Professional Documents
Culture Documents
Business Proposal 2
Business Proposal 2
Business Proposal 2
FACULTY OF EDUCATION
LEVEL: 2:1
MODULE: EDGS231
PROGRAMME: ECDP
LECTURER: DR MUCHABAIWA
ASSIGNMENT TOPIC:
LECTURER’SCOMMENTS:
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
……………………………………………
………………………………………………………………………………………………
1. Executive Summary
Demand for poultry products as a source of protein is rising due to increasing health consciousness
since poultry has lower fat and calorie content than beef. Zimbabwe is currently consuming an
average 9kgs of chicken meat per individual each year and is projected to witness a significant
increase of up to 32kgs chicken meat consumption per capita as the country moves towards the
middleclass economy.
Our proposed chicken business will seek to respond to this increased demand and will focus on the
production and distribution of high-quality poultry products, including whole chickens, chicken parts,
and value-added chicken products. The project will be located on an agro-residential plot in the Cold
Comfort area of Harare.
Gross profit margins for the project will average 40% in years 1 to 3 while return on investment (ROI)
will be 58%, 64%, 71% in years 1, 2 and 3 respectively.
2. Industry and Market Analysis
Growing health consciousness is driving demand for poultry as a source of protein compared
to beef. This is because poultry has lower fat and calorie content than beef.
Zimbabwe is currently consuming 9kgs of chicken meat per individual each year. This is
projected to significantly increase in the near future because of the health factors
mentioned above and the economic growth that would give more disposable income to
citizens. South Africa, for example, has high chicken meat consumption statistics of 42kgs
per capita each year and Zimbabwe is projected to witness a significant increase of up to
32kgs chicken meat consumption per capita as the country moves towards the middleclass
economy,
Zimbabwean poultry industry production relies on both indigenous and imported poultry strains for
breeding stock. Chicken production in Zimbabwe comprises both large- and small-scale producers.
Commercial breeding of poultry is based on imported strains, while the indigenous strains are for
small-scale producers. Large-scale production is characterised by intensive management,
mechanisation and specialisation and dominated by large companies, while small-scale production
includes semi-intensive and extensive farming.
The structure of the Zimbabwean poultry industry has evolved substantially over the years,
especially after the country’s economic recession. The harsh macroeconomic environment between
1999 and 2008 saw traditional chicken-producing firms (Irvine’s and Suncrest) nearly collapsing and
led to increased vertical integration within the value chain as a means of survival. At the same time,
however, new companies entered the sector: Drummonds in 2004, Lunar Chickens in 2007 (now
collapsed) and Surrey Huku, among many other players.
Broiler production in Zimbabwe is broadly undertaken in four categories: large-scale, fully integrated
operations; large-scale, semi-integrated; medium and small-scale. There are four main large-scale
producers of chicken – Irvine’s, Surrey and Drummond. These companies have scale economies
associated with their size. The companies are also highly integrated in the poultry value chain. This
gives them advantages over medium- and small-scale producers, and ensures the availability of feed
and day-old chicks, most likely at lower prices.
Broilers are sold at an average age of 5 to 6 weeks at a live weight of 1.8–2.5 kg/bird. Producers with
reliable marketing arrangements (contract) sell off their birds earlier than those who depend on the
spot market. With the spot market option, birds are grown to a larger size in order to build goodwill
and therefore secure sustainable market competitiveness. The challenge is that the bird continues to
eat feed before it is finally sold, impacting negatively on profits. Generally, prices are set per bird
irrespective of the live weight, except where the contractual market route is used.
Our market research indicates a growing demand for poultry products in our target market. Factors
contributing to this demand include population growth, increasing consumer awareness of the
health benefits of lean proteins, and the versatility of chicken in various cuisines. We have identified
key customer segments, including households, restaurants, hotels, and catering services, all of
whom prioritize quality and reliability when sourcing poultry products.
3. Business Model
Our business model will revolve around the following key components:
4. Location
The project will be located on an agro-residential plot in the Cold Comfort area of Harare.
5. Inputs
Day old chicks,
Feed (starter feed, grower and finisher feed),
Vaccination,
Bedding,
Labour (2 general hands, one supervisor)
6. Products
Whole chickens, chicken parts, and value-added chicken products
Developing a compelling brand identity and positioning that reflects our commitment
to quality and sustainability.
Utilizing digital marketing channels, including social media, online advertising, and a
user-friendly website to reach our target audience.
Partnering with local retailers, restaurants, and hotels to secure long-term contracts
and establish a loyal customer base.
Participating in community events, trade shows, and farmers' markets to engage
directly with potential customers and showcase our products.
8. Financial Projections
Attached to this proposal, you will find a comprehensive financial projection that outlines the
anticipated costs, revenue, and profitability of our chicken business over the next three years. The
projections are based on thorough market research and conservative estimations, taking into
account potential risks and challenges.
10. Conclusion
We firmly believe that our chicken business venture aligns with market demands and presents a
lucrative opportunity for growth and success. We are committed to delivering exceptional products,
maintaining high standards of operation, and contributing to the local economy. We appreciate your
consideration of this proposal and would welcome the opportunity to discuss it further at your
convenience.
Financial projections
As a follow-up to our business proposal for the chicken business venture, I am pleased to present the
comprehensive financial projections outlining the anticipated costs, revenue, and profitability of our
business over the next three years. These projections have been carefully prepared based on market
research, industry benchmarks, and conservative estimations. Please find the details below:
1. Startup Costs
In the initial year, we anticipate the following startup costs:
Year 1: $40,000
Year 2: $44,000
Year 3: $48,400
Year 1: $24,000
Year 2: $26,400
Year 3: $29,040
4. Operating Expenses:
Operating expenses cover the day-to-day costs of running the business. We project the following
annual operating expenses:
Year 1: $6,000
Year 2: $6,600
Year 3: $7,260
Year 1:
Year 2:
Year 3:
Year 1: $10,000
Year 2: $11,000
Year 3: $12,100
Year 1: 58%
Year 2: 64%
Year 3: 71%
Please note that these financial projections are subject to market conditions, operational efficiency,
and various external factors that may impact the business. We have taken a conservative approach
in estimating the costs and revenue to provide a realistic outlook for our chicken business venture.
We would be happy to discuss these financial projections in more detail and provide any additional
information you may require. We appreciate your time and consideration, and we look forward to
the possibility of collaborating with you on this exciting venture.