Milk production business plan
EXECUTIVE SUMMARY
This profile envisages the establishment of a farm for the rearing of milk cows with raising
capacity of 20, heads of cows per annum. Milk’s of cows have become the most important
sources of protein, minerals and other necessary elements in the human diet by using it
directly or after passing through food processing industries. The major inputs and auxiliary
raw materials required are milking cows, commercial formula feed, good ventilation, best
housing and high quality vaccines which have to be imported. The present unsatisfied
demand for milk of cows in Gubre is estimated at lower number of litter of milk. Therefore;
the visionaries milking cows farm is established to satisfy this demand in Gubre town. The
total investment requirement is estimated at Birr 1,150,000 birr, and out of which Birr
920,000 birr (80%) is from commercial bank of Ethiopia in coordination with administration
of small enterprises and 230,000 birr (20%) gained from the visionaries group members. the
farm will create employment opportunities for 11 persons and the major income sources are
milk, manure, and culled cows and calves (specially the male).
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Milk production business plan
ITABLE OF CONTENTS
PAGES
Executive Summary……………………………………………………………………………………………………………..I
Table contents……………………………………………………………………………………………………………………II
List of Table………………………………………………………………………………………………………………………..Iv
1 Business description………………………………………………………………………………………………………..1
1.1 Business idea and market…………………………………………………………………………………………….1
1.2 Description of the farm………………………………………………………………………………………….... 2
1.2.1 Mission statement…………………………………………………………………………………………………….2
1.2.2 Objective ……………………………………………………………………………………………………........... 2
1.2.3 Vision…………………………………………………………………………………………………………………… 3
1.2.4 Location………………………………………………………………………………………………………………. 4
1.2.5 History of the business…………………………………………………………………………………………
4
1.2.6 SWOT Analysis of the sector………………………………………………………………………………... 4
1.3 Making plan product………………………………………………………………………………………………. .6
1.4 Making plan price……………………………………………………………………………………………………. 6
2 DICRIPTION OF THE BUSINESS IDEA…………………………………………………………………………… 7
2.1 Start up summary…………………………………………………………………………………………………….. 8
2.2 Competition……………………………………………………………………………………………………………… 8
2.3 Estimated sale……………………………………………………………………………………………………………8
3. Development and production………………………………………………………………………………… ...10
3.1Developmental status……………………………………………………………………………………………… 1 0
3.2 Production Process………………………………………………………………………………………………….10
3.2.1 Purchase of Calves………………………………………………………………………………………………
11
3.2.2 Feeding………………………………………………………………………………………………………………. 11
3.2.3 Housing……………………………………………………………………………………………………………… 11
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Milk production business plan
