Need a practical guide for how to start a poultry farm for beginners?
…anywhere, any country!
This poultry farming for beginners guide was written just for you.
I forgot to explain something UNIQUE about this article.
I’m about to show you: how to start a poultry farm with only a little capital.
- How to start a poultry farm business (with little capital)
- Who is this poultry farming for beginners guide for?
- Chapter 1: Poultry Farm Loans and Subsidies
- Chapter 2: How To Start A Poultry Farm The Zero Debt Way
- Chapter 3: Poultry Farming for Beginners – The Basics…
- Chapter 4: Getting Trained to Become A Poultry Farmer
- Chapter 5: Writing Your Poultry Farm Financial Plan
- Chapter 6: Setting Your Poultry Farm Management Plan
- Chapter 7: How Much Money Do Poultry Farmers Make?
- Chapter 8: Using Project Management to Run Your Poultry Farm
- Chapter 9: Your Winning Poultry Value Chain Marketing Strategy
- Step 10: How To Sell Chicken Eggs & Meat Successfully
- Chapter 11: How To Start & Stay Debt-Free!
- Chapter 12: “Do I Really Need An Exit Plan?”
- Now, over to you…
How to start a poultry farm business (with little capital)
(You heard it right – that’s not a misprint.)
This guide outlines how to start a poultry farm business WITHOUT a loan/subsidy or consultant.
Sure, you’ll need a little money, but absolutely no debt.
Nor professional fees.
Totally organic – if you will.
This guide is written for self-starters.
Is this you?
Who is this poultry farming for beginners guide for?
Before we begin…
I have an important point to establish!
This not just ‘another how to start a poultry farm guide’.
This guide makes no enticing promises.
But what this guide WILL show you is…
How you might make the approach below, work within 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 profitable poultry farm.
BUT, I must be clear;
I am not claiming this guide to help you start-up with no money…
I’m looking to make running a poultry farm feasible for you today.
Let me explain in some simple steps:
Chapter 1: Poultry Farm Loans and Subsidies
Funding your poultry farm has got to be right now the no.1 query about the whole start-up process.
And you’re right to prioritize setting a start-up budget for your new poultry business.
Starting a poultry farm is an investment and therefore will need some input from you.
For many beginners…
…their immediate thoughts take them to loans and government subsidies.
But these financial instruments carry considerable personal risk.
In this chapter,
I want to demystify how to get poultry loans, subsidies, grants and other forms of financial assistance.
What is a poultry farming loan?
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
A poultry farm loan is:
Either money, land or equipment you need to be given by a lender in advance of starting your business.
Here are the terms…
In receiving the loan, you are agreeing (under force of law) to repay the lender the entire value borrowed, plus interest (and associated fees).
Interest, fees and repayments are scheduled, by date.
Often, a direct debit or standing order (automatic bank payments) will be set-up to offer confidence to the lender.
What is a Poultry Farming Subsidy?
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
A poultry farming subsidy (or grant) is when your government encourage agri entrepreneurs to start poultry farms by offering you a financial incentive to acquire private loan finance.
In other words,
Your government want to make your poultry loan repayments cheaper for you.
Well, just in case the lines are still a little blurred.
Let me clarify.
How poultry loans work
You make a promise with a private lender or investor to take enough money to start your poultry farm and pay them back for:
- the sum of money borrowed (principal sum), and;
- the benefit of borrowing the money (interest/usury)
*One critical note to add:
Poultry loans are typically secured against the ownership/possession of land.
That is to say…
Your promise to pay back the money you borrowed is ‘made sure’ (or guaranteed) by a clause which gives up possession of the land, equipment and livestock, should you default.
Can’t repay or pay repeatedly late? Then hand over the ownership of your land to the lender.
But what if you live on the farm? You forfeit (lose) your house (!)
A very real & personal, material risk.
How poultry farming subsidies and grants actually work
Subsidies and grants are discounts.
They’re like shopping vouchers.
They make things cheaper that you were going to buy anyway.
But you have to qualify to receive the discount. (There are rules involved. Not everybody can get them.)
Why do governments give out subsidies and grants?
It’s actually good business for governments to subsidise loans for poultry farms.
Here’s why subsidies make sense for your government:
- More people take out loans (Banks are happy.)
- Borrowing money is cheaper (People are happy.)
- More business and economic growth (Governments are happy.)
Why banks enjoy government poultry loan subsidies
The goal of a bank is to increase its promissory hold on material assets.
What I mean is:
The aim of a bank is to hold other people’s stuff for them.
By doing this, it uses your stuff by trading it to get financial gain.
(But most of the value of your stuff is insured if they mess up…unless there is a credit crunch of course.)
Some of the gains it makes back is paid to you (interest) as a reward for sharing your stuff with them.
The MAJORITY of gains, the bank rewards its owners, investors and workers with.
And then, of course, the bank also pays the government in taxes.
But what about when things go wrong?
