2018

FEED MILLING COMPANY

BUSINESS PLAN FOR SALAMA
FEED MILL

ANITA A. VINCENT
SALAMA FEED MILL 08021267368
18-Dec-18
TABLE OF CONTENTS

CHAPTER 1………………………………………………………………………………………………..3-4
EXECUTIVE SUMMARY
Objectives
Mission
Keys to Success

CHAPTER 2……………………………………………………………………………………………….5-8
COMPANY SUMMARY
Start up Summary
Company Ownership

CHAPTER 3………………………………………………………………………………………………9-13
MARKET ANALYSIS
Market Segmentation
Target Market Segment Strategy
Customer Buying Habits
Marketing Strategy
Sales Strategy

CHAPTER 5……………………………………………………………………………………………….14
MANAGEMENT SUMMARY
Personnel Plan

CHAPTER 6……………………………………………………………………………………………….15-17
FINANCIAL PLAN
Break even Analysis
Projected Profit & Loss
Projected Balance Sheet

CHAPTER 7……………………………………………………………………………………………….18
SUSTAINABILITY AND EXPANSION STRATEGY

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 CHAPTER 1

1. EXECUTIVE SUMMARY

SALAMA FEED MILL is a well-established custom feed company. The company is

engaged in the production of custom Chicken and fish feeds. SALAMA FEED MILL is
dedicated to providing the highest quality customer service, meeting the agreed
delivery dates, and keeping the sales prices controlled in accordance with ongoing
market trends. The focus of this business plan is to identify target clients, explain our
marketing strategy, improve internal procedures so we can substantially increase
profitability, and obtain the funding required to start the business.

SALAMA FEED MILL is located RSQ 097 SHEMIYE STREET, UNGWAN MAIGERO,
KADUNA. The company is a privately owned by Anita A, Vincent and has been
registered for business.

The marketing research and tailored marketing strategy described in this business plan
will result in after-tax profits of at least N1, 000,000 in Year 2 and increasing to nearly
N 1,400,000 in after-tax profits within three years.

To achieve these goals, SALAMA FEED MILL needs funding for start up. We
are currently seeking an N 8,000,000 long-term loan from CBN through STERLING
BANK, to be repaid within 5-7 years. This loan will enable us to purchase equipments
and aid in financing the business for a complete start up process. The company is
located at Ungwan Maigero.

1.1 Objectives

There are five primary objectives by which the success of SALAMA FEED MILL will be
tracked:

1. Maintain 100% of customer base by consistent customer service.

2. Expand our customer base through direct referrals and aggressive direct sales.
3. Expand our product line gradually, based on customer requests.
4. Expand our custom feed mill to meet the growing sales market.
5. Expand the types of services offered to our customers, as their desires are identified.

1.2 Mission

SALAMA FEED MILL is solely owned and operated company, dedicated to providing
our customers with the best premium products and services on the market. SALAMA
FEED MILL offers all of our customers the direct personal attention they deserve. Our
commitment to customer service and satisfaction assures us that our customers will be
100% satisfied with our products and services.
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 1.3 Keys to Success

The primary keys to the success of SALAMA FEED MILL are as follows:

1. Product freshness and quality.

2. Variety and price.
3. Constant research of industry to keep knowledgeable of market needs.
4. Management: products delivered on time, professional customer service, managing
budgets.
5. Constant evaluation of strengths and weaknesses with adjustments made as
warranted.

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 CHAPTER 2

2. COMPANY SUMMARY

SALAMA FEED MILL is Kaduna based feed mill company dedicated to providing our
customers with professional services and high quality feed products SALAMA FEED
MILL will offer only the best feed and products in the industry. SALAMA FEED MILL will
also offer our customers the option of a custom made feed. Our mill will enables us to
provide high levels of quality products that are always fresh and available SALAMA
FEED MILL primary focus is on keeping our customers satisfied. Professional
and reliable service, competitive pricing, and a knowledgeable staff will provide for
continued growth in the years to come.

SALAMA FEED MILL is founded and registered in 2018 by ANITA A. VINCENT. Her hard
entrepreneurial work and dedication has proven to be successful in other areas.

The future of SALAMA FEED MILL is looking bright as younger family members will
take over ownership. Our focus is on the core products, our sales and promotions will
emphasize on our history and reputation for quality and customer service. With the
addition of new energy and enthusiasm from younger owners in future, we will
increase sales. Even though the new owners have the time, energy,
interest and knowledge to invest in an already successful family business, our greatest
asset will be our commitment and pride in protecting and growing the business.

