SME Industrial development Batticaloa

1. BUSINESS PLAN DEVELOPMENT
S.Thanigaseelan[SEELAN], Assistant Director, NHRDC, Ministry
Of Policy Planning and Economic Affairs

2. 
 Name of the business: Kapilan Poultry farm
 Type of the business: Retailer and Wholesaler
 Targeted customers: officers, business people (small shop
owners) and farmers
 Owners of the business & qualifications and business
experiences: Kapilan- Bachelors of Arts and have business
knowledge
 Number of staff: 02 with other 2 family members
 Required start-up capital (Total estimation)Rs(7.5mn): 7500$
 Sources of start-up capital: Shares of owners, relatives and loan
 Competitors: Kaluthavalai and Kaluvanchikudy public
markets
Executive Summary of Project:

3. 
 Poultry industry in Sri Lanka has shown a phenomenal growth
over the past three decades or so. As a result, poultry products
have become essential food items in Sri Lankan menus.
Demand of chicken meat and eggs have been met by local
producers by now.
 Total availability 73 % production by locally. So, the chicken
meat production is in upright trend and per capita availability
will be 7.98 kg/year in 2014.
(http://www.daph.gov.lk/web/images/content_image/news
_bulletins/poultry_sector_forecast_2014.pdf)
Background
Year No. parent day old chicks
2012 1,185,352
2013 1,064,601

4. 
Location
About 70% of the contribution to livestock
sub-sector in Kaluwanchikudy comes from
chicken meat and eggs.(Statistical hand book
2013-MSEP)
• Vanniyar street ,Kaluthavalai, Batticaloa.
• No harm to surrounding environment
• No dangerous pollutants substances.
However other expected wastes
• Efficiently disposed once a week with
support of local government authority.

5.   Low financial
capacity
 Lack of new
skills
 Lack of
managerial
skills
Problems
Sri Lanka Millennium Development
Goals Country Report 2014

6. 
 To commence commercial poultry farm
 To Supply 75% rural market with competitive prices;
 To create sustainable income of my family
Primary Objectives

7. 
Strength Opportunity
He is traditional poultry farm owner
He is well known person in village and has buyer
information
Relevant Skills in the business
participation of family members in production
Marketing knowledge
Day-to-day management is easier.
Scientific management practices like breeding,
feeding, medication, culling etc. can be applied
easily and accurately
whole year production capability
availability of cheap land to be developed into
farms
Price of vegetable and fishes are expensive
Higher demand for chicken among
households
Minimum land is required for farming.
Farms located near market area.
cheap labor
Veterinarians in the area
Insurance support for farmer
Free instruction of veterinary department
Less capital investment
Weakness Threat
Lack of financial capacity & high production costs
lack of skillful workers
The scientific management practices can not
be adopted.
flood days
lack of adequate infrastructures
viruses which come and infect the farm
Unstable of cost of production
fluctuations of poultry-meat price
Importance of chicken
high death rate
farmers having multiple jobs
Accessibility of inputs
SWOT Analysis

8. 
 This business plan is intended to deliver chicken in the
target market area in Kaluthavalai, Thettativu and
Kaluwanchikudy of MSEP divisional secretariat areas in
Batticaloa district.
 Mostly the target customers are officers, business people
(small shop owners) and farmers. Based on the
observation I have identified the average need of the
surrounding community. As other products didn’t full
fill the market demand, I chose to do the sales of chicken.
 Based on the average requirement of chicken is 50Kgs per
day in my village.
 I have planned to produce 30Kgs rest of other will be
covered by local markets.
Market Opportunity

9. 
 Focus the traditional chicken producers who supply
meat to the various class of customers.
 Target groups would be the high end middle class
families for the best possible chicken
 The availability of fishes and vegetable are very rare
as well these are expensive.
MARKET ANALYSIS & POTENTIAL
FOR POULTRY FARMING

10. 
 Seasonal chicken salesmen in local market
 Kaluwanchikudy Public market (Its away from 3km)
 Existing three traditional chicken farming
Key local competitors

11. 
 Total Estimated cost -750,000
 Existing amount- 260,000
 Additional funding requested: 490,000
Financial Summary
statement

12. 
Cash Flow
Items Jan Feb Apr Jun Aug Oct Dec Total
Opening Balance 38000 171000 160200 167200 155700 142400
Cash Incoming
Sale 630000 486000 756000 720000 486000 720000 630000
Bank loan 500000
Owners investment 450000
Total Cash Incoming 950000 668000 657000 916200 887200 641700 862400 4279500
Cash outgoing
Utilities (electricity, water) 5000 5500 4000 6770 4000 5600 5700 35800
Telephone 2000 1500 1800 2000 2500 2700 2050 14550
Labour cost 20000 20000 20000 20000 20000 20000 20000 140000
Broiler Chicken & Pellet 120000 120000 120000 125000 130000 120000 120000 125000
Maintenance Cost 5000 5000 5000 5000 5000 5000 5000 35000
Feeds Cost 150000 150000 225000 300000 150000 150000 150000 150000
Protein supplement 10000 10000 10000 10000 10000 10000 10000 70000
Investment on building 600000
Total Outgoing 912000 312000 385800 468770 321500 313300 312750 3235350
Bank Balance closing 38000 356000 271200 447430 565700 328400 549650