Well, there are times (as I said) the bank messes up. Their trades (bets) make losses and not profits.
If this happens and they are unable to recover, then…
News gets out to you and you want your stuff back. But if the bank can’t give you back your stuff, they appeal to the government.
(This is where things get nervous.)
If the government turns its back, the bank’s lenders (yes, that’s right – even banks have lenders) swoop in by force of law to take all that left of your stuff.
In a word: bankruptcy.
Now if your poultry farm still depends on getting more finance from your bank, but can’t because they messed up…
…your business may not be able to pay its bills and you could ALSO find yourself bankrupt.
Losing your land, poultry equipment and poultry livestock.
Again, lending carries MASSIVE risk.
Which is why it is better to start with what you have, rather than what you don’t have.
Why governments enjoy government poultry loan subsidies
Governments carry public budgets (and much like banks) which you give them in taxes.
And also, just like banks, they trade you ‘stuff’ (taxes) on funding projects.
If the projects make money, the government:
- rewards banks to lend to you
- rewards you with more credit to borrow & improved civil services
- rewards itself, its private investors (national banks) and its workers
This makes it more feasible for people to borrow the money to get stuff done and start new ideas.
But likewise widens the financial gap between those who qualify for borrowing vs. those who don’t.
(And this only gets wider each day the economy thrives of borrowed funds.)
Why we SHOULDN’T enjoy loans, subsidies or grants
But, what would things look like without borrowing?
Well, people would learn to make the most of what they already have.
And where you would otherwise borrow the money to plug in a gap,
Instead…you now work with a neighbour and share in the labour to get things done.
Far better for the economy. More people working, less inflation, cheaper goods, no debt.
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,
Nor, what you have in your hand to start, but…
When you consider the detail above,
You see that whilst banks and governments are desperate to give their money away,
We ask 2 questions:
- Is it worth taking?
- Do we really need it?
The value of money
Think about all that you’ve just read.
Banks, investors and governments are the only ones who sell money.
We buy money.
If they hold on to money – they lose.
And we think that if we hold on to money – we win.
But for us, the opposite is actually true.
Why (& how)?
Every day, around the world – in every country the value of money decreases.
Because prices keep increasing.
The astounding loss of value within a single generation
Take this as an example:
According to The Bank of England’s inflation calculator, the value of £10 today would have been worth £165.84 fifty years ago.
That’s a whopping a 16,500% loss of value. And ONLY within the lifetime of many of us.
(What in the world is going on here?!!)
The KEY is in the small print.
Take a second look at the image above.
Did you read the line that sits beneath the amount “£165.84”?
In case you missed it: “Inflation averaged 5.8% a year.”
The cause of this great loss is inflation.
But what is inflation and what causes it?
Inflation, simply put, is the cost of living going up.
But why does the cost of living keep going up?
Because of two core global problems with mankind.
- Credit-based economy (A.K.A accrual)
- Supply and demand theory
Combined they produce devastating results.
Here’s how and why…
What is a credit-based economy?
Credit economy is where men agree that the value of money is based on people qualifying to get credit (or to borrow.)
So, in other words,
You are rich if you qualify to have others lend to you.
This way of thinking became popularised in 19th century.
Today, all global economies work this way.
But they didn’t always.
The gold standard.
What is the gold standard?
Gold standard says the value of money is based on how much gold the possessor of the money has deposited with the issuer of the money.
In plain English:
It’s an IOU.
You poultry farm sells eggs and/or meat in exchange for goods and in most cases gold.
You use the goods received (barter) and deposit the gold you receive with a bank.
The bank gives you a note in exchange that acknowledges your deposit of gold with them in weight.
The note also carries a signed promise from the bank, which promises to pay you back the weight of gold you deposited whenever you choose to withdraw the gold.
When you withdraw the gold you are able to trade the value of it in the market for goods or services.
And gold, of course, valued highly for its natural rarity, appearance and treasure.
What is ‘supply and demand’ theory?
‘Supply and demand’ teaches that when there is more supply for something than the demand, then the price should go down.
But where there is less supply for something than the associated demand then the price should go up.
This yo-yo of up…down…up…down…which plague our commercial markets is called price elasticity.
Just think of a bungee cord.
And because of this theory and its effects, men are persuaded to spend all their time thinking about whether their prices housd go up or go down.
To influence buyers to buy more.
They think like this:
Last week 500 people bought my eggs at $1,
And this week 650 bought my eggs.
‘Supply and demand theory’ tells me that I should raise my prices because there is more demand for my supply.
I’ll now charge $1.80 and blame the cost of inflation.
This practice is called revenue management.
But that buying and selling eggs.
What effect would buying and selling money as ‘credit’ have?
Well, if nations print money on the basis of gold deposits, then:
The value of money and the volume (amount) of it in circulation directly represents the amount of excess trade value of the country’s citizens.
In other words,
What gold doesn’t get used immediately to buy food, clothing or housing – gets deposited with the bank,
And your receipt for your gold is the ‘note’, or money, they give you – promising to pay you back your gold when you ask.
