Need a practical guide for how to start a poultry farm for beginners?
…anywhere, any country!
This guide was written just for you.
Read the title again.
I forgot to explain something unique about this article…
Before we begin…an important point to establish!
This not just ‘another poultry start-up guide’
This guide makes no promises.
What this guide will show you?
How you might make the approach below, work for your circumstances.
Clearly, I don’t know what they are.
But whatever they are, I want to be able to assist you in achieving your goal of starting up a successful poultry farm.
It is, however, important to clear up one fact.
We are not claiming with this guide to help you start-up a poultry farm with no money.
We would like to share with you how to start-up without a loan (debt) or professional help…
Simply by being resourceful.
Looking at what you do have or ‘could acquire’…within your current means…
And using this to maximum advantage.
This way, with reasonable growth you could achieve any scale poultry business with time.
Let us explain.
Why starting a poultry farm business with no loan (or subsidy)?
Let’s define the word ‘loan’:
“A loan is money, property or other material goods that is given to another party in exchange for future repayment of the loan value amount along with interest or other finance charges.” – Investopedia
Now let’s take a technical look at subsidy:
“Subsidy is a transfer of money from the government to an entity. It leads to a fall in the price of the subsidised product.” – Investopedia
Well…just in case the lines are still a little blurred.
Let’s attempt to clarify….
Poultry farm loans and their technical application
A loan according to the definition above is:
- The process by which a lender gives something of value…
- …in most cases, a credit of monetary finance;
- …into the possession of a borrower
- …for the purpose of achieving a specified goal,
- …on the premise it is paid back in line with a scheduled repayment plan.
One critical note to add, is that loans in the agricultural industry are typically secured against the ownership/possession of land.
That is to say…
The promise of the borrower to pay back the money loaned by the lender is made sure (or guaranteed) by a clause which hands over the ownership of their land to the lender, should the borrower fail to keep to the repayment schedule agreed.
This is a very real, personal, material risk.
Especially so, if the land involved hosts your family home (!).
A few missed debt repayments and you might just lose your family home, if that is the case.
Think it through.
Let’s dig deeper…
How do government subsidies work? And how do they relate to bank loans?
As defined above…
Subsidies are when government agencies offer money to borrowers of loans who qualify by their criteria, for the purpose of reducing the debt and repayment repayment burden of the borrower.
It’s much like being awarded a discount, if you are an existing customer of a company.
It’s a benefit transferred for being a valued user of their products or services.
Whilst the government and private issuers of loans are not the same entity.
Their collaborative work and common interest in stimulating economic growth through loans and subsidies is mutually beneficial.
The bank & what it really wants…
The goal of the bank is to increase it’s promissory hold on material assets by way of secure loan contracts.
The more loans it issues to borrowers who qualify it’s compliance procedure to insure against the risk of loss through default…
The more financial worthiness and asset value (balance sheet robustness) the bank accumulates – attracting more corporate investors who plough increasing amounts of capital into it’s reserves.
The government and what it really wants…
As for the governmental office, the more qualified and therefore financially mobile business start-up borrowers are within it’s jurisdiction…
The greater productivity there is on it’s turf…
The level of employment and gainful labour is increased…
Financial stability among residents improves and general economic prosperity abounds.
This is simple economic theory.
But where does all of this leave you and your poultry farm idea?
Really, it leaves you with a serious decision to make.
Again, I don’t know where you are in your planning and what you have in your hand to start, but…
When you consider the meat of the detail above, you quickly see that whilst those entities which seek after asset wealth (banks and institutions) are all too keen to give away money…
Why are we then so keen to loan their money?
Do we really need it?
What is the lender’s gain? And why are they so keen to give out money?
They simply have their eyes on the long term.
If they give out money today, the value of their money gains value (interest) for tomorrow.
They’re therefore happy to put their money in the hands of as many as they can (who seem able to keep their repayment arrangements) in order to increase their future potential gains.
Their business is to sell money and to buy interest by way of loan contracts.
So, it seems that their parting with money buys them future advantage.
Their understanding of money is that it depreciates with time because the prices of products and services in the market continually increase.
So, money in your pocket today…
If it doesn’t multiply and increase, can only buy fewer products or services tomorrow.
To maintain increasing value of your money – you need it out there (invested and…) continually working for you.
Whilst we are familiar with bank investments like savings accounts which offer interest earnings to investors.
The concept of putting our money to use invested in our own business projects, like poultry, is a little more mysterious.
But think about it…
Banks exists to make profit.
If they offer you interest on money deposited on a savings account…
It’s only because where they go to invest your money, after your deposit is in their hand, offers them greater returns (profit) than the interest they offer you.
What can we learn from this?
Think differently about money.
If you consider money as being worth more being put to work than sat still – you’re thinking like your bank.
Do this and you’re likely to have increasing money, not decreasing money.
The only question to ask is: where would our money be best invested in order to get optimal returns?
Any business could be the answer to this question.
How about poultry farming businesses?…try hatcheries, chicken farms or egg farms etc.
Could be just the opportunity you (and whatever money you have in hand) have been looking for.
Don’t I need capital to start up a poultry farm? Isn’t it expensive to start?
Yes and no.
Sure, you need something to start:
But if you begin by accepting that what you do have must be sufficient…
You leave yourself with no choice and the task of being maximally witty in order to make up the difference in financial means.
Again, no loan…
= no debt
= you and your money are now gaining value for the future
= your labour is not simply buffering the bank’s reserves.
Start thinking like an investor rather than a consumer and seek a self-start for your poultry farm business.
Now for more practical detail…
The business of start-ups
So, you’re set on poultry farming as your start-up idea.
Before we get our hands dirty and take a look at the practicality of poultry…
Let’s first understand what is really meant by start-up:
“A startup or start-up is started by individual founders or entrepreneurs to search for a repeatable and scalable business model.
More specifically, a startup is a newly emerged business venture that aims to develop a viable business model to meet a marketplace need or problem.”
- Further reading: Start-Up – Wikipedia
Why is this important to know in the case of your poultry farm start-up?
The key is understanding why entrepreneurs search for:
Entrepreneurs earn their income and pay for their personal livings expenses by achieving consistent returns on invested money & time…
In the same way in which an employee, receives a wage upon which they rely for household upkeep…
An investor or entrepreneur relies on scheduled returns coming in from investment(s).
But where’s the security in investment?
Let’s continue with the comparison with employment…
The security of employment is backed by a contract which declares legal commitment of an employer to pay an employee an agreed income at set intervals…backed and insure by terms of contract.
But how secure is an employment arrangement really?
Only as secure as the ability of the employer to keep their promise.
As we know in the issues of life in this world – nothing is guaranteed, or really sure among us men.
An employer could:
- become bankrupt,
- lose key accounts,
- strategically divest from your area of expertise etc…
Where would that leave you as an employee?
Redundant. No work & no income.
How would you protect yourself against this?
Choosing employers who have:
- relatively financial stability
- good long term employment track record
- long term strategic dependence in your area of expertise
These are just a few career tactics.
By each of these, you would seek as an employee to reduce your risk of losing necessary income.
But, how do things work for an entrepreneur?
Entrepreneurs similarly earn their income from arrangements which promise/offer consistency.
But again, this is not guaranteed.
The nature of the payment arrangements are based upon business investments.
In other words, entrepreneurs earn their income by putting their personal money and time at stake into the running of successful businesses.
Emphasis on the word successful.
But how can an entrepreneur make sure that any prospective business opportunity will be successful?
In truth, they can’t.
But they can do their best to eliminate risk.
Every business is different and the conditions and variables affecting them are in constant change.
So what does a business investor look for when assessing their investment options?
They look for the presence of common factors for business success.
The factors act as markers which inform the entrepreneur that the business opportunity they are examining have the necessary characteristics to succeed.
The combination of such business characteristics are collectively known as a business model.
“Business modelling is about finding a systematic way to unlock long-term value for an organisation while delivering valuable products and services.”
- Further reading: What is a business model – www.fourweekmba.com
As we see from the above quote, entrepreneurs use their knowledge and experience of business systems to:
- reduce their risk of investment loss, and;
- increase their potential of staying on track with earnings
If you are seeking to start-up a poultry farming business with confidence
- (i.e. on the hope of either replacing or complimenting current earnings, perhaps from employment etc.)…
Learning the poultry farming business as a beginner
Poultry farming is a physical product based business.