3.2.4 Feeders………………………………………………………………………………………………………………. 11
3.2.5 Drinkers……………………………………………………………………………………………………………… 11
3.2.6 Vaccination………………………………………………………………………………………………………….. 11
3.2. 7 Culling……………………………………………………………………………………………………………………11
3.2.8 Rearing and milking schedule…………………………………………………………………………………11
3.3 Cost of development…………………………………………………………………………………………….. 12
3.4 Labor requirement…………………………………………………………………………………………. …..
12
3.5 Expense and capital requirement……………………………………………………………………..………13
3.5.1 Operating expense………………………………………………………………………………………… …
13
3.5.2 Capital requirement…………………………………………………………………………………………..
13
3.5.3 Cost of goods…………………………………………………………………………………………………..
14
4 MANAGEMENT………………………………………………………………………………………………….. ..
15
4.1 Management description……………………………………………………………………………………
15
4.2 Market segmentation………………………………………………………………………………………. …
15
4.3. Customer………………………………………………………………………………………………………..
17
4.3.1. Description of the market…………………………………………………………………………………….17
4.4. Legal form…………………………………………………………………………………………………………
18
4.5. Supportive service…………………………………………………………………………………………….
18
4.6. Risk……………………………………………………………………………………………………………………
18
5. FINANCIAL DOCUMENTS…………………………………………………………………………………….
5.1 Cash flow statement……………………………………………………………………………………………
18
18
5.2 Balance sheet ……………………………………………………………………………………………………… ..19
5.3 Market income statement…………………………………………………………………………………... 20
5.4 Funding requirement and return…………………………………………………………………………… 20
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Milk production business plan
LIST OF TABLE
Table 1. Estimated sale in birr…………………………………………………………………………………………… 7
Table 2. Total business cost………………………………………………………………………………………………… 10
Table 3. Manpower requirement& estimated labor cost………………………………………………………11
Table 4. Operating expense……………………………………………………………………………………………………11
Table 5 .Financial plan……………………………………………………………………………………………………………12
Table 6. Farm/business equipment………………………………………………………………………………………..12
Table7. Management description……………………………………………………………………………………………13
Table 8 cash out flow…………………………………………………………………………………………………………….15
Table 9. Balance sheet…………………………………………………………………………………………………………16
Table 10. Funding request and return…………………………………………………………………………………..16
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Milk production business plan
1. BUSINESS DESCRIPTION
1.1 Business idea and market
Milking cow’s farm business is an agro-based project. That means rising of milking cows for the
purpose of commercial milk production. Milking cows that we are purchase when they are four
years of age on giving milk, such a special breed of cows. They remain milking continuously till
their 8 years of age. They can produce average of 12 liters of milk per day, from two times of
milking by consuming about 6 kg per day of food during their milking period. For the purpose of
producing hybrid milking cows, consider the various characteristics of bulls and cows before
breeding. There are various types of highly milk productive cows breeds available throughout the
world.
It became one of the most profitable business ventures due to easy availability of inputs, and
demand for cows, suitability for all weather conditions, encouragement from the government
especially for educated unemployed and the like. It cannot be gainsaid that, agriculture
production alone can meet the demand of human population. In this context production through
dairy cows sector has become centre stage as a means of alternative source of minerals and
protein. This can be started in both rural and semi-urban areas. According to the current industry
practice, dairy cows shed area available on rent basis. Dairy farming requires large area with
high return than any other animal husbandry and agriculture activities. The agricultural sector
plays a central role in the economic and social life of the nation and is a cornerstone of the
economy. About 80-85 percent of the people are employed in agriculture, especially farming.
The sector contributes about 40 percent of total GDP; livestock and their products account for
about 20 percent of agricultural GDP.
Dairy represents an important sub-sector in the Ethiopian agriculture. Dairy as industry is also of
high economic value for the country. airy products including milk and milk products constitute
a significant share in the global food industry. Cheese with kitfo is commonly preferable food in
various parts of Ethiopia especially in Guraghe. Dairy cows products are also known for having
high nutritional value.
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Milk production business plan
In Ethiopia, Dairy cows is an integrated part of the smallholder production systems and plays a
significant role in poverty alleviation because of its source of foreign exchange and it can be an
income earner for households for household farmers.
Globally dairy cows are known to have a significant potential to generate income for households.
Many developing and developed countries have integrated dairy in their economy. Dairy
production has high socio-economic value and vital especially for those who engages in an
intensive farming system.
In Ethiopia much of the milk and butter is produced by household farmers. The high increase in
consumers’ demand for dairy products mainly in urban areas will have major implications on the
prices of the products which obviously is important for those engaged in the sector. They were
primarily raised for human food. Dairy consumption is more common in urban than in rural areas
and commonly high during holiday periods.
1.2. Description of the farm
1.2.1 Mission Statement
Our Mission is to provide a unique and relaxing dining experience similar to dining at home.
We will strive to achieve this goal by:
1) By providing menu items incorporating quality ingredients at reasonable prices, and
2) We will be mindful of the well being of our customers and staff treating each and everyone
with dignity and respect – just like we would at our own home. So, Visionaries’ dairy cows’
farm is going to be established to provide fresh and high quality milk and butter to the individual
customers, hotels, restaurants and distributors found in and around Gubre.