But if the value and volume (amount) of money in circulation had no link to the value of gold on deposit, but it itself is traded as if it were gold, then:
- Who stole our gold?
- And more important than that – who stole the value of all our trade (fruitful labour) that is exchanged for the gold?
You see in truth, holding money should be the bank’s debt to pay us back gold.
But somehow, we’ve made money our debt to pay back the bank.
A very subtle steal. (What a crime…)
The disease of this is poverty and disinheritance of generations to come through inflation.
We’re killing ourselves with this. It’s making us desolate.
Any we have no excuse. Because now we know better, right?
This is the equation we just learned:
Supply and demand x The credit economy = Inflation Creation
Clash these 2 terrible teachings together and what you get is a runaway, (un)natural catastrophe called inflation.
A financial wildfire of deception, which devastates nations and leaves everything and everyone in its path in ashes.
Its time to get out of the way of inflation.
Its time to leave the credit.
It’s time to go back to gold.
Quick economics of starting a small scale poultry farm
Now, let’s return to the example of that £10 fifty years ago…
Now, just think about the difference in the market value of your home 50 years ago.
(Again, only a fraction of its price today.)
To put that into context with your poultry farm:
The cost to start your poultry farm 50 years ago, is only a fraction of what it will cost you to start the same farm today.
Let’s get this straight:
If the cost of borrowing money to start your poultry business today is 16,500% more expensive than it was only 50 years ago…
And the cost of an egg or chicken is 332.94% more expensive today than it was 50 years ago…
And if things continue to go the same way over the next 50 years (and you pass on your poultry business to the next generation),
Then, your children would have inherited a staggering 16,167% loss (disinheritance) from you.
(Plus the risk of losing their family home should they default to pay back).
A TERRIBLE DEAL.
And all because of the small print.
5.8% interest on a loan application sounds like nothing today.
But in actual fact, you would lose you 16,500% in 50 years.
PLUS adding 5.8% cost of inflation to the equation too,
And you’ve then lost 33,000% value in 50 years. And passed that ‘hangover’ on to your children.
An unforgivable deed having read this article today. Especially for the sake of the next generation.
No wonder poverty in each of our countries is so-so crippling. And for so many.
And caused by nothing more than the greed of those who qualify to get more, despite so many having less.
It’s otherwise inexplicable.
Maybe this is why you decided to start a poultry farm?
- make a sustainable income without debt
- take advantage of a low-cost startup agribusiness
- offer accessible labour for unskilled people
- provide poor communities with affordable, quality food
- help your neighbour to start small scale production in their communities
- keep a clear conscience
- HELP US ALL STAY DEBT FREE
- (& kill inflation)
What can we learn from this?
Start to think differently about money.
Borrow to start your poultry farm and lose 33,000% in your lifetime.
Start your farm as a zero-debt startup and use proven techniques for exponentially scaling your agribusiness NATURALLY through value production (without play yo-yo prices) and totally outstrip inflation.
Don’t I need capital to start up a poultry farm?
Yes and no.
Sure, you need something to start:
But if you begin by accepting what you’ve got is ALL you’ve got…
Then, you leave yourself with no choice but to be witty in order to make up the difference in what you can’t buy.
Chapter 2: How To Start A Poultry Farm The Zero Debt Way
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…
We examine the core concepts of poultry entrepreneurship,
And how with nothing more than sharp business wit (or hustle),
You can get your poultry enterprise off to a flying start – with only little personal capital.
Starting up: the poultry entrepreneur way
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
This is the DNA of a poultry entrepreneur.
Spot the KEY in the code?
Here it is again:
How the poultry entrepreneur thinks
Poultry entrepreneurs earn their income by achieving consistent returns (ROI) from investing money & time in their farm business.
Just like an employee receives wages…
A poultry entrepreneur relies on scheduled earnings coming in from their poultry farm.
Is poultry entrepreneurship secure and sustainable?
Let’s continue with the comparison with employment…
The security of employment is backed by a contract.
In it, an employer has the legal obligation to pay their employee an agreed income and at set intervals.
Can employment go wrong?
Employment is only as secure as the ability of the employer to keep their promise.
As we know, in business – nothing is really guaranteed.
Although insured, even insurance policy cover can fail.
And what would happen to the employee?
No work & no income.
Could the employee have avoided this?
They could have chosen financially stronger employers for a start.
But other than that, not much.
Entrepreneurs similarly earn their income from arrangements which promise/offer consistency.
But again, even this is not guaranteed.
An entrepreneur’s pay-back is based on return on investment (which, again, is not guaranteed).
In other words,
Entrepreneurs earn their income by putting their personal money and time at risk for the hope of running their business successfully and making a profit.
No profit = no earnings.
A real risk for every entrepreneur.
Can an entrepreneur make sure that their prospective business opportunity WILL definitely be successful?
In truth, no 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 (or key success factors ‘KSFs’).