Your poultry farm will deliver the physical product of either chicken meat or egg…
In exchange for money, which becomes your sales revenue.
To state the obvious, yet to be explicit for the sake of completeness…
Your poultry farm’s overall productivity is dependent upon the critical performance of it’s units of productivity, being:
In other words:
Without the birds, your farm will have neither meat nor eggs to sell.
Why stress such a basic point?
To emphasise: performance.
Grasping the simplicity of the point above is to hit upon the key to your poultry farming success:
Your business profits and entrepreneurial earnings are…
…directly linked to:
The welfare & output of each individual chicken,
As resulting in:
- Weight ‘meat’ gain
- Egg laying consistency
Anything less than optimal performance will have a knock on effect of eroding your profit margin.
The wrong combination of adverse incidents could render you being out of business completely.
So, we conclude:
To succeed at earning a sustainable income from poultry farming…
You need to know your birds!
One well bird brings better returns than a thousand stressed, sick, or stressed birds.
Let’s take a look at some simple outlines to illustrate this fact:
He’s a ‘would-be’ start-up egg farmer from Pune.
He wants to perform some simple, ‘back of an envelope’ risk analysis to try his idea of running a farm.
As yet, he is undecided on mode of poultry farm i.e. broiler or layer, so he decided to run a head-to-head comparison.
Again, the idea here with Ravi’s risk analysis – is to gauge the real cost of making errors in this poultry venture.
Let’s break it down to the individual units:
The Broiler Chicken Basics
A broiler chicken is raised for meat.
Chicken reared for meat can be either male or female.
There are many breeds and strains which are reared for this primary purpose.
There are globally reared breeds, as well as locally prevalent ones in each country.
Each breed has it’s own profile of characteristics and performance statistics.
A broiler chicken purchased at 1 day old and reared for meat is scheduled to reach it’s full marketable weight at 42 days.
The price for a 1.5 kg broiler chicken at market in Pune, India is approximately Rs. 170
This target weight of bird (1.5 kg) might look as a given on face value, but the detail lying beneath the result goes deep.
The following are the 10 most influential factors affecting broiler growth:
[Because the scope of this guide is the business of poultry farming and rather than the discipline of animal husbandry; we are not going to delver deeper into each of the 10 points above.
But suffice to say that the factors each impact the bird’s ability to eat well, avoid stress, grow and remain healthy.]
As far as making a profit goes in the broiler business, our start-up businessman, Ravi, learns timing is key.
Getting birds to market on time as expected means buyers are not disappointed and will rely on the consistency of your service delivery.
Timeliness with marketing broilers also keeps the cost of rearing down to a minimum.
Ravi, sees it this way…
If his animal husbandry is ‘off’, or ‘below par’ and broilers become sick or stressed – they lose weight.
Losing weight means they fall short of marketable weight.
This means he defaults on sales arrangements and is forced to keep broilers on his farm longer than is optimal in the hope they regain weight lost.
The longer he keeps broilers on farm…
The more feed they consume…
The more cost he incurs against his expected margin of profit.
Especially as feed is typically touted as contributing 70% of the overall cost of sale.
Prolong the delivery of his batch and his chicken drastically ‘eat’ their way (for want of a better phrase) into his potential profits.
Let look at some of his figures:
Our would be poultry farmer, Ravi, works out…
A broiler is sold at Rs.170
His estimation on operating profit margin after all expenses, overheads, depreciation & debt repayment is 28%.
In real terms, this works out as:
= Rs. 170 x 0.28
= Rs. 47.6 profit per bird (28% profit margin)
...if a broiler bird consumes approximately 0.6 kg of feed per week...and feed costs Rs. 35 per kg...
Due to adverse handling conditions, Ravi's batch is delayed for market delivery by 2 weeks (because they were under weight)...
This is what his profit calculation now looks like:
= Rs. 47.6 - ((0.6 x 2) x Rs. 35)
= Rs. 47.6 - 42
= Rs. 5.6 per bird (3.2% profit margin)
Ravi's figures indicate that a batch delayed by 2 weeks almost entirely erodes his profit margin of 28%!
The Layer Egg Basics
Ravi is keen also to take a look at how under-par handling could affect his poultry farm, if it was trading eggs and not meat.
Further reading on the subject on layer bird health and impact on productivity, Ravi finds factors such as:
- lighting…(if poorly balanced) can reduce laying rates by up to as much as 30%
- seasonal temperature fluctuations also in hotter climate seasons, especially in hot global climates like India, can reduce egg output by 10%
Let's take a look at the profit breakdown as before...one bird at a time:
An egg is sold at market for Rs. 3.5 (each).
A layer bird is kept for production at a farm for 72 weeks (optimal commercial laying life).
Within the 72 week period from 1 day old to being culled as a 'spent hen' - each hen is expected to produce on average: 295 eggs.
The expected profit margin to be gained by Ravi in running this layer farm will be 28% per batch of eggs sold.
The profitability of a batch of eggs would be worked out like this:
295 eggs x Rs. 3.5 (price per egg) = Rs. 1,032.50 sales revenue
Ravi's cost of sale for selling those eggs would be:
= Rs. 1,032.50 x 0.72 (which is the same as 72% of the total sales revenue i.e. the total cost of producing a batch of eggs sold)
= Rs. 743.40 direct costs of producing a batch of 295 eggs from one layer over 72 weeks
But what would things look like if the egg production was down by 30% due to poor ventilation & over heating?
= 295 x 0.7 (to reduce production levels by 30%)
= 206 eggs
...then multiply this number of reduced eggs by the price per egg of Rs. 3.5 and you get:
= 206 eggs x Rs. 3.5
= Rs. 721 sales revenue
...take away the direct costs of sale...
= Rs. 721 revenue - Rs. 743.40 direct costs of sale
= Rs. -22.4 (...notice the negative symbol! This is a loss of Rs. -22.4)
So what has Ravi learned?
A marginal dip in bird handling quality can seriously harm his profit margin.
And if he isn’t careful, it could totally wipe him out!
Get it right however…
And he’s got a consistent and consistently GROWING source of personal income.
Let’s get our hands trained on some chicken.
Practical crash course to starting a poultry farm
From what we’ve learned at the desk this far is that our paper profits depend largely on bird welfare.
Now let’s ask the obvious question…
How well do we know chicken?
Let’s be honest!
Do we know them well enough to stake our family income on?
If there’s any doubt, we need to get up to speed.
Sure, a professional training course is will get you formal exposure…
But there’s nothing stopping you taking the front foot of initiative and directing your own learning.
The following is a quick crash course to getting yourself some grassroots knowledge and experience in handling chicken successfully:
Step 1: Get a soft beginners introduction to handling live chicken
Get a simple, starters beginner’s manual on rearing chickens.
Something like this might do:
Study it back to front.
It’s light, easy and nothing too technical.
Just a gentle introduction.
Ready for something a bit more challenging?…
Let’s get some hard(er) facts on board!
Time to read some top Agri-blogs…
Informative animal husbandry blogs like:
…will help you very swiftly broaden your personal knowledge base on poultry farming.
Such digital publications give a sound foundation upon which to build more specialist insight.
Highlight key topics and points.
Step 2: Develop a firm handle on the key poultry business facts, figures and success factors
Time now to gain mastery on the subject of rearing poultry.
By taking a deep dive into professional research papers online.
are exactly that.
World leaders in their field of teaching people about how to successfully handle animals of all kinds…
Of course including chicken.
They are funded by government especially for the purpose of producing world class learning literature on your new area of interest.
Why wouldn’t you take advantage of their output?
Highly specified by topic…
And readily available…
What do we mean by upstream?
The commercial market participants of poultry farming:
- e.g. hatcheries, farms etc.
…are feeding from the findings of such learning institutes in order to gain advantage on staying on top of their goals.
Studies on topics such as, ‘…most effective poultry feed alternatives’ are constantly being reviewed by farmers in an attempt to cut their costs.
Why wait? Get reading.
How do you find such material…? (Quickly!)
Try search operators for more precise poultry farming research results online:
What is a search operator?
Google defines search operators as…
“…symbols or words in your search to make your search results more precise.”
Remember, the more precise your research – the more effective/informative your findings…
And the more time saved doing desk research!
How exactly can these search operators be used to research advantageous poultry farming techniques?
Here’s a quick example…
Step #1 – Take some of the key poultry farming topics which you have gained from your research in the step above.
poultry house ventilation
Step #2 – Make a list of the most relevant additional search detail for finding your ideal poultry farming research paper:
"PDF", ".edu", "study", "FAO", "research" etc.
