BUSINESS PLAN OF SRIJANA UNNAT

BAKHRA PALAN

Semlar, Rupandehi

January 2018

Prepared By: Ronit pachhai

Second Semester
Msc.AG(ABM)
HICAST
Contents
1. Introduction.............................................................................................................................................4

2.Market plan..............................................................................................................................................4

2.1. Details of produced goat...................................................................................................................4

2.2. Place of establishment of farm:.........................................................................................................5

2.3 Targeted market and demand:............................................................................................................5

2.4 Production and selling strategy..........................................................................................................5

2.5 Market Promotion..............................................................................................................................5

3. Production plan:......................................................................................................................................6

3.1. Procedure for production of doe, goat and buck...............................................................................6

3.2 Production Structure..........................................................................................................................6

3.3 Needed Property, investment and Depreciation.................................................................................6

4.Expenses Plan...........................................................................................................................................7

4.1 Required production materials (Raw materials), services and their expenses....................................7

4.2 Labor charges, employee salary.........................................................................................................8

4.3 Production and Pre organizing expenses............................................................................................8

4.4 Other Annual Expenses.....................................................................................................................9

4.5 Annual Cost (expenses) summary......................................................................................................9

4.6 Per unit production cost...................................................................................................................10

5. Financial Plan........................................................................................................................................10

5.1 Required annual capital and Sources...............................................................................................10

 5.2 Capital Sources Needed...................................................................................................................10

5.3 Interest Expenses:............................................................................................................................10

5.4 Determination of selling price:........................................................................................................11

5.5 Sales and other income:...................................................................................................................11

5.6 Annual Profit loss analysis..............................................................................................................11

5.7 Loan payment schedule...................................................................................................................12

5.8 Investment Returns..........................................................................................................................12

5.9 Break Even Point.............................................................................................................................12

5.10 Investment returns and BEP in different year................................................................................12

6.Risk and Risk Management....................................................................................................................13

7. Conclusion.............................................................................................................................................13

APPENDIX - I...........................................................................................................................................14
EXECUTIVE SUMMARY

1. Enterprise/Business Name : Srijana Unnat Bakhra Palan

2. Entrepreneur/ Business man Name: Rajan Dhakal
3. Entrepreneur/ Business man address: Semlar, Rupandehi
4. Enterprise/ Business Address: Semlar, Rupandehi
5. Productive goods: Quality goat and female kids
6. Main Targeted Market: Kathmandu and Butwal
7. Net investment : Rs.168970
8. Fixed Capital: Rs113000
9. Variable capital : Rs54000
10. Loan from Bank: Rs.20000
11. Annual Sales income: Rs.172560
12. Annual expenses: Rs120539
13. Annual Profit: Rs.50271
14. Returns from investment: 30.03%
15. BEP: 58.81%
 1. Introduction
Livestock production is one of the most important activities of agriculture in Nepal. The
livestock sector has contributed 27% in overall agriculture sector of Nepal. Although goat alone
has contributed 12% in overall livestock sector there is still the situation of importing 500,000
goat annually. Nepalese farmers consider goat farming as a profit raising superior livestock.
Goats provide milk, meat and fiber. Goats have played multiple roles in the support of mankind
in the last 7000 years and are one of the oldest species of domesticated animals.

With goat farming being a highly profitable business idea, this business plan was made to ensure
the development of the goat enterprise. In this village, Different NGOs and Government bodies
itself is helping farmers on technicians, gifted goat and season based grass for goat through its
various projects. So he hopes he will also get direct help from such programs to run his business
successfully. This year He has already bought 10 improved does alone with 5kathha land for
cultivation of green fodder to run my farm commercially. Recent establishment of farmers group
in the community has helped to seek the markets in different places and also has aimed to
facilitate access to collective market of the produced products through group and he had high
hopes of it in the future has made me proud to be the successful person in future. He says that
there is no problem for market here because there is the huge demand of local goats in local
community and has huge market in Kathmandu and Lalitpur as well.