These KSFs act as indicators.
They inform the entrepreneur that the business opportunity they are examining has the necessary ingredients for success.
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 long term 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.)…
…then, get systematic.
Chapter 3: Poultry Farming for Beginners – The Basics…
There are some basic rules which govern your poultry farming business.
Kind of like a code of practice for how to start a poultry farm.
Here they are…
What is the first lesson in poultry farming?
Poultry farming is a physical product-based business.
Your poultry farm will deliver the physical product of either:
- chicken meat or;
In exchange for money, selling these poultry products gets converted into sales revenue.
What does your future poultry farm successes depend on?
To state the obvious, yet to be explicit for the sake of completeness…
Your poultry farm’s overall production success is dependent upon the critical performance of it’s units of productivity:
In other words:
Without the birds, your farm will have neither meat nor eggs to sell.
Why stress such a basic point?
Because I want to emphasise the importance of 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.
The *comfort* of each bird directly relates to its ability to grow and to lay.
(*Comforted birds grow bigger, quicker and better – and lay more eggs.)
Anything less than optimal performance will have a knock on effect of eroding your profit margin.
The wrong combination of bad results from poorly performing flocks can cause your business to fail.
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.
Which is more profitable: broilers or layers?
Let’s this illustration to help us make our point:
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 poultry farm.
As yet, he is undecided on mode of poultry farm. He wants to know, “which is more profitable – broilers or layers?”
So he decided to run a head-to-head comparison.
The idea here with Ravi’s risk analysis – is 2-fold:
- estimate the profit potential of both layer and broiler farming, and;
- calculate th cost of making errors in this poultry venture.
Here’s the breakdown…
The Broiler Farming Basics
Some broiler farming facts:
- FACT#1: A broiler chicken is raised for meat.
- FACT#2: Chicken reared for meat can be either male or female.
- FACT#3: There are many breeds and strains which are reared for this primary purpose.
- FACT#4: There are globally reared breeds, as well as locally prevalent ones in each country.
- FACT#5: Each breed has it’s own profile of characteristics and performance statistics.
- FACT#6: 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.
It must be stressed at this point that 1.5kg is the TARGET weight.
The factors that contribute to your birds achieving this target are as follows…
Factors affecting broiler growth
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 from his research that TIMING is key.
Getting birds to market on time as expected means buyers are not disappointed.
When buyers are served consistently, they will begin to rely on your service.
Timeliness with marketing broilers also helps keeps the cost of rearing down to a minimum.
How husbandry impacts broiler profits
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 production.
Delaying the delivery of his broilers to market,
And his chicken will devour away his optimal potential profits.
Let’s examine Ravi’s potential broiler profits:
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 Farming 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.
Some layer farming facts:
- FACT#1: A layer chicken begins laying eggs at age 20 weeks.
- FACT#2: The first few eggs laid are sub-standard, but mature with time.
- FACT#3: Layer hens maximally will lay 1 egg per day.
- FACT#4: 80% of a laying flock will lay eggs every day, on average.
- FACT#5: Each breed of layer hen has its own laying profile of characteristics and performance statistics.
- FACT#6: Layer hen output usually becomes commercially unprofitable at around 72 weeks.
Further reading on the subject of layer farming reveals many rearing factors play their part in productivity levels, including:
- 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%
…amongst other factors.
Let’s examine Ravi’s potential layer profits:
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 consistently GROWING source of personal income.
It’s about time we get our hands trained on some chicken.
Chapter 4: Getting Trained to Become A Poultry Farmer
Our learning so far has been a lot of business theory, but now…
…let’s ask the obvious question…
Do you have any training advice for how to start a poultry farm?
Here’s my take…
How to start a poultry farm: Training best practice
A professional poultry farming 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 good start with a beginner’s book to poultry farming
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!
Step 2: Read and subscribe to some quality poultry farming blogs
Time to read some top Agri-blogs…
Informative animal husbandry blogs like:
Such digital publications give a sound foundation upon which to build more specialist insight.
Highlight key topics and points.
Step 3: Get familiar with the poultry farming scientific research papers
Time now to gain mastery on the subject of rearing poultry.
By taking a deep dive into professional poultry farming 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.
Institutes are often partly funded by government.
Their strategic goal?
Producing world class learning literature on your new area of interest: poultry farming.
That’s their mission – to help you.
Why wouldn’t you take advantage of their output?
Highly specified by topic…
And readily available…
What do we mean by upstream?
What is upstream feeds the marketplace.
Leading learning institutes literally feed commercial operations like farms, hatcheries, equipment providers etc. with data-driven knowledge of best farming practice.
The poultry value chain gains advantage for staying on top of its goals.
- Government start-up goals are met.
- Commercial lenders have increasing demand.
- Suppliers give more productive solutions.
- Farmers lower costs and increase out for profit.
Studies on topics such as,
‘Most effective poultry feed alternatives‘
…grant profitable techniques for farmers to cut their primary cost of production.