- These are all typically common keywords associated with agriculture-based research papers published online
- …such keywords, as in the ‘grey box’ example (e.g.) above, are known as search modifiers – for the reason that they modify a general search term, using Google search engine, in order to produce a more specified and precise list of relevant results.
Step #3 – Now, choose the most advantageous search operator for producing the best quality list of search results:
- e.g. inurl –
- …this search operator is used in order to find the most relevant web pages for your chosen keyword, which include a particular detail within the url structure of the page’s web address:
- Type the following into the search bar:
poultry house ventilation inurl:'pdf'
- Or try:
poultry house ventilation inurl:'edu'
- Or even…:
poultry house ventilation inurl:'fao'
poultry house ventilation inurl:'study'
You’ll find from adopting such advanced search techniques online – you gather together some obscurely hidden gems of information to support your ongoing poultry farming research…
And save yourself hours of time sat in front of a computer trying to acquire rare subject knowledge.
Also, why not use an application such as OneNote to compile all your findings conveniently in your very own digital notepad?
Step 3: Get some visual guidance on handling poultry
Have a look at how some poultry farmers from around the world approach your new found subject of interest.
Examine their manners both with business and the birds – keeping eyes open for game changers.
YouTube has got to be the most relevant source for video based poultry farming learning material.
Sign-up to subscribe to busy channels and keep abreast of latest methods and tips.
Step 4: Visit some model poultry farms across the country
Visit a few local farms around your country.
Firstly, get in touch with the relevant government animal husbandry office, asking for a list of recommended model farms.
They usually won’t hesitate.
Scan the list.
Do some online research and then…
Take the plunge – call them up to book an appointment.
Prepare a checklist of critical poultry farming/business related queries and thoroughly investigate their techniques for deriving the best results.
Whilst onsite…be observant. Invest your time well.
It’s not just what you see your host do, but it’s how and why they do it that grants valuable insight.
Extract maximum value from the encounter…
N.B. Remember ask permission before taking photos or making any recordings – never presume.
Step 5: Volunteer at a local poultry farm to get experience
Once you’ve gotten a 1st hand view of a working poultry farm from your model visit…
Clearly, this is much more involved and committed and may not be so straight forward to arrange.
But if you are able to land a spot mucking in with some experienced hands, you’ll learn some priceless lessons for running your venture.
Step 6: Search out poultry farming case studies online
Case studies are a highly absorbing way of learning the detail of any particular type of business – especially the poultry business.
Case studies are academic examinations of a 3rd party’s practical experience, usually accompanied with a candid breakdown of what went right as well as wrong – in the opinion of the author.
News articles are typically the most readily available source of poultry farming case studies.
Search for worldwide stories.
Sure, they won’t have localised detail – but you’ll find (…with a trained eye) that the principle value offered by each case is highly transferable to any market.
Also the level of detail shared from one marketplace to another might vary.
One country’s style of investigative journalism, may not be of the ilk as another.
Get a wide spread.
Step 7: Test it out for yourself!
Now you should be ready to take your first steps into the discipline of keeping some chicken yourself.
Begin with a small flock from home and learn the poultry farming fundamentals, first hand – yet, without any commercial risk.
Allow yourself to learn by trial and error and don’t forget to document your journey!
- …starting a local poultry farming blog online could be a profitable way to leverage an early start-up audience for your future business – remembering the unavoidable ‘time factor’ when promoting online and looking to show up in the search engines.
Keeping a journal not only focuses the mind on remaining consistent…
But also suffices an audit trail providing factual reference of steps taken.
By this you have a more robust method of establishing ’cause and effect’ relationship between your actions and the results.
Financial planning for your poultry farm business start-up
As any experienced start-up entrepreneur will tell you…
Keen financial planning ability is the principal skill of the wider entrepreneurial discipline.
Actually, financial prudence is even more vital to a start-up owner than that knack of identifying opportunities.
As we learned in a previous chapter, to be a successful start-up entrepreneur in any field, you need the understanding of an investor.
Financial literacy…& at the highest level.
Is this really achievable from a standing start – very little prior experience or formal qualification?
Get reading and listening.
Financial investment has a language of it’s own.
Definitions, grammatical usage, standard statements, treatments and handling etc.
The quickest way to get fluent is to jump in and begin asking questions.
But don’t finance professionals take years just to acquire the basics and further expertise?
And is all this in excess of what you will need to simply run a poultry farm?
Whilst to run your poultry farm you won’t need a mastery of ALL things financial – getting fluent in the critical topics and applications is indeed essential to making a commercial success of it.
The following are some financial definitions & statements which are fundamental for a successful career in the poultry farming business:
A ‘mini’ financial glossary for poultry farm start-up entrepreneurs…
- the fruit of your poultry farm’s labour output
e.g. eggs, chicken meat
- money held on account available for investment
e.g. savings, loan, surplus revenue
- successful transactions where a specified amount of money has been gained in value by your poultry farm, as received from another entity (person or organisation)
e.g. a tray of 30 eggs for Rs.90
- transactions initiated by your poultry farm where a specified amount of money has been paid by your poultry farm for the acquisition of goods or services needed for operation
e.g. plastic egg trays for KSh. 400
- a general term for monies paid out of your farm for goods or services used during operation
e.g. 30 litres of petrol fuel for transport bought at KSh. 108 per litre = KSh. 3,240
- recurring costs within your business which are routine features in your business expense accounting
e.g. electricity bill for KSh. 7,000
- Variable costs (direct costs)
- as indicated in the synonym ‘direct costs’ these are costs incurred by your poultry farm which are directly related to the production activity
e.g. a bag of bird bird feed for KSh.2,000
- Fixed costs (indirect costs)
- these are costs that are indirectly or softly associated with poultry production – these don’t move at given capacity
e.g. bird house insurance for KSh. 40,000 per annum
- this is financial gain. Financial return gathered up within a given period of time, over and above the corresponding cost of investment made & expressed as a percentage of the original amount invested
e.g. broiler batch bought for Rs. 10,000 was sold for 12,000, yield = 12,000 - 10,000 = Rs. 2,000
Yield = Rs. 2,000 / Rs.10,000 = 20% yield
- Profit margin
- percentage of increased value gained on each individual transaction
e.g. egg sold for KSh. 15 & costs KSh. 11 to produce = KSh. 4 profit per egg sold
Profit margin = KSh. 4 / KSh. 15 = 27%
- Gross profit
- surplus revenue gained by your poultry farm above the amount of related costs of production
e.g. poultry farm income year 1 of Rs. 1,000,000 minus related expenses of Rs. 500,000
Gross profit = Rs. 1,000,000 - Rs. 500,000 = Rs. 500,000
- EBITDA (Earnings Before Interest Taxation Depreciation Amortisation)
- what remains in surplus revenue within your poultry farm from your gross profit after paying overheads (fixed bills)
e.g. Year 1 - Rs. 500,000 gross profit minus Rs. 150,000 overheads
EBITDA = Rs.500,000 - Rs. 150,000 = Rs. 350,000
- Operating profit
- what is left of your EBITDA after deducting expenses for capital equipment replacement
e.g. Rs. 350,000 EBITDA minus Rs. 50,000 depreciation for buildings & equipment
Operating profit = Rs. 350,000 - Rs. 50,000 = Rs. 300,000
- Net profit
- total available surplus revenue available as earnings remaining in your poultry business after your operating profit has been discounted by all relevant personal tax liabilities
e.g. Rs. 300,000 operating profit minus 30% personal income tax
Net profit = Rs. 300,000 x 0.7 (minus 30%) = Rs.210,000
- total amount available to take out of your poultry business as earnings or reinvestment
e.g. Rs. 210,000 net profit minus Rs. 15,000 for hen house extension to increase laying capacity
Household earnings/income = Rs. 210,000 - Rs. 15,000 = Rs. 195,000
- Capital cost projections
- one-off capital cost plus recurring capital costs required for the start-up of your poultry farming business
- Sales projection
- a tally of your expected poultry farm sale transactions with derived sales revenues for a given period of trade
- Income statement
- a simple trade-off expressed as a head-to-head comparison of all poultry farming income revenues vs. expenses (variable & fixed costs of operation)
- Balance sheet
- a financial comparison between poultry business assets (e.g. capital equipment & buildings) and liabilities (e.g. debt or monies owned to suppliers) held by your poultry farm
For a further look at example poultry farm financial statements take a look at:
- Poultry Farm Profit Calculation: A Detailed Step-By-Step Guide – The Big Book Project
Choosing your poultry farm business model
As we learned in an earlier chapter above, entrepreneurship success largely relies on the effectiveness of chosen business model.
