The following business plan analysis and example is based this video interview published by AIM Agriculture:
Karugu Poultry Farm is a home-based or backyard poultry enterprise rearing both broiler and layer flocks.
Starting as a 200 broiler side project whilst employed, Mr. Karugu and his wife now are full-time poultry farmers with a flock size 1,600 birds.
Their aim is to three fold:
- optimize the rearing yield
- introduce cost advantage
- concentrate buyer power as a cooperative
By this they hope to establish a sustainable competitive advantage for remaining buoyant during economic fluctuations.
Karugu Poultry Farm targets a mixed portfolio customers, both consumers and business buyers.
The farm is mostly supported by hospitality trade demand. Regular demand for hotel breakfast eggs offers a continual outlet for the Karugu’s output.
Aside from this, there are regional food processors who receive supply of frozen broiler meat from the farm ongoing. Also, spent hen are sold through this channel to processors seeking cheaper alternative to broiler meat.
Lastly, some local families order their household’s eggs a week in advance from Karugu Poultry Farm. This direct sales channel generates the largest gross profit (cutting out the middle man), but is heavily reliant on word of mouth.
The service and products
Karugu Poultry Farm is a producer of both eggs and broiler meat.
They have adopted multi-flock production models. This way their product is always available for purchase. Customers’s experience an uninterrupted supply and a deeper reliance on their service is embedded.
Mr. Karugu works diligently to maintain consistent service levels with buyers reducing the chances of his business losing profitable accounts.
Mr, Karugu made the switch to becoming a full-time poultry farmer having spent years as a career engineer. His methodical approach and project oriented handling of business has assisted him in succeeding with profitability.
His experimental approach to solving his operational difficulties has resulted in some very beneficial farming innovations.
Mr. Karugu has opted for a very lean operation model, completely family run. He spends no overheads on wages and a by-product of this hands on style of management is his exception stockmanship. He knows his birds, his metrics and how that translates into income.
1. Keep 2 simultaneously reared flocks of layers and the same for broilers. S0, 4 flocks in total of 400 birds each. Giving the farm a total head count of 1,600 birds.
2. Minimise losses to mortality with stringently practiced flock management. No more than 4%.
3. Grow annually by 12.5% output and profit.
The mission is to deliver good quality, antibiotic-free chicken meat and eggs at affordable pricing, consistently.
Mr. Karugu sees his trade suffering from economic exposure. He sees his efforts as a poultry farmer as collaborative, not solo and his dream is to form a cooperative to consolidate their bargaining power in the market.
By this, obtaining inputs at lower cost and perhaps even backward integration with like-minded suppliers offering favourable terms.