So, why wait?
How do you find such material…? (Quickly!)
How to find poultry farming research papers easily via Google…
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 that you gather together some obscurely hidden gems of information.
This will greatly support your ongoing poultry farming research.
(Save yourself hours of time sat in front of a computer TRYING to find rare subject knowledge. Use search operators!)
Why not use an application such as OneNote to compile all your findings conveniently in your very own digital notepad?
Step 4: Watch some practical poultry farming training videos
Have a look at how some poultry farmers from around the world approach their expertise.
Examine their manners both with business and the birds.
Keep your eyes open for game-changers.
Where should you begin?
YouTube has got to be the most relevant source for video-based poultry farming training material.
Sign-up to subscribe to busy channels and keep abreast of the latest methods and tips.
Step 5: Visit some model poultry farms across the country
Visit a few local poultry 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.
Thoroughly investigate their techniques for achieving 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 to ask permission before taking photos or making any recordings – never presume.
Step 6: Volunteer at a local poultry farm
Once you’ve got 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 own venture.
Step 7: Read poultry farming case studies online
Case studies are a highly absorbing way of learning the detail of any particular type of business.
This is also the case for the poultry business.
Case studies are academic examinations of a 3rd party’s practical experience.
They’re 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 principal 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 same as another.
Get a widespread viewpoint.
Step 8: Raise a trial flock of chicken!
Now, having gained some poultry farming training, you should be ready to take your first steps into keeping some chicken yourself.
Begin with a small trial 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 the factual reference of steps taken.
By this, you have a more robust method of establishing ’cause and effect’ relationship between:
(a) your actions and,
(b) your results.
Chapter 5: Writing Your Poultry Farm Financial Plan
A poultry farm financial plan will help you maintain your focus on getting investment returns.
As we learned in a previous chapter,
To be a successful start-up entrepreneur in any field, you need the understanding of an investor.
You need financial literacy…
And at the highest level.
Is this achievable for newbies without experience or formal qualification?
Get reading and listening.
(It’s amazing how much you can pick up by observation.)
Financial investment has a language of its own:
- grammatical usage,
- standard statements,
- treatments and
- handling etc.
Getting FLUENT is essential to commercial success.
Writing your poultry farm financial plan
The following are some financial definitions & statements which are fundamental for writing a succssful poultry farm financial plan:
A ‘mini’ financial glossary for your poultry farm financial plan…
- 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
Your poultry farm financial statements
- 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
Chapter 6: Setting Your Poultry Farm Management Plan
When deciding how to start a poultry farm, management planning is essential.
Each style of poultry farm management has its own distinct profile of merits, drawbacks, metrics and parameters associated.
Let’s take a look at some of the common poultry farm management 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?
We’re about to look at:
- sales cycles
- future cash flows.
Planning broiler farming sales and cash flow
- 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 frequent intervals…
You are solidifying your customer relationship.
Multiple broiler batches for better cash flow
In order to produce a market-ready flock every week, you need to raise multiple batches of broilers.
This is a more intensive production process (than raising a single flock at a time)…
And requires more funds to get going…
It affords for a more consistent cash flow.
Planning layer farming sales and cash flow
Layer birds of are kept by nature for a period of 72 weeks.
52 of those weeks (from 20 weeks old onwards), layers are expected to be actively laying eggs.
They produce eggs roughly one per day.
The number of eggs your farm produces will naturally dictate:
- size, and;
Whatever your chosen scale (size of operation),
The ideal result is a daily production capacity supply of a certain number of eggs.
Remember, the 72 week optimal laying output and the need for renewing your layer flock periodically.
Again, as with broilers – this production consistency requires raising multiple flocks.
Selecting layer and broiler breeds for optimal production
General (Standard Commercial Breeds) vs. Specialist Breeds
What type of breed of chicken will you rear?
What difference does it make?
A lot of difference when you look into it.
Standard commercial breeds or strains are selectively bred.
Breeders choose the breeds with the most economically advantageous/optimal output traits.
The results birds become commercially desirable strains.
Take layers, for example…
Example commercial layer breed: BV 380 (Brown) Layer
Eggshell 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 indigenous or local breeds of chicken (like Aseel in India, for example),
There is just no contest with commercial strains, like the BV 380.
They are far more superior in producing profitable results.
They offer financial predictability.
How accessible are commercial laying birds?
Commercial layers are ubiquitously accessible, worldwide.
Either via national breeders or global suppliers exporting to all markets.
Are there no locally bred birds which can compete with commercial strains for output, at all?
On the rise across the world are local hybrids which are genetically selected.
In India, there are birds such as:
Example commercial layer breed: 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.
Depending on its price and availability – you might try stocking some.
Now, onto cages…
Cage vs. Deep Litter Poultry Farming
What’s the key difference in benefit of caged poultry farming vs. deep litter?
Cages offer control.
Deep litter housing offers greater freedom to the birds, but on the contrary:
Lesser management control.