For review, the business model is the system by which the business is geared for achieving the expected results.
There are many modes and methods by which you could run your poultry farm.
Each has their own distinct profile of merits, drawbacks, metrics, facts and figures associated.
Let’s take a look at some of the common poultry farm business models:
Broiler vs. Layer Poultry Farming
Ok…suffice to say, we have these defined by now:
- Broiler poultry farming – produces chicken meat
- Layer poultry farming – produces eggs
But is there any more to it than this?
The nature of your poultry farm, whether for chicken meat production or eggs, will define your sales cycles and future cash flows.
Take a look at what we mean:
Broiler birds are grown by poultry farms from 1 day old to 6-7 (42-49 days) weeks old.
At this target age, they are scheduled to achieve target weight of somewhere between 1.5-2 kg each.
At target age of 6-7 weeks, they are ready for market.
Depending on how many batches of broilers you raise simultaneously, your poultry farm will have a certain frequency of being ready for market.
It is generally accepted that the more regular your appearances at market, the greater the demonstration of your production consistency before buyers.
Remember, that a wholesale buyer will most likely require a high frequency of chicken replenishment.
If you have available stock at the most frequent intervals…
You are solidifying your relationship.
To have a weekly delivery available every week, this would require keeping multiple batches of broiler at varying ages at a time.
This is a relatively, more intensive production process and requires more funds to get going…
Once going, it affords for a more consistent cash flow.
Layer birds of are kept by nature for a period of 72 weeks of which, 52 weeks are actively laying eggs.
They produce eggs roughly one per day.
The number of eggs your farm produces will naturally lead you to serve a certain:
- size, and;
Whatever the scale, the ideal is a continual weekly supply of a consistent number of eggs.
Remember, the 72 week optimal laying output and the need for renewing your layer flock periodically.
General (Standard Commercial Breeds) vs. Specialist Breeds
What type of breed of chicken will you rear?
What difference does it make?
Quite a lot of difference when you look into it.
Standard commercial breeds or strains are selectively bred for the most economically advantageous/optimal output characteristics.
This is an example of a globally commercially layer:
BV 380 (Brown) Layer
Egg shell color is uniform brown.
Parent stock performance specifications
- Female livability from 0 to 20 weeks – 97%
- Female livability from 21 to 72 weeks – 92%
- Male livability from 0 to 20 weeks – 95%>
- Male livability from 21 to 72 weeks – 96%
- Age at start of Hatching Egg – 25 weeks
- Number of hen housed eggs at 19 to 72 weeks – 289+
- Number of settable hen housed eggs at 25 to 72 weeks – 240+
- Average % of hatching eggs – 83.3
- Average % of hatching eggs (On set eggs) – 84.0
- Female Body weight at 21 week – 1.5 kg
- Female Body weight at 72 week – 1.85 kg
- Feed Consumption /Female Housed at 0 to 20 weeks – 7.5 kg
- Feed Consumption /Female Housed at 21 to 72 weeks – 43 kg
- Further reading:
- BV 380 (Brown) – Vikaspedia
Against the the naturally occurring local breeds across the world such as Aseel in India, for example, which have traditionally been reared as ornamental birds – there is just no contest.
How accessible are commercial laying birds?
Commercial layers are ubiquitously accessible, worldwide.
Available either via national breeders or global suppliers exporting to all markets.
Poultry farmers favouring ‘cookie cutter’, prescribed production levels, prefer to stock such standardised strains of chicken.
Standard quality & quantity…
And, stable market demand.
Is that to say that there are no locally bred birds which can compete with commercial strains for output?
On the rise across the world are local hybrids which are genetically selected for producing commercial results.
In India, there are birds such as:
CARI SONALI LAYER
- First egg at 18 to 19 weeks
- 50% production at 155 days
- Peak production at 27 to 29 weeks
- Livability of grower (96%) and layer (94%)
- Egg production Peak 90%
- Hen Housed to 72 wk. more than 265 eggs
- Egg size Average
- Egg weight 54 g
- STUDIES ON PRODUCTION PERFORMANCE AND EGG QUALITY – SANDEEP KUMAR
As you can see the Cari Sonali figures are pretty similar to the BV 300.
Now, onto cages…
Cage vs. Deep Litter Poultry Farming
The difference is simple.
Cages offer control.
Deep litter housing offers greater freedom to the birds, but lesser management control for you.
Arguably greater control = greater projection of profitability.
But there are benefits to offering the birds greater space in rearing.
The pros and cons have been neatly summarised in a study published in the World’s Poultry Science Journal:
Advantages of caged poultry farming
- (1) increased hygiene resulting in a much lower incidence of diseases,
- (2) small group size resulting in a low incidence of social friction,
- (3) ease of management,
- (4) absence of litter problems,
- (5) better working conditions, and;
- (6) a much lower cost of production
Disadvantages of caged poultry farming
- (1) lack of physical and psychological space for the hens,
- (2) lack of exercise resulting in a higher incidence of metabolic disorders,
- (3) lack of nesting opportunities resulting is severe frustration for many birds each time an egg is laid,
- (4) lack of dust bathing opportunities which, although not a severe disadvantage, should still be charged to cages,
- (5) lack of other behavioural opportunities which again seem not to be a severe disadvantage and which await further elucidation, and
- (6) a higher incidence of foot lesions.
Further reading: Pros and Cons of Cages – Ian J. H. Duncan
Making the decision for investing in a cage based system or otherwise clearly has more to it than simply considerations of profit.
For example, if available land space is an issue – much smaller floor space per bird is required to host a cage set-up, whilst still maintaining the output of eggs or meat production.
The points above don’t cover all variables involved in weighing up the decision, but it should set you off in the right direction.
Pastured/Natural Poultry Farming vs. Manufactured Feed & Medicines
Feed, health supplements and medicines for your flock of poultry can be approached in two ways.
Either purchase manufactured supplies, or opt for the natural approach.
They are two fiercely contested ‘schools of thought’ which equally carry much evidence-based support.
Because of the threat of a variety of diseases and parasites which serve as environmental risks on a poultry farm, your return on investment is not without being contested.
Overcoming such attacks on flock health is often one of the critical turning points for many beginner poultry farmers.
Having been hit by one outbreak or another and suffering batches being wiped out in failed attempts…
Many newcomers lose confidence and simply give up.
Those who stick it out, come back around to facing their adversary – ill bird health – and conquer with one winning approach or another.
- A Review on Effects of Aloe Vera – Research Gate
- I Keep My Chicken Free Of Disease Using Herbal Remedies – The Standard (Kenya)
- Poultry Disease Prevention and Management – Queensland Government
- Poultry Vaccines for Use on Organic Farms – Extension
Both approaches claim advantages, but for a definitive on the matter –
We think it would really take trying out the methods you read about in a real life, yet controlled environment.
Manufactured feed/medicines are readily available worldwide.
Whereas alternative remedies are dependant upon local availability of raw materials and ingredients.
For examples of the kind of natural regimen that reportedly works in fending off disease from flock are as follows:
- Why I Keep My 300 Chicken Free Range – Daily Nation (Kenya)
- Plants That Will Keep Birds Free of Diseases – Daily Nation (Kenya)
Poultry Farming Rearing Systems
A rearing system is to do with how you line up your chicken batches in order to achieve a planned scale and regularity of production on your poultry farm.
How many batches you keep at any given time (simultaneously reared batches) and how frequently you replenish ‘sold’ or ‘spent’ stock will determine your total output capacity.
Rearing systems characteristically are defined by the combination of poultry houses used to host batches bought at different intervals.
Think about rearing systems like being a conveyor belt at a manufacturing plant.
In the plant:
- raw materials go are received and begin their journey of internal processing;
- at every stage of handling, what was an input of raw material is augmented one step at a time,
- each step changing the nature of the ‘work in progress’ making it more like the profitable end product,
- at the end of the process the manufacturing company has in it’s inventory a unit to be sold once only for profit,
- at the time appointed it is packaged up a sold with other units produced at a similar time (a batch),
- once sold, the batch would return a defined financial profit unto the company
But think about it…
What happens if you get the balance of supply & demand wrong…i.e. too much input and not enough profitable batch sales?