2.Market plan

2.1. Details of produced goat

 Improving the local breed by crossing with the improved breed for commercial
production as well as produce according to the market needs.
 The goat produced from this farm will be fresh and produce according to the needs of
the consumer so that all consumer needs will be fulfilled.
 2.2. Place of establishment of farm:
The regions for selecting Semalar as the perfect place for business are as follows:

a. Availability of required infrastructures ( improved shed)

b. Availability of green grasses and free surroundings areas for rearing.
c. Availability of service centers
d. This place is known as pocket area for goat production
e. Being the local area it is secure and easy to look after
f. Easy in marketing of the product due to membership of cooperative.

2.3 Targeted market and demand:

 The goat produced from this farm is primarily marketed to the Kathmandu and
Lalitpur where there is unlimited demands of goats every months. The problem is that
there is huge number of goat that is imported from India.
 So when we inspect the market, there is probability of selling the goat from
cooperative/ groups or direct contact with the shopkeepers or butchers.

2.4 Production and selling strategy

According to his plan of rearing of 10 goats along with their 3(probability of 3 female kids) in
one cycle, he will be able to sell 10 goats per year and sell 9 female kids a year.

Number of doe: 10(FY: 2073)

– Number of birth per year=1.33

– Number of kids per gestation:1.58
– mortality rate:10%
 Number of kids in a year=no. of doe*no. of gestation*no. of kids per gestation
=10*1.33*1.58=21
 Death rate=21*10=2:21-2=19
 Marketable kids=19,marketable kids(male),marketable kids(female)=9

2.5 Market Promotion

 He has a plan of collective marketing through groups/farmers group
  Contacting with local traders and butchers.

3. Production plan:

3.1. Procedure for production of doe, goat and buck

He will start his business with 10 doe and their kids (female) . He has planned to sell
improved quality goats from the initial year. Similarly in the second year he plans to
produce 10 marketable goats along with improved kids. The plans of my farm in coming
days are:
 Selection of doe that can give 2 kids at a time and 3 times gestation in two years.
 Rearing of Khari and Jamunapari breeds which are suitable in the climate
 As he will be doing commercial goat rearing then regular vaccination and medical
treatment should be given to goats and mineral blocks are also to be given.
 Providing leguminous and non-leguminous crops which are grown in home land to the
goats as well balancing the diet regularly according to different categories of their ages.
 Giving attention to the production line by adopting improved breeds and selection of
improved breed in reproduction, those healthy kids who are reproduced from the mother
who often gives twins should not be inbred.
 Kids should be castrated within 2months of birth and should be sold within first year.

3.2 Production Structure

He has enough fodder and forages to feed 10 mother does in my land so he will be rearing goats
intensively keeping in mind my resources, targeted market demand, and scopes.

3.3 Needed Property, investment and Depreciation

S.N Details of Fixed Result (A) Rate(B) Total amount Age(years) Yearly
Assets Rs. Depreciation
(D)
C/D
(C=A*B)

1. Construction of goat 1 Rs.20000 Rs. 20000 15 1333

 shades and
improvement

2. Purchase of Mother 10 Rs.6000 Rs.60000

doe

3. Breeding Buck 1 Rs.16000 Rs.16000

Purchase

4. Utensils for cooking

feed

5. Water tank 1 Rs.10000 Rs.10000 15 666

construction

6. Tatana Construction 1 Rs.7000 Rs.7000 5 1400

and improvement

7. Feeding Machine

Rs.113000 Total 3399

Depreciation

4.Expenses Plan

4.1 Required production materials (Raw materials), services and their expenses

S.N Production materials and Volume Rate Total Amount

services details (Rs.)
1. Feed(29*100gm*365 days) 1058kgs Rs.35 Rs.37030
2. Fodder and Forages 1 Kg Rs300 Rs300
Saplings(Berseem)
3. Deworming 174 in number Rs10 1740
Medicines(29*6times)
4. Expenses on PPR Vaccination 29 Goats Rs.10 Rs.290
cost
 5. Raw materials required for 80 Pieces Rs.75 Rs6000
preparation of mineral
block(urea, molasses)

6. Castration charges 10 Rs.50 Rs500

7. Service charge and medicines 29*100 Rs2900
Total amount Rs.48740
required for
production with
service expenses

4.2 Labor charges, employee salary

S.N Details Work Number Rate Amount(yearly) Sources
tenure

1. Regular Yearly 1 Rs.4000 Rs.48000 Internal 12

months

2. Daily labor Daily 2 Rs.350 Rs.1950

Total Expenses Rs.49750

4.3 Production and Pre organizing expenses

S.N Details Total Expenditure (RS.)