One argument says that,
greater control = greater profit.
But are there other valid arguments within this comparison?
Here is a neatly summarised piece published in the World’s Poultry Science Journal:
The pros and cons of caged poultry farming
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
Deciding on caged poultry vs deep litter has much more to it than just control for profit.
The points above don’t cover all variables involved in weighing up the decision,
But they should guide you in making the best-fit decision for your farm.
Poultry health management: Biosecurity
Good poultry health means good poultry profits.
And there are 2 ways to approaching poultry health management.
- Natural remedy
They are two fiercely contested ‘schools of thought’ that equally carry much evidence-based support.
But either way,
There should be no debate about the concern for biosecurity.
Parasites and pathogens are very REAL threats to your flock.
Overcoming such attacks on flock health is often one of the critical turning points for beginner poultry farmers.
By failing to curb an outbreak…
…many a newcomer has lost confidence and simply given up.
Those who stick it out, come back around to facing their adversary – ill bird health,
And conquer with one winning approach or another.
Here’s some guidance on how to toughen up your biosecurity (either naturally or pharmaceutically):
- 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 –
I think it would really take trying out the methods you read about in a real-life, yet trial environment.
One contrast between natural and artificial poultry healthcare is:
- Manufactured feed/medicines are readily available worldwide.
- Alternative remedies are dependant upon local availability of raw materials and ingredients.
Here are some case-studies of natural poultry remedies that work:
- 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 (input)
- the input is augmented one step at a time
- each step changes the raw material making it more like the end product,
- when manufacture is complete, product inventory is held and made ready for sale
- similar units produced are all sold at the same time (a batch),
- once sold, the sales revenue provides a profit to reward the company
That’s if all things fo well,
But what if your business model suffers from bottlenecks, inefficiencies and backlog?
Just like your plumbing suffers problems, 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 principle – made famous in the 90’s by Toyota car manufacturer.
The relative infant-sized manufacturer sought for a way to compete with giant Detroit based car manufacturers.
In a fight to survive, Toyota was forced to re-engineer its business processes to become much more efficient.
Through increased efficiency, they planned to save cost and gain economic advantage.
By producing (supplying) only the type and volume of units required at any given time as covered by a purchase order from a buyer (demand)…
This is Just-In-Time Inventory.
“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 and at the time 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.
Just-In-Time Management Explained
- Strategy: to spread out, expansion
- Increased efficiency: to grow in the accomplishment
- Reduce costs: to bring back to stand at
- Process: to go forward
- Anticipating demand: to take or grasp and completely order
That tells a story, doesn’t it!
- For your poultry business to expand according to it’s planned accomplishments,
- Rather than being held back at a standstill,
- It needs to go forward in a manner,
- Where all it produces is taken up completely & in advance.
Secure your demand first, on the confidence of having the supply.
To say it another way…
The benefit of Just In Time Management
- Generate the demand before you supply
- And only supply that which is demanded
Just-In-Time Management in Poultry Farming
How does this principal translate to poultry farming?
Poultry farming being a form of agribusiness deals in perishable goods.
Eggs and meat.
When stock comes to maturity (if it is held rather than sold) it loses freshness. i.e. quality diminishes.
As quality diminishes your produce becomes less desirable to buy and harder to sell.
But also, you incur inventory costs & associated expenses of holding and storing the stock.
Think it through…
Managing Just-In-Time broiler production
- Broilers are bought at day 1
- Broilers hit peak maturity and profitability at 6-7 weeks i.e. 42-49 days.
- Broilers cost your farm the expense of feed to stay alive.
EQUATION: Broiler profit = sale price – cost of rearing (for 42-49 days)
[Note: keeping a broiler beyond it reaching market weight 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 to keep it alive.
Although every day they keep the bird beyond its target weight,
Its sale price doesn’t increase because the bird’s weight gain potential plateaus (flattens out)…
What happens is a reduction in profit.
With every peck of feed from that point = loss.
Managing Just-In-Time layer egg production
- Peak egg-laying occurs between weeks 20 – 72 of a layer hen’s life lives.
- The rate of laying will be 1 egg per day
- Eggs produced daily are gathered and sold at weekly intervals.
EQUATION: A layer hen profit = sale revenue of eggs sold (weeks 20 to 72) – cost of rearing
When layers stop producing at optimal rates, they are culled or sold as spent for cheap chicken meat at market.
What happens if eggs are not sold immediately?
Eggs which are not sold immediately 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 additional storage expense.
(This reduces 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 your losses internally and suppresses your business’s ability to grow.
What’s the solution?
Advanced sales help you manage your poultry farm more efficiently.
We learn that for a poultry farm business to operate efficiently and profitably,
You need advanced sales at one end…
BUT, what about at the production end.
How should you gear production to meet the demand effectively?
Example Poultry Rearing Systems
An introduction to broiler rearing systems
4+1 broiler house rearing system:
Using this approach, you would…
- construct 5 broiler houses.