…in other words,
What if your business model suffers from bottlenecks, inefficiencies and backlog?
Just like bad, plumbing you get:
- breaks, leaks, spillages, flooding and collapse!
What’s the solution?
‘Just-In-Time’ inventory management!
What do we mean by ‘Just In Time’?
This is a strategic management principal – made famous in the 90’s by Toyota car manufacturer who sought to re-engineer their business by clawing back on lost profits through holding stock by…
Producing (supplying) only the type and volume of units required at any given time as covered by a purchase order or card from a buyer (demand)…
“Just-in-time inventory strategy can be referred as a production strategy which is employed to increase the level of efficiency and reduce waste by receiving goods only in the form they are required in the production process, thus reducing the inventory costs.
This method calls for the producers to be capable of forecasting demand accurately.”
- Just In Time Inventory Systems – Ready Ratios
A great definition.
It has all the ingredients.
- Strategy: spread out, expansion
- Increased efficiency: to grow in accomplishment
- Reduce costs: bring back to stand at
- Process: go forward
- Anticipating demand: to take or grasp and completely order
That tells a story doesn’t it!
- For a business – including your poultry start-up, to expand by growing according to it’s planned accomplishments
- …rather than being held back at a standstill…
- …it needs to go forward in a way where
- …all it produces or has to offer is taken completely & in advance.
Secure demand first on the confidence of having the supply.
To say it another way…
Know the market demand ‘before’ customers approach and prepare to satisfy it on time & to optimal profit.
How does this principal translate to poultry farming?
Poultry farming being agribusiness deals in perishable goods from either livestock or crop.
Stock which comes to maturity and is held by the farm not only loses freshness (shelf-life) and desirability whilst held as inventory (making it increasingly harder to sell)…
But also, inventory costs & associated expenses of holding and storing the stock.
Think it through…
Broilers are bought at day 1 and come to peak maturity and profitability at 6-7 weeks i.e. 42-49 days.
Broilers directly cost your farm the expense of feed to stay alive.
Your profit on a broilers sale is equal to sale value minus the cumulative cost of feeding it over the 42-49 days of rearing.
Keeping a broiler longer than 6-7 weeks doesn’t add any more profit to the sale.
Because they are sold on weight and their optimal weight is achieved at 6-7 weeks.
If the poultry farmer keeps the broilers any longer than the 6-7 weeks (…e.g. because they struggle to find the demand i.e. a willing buyer)…
The farmer still has to incur the cost of feeding the broiler every day…
Although every day they keep the bird the price potential doesn’t grow because the bird’s weight gain curve plateaus (flattens out)…
So instead, what happens is a reduction in profit…
With every peck of feed the broiler consumes until the date/time of sale.
Now for layers & eggs…
Layers lay at optimal commercial rates between weeks 20 – 72 of their lives.
If they during this phase they are producing eggs typically, once a day.
Eggs produced daily are gathered and placed on trays to sell at, perhaps, weekly intervals.
The profitability of a layer bird is therefore derived from the number of eggs it produces which are sold during its 52 week (20 weeks – 72 weeks) commercial laying cycle.
When layers stop producing at optimal rates, they are culled or sold as spent for cheap chicken meat at market.
What happens if the eggs that a batch of layers produces are not sold in a timely fashion?
The eggs not sold are held as inventory stock.
But for every egg held in stock there are new eggs being laid every day by each bird.
If backlog of inventory is not cleared, stock builds up and you get store overspill costing your farm – reducing profit.
If you don’t outstrip the production backlog with increased sales you have ‘stagnant’ stock which depreciates with every new fresh addition added to your store.
This produces cost inefficiencies which multiply losses internally and suppresses your business’s ability to grow.
What’s the solution?
Keeping your ability to manage decisions within your poultry farm operations in line with optimal efficiency and profitability.
i.e. keeping the pump primed at both ends.
After this, all you then need to do is take your time to scale your poultry farm according to your ambition for profit and earnings.
How Broiler Rearing Systems Work!
4+1 broiler house rearing system:
Using this approach, you would construct 5 broiler houses.
In each house you will rear a batch of broilers from 1 day old until 6 weeks (market ready / target weight).
You buy them at 2 week intervals.
…the result is a batch of broilers (at your chosen flock size) being ready to sell at market, on schedule & for optimal profit, every 2 weeks (fortnightly).
There is always a broiler house which unoccupied during any 2 week spell which is being sanitised for another incoming batch.
Here’s a visual look…
8+1 broiler house rearing system:
Using this approach, you would construct 9 broiler houses.
This program of broiler management is geared to deliver a batch for sale at market every week.
The increased frequency of broiler availability is thought to be an advantage in maintaining tighter buyer relationships…more regular sales interaction.
Simply by remaining top of mind, your poultry farm could stand to hold the interest of buyers more readily.
Once in full flow, there are always two houses unoccupied/vacant which are being cleaned out before accommodating a new incoming batch.
This is a disease prevention method of management.
Let’s take a visual look at this system…
How Layer Rearing System Work!
As for layer rearing systems, the following are the most common formats:
But what do these mean?
Let’s lay the foundation of how layer farms are geared.
As a reminder from a previous chapter of this guide, layer hens are taken into the farm at 1 day old.
Between the ages of 1 day to 8 weeks old, they are technically referred to as ‘brooders’.
Age 9-20 weeks old the birds are referred to as ‘growers’.
Between 21 weeks old to 72 weeks of age, the hens reach their physical maturity and begin cycles of consistent egg production and are therefore known as ‘layers’.
Layer hens therefore should provide your poultry farm with approximately 52 weeks worth of egg laying weeks throughout a rearing interval…
Before they reach 72 weeks of age and effectively, for commercial profitability reasons, become loss making or ‘spent’.
At this stage they are sold to market traders as ‘ spent hens’ for a cheaper class of meat.
The weight and quality of meat of spent hens is significantly lower than that of ‘broiler’ birds and therefore fetch a lower price.
However, we should always view the real profitability of the layer hen being the 52 weeks worth of egg production, rather than their ‘spent’ price at the end of their commercial viability.
The price they achieve at the point of becoming spent hens, is really an exit value of sorts.
But how does this technically work with the rearing systems quoted above:
…1+2, 1+3, 1+1+5?
Simple enough, when you know how…
Let’s take 1+2:
In this system you build 1 brooder cum grower house (i.e. a house which accommodates birds aged 1 day to 20 weeks old) and buy your first batch of day old chicks, putting them in this house.
At the point of becoming layers (i.e. 21 weeks old), you move the batch as a whole into one of your 2 layer houses.
The other (second) layer house is left empty awaiting a mature batch of layers to occupy it as you accumulate your stock.
At an interval of 28 weeks from when you bought your first batch of 1 day old chicks (brooders), you then buy another batch of chicks – at the same batch size.
The new batch of chicks moves into the original brooder cum grower house only a few weeks after the previous batch vacated it…
Your farm staff within this interim have cleaned/sanitised the house to prevent cross contamination between batches.
You move the new batch of layer hens into the 2nd layer house…
And now your egg laying capacity hits the equivalent of two batches big.
You also now have a pipeline batch in the brooder cum grower house waiting to replace the oldest layer batch and enter into their house – again – once your staff have cleaned it out.
The cycle continues on an interval of 28 weeks, affording for 2 full cycles to be cleared within the space of a year (52 weeks).
Every year at full speed, your 1+2 layer farm will take on 2 new layer chick batches and sell 2 spent hen layer chick batches.
Now for 1+3…how does this fare in comparison to 1+2?
Did you spot the difference and work it out?
That’s it…it’s that simple…
Now, rather than 1 brooder cum grower house and 2 layer houses, we have:
1 brooder cum grower house and 3 layer houses.
The only technical variation in how we gear the system is the interval between purchasing a new batch.
Rather than a 28 week interval, like with 1+2, the interval of replenishing your stock of birds with a new batch using 1+3 would be:
- 20 weeks.
Again, between transfers of batches from one house to another, there is a 2 week period of sanitising and decontamination.
This means in the process of running your system back-to-back, year-on-year the average number of batches bought in a year will be 3.
And finally, 1+1+5…
This time around we break the normal array of two numbers only with the formation of houses and now we have a combination of three numbers.
Here’s what they signify…
- 1 brooder house
- 1 grower house
- 5 layer houses
The series begins like this…
You buy your first batch of chicks on day one.
