liters a day
- Feeding capacity: 100-200 persons a - Feeding capacity: 200-400
day persons a day
- Monthly profit: at least 100 USD - Monthly profit : at least 200
Price: from 200 USD USD
Price: from 500 USD
- Power: 1.1KW
- Production Capacity: 200-300
liters a day
- Feeding capacity: 400-600 persons
a day
- Monthly profit : at least 500 USD
Price: from 2,500 USD

August 2012
A. Soya Milk Production

1. Type of Business

The soya micro-enterprise is about producing and selling soya food products at local market. The soya
food products are soya milk, soya meat, soya flour and soya blends flour that are sold to low and
middle income households. The micro-enterprise use small investment to produce at small scale but by
making profit.

The business costs are down and to keep the products produced affordable for the working poor, it is
strongly recommended for production units to have the following characteristics:

- No or simple refrigeration
- Packing not required or very simple. The simplest packaging is none: consumers bring their
own jars, buckets etc. to be filled with milk, tofu, etc. Soya flour will be packaged in plastic
bags easily available on the market.
- Initial maximum production volume of 150L per day. Higher production targets indicate a
larger consumer market, and therefore a higher chance of sustainability. It is of course
important that confidence in the ability to sell the proposed volume of production is based
on previous business experience, knowledge of the market and a variety of products.

The type of products produced by the micro-enterprise will of course be influenced by two key factors:
availability and type of local produce (including soybeans), and local dietary habits and preferences. It
is recommended that businesses produce some soymilk for two reasons: 1) profit margin for the milk
and tofu is relatively high, and 2) it provides low-cost protein for the local community, which often
improves their health.

The ideal business model will include soymilk, tofu and soya flour.

Another aspect of business model is the manner of distribution/sales: will it be retail, such as operating
a restaurant or shop or wholesale distribution to retail vendors and shops, or a combination of the two?
Ready to eat, or take home food could also be sold in the local market by either directly staffing a
small table/kiosk or supplying existing street vendors. Wholesale in not advised at this level because it
has to be done by providing products with a longer shelf-life of at least three days (e.g., tofu, bottled
soymilk,) to various retail operations such as restaurants or shops.

2. Soy Processing Systems

Soya Milk and Soya meat makers

An electric Grinder/blender has a daily production capacity of 50 litres of soya milk and 10 kg
of tofu. Its cost and accessories is from USD 100.

Small scale soya processing system using the electric Soya Milk Maker has a daily
production capacity of 200 litres of soya milk and 50 kg of tofu. Its cost and accessories is from
USD 3,000.

Soya four and soya blends flour

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 Small scale unit for making soya flour and soya bended flour with a soya grains roster and
mixer. The cost of a grinding mill is from USD 1,000 but they are available for grinding
services in many places that is it is possible to bring the grains to the mill and pay grinding
service fee.

3. Financial Projections: Cost / Revenue and Profit Calculation

It is important for a business to quantify and project the flows of revenues (money in) and expenses
(money out) that it will experience in the short and medium term. This is a necessary exercise at all
times, but it is critical in the planning and start-up stages of a business since the improper planning for,
and management of, cash flows is the single largest cause of business failure.

The Cost-benefit Analysis provides a very useful snapshot of whether the business will be profitable
or not. Calculations about cost-benefit analysis are included as Appendix.

N.B.: The costs are given in US Dollars and can be converted in any local currency and these costs
could be adjusted as well considering the prevailing prices of different items.

The cost-benefit analysis table has 4 sections:

A. Capital Investment: This includes the cost of all equipment, site preparation, etc that is
necessary to start the business.
B. Variable Costs: These are costs that are only incurred if there is production.
C. Fixed Costs: These costs are incurred regardless of whether there is production or not.
D. Revenue: This is the money that the business collects for products it sells.

Here are the basic assumptions:

1- The start-up investment for the Electric blenders is about USD 350 and Soya Milk Maker
System is approx. $5,000
2- It is assumed that 1kg of dry soybeans yields 8 liters of soymilk, and approx. 1.2 kg of 80%
moisture okara. A typical soymilk batch uses 2 kg of dry soybeans (that are soaked 8-10 hours
and absorb 1.4 kg of water per 1 kg of dry weight) to 15 liters of water. This results in approx.
16 liters of soymilk. Production is assumed to be 50 liters per day per electric blender and
30liters/hour for a Soya Milk Maker System.
3- 1 liter of soymilk will produce 0.3 kg of tofu.
4- Production is assumed to be comprised of 8 hours/day (130 liters soymilk) divided into 80%
soya milk and 20% tofu. These figures are arbitrary and can be modified.
5- The selling prices for the soy dairy foods were determined in light of similar cows milk
products, and the cost of production.

For the Soya Milk Maker system , labour is assumed to be comprised of 3 people.

B. Experience
Individuals or groups with prior experience in some kind of profit-making business are superior.
Likewise, partner NGOs with experience in assisting or monitoring micro-enterprise projects will also
be vastly more helpful than those without such experience.

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C. Management / Training
At least one person managing or co-managing must have basic reading and writing skills, preferably in
English. The ideal situation would have a core of two people. These two people between them would
experience as a cook, mechanical aptitude (handy-man type and basic management skills or potential.
Other, less critical and unskilled employees could be hired depending on volume of production or the
number and variety of additional products produced.