- rear a batch of broilers in each house from 1 day old until 6 weeks (market ready / target weight).
- Sell batches and buy batches at 2 week intervals.
A batch of broilers being ready to sell at market (on schedule & for optimal profit):
- every 2 weeks.
Managing broiler farm production with 4+1 rearing
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…
And now, for an alternative.
8+1 broiler house rearing system:
Using this approach, you would:
- construct 9 broiler houses.
- rear a batch of broilers in each house from 1 day old until 6 weeks (market ready / target weight).
- Sell batches and buy batches at 1 week intervals.
[NOTE: the difference is this program of broiler management is geared to deliver a batch for sale at market every week.]
The increased frequency of broiler production has these advantages:
- more consistent cash flow
- more frequent customer interaction
Managing broiler farm production with 8+2 rearing
Once in full flow with this 8+2 method,
There are always two houses unoccupied/vacant which are being cleaned out before receiving a new incoming batch, each.
Let’s take a visual look at this system…
An introduction to layer rearing systems
As for layer rearing systems, the following are the most common formats:
But what do these mean?
Managing layer farm production with 1+2 rearing
In this system:
- You build 1 brooder cum grower house (i.e. a house which accommodates birds aged 1 day to 20 weeks old)
- You 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 buy a pipeline batch in the brooder cum grower house waiting to replace the oldest layer batch when they become spent.
The cycle continues at an interval of 28 weeks.
This affords for 2 full(-ish) cycles of rearing 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.
Managing layer farm production with 1+3 rearing
(Did you spot the difference and work it out?)
Rather than 1 brooder cum grower house and 2 layer houses, we have:
1 brooder cum grower house and 3 layer houses.
How does that work in practice?
(*The only technical difference 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.
[NOTE: again, between transfers of batches from one house to another, there is a 2 week period of sanitising and decontamination.]
How does this change your production capacity of eggs?
Back-to-back the average number of layer chick batches bought in a year will be 3.
This gives you three flocks worth of eggs production rather than 2.
Managing layer farm production with 1+1+5 rearing
This time around we break the normal array of two sets of houses/numbers.
Ad now we have a combination of three houses/numbers.
Here’s what they signify…
- 1 brooder house
- 1 grower house
- 5 layer houses
What does this mean and how does it work?
- You buy your first batch of chicks on day one & house them in the brooder house.
- When this first batch reaches 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 leaves 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 what 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 – now let’s look at scale & income.
Chapter 7: How Much Money Do Poultry Farmers Make?
Now you want to estimate how much money there is in chicken farming.
Start with the endpoint and work backwards (or rather forwards) towards the:
- required type of farm,
- production model
- flock size
- batch size
Your expected earnings should determine what manner of business your run.
You’ll avoid disappointment.
Calculating how many chickens you need to make a profit
Let’s take this example, for calculating how many chickens you need to make a profit…
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.
Having found us here at The Big Book Project online searching for advice on ‘How To Write A Poultry Farming Project Plan‘, Ernest contacts us via the web form.
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.
If you were in Ernst’s position, which system or model would you go for?
Either way, at least this illustration helps you calcualte how much money your chicken farm can make.
Have a think.
Next is managing the poultry farming start-up process.
Chapter 8: Using Project Management to Run Your Poultry Farm
So, what relevance does project management have with how to start a poultry farm?
What do start-up poultry businesses and projects have in common?
Actually, by definition,
Every business 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…
…it becomes clear that 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. it should have a target to accomplish particular results and to finish at a certain endpoint.
- Outputs, outcomes or benefits – every business must produce something good for the people involved
- (…gain, yield, return…) to repay them 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 an additional return on top for those involved, then it has by definition failed to be a business.
- …at best it becomes a hobby.
- Acceptance criteria – every business must be founded upon clearly written articles of start-up
- …declaring strictly defined (qualitative and quantitative) criteria by which it will be measured, assessed, or judged as either successful or unsuccessful.
- Agreed timescale and budget – every business should have defined resources allocated:
- start-up date and finish date,
- effort involved,
- operational timings time and
- input expectations, which the owner will give – and no more.
- Final deliverable – every business should be destined to achieve a single deliverable
- …after which achieving it will ‘set free’ of the owners and stakeholder from a burden that otherwise would have been carried
- i.e. debt, mortgage…
- Finite timespan – every business should be limited to:
- 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,
- And should be able to communicate with confidence about any and every aspect 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?
Then you’ll probably gain a lot from reading up on common project management methodologies and techniques.
These can be used for successful management of your poultry farm start-up.
Prince 2 project management techniques for starting a poultry farm
Project management approaches like PRINCE2 (PRojects IN Controlled Environments) offer 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
How PRINCE2 really works…
Poultry farming quality assurance
- …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
Poultry farming procurement
- …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
Poultry farming change management
- …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.
Now, on to marketing your product.