FACT: They are one day old.
When this first batch reach 8 weeks old they are transferred to the grower house.
Two weeks after your 1st batch vacates the brooder house, during which your staff sanitise the house, you acquire a new batch of chicks and house them in the (now sanitised) brooder house.
At 20 weeks of age your first batch leave the grower house and enter into the layer house.
Once your first batch is in the layer house, they remain there for 50-52 weeks, until sold as spent at 72 weeks.
But where now?
This is where the detail makes all the difference.
The interval between buying new chicks this time around is only 12 weeks…
Affording the time for 5 batches to be bought within one year – hence the need for 5 layer houses to house 5 mature flocks simultaneously.
Again, as one house empties, another batch is waiting in the pipeline to fill it (after the customary 2 week cleaning period).
Now that’s enough about gearing and systems – although an important detail…
Now we look at scale.
Scenario Planning For Your Poultry Farming Start-Up
So now you want to project the scope and scale of your poultry farm enterprise &…
Also, estimate your potential earnings!
Start with the end point and work backwards (or rather forwards) towards the required mode, gearing and batch size of poultry.
Your expected fruits of the matter (earnings) then determine what manner of business your run – this way your strategic aim will not have deceived you at length.
Let’s take an example…
He is a resident of Limpopo, South Africa.
He is currently a project manager in the agri-industry but wants a more practically applied means of earning an income – and one which he can outstrip his current earnings trajectory.
Ernest has heard that poultry farming could offer him such entrepreneurial potential…
But, he wants to determine the type, scale and gearing/system of poultry farm that will be suit him.
Having researched online he understands the basic techno-economic differences between broiler farming and layer farming.
He intends to run a side-by-side evaluation on paper of each type of farm – chicken meat or eggs – and to find out the start-up implications offered by each.
The aim of the exercise is to determine the minimum farm set-up required to achieve his target earnings.
He leaves our team, the following message:
“Dear Sirs, Your assistance would be kindly appreciated, I am looking to start up a poultry farm from scratch on my own land.
I want to give up my career in project management and therefore need my farm income to replace my employed salary.
Where do I start making this decision? Your response is eagerly awaited and appreciated. Regards, Ernest.”
After an initial first email contact to qualify the details surrounding Ernest’s position, we give him the following outline advice…
Which we share with you 🙂
Thank your clarifying your start-up position.
Your request is not uncommon and therefore we are adept at laying out such options.
The following is a step-by-step approach we take to determining scale and type of poultry start-up best suited to an individual’s circumstances.
Step #1 – Determine your target personal annual earnings from the farm
Advice: In your case, as you are in expectation of R. 500,000 annual salary we set this number as the operating profit which your poultry farm must produce (pre-tax figure).
Step #2 – Determine the gross figure of your proposed poultry farm
Advice: As with a typical picture, a very broad yardstick for gauging the relationship between operating profit and gross is to say operating profit should be in the region of 80% of gross profit.
Gross profit being direct income minus direct expenses.
Operating profit being gross profit minus overhead bills and depreciation.
Taking your example of desired operating profit or (EBIT) = R. 500,000...
This would determine your poultry farming gross profit to be around R. 625,000
Now, the gross profit margin on either every egg sold or broiler bird sold for meat would be in the region of 30% (gross margin) of total income - the same is the case in most major markets on and off the continent.
This would set the expected total income from your proposed poultry farm to be around:
Step #3 – Estimate the annual broiler sales & egg sales
Advice: We advise you take a conservative mid-market rate per unit on both eggs and broiler birds.
Then simply extrapolate the necessary sales.
A broiler example would be…
At 1.5 kg, your broilers would fetch a feasible price of R. 32.16 each.
To achieve an annual income figure of: R. 2,083,333...
You would therefore need to sell 64,781 units (broiler birds) per year (= R. 2,083,333 / R. 32.16)
If using 4+1 rearing system and therefore selling 26 batches per annum...
The batch size would need to be 2,492 birds a time (= 64,781 birds / 26 batches)
To be clear of an average bird mortality rate of 5%, you would need to buy in excess of 2,617 chicks per batch (=2,492 x 1.05)
If using 8+2 rearing system and therefore selling 52 batches per annum...
The batch size would nee to be 1,246 birds a time (=64,781 / 52 batches)
To be clear of an average bird mortality rate of 5%, you would need to buy in excess of 1,309 chicks per batch (=2,492 x 1.05)
A layer example would be…
R. 1.2 per egg is an average market price for a chicken egg.
To achieve an annual income figure of: R. 2,083,333...
You would therefore need to sell 1,736,111 units (eggs) per year (= R. 2,083,333 / R. 1.2)
If using 1+2 rearing system and therefore having 2 layer houses in operation at the same time, with each hen laying 280 eggs per annum the required batch size would need to be...
3,102 layer birds at a time (= 1,736,111 / 280 = 6201 total layer capacity / 2 houses = 3,102 batch size)
To overcome the anticipated bird mortality of 5%, it is recommended you buy:
3,258 chicks at a time
If using 1+3 rearing system and therefore having 3 layer houses in operation at the same time, with each hen laying 280 eggs per annum the required batch size would need to be...
2,067 layer birds at a time (= 1,736,111 / 280 = 6201 total layer capacity / 3 houses = 2,067 batch size)
To overcome the anticipated bird mortality of 5%, it is recommended you buy:
2,171 chicks at a time
If using 1+1+5 rearing system and therefore having 5 layer houses in operation at the same time, with each hen laying 280 eggs per annum the required batch size would need to be...
1,241 layer birds at a time (= 1,736,111 / 280 = 6201 total layer capacity / 5 houses = 1,241 batch size)
To overcome the anticipated bird mortality of 5%, it is recommended you buy:
1,304 chicks at a time
What are the advantages and disadvantages of the various rearing systems?
Typically a trade-off between:
- required batch size (giving differing starting investment amount per batch)
- quicker multiplication of production,
- quicker cash flow
…examine the pros and cons.
The Big Book Project Team.”
If you were in Ernst’s position, which system or model would you go for?
Have a think.
Once decided, now on to how you would manage your poultry farming start-up process.
Project Management 101 for Poultry Farmers
So, what relevance does project management have with poultry farming?
What do poultry businesses and projects have in common?
By definition, every business (…whether a poultry farm or otherwise…) is a project.
And every entrepreneur ought to view their business as a project.
Let’s look at a formal definition from Association of Project Management:
“A project is a unique, transient endeavour, undertaken to achieve planned objectives, which could be defined in terms of outputs, outcomes or benefits.
A project is usually deemed to be a success if it achieves the objectives according to their acceptance criteria, within an agreed timescale and budget.
A key factor that distinguishes project management from just ‘management’ is that it has this final deliverable and a finite timespan, unlike management which is an ongoing process.
Because of this a project professional needs a wide range of skills; often technical skills, and certainly people management skills and good business awareness.”
According to the definition of what a project is above, we would assert with confidence the EVERY business is a project.
Let’s test it…
- Unique – every business is different, one from another…why? Because we as people are different, therefore our businesses will be different.
- Transient endeavour – every business is passing over and passing away day by day. No commercial entity (business) lasts forever…as empires rise and fall, so do businesses every day.
- Planned objectives – every business should be targeted at achieving something in the future i.e. have a target to accomplish particular results and to finish at an end – before even beginning .
- Outputs, outcomes or benefits – every business must produce something good (…gain, yield, return…) for those involved along the way to repay for and to sustain them in their efforts along the way.
- Successful, if it achieves the objectives – every business must achieve it’s objectives. If a business does not achieve that thing planned in the future, by the given date and time appointed, nor provide the incremental gain, yield or return to those invested along the way, then it has by definition failed to be a business.
- Acceptance criteria – every business must have associated with it’s foundation clearly written articles of start-up declaring strictly defined (qualitative and quantitative) criteria dimensions & characteristics by which it ought to be measured for assessment to be judged either as successful or unsuccessful.
- Agreed timescale and budget – every business should have a defined start-up date and finish date, along with a defined amount of resource, effort, time and input which the owner will give – and no more.
- Final deliverable – every business should have a single point for which it was purposed to achieve the deliverable which by nature should be in some way to the ‘setting free’ of the owners and stakeholders invested from some burden that otherwise would have been carried i.e. debt, mortgage…and once delivered, it should bring about a complete end to that burden.
