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Diary of a Poultry Farmer: Making your business plan stand out

Friday May 5 2017

A chicken trader waits for customers at Kariobangi Market in Nairobi.

A chicken trader waits for customers at Kariobangi Market in Nairobi. Every agribusiness venture requires a business plan before setting up and the farmer should strive to ensure their plan stands out from the rest of the competition. PHOTO | ANTHONY OMUYA | NATION MEDIA GROUP 

SUBIRI OBWOGO
By SUBIRI OBWOGO
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I recently shared a guide on how to draft a winning poultry business plan (Seeds of Gold, February 4).

The response was overwhelming and today, I want to talk about how you can make your plan stand out from the rest of the competition.

But before I get to the gist of it, let me share feedback from Steven and Sharon, who shared with me their business plans.

I found Sharon’s plan outstanding because it was part of a government supported youth initiative. The elegant lady from the ‘Land of a Thousand Hills’ was part of the Agribusiness Investment for Graduate Projects.

You see, the Government of Rwanda through its Vision 2020 has come up with interventions to make agribusiness attractive to university graduates and plans to create 200,000 off-farm jobs every year in production and agro-processing.

Another thing is that the average age of a farmer in Rwanda is 55 and the youth shun the sector. Through this initiative, the government wants to change all that.

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Steve, an accountant from Mombasa, was seeking funding for his project from Co-op Bank. He didn’t have any experience in poultry rearing but he had done a lot of research on it and was ready to go. He also told me that he planned to tap into a strong network of vets in his area.

Now, to tease out some unique aspects in their plans, I shared some questions. The reason was that although some sections of a business plan like critical factors – house plans, disease control and vaccination programme, farm bio-security and feeding – will be standard, the challenge is to ensure that at least 10 per cent of your plan is unique and speaks to your specific needs.

FIVE AREAS

For Sharon and Steve’s plans to look unique, I focused my questions on five areas: availability of basic infrastructure like housing, value proposition, sound sales and marketing plan, source and cost of feeds and partnerships arrangements.

Here’s the thing. Infrastructural start-up costs for a poultry project like land and housing can be prohibitive and most investors require that you have these in place before seeking additional funding.

To their credit, Sharon and Steve were not seeking funding for basic infrastructure.

When I asked Steve whether he had ready market for his products, he said, “There is ready market for eggs because, as I speak, demand outstrips supply.”

He planned to focus on raising exotic layers for eggs. I was not satisfied with his answer and felt this is one area he needed more thought.

Many big buyers like hotels and supermarkets are interested in a steady supply. Individual farmers starting out lose out on lucrative tenders when they can’t meet demand.

Another thing I have observed is that demand in the market can fluctuate especially in Mombasa where tourists visit seasonally. It is also important to mitigate against cheap imports.

My advice to Steve was, “If you can, team up with others and develop a common production and marketing plan.” This way, five farmers can agree to produce and sell in cycles to meet demand.

Under this arrangement, it is possible to employ a fulltime marketing manager and share other costs like veterinary services and farm transport.

AVOID CLICHES

“The poultry industry works best through networks where ideas and inputs are shared,” I said. “It is possible to develop an individual business plan but still incorporate a partnership arrangement through a separate contract signed by all the players.”

Unlike Steve who was starting out alone, Sharon is part of a supportive government network of producers, processors, financers and business experts.

There’s more. Apart from a sales plan, you also need a marketing plan. I have said before that ‘sales’ is getting rid of your product, while ‘marketing’ is about “making the customer happy and satisfied”. (Seeds of Gold, February 11).

That means that to develop a good marketing plan, you need to understand what your customers are looking for in the product you plan to sell.

The last thing that will make your plan unique and ensure you make profit is how you handle the cost of feeds that account for 60 to 70 per cent of the cost of producing an egg or chicken meat.

“Every business needs a value proposition, that is, something that makes it different from the competition,” I told Steve and Sharon.

In future, I will be talking about writing value propositions. For now, avoid clichés such as, “Poultry production for wealth creation” in your plan.

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Your Question Answered

Githenya Kamau: I have developed great interest in rearing chicken after reading your educative and well-researched articles.
Thank you for the kind words and keep reading.

Hellen Gatari Njuguna, Kiambu: I have been following you keenly for the last two years. Before I expand my poultry venture in Ruai, I would like to visit your farm.
Send me an email for directions.

Yaddar Abisai and Sheilah Koech: Thank you for educating fellow Kenyans. Share a write up on poultry for beginners.
Send me an email for a free copy.