1.2.2. Objective
It is expected that the dairy farm will meet the following objectives
 To ensure self-employment of the member owners.
 To create work opportunities for others.
 To market milk and milk products for the consumers.
 Milk will be marketed for individuals, hotels, restaurants and different consumers
 Reach profits that allow the whole group members to work for the company full-time and
make sufficient incomes.
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Milk production business plan
1.2.3. Vision
The visionary project envisages production of milk and milk product. Based on the cash flow
statement, the project will have a cash inflow of 1,176,620 birr in the 1st year& 2nd of operation
and cash out flow of 678,532 birr in the same year. Therefore, the project profit will be 408,088
birr; indicating the visionaries milking cows farm is profitable and our vision is at the 5th year the
total debt to be returned and being one of the mostly known competitive milking cows farm in
the country. The farm is expected to create employment opportunities for about 11 persons at the
beginning and it will extend to 15 persons at 5th year.
Guiding Principles
1. Being Mindful of our Customers and our Staff
Coinciding with our family values, we will treat both our customers and staff in a
manner in which we ourselves would want to be treated (or better!) .
2. Gratitude
“An attitude of gratitude” shown to our customers, employees and vendors – because
without their input, service, labor and time, our business would not be here without
them.
3. Our Service: Provide the warm and friendly service expected from a dairy milk
production creating an informal, comfortable environment which will make the
customers satisfied and want to return again and again.
Keys to Success


Repeat business: Every customer who comes in once should want to return, and
recommend us.
Location: Convenience is essential to us; we need to be close to our market because we
are not trying to get people to travel to reach us.
Drink and other service: should be high quality.
1.2.4. Location:
Geographically Gubre in southern nation, nationalities, and peoples region is a place in Ethiopia
–about 84 mi (or 136 km) south west of Addis Ababa, the country’s capital city. The annual
average temperature of the city 34 c and therefore it is most of the time it’s not comfortable. The
annual rain fall of Gubre amounts 61/sq m. generally the rain fall of Gubre is characterized by
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Milk production business plan
moderate rain. This geographical location is suitable for our milking cow’s farm because there is
large grass land in this place and locates the road.
1.2.5. History of the business
There are inadequate dairy farms (no qualified milk suppliers) in and around Gubre. There is an
increasing demand for milk, so we are encouraged to establish our milking cow’s farm to fulfill
this gap.
1.2.6. Strength, Weakness, Opportunity, Threat Analysis of the sector
Strength:
 Favorable Government policy measures.
 Good network of animal health institutions.
 Milk and milk products constitutes an important component of human diet in most of the
developing countries of the world. The consumption is also increasing at rapid rate due to
easy availability & cost effectiveness.
 Calcium, Phosphorus and Iodine along with fat.
 Dairy farming requires no much large area husbandry and agriculture activities.
 Ample professional knowledge of members on livestock production and health
management.
 Commitment of the members to run the business as they are visionary groups.
 Similar economic and social status that enables the members to work and communicate
easily.
 The potential for future specialization with quality service provision both at national and
international level.
Opportunity:
 Increasing demand of milk and milk product.
 Support and incentives from the government.
 Availability of infrastructures.
 Availability of cheap labor force.
 Availability of local materials used for making different equipments.
 Good progress of modern animal production system in the country.
 Domestic Consumption.
Weakness:
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Milk production business plan
 Price fluctuation.
 Highly capital intensive.
 Slow adoption of automation in production system.
 Lack of capital to invest in assets, equipment and inputs that would improve quality are
the major challenges faced by the market value chain.
Threat:
 Disease
 Short shelf life
 Un comfortable weather condition
 Shortages of necessary inputs
 Price fluctuations in the market
 Lack of adequate land.

Presence of long fasting days so that demand will decrease during these times.

Prevalence of many tropical diseases.

Livestock market structure

Challenges with exports

Demand and consumer preferences.

Inadequate finance, lack of technical and managerial skill, lack of efficient and modern
equipment, and lack of proper infrastructural facilities among others.