2.1 Start-up Summary

The start-up expenses for SALAMA FEED MILL include equipment, Salary, utilities, legal
services and office materials needed for the facility. Anita will invest N200, 000 in
addition, We will secure up to N8, 000,000 in long-term financing to fund the
enterprise. The funding is needed to cover the equipment costs, the funds will be used
exclusively to buy equipment, based on the list that will be made available. Our cash-
flow analysis demonstrates the company's ability to manage its resources and meet its
obligations, while maintaining adequate liquidity and generating positive cash flow, and
sufficient cash reserves for unforeseen future events.

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The following equipment will be needed for the park set up and operation. Below is a list of
equipment needed and cost:

Item Unit Specification Total Cost (₦)

Cereal/Maize 1 2 Ton/Day 700,000

Destoner

Hammer Mill 1 1 Ton/hr 1,500,000

Grain Mixers 1 1 Ton/hr 1,500,000

Pelletizing Machine 1 700,000

Cabinet Tray Dryers 1 500Kg/Batch 1,510,000

Weighing Scale 1 650,000

Total 6,560,000

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2.2 Table Start Up

Start-up N

Requirements

Start-up Expenses
Legal 10,000
Stationery etc. 50.000
Advertising 20,000
Insurance 150,000
Salaries 60,000
Utilities / Phone 50,000
Expensed Operating Equipment 100,000
Office Supplies 100,000
Container 150,000

Total Start-up Expenses 690,000

Start-up Assets
Rent 400,000
Cash Required 200,000
Other Current Assets 350,000
Long-term Assets 6,560,000
Total Assets 7,510,000

Total Requirements 8,200,000

2.3 Company Ownership

SALAMA FEED MILL is a owned business. Anita A. Vincent is the sole owner and
registered with the Coperate Affairs Commission. And there are sound provisions for
both ownership and management

2.4 Services
SALAMA FEED MILL will offer its customers with products and supplies (Chicken and
fish Feed) for the following animals:

Services

 Custom Made Feeds

 Delivery (Selective)

SALAMA FEED MILL will offer all of the above great products, while evaluating the
desire and need by our customers for the following items.

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 Products

 A Complete Line of Feeds for chicken and fish.

 Books (Related to chickens and fish)
 Exotic Feed
 Organic Gardening
 Ponds and Water Gardens

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 CHAPTER 3

3. MARKETING ANALYSIS

SALAMA FEED MILL will be the only custom feed manufacturer in Kaduna area. In
reviewing the industry and customer base, we recognize the broad range of local
poultry and fish ponds; we have seen the possibilities for potential market growth.

3.1 Market Segmentation

SALAMA FEED MILL will focus on the following markets:

 B2B CUSTOMERS: Simply put, this segment of our market is our future. We are
working with B2B poultry and ponds, to get their nutritional needs, and means of
cost containment. Through offering quality custom feeds we will provide success for
today and many tomorrows as these businesses become adult consumers

 Other poultry Farms: The number of cattle farms within a 100 mile radius of
SALAMA FEED MILL is quite phenomenal. There are many different purposes for
these farms as well. Some raise chicken and fish for onward sales all together, this is
a market that is small, but would be very lucrative just by having a few of these
commercial accounts purchase their feed from us on a weekly basis. The market is
very tough, but with our low prices and quality service, we should be able to obtain
at least 5% of the overall market.
 Households: We will provide custom feed while building customer relationships for
long term growth and expansion into our goals of massage, boarding and other
related services. Household poultry owners range from individual owners to family
and even direct marketing to their area will be undertaken.

3.2 Target Market Segment Strategy

Strategically targeting all the B2B close to our business helps serve the needs and
requirements of our local customers, and ties in logically with our marketing. The B2B
are our future. These customers have regimented schedules, and find value in
exceptional service, low prices and high quality feed. This first tier of our market
segment is also the primary focus of our marketing plan, which has a deep commitment
to focusing on the support of the B2B and their community.

Our SECOND-TIER market group, Other Poultry, will also find value in great service
and quality feed, and will appreciate a supplier that keeps their products fresh and
ready for immediate delivery. Finding the niche in all our targeted markets has been
relatively easy... customers are looking for a feed supplier who maintains a complete
line of fresh products and has the ability to deliver SALAMA FEED MILL will provide
custom-made feed, much more economical than other name brand feeds, and as an
added bonus we will deliver directly to their farms. This particular group is smaller in

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 size, yet the number of Chickens and fish to feed on each farm is substantially larger
than most other.