- Finite timespan – every business should be limited to both a set time of owner involvement during its operation and a set endpoint beyond which it should not exist.
- Business professional – every business should be run by someone who is able to make clear what they do, why, how, when, where and should be able to communicate with confidence about any and every aspect or discipline of their business e.g. product, service, finance, IT, sales, marketing, operations etc.
- Wide range of skills – every business should be run by a generalist and not a specialist.
- Technical skills – every business should be run by an owner who knows and has mastery over how everything really works.
- People management – every business should be run by someone who has experience and expertise in consistently and successfully maintaining professional relationships. Not a novice.
- Good business awareness – every business should be run by someone who is able to perceive the signs and identify the warnings of things to come within a commercial business environment, before they strike.
Does this round-up sound like you & your business?
If not, then you’ll probably gain a lot from reading up on common project management methodologies and techniques online.
These can be used for successful management of your poultry farm start-up.
Project management approaches like PRINCE2 (PRojects IN Controlled Environments) tout the following advantages:
- A common, consistent approach
- A controlled and organised start, middle and end
- Regular reviews of progress against plan
- Assurance that the project continues to have a business justification
- What Is Prince 2? – Prince 2
By gleaning some element of organisation and integrity from such project management frameworks, you are able to set your poultry farming business in good stead for real business success.
For more definition on exactly how it’s done, we look to the main topics covered by such projects management methodologies:
- …this involves instilling measures for assuring a standardised quality of output in product or service…
- i.e. How can you measure to verify for certain that your customers are getting what both they and you expect, every time?
- What is Quality Assurance – Prince 2 Wiki
Poultry farming cost management
- …identifying, accurately estimating & accounting for the expenses incurred by your business…
- i.e. How can you make sure that your business doesn’t spend any more than is optimal for running peak rate operations?
- How To Estimate Projects: The Complete Guide To Project Budget & Cost Estimation – The Digital Project Manager
- …establish the most advantageous purchase arrangement for your poultry farm business…
- i.e. How can you make sure that your poultry business makes the most of buying arrangements?
- Procurement Management Guide – Delta Bid
- …ensure the timing of key business related tasks work toward the optimal benefit…
- i.e. How should you line up necessities of the business operation in sequence for the best outcomes?
- Project Scheduling – Project Insight
Poultry farming staff management
- …hiring and enabling staff for you farm which grants the greatest commercial advantage in the market…
- i.e. How should you get the most out of your staff to the accomplishment of your goals?
- HR Project Management: The Ultimate Guide – upstart HR
- …making sure that as and when ‘change’ related challenges hit you business, you are able to govern such occurrences, flexibly as well as diligently – minimising potential for loss.
- i.e. How will you govern changes to scope, budget etc. carefully within the running of your poultry business & document them?
- …communication between stakeholders within the running of the business is critical for maintaining optimally running processes and procures…
- i.e. How should you communicate effectively with stakeholders supporting your business for best results?
Poultry farming risk management & record keeping
- …keep a tight handle on the main factors threatening to derail your plans for achieving the goals and benefits outlined in your business objectives…
- i.e. What factors most affect your ability to achieve your poultry business goals? And how you get on top of them?
Wrestling a firm command of the disciplines above will grant you greater ability to keep your poultry enterprise on track for doing what you plan it to do.
Marketing Your Poultry Farm For Maximum Impact
So now, managerially you are set for success…
But how do you reach people in your marketplace to make them aware that your business exists?
By becoming the most valued participant in your market vertical.
Value is what makes markets tick.
Poultry farming is no different.
Where your poultry business has demonstrated that its participation in the poultry market should be valued by others & most of all esteemed to be of great worth by potential buyers…
You’ll naturally get sales conversion as well as, advantageous commercial partnership offers.
This will only advance your farming enterprise toward it’s objectives with haste.
But how do you achieve this?
Know your market.
Did we say that correctly?…
Didn’t we mean, “Know Your Customer”?
We really mean, “KNOW YOUR MARKET”.
To get a grasp of what this is really saying and how it can achieve maximum visibility, sales and profit for your poultry farm…
Let’s first examine the definition of the old market adage, Know Your Customer (…which we have replaced with the better – Know Your Market):
The internet-based SME marketing advisory hub, Marketing Donut, owned by Atom Content Marketing Agency defines, Know Your Customer as:
“…great customer care involves getting to know your customers so well that you can anticipate their needs and exceed their expectations.
To understand your customers well, you need to be attentive to them whenever you are in contact with them. The potential rewards are great: you can increase customer loyalty and bring in new business through positive word-of-mouth recommendation.
There are three main ways to understand your customers better:
- Understanding Your Customers Overview – Marketing Donut
See how this works?
If you know whom you are serving well enough, you can always best position yourself to give them what they need beyond simply what they ask.
This is real value.
In this your customers know you’ve really gone beyond and put yourself in their shoes.
This provides comfort through sincerity and care which goes a long way to establishing your business’s staying power.
Your customers go out of their way to build your business in a giving back what they received from you.
Repeat business and word of mouth marketing being the major benefits and return on investment.
If we really need to be sold on the benefits of repeat custom and word of mouth marketing…
The the following articles should say enough:
- Customer Retention Statistics – Small Business Trends
- Positive Word of Mouth and Profitability: The Experience of Banks in Port Harcourt in Nigeria – (IJMSR)
Whilst the above, Know Your Customer, is a classical marketing principal which has great merit.
We are persuaded that there are better rewards in Know(ing) Your Market, rather than just knowing your customers.
Here’s what we mean…
The poultry market vertical is a value chain.
- Raw input enters into the top end,
- …along the way are augmented by products or services added, and;
- …consumers consume at the end, the final product offered.
This is an ongoing process.
Let us look at what the poultry farming vertical market would look like, courtesy of www.business-plan.co.za:
Let’s focus on that first green column.
Consider that you produce eggs.
Your poultry farm business would occupy the two boxes respectively named, “Growing Layers” & “Eggs”.
The sequence of value being added, continues along the diagram – left to right – until the final stage (in the bottom right hand corner ‘END CONSUMER’ red ball) of households eating eggs across the country, at the end.
This is how it reads:
- Breeders produce parent stock or strains from which chicks come,
- Hatcheries buy parent stock from breeders and promote breeding to produce chicks,
- Your layer farm will buy batches of chicks to replenish your laying stock & quality eggs are produced
- Your farm collects, cleans, grades & packs the eggs for distribution
- Your farm having established relationships with buyers who are either:
- (brokers/middlemen, wholesalers or retailers) sell eggs
- Retailers sell the eggs direct to households
Granted it is the consumption of eggs by households that drives the whole engine, but each component of the supply chain along the way adds its own unique value to the final delivery.
Now back to your poultry farm…
Sure, your business prospers if more buyers find out who you are and decide to buy, but…
What how much MORE would your farm prosper if all the intermediaries along the supply chain knew about your farm and wanted to offer you commercial advantage in:
- reduced input costs like discounted feed costs
- bonus chicks when batch buying
- preferred rates from equipment suppliers
- stable & consistent prices from buyers
- preferred stocking by retailers
- preferred consumption of your egg product by households
With all this behind your business, it seems you’ll be set to achieve your targets and objectives with success.
But how will your humble poultry farm achieve such fame, favour and acclaim within its market?
By giving, rather than receiving.
Being focused on your own sales is short sighted.
Being focused on the sales of the other participants in your market will leverage you good will.
Good will in a market is more valuable in the long term.
Increase the sales of the entire marketplace, demand increases and all supply participants benefit.
But how can you single-handedly promote the benefits of your entire industry and all its participants to drive increasing demand for all involved?
Position your business as the glue, hub or champion for the entire supply chain.
The key is communication.
It goes back to ‘word of mouth’.
How do you get people to talk about something?
Give them a reason to.
Master the art of business communication across all media formats in a clear, easy, relevant, informative, detailed, illustrative, honest and enthusiastic manner.
You’ll draw all comers to listen in.
A natural word of mouth generator.
Proactively answer the questions of the poultry marketplace in the most useful and informative manner…
What is a topic is your expertise?
Research. Ask somebody. Do some investigative journalism.
Put together a resource to communicate the benefits & distribute freely.
Get supply participants to contribute expertise on their respective areas.
Make it a collective effort…a collaboration.
Share the fruits.
There’ll be more than enough to go around.
Brand all the collateral with the brand identities of all involved.
Watch it bloom.