1.3. Marketing plan products
The main products of our farm are milk which is important sources of high quality proteins,
minerals and vitamins to balance the human diet, and meat of old aged cows. Another product
like manure for fertilizer is also going to be available.
1.4. Marketing plan price
Product/Service
Our customers willing to
Pay
Competitors price
Our price
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1
Average
2
Average
Low
7-8 Ethiopian birr
7-8 Ethiopian birr
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Milk production business plan
Because to attract
many The same is true as the first
Reason for setting the low customers& also depend up on one
price is
the communities
Margin for discount
10%
10%
The milk is going to be distributed either directly to the nearby individual customers or indirectly
to the distributors. The envisaged farm, as a new entrant into the market, has to penetrate the
market and create awareness and product loyalty first.
Therefore, the objective of the pricing policy should be to gain a foot hold in the market, get a
sizable market share and attempt to sustain a reasonable profitability, which at the initial
stage, could only be achieved through charging of lower prices that could influence users of
the product. Accordingly, the price of one litter milk will be 8-9 birr in non fasting season and 6
birr in fasting season; the price of culled cows are 3500 birr and 2000 birr per cows for non
fasting and fasting season respectively.
2. Description of the business idea
Dairy farms product launches with its first diary milk product located in Gubre town. Dairy
farm product will offer residents and visitors a totally new style of dairy milk product one
offering uniquely flavorful milk drink and a comfortable, upscale environment at which to
socialize, relax or work.



Variety: No other dairy product in the area will provide the range of milk drinks, juis ,
and other products that we does.
Location: Our business is will be located in the Gubre town. The reason why we prefer
this location are there is no other dairy products in the town and when we see the
interest of the community, there is no any supply who fulfill the interest of the customers
and also its designed for profits to match.
Expansion: Assuming this store is successful, it will be the first of a chain of our product
will be starts in Wolkite, Gubre and also Endebir which located in markets that have
similar demographic profiles.
2.1 Start-up Summary
To start the business there must be infrastructures need and capital need. Both of which is
described in table below
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Milk production business plan
Infrastructures and its cost table
Infrastructures
Quantity
Coast of single Total cost
Refrigerator
1
4,000
4,000
Shelving
1
2,000
2,000
Dairy machine
1
4,000
4,000
Bench
5
400
2,000
Table
7
200
1,400
Chair
15
200
3,000
Total
16,400
2.2. Competition
There are some small sized individual household milking cow’s farms in the town and
surrounding the town. In which thus are not such strong competitors in the market by taking the
higher demand of the population into consideration.
2.3. Estimated sales
Table 1: Estimated sales in birr
products
Milk
During fasting
1st
year
1st
qua
rter(
4m
ont
h)
20*
42*
12(
5)=
50,4
00
Sales in birr
2nd year
3rd year
2nd quarter
3rd quarter
20cows*55
days*12(5)birr
=66,000
20cows*35
days*12(5)birr=
42,000
20cows*141day
s*12(5)birr=169
,200
24cows*141d
ays*12(5)birr
=203,040
20caws*65day
20cows*85days
20cows*224day
24cows*224d
Not fasting
20*
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Milk production business plan
78* s*12(7.5)birr=
12( 117,000
7.5)
=14
0,40
0
Culled
caws
s*12(7.5)
birr=403,200
ays*12(7.5)
birr=483,840
During
fasting
0
0
4cows*2000birr
5cows*2000birr
5cows*2000bi
rr
Non fasting
0
0
4cows*3500birr
5cows*3500birr
5cows*3500bi
rr
8quntals*80bir
r
8quntals*80birr
10quintals*80
birr
10quintals*80
birr
Manure
3.
*12(7.5)birr=15
3,000
8qu
ntal
s*8
0bir
r
DEVELOPMENT AND PRODUCTION
3.1. Development status
The visionary project is on the progress of establishing the dairy farm, since we are beginners
we are going to request working capital and we are also on saving our money.