1. Technical knowledge and Skills learning expenses 10000

2. Visit and monitoring expenses

3. Books and Posters 5000

Total Expenses in production and pre organizing Rs.15000

expenses

4.4 Other Annual Expenses

S.N Expenses Topic Monthly expenses Annual expenses
 (Rs.)

1. House rent, Lease land

2. Electricity/ Water (12 months) 150 1800

3. Transportation 3000

4. Miscellaneous Expenses 500

5. Marketing and promotion

6 Others including ; Registration fees, 12000

. Contribute fees etc

Total Expenses Rs.17300

4.5 Annual Cost (expenses) summary

S.N Details Annual Cost (Rs.) Remarks

1. Total variable cost 50490

a. Production materials and service cost 48740

(4.1)

b. Labor Charges (4.2) 1750

2. Total fixed cost 71799

a. Depreciation cost(3.3) 3399

b. Interest on loan (5.3) 1600

c. Pre organizing cost (4.3) 1500

d. Regular or irregular labor charge(4.2) 48000

e. Other expenses (4.4) 17300

3. Total annual gross production cost Rs.122289

(1+2)
4.6 Per unit production cost
= Gross production cost (yearly)/ Yearly marketable production (target) Volume

= 122289/19

=Rs.6436 per marketable goat

5. Financial Plan

5.1 Required annual capital and Sources

S.N Capital Details Amount (Rs.)

1. Fixed Capital (3.3) 113000

2. Working capital
 Six months production goods(4.1/2) 24370
 Cash for six months – employee salary and 30000
expense

Gross Capital Needed 167370

5.2 Capital Sources Needed

Details Total (Rs) Self-Investment Grant from Loan (Rs)
Institution

Fixed capital 113000 93000 20000

Working Capital 54370 54370

Total 167370 147370 20000

5.3 Interest Expenses:

This farm has taken loan of Rs. 20000 hence six monthly Rs. 1600 is required for interest.
5.4 Determination of selling price:
Given price is determined for the targeted market

Total Live goat price Selling price= Rs.350/kg

Female kid selling price = Rs.280/kg

5.5 Sales and other income:

A. Annual income from goat sales

S.N Details Unit Sales Selling Amount Remarks

volume price rate

1. Goat Number 10*30 350 Rs105000 3O kg in 9-

12 months

2. Buck Number

3. Female kid Number 9*16 Rs.280 Rs.45360 In six

months

4. Male kid Number

5. Doe Number

Gross income Rs150360

B. Annual Income from sales of goat manure= Total goat manure volume* local selling price

= 970kg*7.5/kg = Rs.7200

C. Annual Income from Buck Services= Rs.15000 (150 doe *100/ Service)

D. Total Income= A+B+C= Rs.172560

5.6 Annual Profit loss analysis

Details First year (Rs.) Second Year(Rs) Third Year(Rs)

Annual gross 172560

income(A)
Annual gross 122289
expenses(B)

Annual profit/ Loss 50271

(A-B)

5.7 Loan payment schedule

Year Principal interest Total Payment Remarks

First Year Rs.20000 Rs. 1600 Rs.21600

Second Year

Total Rs.2000 Rs.1600 Rs.21600

5.8 Investment Returns

= Annual net profit * 100
Total capital

= 50271/167370* 100

= Rs.30.03%

5.9 Break Even Point

BEP= Annual fixed capital (2 of 4.5 ) * 100

Annual sales Amount ( D of 5.5) – Annual variable cost ( 1 of 4.5)

= 71779/172560-50490*100

= 58.81%
5.10 Investment returns and BEP in different year
First Year Second year Third Year Fourth Year Fifth Year

Annual net 50271

profit (Rs)
Investment 30.03%
Returns
BEP 58.81%

6.Risk and Risk Management

Goat farming is one of the major income source for small holder farmers. It can be done in small
scale, without huge investments. In many parts of Nepal goat are referred as “poor people’s
cow”. But there are a set of challenges that goat farmers of rural areas have to face. Different
kinds of diseases and untimely deaths of the goats causes burden to the farmers.