Your fellow supply chain providers will prosper and will be delighted in increased business that they receive because of your efforts.
Not to mention…
The consumer market will be attentively plugged in to your broadcasts and will interact readily, unquestionably and repeatedly with your business through your collateral and your business enquiries/sales will increase continually.
The net result?
The poultry farming market in your vicinity and beyond – nationwide…even further…worldwide will all profit.
Take a look at these examples (…alright, they aren’t poultry farms, but the principal is total transferable):
- A Revolutionary Marketing Strategy: Answer Customers Questions – New York Times
- The Wood Finishes Direct Story (Part 3) – Wood Finishes Direct
- How A Boston Appliance Store Grew Their Business Through Content Marketing – Marketing Land
Want some practical help on how and where to get started with content marketing for your poultry farm start-up?
Read these simple guides:
What Is Content Marketing? – Content Marketing Institute
Want some hands on help?
How to sell your eggs and chicken meat to restaurants profitably
As a producer of eggs or chicken, your poultry farming start-up will need to be adept at selling to your chosen target customers.
Producing and therefore selling at a high enough volume of units to be profitable and worth your while running…
Will often mean your farm selling to commercial buyers, rather than retailing direct to households.
But how skilled & therefore confident are you at selling to commercial buyers? e.g. chefs, restaurants, caterers etc.
If the answer is: not at all…
Then don’t miss out on they following detail.
If the answer is: “…very confident thank you…”, then you’ll no doubt find the following a useful complement to your existing repertoire:
[Insights from “Food Hub’s Guide to Selling to Restaurants” by Ryan Crum Local Food Marketplace – Sales and Marketing Coordinator…an ex-chef/restaurant buyer and commercial produce seller who has experience on being on both sides of the transaction…here him out:]
Do’s for selling to chefs…
- Check your local food blogs
- Connect with organisations supporting local food
- Join Facebook Groups.
- Do web searches
- Understand their menu and hours and anticipate their needs
- Know what they are buying from local producers
- Explain your delivery and order schedule
- Consider offering samples
- Make reminder calls/emails/texts
- Make it easy for them to order from you
- Be predictable
- Visit them
- Provide promotional materials
Maintaining relationships with chefs…
- Don’t take on too many new customers at once
- Respect their schedule
- Don’t compete to replace other producers – simply offer something new
- Add value – don’t undersell your value proposition
- Have clear arrangements
- Get to know staff and owners at each establishment
- Promote your customers
Food Hub’s Guide To Selling To Restaurants – Local Food Marketplace
In addition to the useful & practical advice above, from Local Food Marketplace, we also share with you the following insightful research statistics published by “The Chefs Collaborative” – an association of restaurant owners and local producers in America.
The title of the study is “Approaching Foodservice Establishments With Locally Grown Products” and was commissioned in 2003 by:
- FOOD PROCESSING CENTER
- INSTITUTE OF AGRICULTURE AND NATURAL RESOURCES
- UNIVERSITY OF NEBRASKA – LINCOLN
The study is the fruit of a survey from which over 100+ responses were received.
The recipients were “individuals at the foodservice establishment who would have the greatest buying authority for the restaurant or institution”.
The survey had the following objectives:
(1) To identify attributes important to foodservice establishments. These attributes will help define how foodservice buyers make their purchasing decisions.
(2) To identify challenges and obstacles associated with purchasing locally grown food. Producers could then anticipate and confront these challenges and obstacles as they market their products.
(3) To identify locally grown food products (including specialty or unique products) with the greatest potential for success in the foodservice market.
Here’s a few points of illustration:
“If a farmer or a small manufacturer approached your establishment, how important are the following in making a decision to purchase their product(s). [Rank on a scale of 1 to 10 with 1 as Not at all Important and 10 as Extremely Important.]”
“If given a choice, what is your establishment’s preferred source for locally grown food?”
“Is Purchasing Local Profitable? Q. Purchasing locally grown food has had a positive impact on my foodservice establishment’s bottom line profits (Strongly Agree/Somewhat Agree/Somewhat Disagree/Strongly Disagree).”
“Based upon your experience, what types of locally grown food products have the greatest foodservice potential?”
What can we conclude from the survey insights above?
- Aside from freshness and quality, commercial food buyers favour buying from producers who have extensive product knowledge.
- Behind unspecified meats, the 2nd most frequently mentioned foodservice which restaurant buyers considered had the greatest potential for purchasing from local suppliers/farms is “Chicken/Poultry”
So to interpret…
- Restaurants buyers are actively looking to buy for local farmers like you – they prefer to support local producers rather than larger corporations.
- Restaurant buyers like to feed off the specialist product knowledge of local farm producers
- Restaurant buyers think by buying your locally sourced poultry farm produce their businesses will be more profitable.
- When restaurant owners think about the types of produce they would prefer to buy locally, top of their mind is your chicken or poultry products.
What are you waiting for?
Growing Your Poultry Business Organically: How To Start A Poultry Farm – Debt Free!
Which is the most successful way to start-up a poultry farm?
Should you start your poultry farm with gathering investment to establish the operation first…? (i.e. getting capital, investment, loan and subsidy)
Or, should you generate demand at the first… (i.e. customers and suppliers keen to supply your business with good will prior to launch)…
Then afterwards, set-up your operation with necessary investment to match demand?
Let’s ask the same question, but in another way…
What came first?
The chicken or the egg?
The answer is clear…
As demonstrated, (even by the supply chain diagram above…)
It is apparent the the start of the whole poultry market supply/value chain is the parent stock of birds kept by the breeders.
It’s clear that at the end of the chain, you get eggs/meat being delivered on the tables of households.
So it’s settled…
Clearly, and truly…the chicken came before the egg!
So in like manner, we advise that you don’t invest in building the operations of a poultry farm to match a demand that you have not gained yet.
First build up the demand and then design your operational supply to follow.
This way around even ensures that when you begin investing personal funds, you already would have gained the good will of your entire marketplace by vertical value marketing strategy (in the chapter before this one)…
Good will will translate into willing and interested investors in your business before it begins…
Saving massively on capital cost, negating the long term expense and disadvantage of taking on debt via loans & subsidies.
What if every commercial participant in your marketplace is knocking your door to become an investor, by barter value, in the start-up of your poultry farm…
Before it begins?
Those favours will go a long way to saving start-up capital cost – maybe even totally wiping out the need for a start-up wedge.
Sure this way round will take patience, time and effort…
But with lower risk and assured demand before you invest – this surely is the most advantageous strategy both for starting up your poultry farm and also establishing ongoing growth.
Why you need an exit plan for your poultry farm…
Arguably, the most overlooked, forgotten and misunderstood component of every successful entrepreneur’s business start-up plan…is the exit.
But why would the starry eyed entrepreneur ever have thoughts of exit?
Isn’t exit giving up?
On the contrary, business start-ups without an exit plan is the same as a campaign or project without an objective or goal.
This is one sure way to demotivate yourself and rob your ambition of purpose.
Starting a poultry farm for beginners can carry the promise of excitement and adventure, but if you neglect to set a defined endpoint, you’re being unrealistic.
As we said before, things in life are passing.
Business is no different.
To get the most out of your business venture, be sure to set a definitive end date complete with exit value to be obtained on the way out. A faithful vision.
In many ways, the real pay off for entrepreneurs is at exit.
In other words, once the poultry business you started has accomplished the thing you intended for it to do.
The salary obtained during the running of your poultry business, should really be viewed as a means to a profitable end.
Many new entrepreneurs see the salary derived from income as the pay off…
But rather, set your sights on the long term pay off.
Don’t get blinded by the shortsightedness of leaving your start-up plans boundless.
The mature investor always targets an exit with a view to move on to something else thereafter…in the bigger plan…for family, the household, children etc.
No thing is limitless in resources, therefore why should our business planning deceive us into thinking a farm should launch without expectation of its ending.
Remember, life has so much more dimension that any particular business idea.
When starting up your poultry farm…
Give it a shelf life.
Achieve your targets.
Harvest the yield.
Thanks for taking your time to read this guide.
Happy poultry farming! 🙂
Are you looking to start a poultry farm and need some 1-to-1 advice?
Contact us for a free consultation by email/phone.
Are you an experienced poultry start-up entrepreneur willing to offer some advice to your peers?
Feel free to write your comment below.
Are you a supplier or industry professional with something special to offer?
Get in touch – we’d be glad to explore opportunities to work towards getting your poultry business profitable exposure