3.2. Production process
The production cycle for the envisaged dairy farm starts with calves’ production and contains a
feeding process, management process of the farm and dairy farms where the calf are raised, to
avoid risk usually away from20-30 km radius from the processing plant. But the envisaged farm
starts from the calves from the birth and grows for production of milk. The calves live in medium
houses which hold as many as 20 calves. These grow-out houses are kept at about 37.4°C
through ventilation controls. The floor of the house is inclined by 2cm, must be dry and concrete.
The dairy cows are fed a diet of cow feeds, which is typically 60% hay, 30%legiums , and 10%
other ingredients such as vitamins and minerals.
Sick cows are treated with antibiotics or other medications. The cows are usually watered
through genda drinkers.
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Milk production business plan
A significant waste produced in dairy farming is the feces of the cows. So these feces have to be
collected and used for fertilizer or biogas generation for energy source. By doing so the
environmental effect will be controlled.
The overall processes of production are indicated as follows:
3.2.1. Purchase of calves
The calves should be of uniform size, active and alert. The skin of calves should be free from
disease. Improved and high yielding calves should be purchased from reputed farms.
3.2.2. Feeding
The requirement of feed during milking depends on the rate of milk production and the body
condition of milking cows. The cows may need more feed in winter and less feed in summer.
During summer months the herd is under severe stress then it is suggested to temporarily change
the ration to a higher level of protein content. The actual feed consumption may be influenced by
several factors as follows:
 Body condition of the cow.
 Rate of milk production.
 Season and weather condition.
 Health and physical condition of the cows.
 Feed quality such as protein contents, caloric value of feed etc. Generally the feed intake
increases with an increase in milk production.
3.2.3. Housing
The dairy house should be well ventilated, dry and concrete. It is also free mud, cracked ground.
Extensively wet and dusty floor should also not be used. Using proper floor is good for raising
disease-free milking cows reasonably warm in winter and cool in summer. The dairy house
should be cheap, comfortable and safe.
3.2.4. Feeders
It is essential to provide adequate feeder space. Ideally, two pan type feeders are sufficient for 50
birds. Therefore, for 5000 birds, 200 feeders are enough.
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Milk production business plan
3.2.5. Drinkers
Proper drinking space should be provided to cows. It is necessary to provide extra water during
summer and extremely hot weather. Generally, one large genda is sufficient for 50 birds.
3.2.6. Vaccination
Vaccination can be applied to cows through injections. The medicine can also be mixed in the
water and also through mouth. Vaccination is provided to the cows once in the rearing period
and once in the milking period.
3.2.7. Culling
Culling is the procedure of selection and rejection of unproductive and poor producers. Culling is
a very important job for running dairy farm profitably. Poor milking cows should be culled to
minimize the cost of production.
3.2.8. Rearing and Milking Schedule
The cycle of one8 herd of dairy farm is divided into two distinct phases, the rearing phase and
the production phase. During the rearing phase of 4 years, the cows consume feed and are nonproductive. After the rearing phase is over, the cows start birth and remain productive for the
next 8 years. So, the revenues and costs occur in the form of cycles.
3.3. Cost of development
Table 2: Total Project Cost
Market Costs
In birr
Machinery & equipment
120,500
Total Fixed Costs
120,500
Raw material inventory
300,000
Total Working Capital
600,000
Total market Cost
1,141,000
3.4. Labor requirement
The total manpower required is 11 persons. Details of manpower and annual estimated
labor cost including the fringe benefits are given in Table 3. The total annual manpower
cost is estimated at Birr 166,200.
Table 3.Manpower requirement and estimated labor cost
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Milk production business plan
Sr.
Description
No. of
No.