Chapter 9: Your Winning Poultry Value Chain Marketing Strategy
So now, managerially you are set for success…
The following questions remain:
- But how do you market poultry?
- What’s the best poultry farming marketing strategy?
It’s very simple.
Become the value leader in your poultry vertical.
Let me explain…
The poultry value chain
Understanding the poultry value chain is actually quite simple.
*Value* is what makes markets tick.
(* None of us mind giving something away if it means we get more back. This is value.)
Poultry farming is no different.
Where your poultry business has been proven reliable and is valued by others…
(…most of all potential buyers…)
…you’ll naturally get sales conversion as well as, offers for strategic business-to-business partnership.
This strengthens your poultry business.
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”.
Here’s what I mean…
Marketing strategy in the old days was based on the traditional teaching of, Know Your Customer
(…I have replaced this with – Know Your Market).
To understand why I recommend this new way…
First, take a look at the definition of the now ‘old fashioned’, Know Your Customer:
“…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 for.
This is real value.
In this your customers know that 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’ are the major benefits and return on investment.
Still not persuaded?
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.
I can prove 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, the raw material is improved by products or services added;
- And, in the end, consumers consume 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.
An example poultry value chain
Consider that you produce eggs.
Your poultry farm business would occupy the two boxes in the diagram above, 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.
This is how it reads as a story or process:
- 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 by your layer hens
- 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
What drives all of this?
The consumption of eggs by households.
This is what drives the whole engine.
But each component of the supply chain along the way adds its own unique value to the final delivery.
Where does your poultry farm fit in the poultry value chain?
Now back to your poultry farm…
Sure, your business prospers if more buyers find out who you are and decide to buy,
How much MORE would your farm prosper if all the business 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.
Business-to-business marketing for value chain leadership
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.
How communication helps to generate demand poultry value chain demand
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…
And what if you hit a topic which isn’t your area of expertise?
Do some investigative journalism.
Put together a resource to communicate the benefits & distribute freely.
Engaging other businesses in your poultry value chain
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 into all your broadcasts and will interact
- unquestionably and
- repeatedly with your business
…because of 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?
Step 10: How To Sell Chicken Eggs & Meat Successfully
Your start-up poultry farm will need to successfully sell chicken eggs and meat, regularly.
Selling for household consumption is one avenue.
But another, highly profitable angle is selling to retail and hospitality businesses.
How are you at selling to commercial buyers? e.g. chefs, restaurants, caterers etc.
If your answer is: “not at all…”
Then, don’t miss out on the following detail.
If your answer is:
“…very confident thank you…”, then you’ll no doubt find the following a useful complement to your existing repertoire:
Selling chicken eggs and meat to restaurants: Do’s and Dont’s
[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
Selling your chicken eggs and meat to local foodservice businesses
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…
- Restaurant buyers are actively looking to buy for local poultry farmers like you because they prefer to support local producers rather than larger corporations.
- Restaurant buyers like to feed off the specialist poultry product knowledge of local farm producers.
- Restaurant buyers think by buying your locally sourced chicken eggs and meat 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 are chicken eggs and meat.
What are you waiting for?
Chapter 11: How To Start & Stay Debt-Free!
Your key start-up question surrounding your poultry farm business idea is probably:
- “How do I start a poultry farm with little capital?”
I’m about to show you that you can actually start up your poultry farm – totally debt-free.
I have a question…
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,
You don’t invest in building the operations of a poultry farm BEFORE you generate demand.
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 goodwill of your entire marketplace by my vertical value marketing strategy (in the chapter before this one).
Goodwill will translate into willing and interested investors in your business BEFORE it begins…
- saving massively on capital cost,
- negating the long term expense and
- removing the risk of taking on debt via loans & subsidies.
What if every commercial participant in your marketplace is knocking your door to become an investor,
That translates into A LOT of barter value for the start-up of your poultry farm.
Those favours will go a long way to saving start-up capital cost.
Maybe even totally wiping out the need for a start-up fund.
Sure this way round will take patience, time and effort…
But with lower financial risk and assured demand – before you invest – your farm will be set for solid future growth ongoing growth.
Chapter 12: “Do I Really Need An Exit Plan?”
Arguably, the most overlooked, forgotten and misunderstood component of every successful poultry entrepreneur’s business start-up plan…is the exit.
But why would the starry eyed broiler or layer entrepreneur ever have thoughts of exit?
Isn’t exit giving up?
On the contrary,
A business start-up without an exit plan is the same as a campaign or project without an objective or goal.
This leads to becoming demotivated, which robs your ambition of purpose.
Starting a poultry farm, as a beginner, 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,
You only get the true rewards, 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. But NOT the end.)
Many new poultry entrepreneurs don’t see things this way.
They see the salary as the payoff.
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.
Life has so much more dimension than any 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! 🙂
Now, over to you…
Are you currently think about how to start a poultry farm?
Are you currently running a poultry farm and need to start again in some areas?
Either way, I’m interested to hear from you
Leave a comment below.
(I read every comment.)