The manager (ideally the entrepreneur or partner), should be able to communicate well and be hard
working and self-motivated. He or she must also be able to motivate and manage the work of other
people, and so must have a combination of friendly attitude with discipline both for themselves and for
employees. If the manager has no basic accounting or money handling skills, then this will require the
help of a partner or family member who has the experience.

The people selling the product, or dealing with the public in any way, should be polite and friendly at
least. It is better if they are also well-informed about the products from a nutrition and health basis.

Training is important: most critical is the training of the primary operator and/or entrepreneur who may
be the same person. Procedures for quality and safety must be understood and followed, as per the
details in the technical and operation documentation provided.

Improper operation of the equipment can be dangerous, or damage the equipment, or produce an
inferior product. Furthermore, improper formulation of value-added products, or locally adapted
recipes, will result in poor acceptance and sales of the finished product. The main causes for Soya Milk
Maker locations that have failed are due to poor management and organization of the business, so
training that addresses these activities is also needed.

Subjects of training include:

a) Operation of the Soya Milk Maker
b) Production / formulation of value-added products.
c) Cleanliness / Sanitation
d) Sales / Distribution and Packaging
e) General management including personnel management, accounting, and marketing
f) Nutritional and home cooking information for customers

D. Marketing and Pricing

The business should try to estimate the size of each of the target markets. Its also good to try and
quantify the purchasing power of each group, and key characteristics (age, if they prefer packaged vs.
fresh, etc) so that they can be properly understood and targeted.

A critical factor is the prices that will be charged for the different products. First of all, this has to take
into account the actual production & packaging costs plus a minimum profit. However, no matter what
such a formula indicates as a suggested price, the prices for competitive products must be examined to
make sure that the new products are affordable and less expensive than similar existing products.

A large number of prospective customers may be illiterate. Even if not, people of modest education
need the information and selling approach that they can appreciate. For example, more pictures and
opportunities to sample the food product are helpful.

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There are three main areas of marketing attention: price, quality and health. Only careful analysis of
the community and potential customer base will allow a decision on the relative importance of each of
these three aspects. Soymilk products made with the system, can be low price, high quality and
definitely healthy. So there is no shortage of good marketing messages to benefit the business.

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 APPENDIX: Profit model Cost-Benefit Analysis
1. Business Model for Two Electric Grinders (Daily capacity: 100 liters of milk, 10 kg of Tofu)

Unit Cost in USD Quantity Total Cost

A) Capital Investment
Two Electric Grinders and 100 2 200
accessories
Tables, containers, sink, utensils 50
Start-up inventory (100 kg of soya 100
beans and ingredients)
Initial Start-up Investment= 350

B) Variable Costs

1- Soybeans (per kg) 1 0.75 16kg x20 days=300kg 240

2- Labour - avg. per day 0.5 1 USDx20x 2 pers 20
3- Electricity 0,2 per Kwh 100 20
4- Charcoal 10 2 bags 20
5- Water (per m3) 2 0,25x20 20
6- Ingredients (sugar, salt, flavor) 20
(per kg)
7- Coagulant (for tofu) (per 20g) 20
360

C) Fixed Costs (per month)2

1- Rent (6 m2) 20
2- Maintenance and spare parts 10
3- Depreciation on Equipment (1 10
year life)
4- Promotion 5
5- Distribution 5
6- Cleaning chemicals 5
55

Monthly Production Costs 415

D) Revenue4

Soymilk / liter (cow's milk is $0.30 - 0.30 100litres x 20 days=2,000 liters 600
$0.90 / liter)
Tofu / kg (regular cheese is $10- 1.50 10 kg X 20 days= 200 kg 300
15/kg)
Total revenue 900

Monthly Profit 485

N.B.:
- One kilo of soya bean grains give 8 liters of soya milk
- One kilo of soya bean grains gives 3 kg of tofu
- 16 kg of soya bean grains gives 100 liters of soya milk and 10kg of tofu

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2. Business Model for One Soya Milk Maker (Daily capacity: 200 liters of milk, 20 kg of Tofu)

Unit Cost in USD Quantity Total Cost

A) Capital Investment
One Soya Milk Maker and 3,500 1 3,500
accessories
Tables, containers, sink, utensils, etc 1,000
Start-up inventory (500 kg of soya 500
beans and ingredients)
Initial Start-up Investment= 5,000

B) Variable Costs

1- Soybeans (per kg) 1 0.75 32kg x20 days=300kg 480

2- Labour - avg. per day 3 1 USDx20x 3 pers 60
3- Electricity 0,2 per Kwh 100 20
4- Charcoal 10 4 bags 40
5- Water (per m3) 2 0,25x20 20
6- Ingredients (sugar, salt, flavor) 40
(per kg)
7- Coagulant (for tofu) (per 20g) 40
700

C) Fixed Costs (per month)2

1- Rent (6 m2) 50
2- Maintenance and spare parts 50
3- Depreciation on Equipment (3 200
year life)
4- Promotion 25
5- Distribution 25
6- Cleaning chemicals 20
370

Monthly Production Costs 1070

D) Revenue4

Soymilk / liter (cow's milk is $0.30 - 0.30 200 litres x 20 days=4,000 liters 1,200
$0.90 / liter)
Tofu / kg (regular cheese is $10- 1.50 20 kg X 20 days= 400 kg 600
15/kg)
Total revenue 1,800

Monthly Profit 730

N.B.:
- One kilo of soya bean grains give 8 liters of soya milk
- One kilo of soya bean grains gives 3 kg of tofu
- 32 kg of soya bean grains gives 200 liters of soya milk and 20kg of tofu