Salary, Birr
Persons
Monthly
Annual
1
Manager
1
3000
36000
2
Secretary
1
750
9000
3
Production supervisor
1
2000
24000
4
Laborer
3
3000
36000
5
Accountant
1
1300
15600
6
Sales/Purchase man
1
1000
12000
7
Store keeper
1
1100
13200
8
Cleaner
1
500
6000
9
Guard
1
1200
14400
Total
11
12,850
166,200
3.5. Expense and capital requirement
3.5.1. Operating expense
Table 4: Operating expense
Cost of Production
In birr
Cost of cows
364,950
Feed cost
24,950
Salary
166,200
Insurance expenses
13,950
Marketing & Misc. expenses
29,950
Total
600,000
3.5.2. Capital requirements
Table 5: Financial Plan
Initial Financing
Debt
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Birr in actual
80%
920,000
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Milk production business plan
Equity
20%
230,000
Total
100%
1,150,000
Note: The debt will be taken from Commercial Bank of Ethiopia with correlation to
administration of small enterprises and covers 80% of our total budget and other 20% of the
budget is from the group members’ contribution.
3.5.3. Cost of goods
Various types of farm equipment are needed for feeding, drinking and handling the cows. List of
the required farm equipment is given in Table 6-1.
Table 6: Farm Equipment
Farm Equipment
Unit
Unit Cost
Total Cost
Drinkers (genda)
5
2000
10,000
Feeders
5
1500
7500
Total
10
3500
17,500
4. MANAGEMENT
4.1. Management description
The manager and other most personnel of the farm and the responsibility of each person is
described in the following table:
Table 7: Management description
1
Manager
Some
experiences
in
managing farm.
2
Secretary
2 years’ experience
3
Production supervisor
3 years’ experience
4
Veterinary doctor
6years’ experience in animal
health administration in 3
districts.
5
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Sales/Purchase man
Experienced in shopping
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Milk production business plan
4.2 Market Segmentation
Dairy milk production customer base in Gubre is comprised of four target groups.
1. Affluent local residents
2. Tourists
3. Local business people
4. Wolkite University Students
These groups are all potentially strong customer segments. The benefit of this mix of
customers is that it helps maintain consistent business throughout the year. The other customer
segments (local residents, local business and pass-through traffic on the area) provide a
consistent foundation all year long.
Affluent locals:-Near to our dairy milk business production, most affluent people is
there.
Local business people:-Dairy production is located on the corner of Gubre bus station
and First Avenue in the heart of the prime down town business district.
Students:-. Most of the time students are live in Gubre and enjoy to our production.
Travelers passing through:-most of the service buses and any other official automobiles
can cross the dairy business production.
4.3 Customers
The primary customers will be local community, hotels, restaurants, travelers passing through,
and milk distributors. There is high demand of hotels for meal in Gubre and nearby town likes
wolkite, Agana, Endebir and demand of local community is high during holidays so that there
will be more production during these times. There will be shops for distribution during holidays
in the home city and nearby towns. Cow’s
by-products such as manure will be sold to local
farmers to be used as fertilizer.
4.3.1 Description of the market
The product can be sold directly to bulk buyers. For individual buyers existing outlets such as
super markets and specialized food items department stores can be used. Past Supply and
Current Demand:
airy products such as milk, butter and cheese are the central diets of Ethiopian’s. Moreover,
milk as they are easy to prepare and digest, have good test and nutrient are becoming the favored
breakfast items in urban areas like Addis Ababa. Accordingly, due to the traditional consumption
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Milk production business plan
habit and as the awareness of the population on the nutritional and other advantages of dairy
products increases the market for the products is also expected to expand
4.4 Legal form
The visionaries’ Dairy farm is going to be built by partnership with the members of the group
(Alemayehu Admasu, Dereje Abera, Yemarshet Zerfu, Hasan Nuresa and other members).
4.5. Support services
Commercial bank of Ethiopia with small business administration by providing capital as a loan
and we have also an insurance divisor, who is responsible for his task and is experienced, are
some of supporters for the farm.
4.6. Risks
The visionaries’ dairy farm may face the following risk factors:
 Dairy cows diseases like infectious Mastitis disease etc.