So to minimize the risk he has plan to do an insurance all of the mother does. He is very hopeful
that the goat insurance will minimize the risks involved in goat rearing and make it profitable for
farmers like him. This kind of scheme is entirely a new concept and he is very excited about it.

7. Conclusion
As per my view this Sriajna Unnar Bakhra Palan to go to commercialization this business plan
was created, analyzing different economic and social aspect it has potential to become profitable
business. Analyzing first year investment returns and breakeven point it has annual gross profit
of Rs. 50271, Investment returns (30.03%) and BEP (58.81%) on this basis if this business is run
it has huge scope to become can be very successful .
 APPENDIX - I

Questionnaire used for making Business Plan

1) Personal Information

District : VDC/ Municipality:

Respondent name: Relation to household head:
Gender:(M/F/Other ) Primary occupation:
Education:
Age: Family size:
2) Educational attainment:

a) Illiterate b) Literate If literate,

c) Primary school level d) Lower secondary level

e) Secondary level f) Higher secondary level

g) Bachelor or above

3) Total family member: Male: Female:

Age 0-15 years 16-30 years 30-60 years > 60 years Total
M F M F M F M F
4) What is the size of land holding (ropani)?

a) < 1 b) 1-2 c) 2-5 d) > 5

Land type Area (ropani) Types of land

Irrigated Un-irrigated Low land Up-land
Leased land
Owned land
Total land holding

5) Number of livestock:

Livestock Number
Goat
Cow
Buffalo
Poultry
Pig

6) Name of the goat breed raised?(Tick the response answer)

Khari
Khari*Jamunapari
Jamunapari
Boer
Others
7) Present Stock (Goat)

Present stock Number

Doe > 12 months
Buck > 12 months
Male kids 6- 12 months
Female Kids 6-12 months
Male kids 0- 6 months
Female Kids 0- 6 months
Total stock

8) What physical assets that you have and using in goat enterprises?

S.N. Last year investments Life year Nos Rate/unit

1 Construction of shade
2 Purchase of Doe
3. Purchase of Buck
3 Utensils and feeders
4 Food Rack
5. Running capital

9) Have you taken Loan from Bank or not? How much?

Less than 50 thousand
Between 50 thousand – 1 lakh
More than 1 lakh
10) What is the trend of Goat production?
Year
2014 2015 2016 2017
No of goats brought
No. of goats sold
Price Rs/ Kg

11) Production system used? Tick the answers

Production
System used
Intensive
Semi intensive
Grazing

12) Variable costs in a year

Variable Cost current year Quantity Rate/Unit Total
Grain(maize)/kg
Wheat Bran/Kg
Oil seed cake/kg
Salt
Rice bran
Forage(opp Cost)
Vet drugs
Labor/year
Forage(opp Cost)
Insurance
Grazing cost
Land tax
Buck Services
Castration per head

13) Where do you sell your goats? ( Tick the answers)

Personally directly go to market for sales
I sell to middlemen
I sell to Cooperative
 I don’t know whom I am Selling to

14) Current year Returns/Sales

Quantity Rate/Unit Total
Goats below one year
Goats 1-1.5 years
Goats above 1.5 years
Paati
Buck
Culled Doe
FYM
Self-Consumption
Total

15) Have you taken trainings regarding goat enterprise?

Yes
No

16) What are the major advantages?

Advantages Index Rank
Cheaper to Maintain
Requires less attention
Suitable for farmers having small land holding
Less occurrence of diseases in Goats
More Production from per unit of cost
Easy to Manage because of their behavior
Easy to manage as it requires minimum housing
High Market Demand
No Necessary of Modern Equipment
17) Disadvantages of Goat Rearing?
Problems Index Rank
Initial cost of production is higher
Market price instability
Lack of fodder and feeds
Breed selection,
More labor required
Difficult to manage number of animals
Higher price of inputs