13. Kapilan poultry farm
Balance Sheet Forecasting
LKR 000’
Year 1 Year 2 Year 3
Assets
Non-Current Assets
Property, Plant & Equipment (net) 540,000.00 480,000.00 420,000.00
Current Assets
Inventory 120,000.00 132,000.00 138,000.00
Other Current Assets 560,000.00 506,400.00 499,000.00
Cash & Bank Balance 549,650.00 580,000.00 550,000.00
Total Current Assets 1,229,650.00 1,218,400.00 1,187,000.00
Total Assets 1,769,650.00 1,698,400.00 1,607,000.00
Equity & Liabilities
Equity 450,000.00 450,000.00 450,000.00
Profit/Loss 506,900.00 540,200.00 572,000.00
Long-term Liabilities 500,000.00 400,000.00 300,000.00
Current Liabilities
Accounts Payable 312,750.00 308,200.00 285,000.00
Other Current Liabilities - - -
Subtotal Current Liabilities 312,750.00 308,200.00 285,000.00
Total Equity & Liabilities 1,769,650.00 1,698,400.00 1,607,000.00
Blanch Sheet

14. 
 Ownership- who will be the owner
 The farm would be owned by me. It would be own enterprise with 100 % of his
family share
 The farm would be owned by his family. It would be a individual enterprise with his
owners holding 100 % of the share.

 Staff-Will you be recruiting staff?
 he needs two un skills labour for the monthly payment. I can facilitate them for their
EPF, ETF coverage based on their salary level. And I will also insure them to protect
my labour force incase if any incident happen.
 How will you recruit?
 The recruitment will be made based on the number of workers required, skills and
experience needed, requested responsibility and their reasonable salary.

 How will you pay wages?
 Monthly base with ETF and EPF facilities.
Business Structure

15. 
 Registered your name
 I planned to registered my poultry farm under the Divisional secretariat to access
the facility of government, incentives as well free services and promotion. Once we
register the new registered number will be provided which can be display in the
name board and our bulls. Once I registered then I will be able to access the loan
facilities from finance institutions.

 Apply for permit
 The Project will be approved from State Environment & Pollution Department

 Awareness of any specific laws relevant to your industry
 State regulations on insurance and the practice of medicine.
 The following regulations apply to the employees: clean environment
 The business will need the licenses and permits: Shine board, vehicle license
 Follow an other responsibilities of the business:
Legal Considerations

16. 
Insurance
1. Public liability:
Pay compensation for accidental damage to the property & employee
2. Asset protection, revenue protection:
Protect unsure small business while loses are happening.
This type of insurance is recommended for every business that manufactures a
product
What it covers
The company shall indemnify the Insured against all sums which the Insured
shall become liable at law for damages and claimant’s costs and expenses in
respect of:
•Accidental bodily injury to any person not being a member of the Insured’s
household or any person in the service of the Insured.
•Accidental damage to property not belonging to or in the custody or control
of the Insured.
•Any legal expenses incurred by the Insured in defending legal proceedings
with the Company’s written consent.

17. 
 Location: This is located in Kaluthawalai, Batticaloa
 The chicken farm plan to built in his own land
 Financial: The financial source will be use from his
family and loan from bank
 Productivity: The product will be targeted 60%
customer from his village
 HR: The paid labour use for maintaining and selling
the products.
 They will be trained to promote the skills on this
farm
Operational Factors

18. Category Risk Mitigation Status
Natural disaster flood days -Ask GN help
- Keep average product
- Insure the farm
Followed mitigation
plan
Infrastructure Lack of sufficient
infrastructure
-Request public road from local
authority.
-Inform district SM Industrial
department
Followed mitigation
plan
Disease viruses which come and
infect the farm
- Register the Small business
- Keep record of inspection of
veterinary Doctor
- Follow the instruction of Doctor
Followed mitigation
plan
High Competition poultry-meat import from
other provinces
- Keep quality and stable price
- Improve the services to distribute
at the door
- Keep up clean production
Followed mitigation
plan
Service accessibility Lack of veterinary services,
Insurance and business
advisory
- Register the farm under the DS
- Approach Insurance company
- Approach Entrepreneur development
Officers
Followed mitigation
plan
RISK MANAGEMENT PLAN

19. 
Thank you

20. 
No. The start-up expenses Amount
1 Expenses for hiring advisors and technical experts 10,000.
2 Marketing promotion expenses for the brand imaging 5,500
3 Insurance (general liability, workers' compensation and chicken casualty)
coverage at a total premium
18,000
4 Other start-up expenses including transportation 2,000
5 Stationeries and Office supplies 1,000
Total 36,500
The required start-up assets
1 Operating capital in the total amount(which includes salary of one unskilled
labors(10,000x12) operation cost 10,000
20,000
Cash in hand (Family Capital) 260,000
2 Bank loan 4,90,000
3 Start-up inventory
Broiler chicks (1000 heads @ Rs 100 per head) – Rs 100,000
Pellet balls (30 quintals @ Rs 3,000 per quintal) – Rs 90,000
1,90,000
4 Protein supplements, vitamins and antibiotics 10,000
Equipment and machineries
1 Nets, baskets, buckets, tillers and other equipment 20,000
2 Heating, lighting system and pellet machine 50,000
3 Farm house building 600,000
4 Feeds cost 1,50,000
Total of Assets and Equipment 19,00,000
Total Cost 19,36,500
Startup Cost