 Financial problems
 Competitors
 Shortage of commercially prepared dairy feeds, and other inputs
 Environmental effects like flood, drought
5. FINANCIAL DOCUMENTS
5.1. Cash flow statements
Table 8 Cash out flow
Item
Cost (per year)
Feed
172,800
Cows replacement
72,792
Salary
166,200
Insurance
13,950
Marketing and advertisement
29,950
Debt return
184,000
Interest
6% until 4th year(128,840)
Total
768,532
5.2. Balance sheet
Table 9: Balance sheet
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Milk production business plan
Projected balance sheet
Year 1
Year 2
Year 3
Year 4
Cash
600,000
600000
600000
608,000
Stocks and Inventory
300,000
300,856
300,740
300,630
Gross Fixed Assets
120,500
120,500
120,500
120,500
Accumulated depreciation
6,200
12,400
18,600
24,800
Total Assets
564,793
606,076
627,869
611,867
Current Liabilities
239,200
143,152
197,490.88
182,358.57
Total
239,200
143,152
197,490.88
182,358.57
Equity
239,200
0
0
0
Total
239,200
07
Note: since the visionaries dairy farm is going to be established by equity debt ratio of 20% to 80% and
the amount of equity is paid up in the first year.
5.3 Marketed Income Statement
The market mainly gains its money from selling of milk, culled cows and male calves and collected
manure. By considering the whole products to be sold in the market, the project will have a cash inflow of
10,876,250 birr in the 1st year of operation and cash out flow of 662,966.84 birr in the same year.
Therefore, the business profit will be 10,213,283 birr; indicating the visionaries’ dairy farm is profitable.
5.4. Funding request and return
The debt, that was taken from the bank in 6% interest as a loan will be paid up in 4 consecutive years of
operation. The breakdown of the money return will be as follows:
Table 10 Funding request and return
Amount
Payback years
1st
2nd
3rd
4th
5th
Principal
920,000
680,800
224848
27357.12
0
Interest
6%
6%
6%
6%
0
Debt return
184,000
184,000
184,000
184,000
0
Prepared by Nerga
Page 15
Milk production business plan
Total
239,200
143,152
197490.88
182358.57
0
Debt return for each year of payback = total debt (453,200)/number of payback years (56.
Appendix
Cash inflow for one year by dividing in to three quarters and also for the second year of the visionaries’
layer poultry project is as follow:
Items
Yea
Year 2
r1
Qua
Quarter 2
Quarte
rter
r3
1
4
Jan
Feb
Mar
Apr
May
June
July
Aug
20*(
20*
20*3
20*
20*3
20*30
20*3
20*3
20*30*1
20(141*
42*
30*
0*12
(25*12(5)
0*12
*12(7.
0*12
0*12
2(5)=36,
12(5)+2
12(5
12(7
(5)bi
birr
(7.5)
5)=54,
(5)=3 (7.5)
000
24*12(7
)+7
.5)bi rr=3
+5*12(7.5 birr=
000
6,00
=54,
.5))=57
8*1
rr=5
6,00
))=39,000
0
000
2400
2(7.
4,00
0
5))=
0
mon
th
Milk
5400
0
190,
800
Manure
8*8
2*8
2*80
0bir
0=1
=160
r=6
60
2*80=160
2*80
2*80=
2*80
2*80
2*80=1
10*80=
=160
160
=160
=160
60
800
40
Culled
Fasti
1*200
1*20
1*20
1*2000
5*2000
cows
ng
0=200
00=2
00=2
=2000
=10,000
0
000
000
and
Prepared by Nerga
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Milk production business plan
calves
Non
1*350
1*35
1*35
1*3500
5*3500
fasti
0=350
00=3
00=3
=3500
=17,500
ng
0
500
500
57,860
4166
5966
41660
600,700
0
0
Total
191
541
3616
440
60
0
Total in flow
575,
39160
5416
0
600,700
920
Note: the total cash inflow is 575920+600700 = 1,176,620 birr and an outflow of 768,532 birr in that
period.
Prepared by Nerga
Page 17