Our THIRD-TIER group, Household Owners, will find that SALAMA FEED MILL special
blend of grains, all mixed in with our high quality minerals, results in premium feed at
an affordable cost. All of these things are essential factors in a customer's feed-buying
decision. Our specialty feeds are made of quality. We need to market the right avenues
to gain industry share in this rapidly expanding market.

All of our projections are based on actual, real-life numbers (number of

people/farms/etc.). We forecasted conservatively to show the actual amount of
business we can easily obtain through a few advertisements and direct marketing.

3.3 Service Business Analysis

SALAMA FEED MILL will be involved in the manufacture and retail sale of custom feed
and related products. SALAMA FEED MILL straddles two industries - manufacturers of
feed, and retailers of feed and farm supplies.

Our products will be purchased from wholesale suppliers and re-sold to retail
consumers. Our custom feed will be huge competitor with other retail products. The
raw goods and time to manufacture cost at least 80% less than similar feeds. With more
focus on the overall quality of our feeds, the cost savings to our customers will become
more of a word of mouth advertising from end user to end user. Direct referrals are
always the best source of committed customer and sustained reliable growth.

There are competitors within a few mile radius of SALAMA FEED MILL. Our tasks are to
encourage our customers to make referrals, to implement direct marketing to groups
such as the B2B, and to go out to the various Poultry and fish farms and introduce our
company and our line of custom feeds.

At this point, we will be a great-kept secret, when comparing our customer base to the
existing market research potential.

3.4 Competition and Buying Patterns

Within the feed and farm supply industry, businesses compete on price, quality,
customer service, and delivery. Customer service can include things like ability to
produce a range of quantities, and custom-feed options. Customers must also trust the
supplier for regular, reliable service and consistent quality.

We strongly believe that by offering delivery services, we will gain a substantial number
of new customers, both through the advantages of the new service, and with the new
advertising (signs on our truck). We will gain the recognition of new customers through
our focused marketing plan.

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 3.5 Sales Strategy

SALAMA FEED MILL will be entering into direct sales. Starting in 2019, we
will approach members of our target markets within 10 square miles both via phone
and with direct visits. Where possible, we will ask existing customers to provide us with
an introduction or to mention us to their neighbors and friends before we approach
them. This will both lend credibility and pre-qualify potential customers as genuinely in
need of our services, based on others' knowledge of them.

We will tell them about our products and services, and then ask them clearly what we
need to do to earn their business. We will listen to their desires and individual goals.
We will then mirror back to them what they have said; to be sure we understand their
needs. Finally, we will create an individualized sales proposal with their specific needs
(products, volumes, frequency, price, other services) included.

We will present the proposal as a written agreement ready for signature by both parties
to begin doing business.

Details for each order will be entered into our customer database. We will then adjust
our planned supply of raw goods to include arrival of fresh product necessary for new
orders, to be manufactured and delivered as agreed by the timeline. Deliveries will be
automatically scheduled through our point of sale. Each customer price grid, conditions
and all specific comments will be clearly maintained for all to review and to guarantee
complete customer satisfaction. Each order will be reviewed by one of the owners prior
to delivery to guarantee quality, accuracy and completeness. Follow up calls will go to
each customer within 24 hours of each delivery to ensure satisfaction. If for any reason
there is an issue, it will be handled immediately. We will also focus on keeping the
customers happy and successfully introducing new products and services. We will
always focus on our repeat customers. The loyalty and respect we get from those
customers will all play a big role in growing the business and taking it to the next level.

3.6 Sales Forecast

The sales forecast for SALAMA FEED MILL includes all varieties of feed, as well as non-
feed supplies and future forecasts stable revenue.

In 2020, we are forecasting a modest increase of 10%, based on the growth of feed sales
and stable services alone.

3.7 Strategy and Implementation Summary

Emphasize customer service

We will differentiate ourselves with CUSTOMER SERVICE! We will establish our

business as a clear and viable alternative for our target market, from the scores of

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 competitors known for "do-it yourself," "no we don't offer that product," and "no
delivery available."

We believe that an employee who is happy at work will enjoy working. It is always
easier to please customers with staff that cares, a facility that is clean and equipment
that is kept in proper working order.

SALAMA FEED MILL will also in the future work toward establishing community
involvement programs that will demonstrate how the business can contribute to a
better quality of community life.

Build a relationship-oriented business

Build long-term relationship with customers, not single-visit deals. Become their "feed
dealer of choice." Teach them the value of the relationship.

Focus on target markets

We need to focus our offerings on specific population groups as the key market segment
we should own. We definitely want to be able to sell to smart, quality conscious
customers.

3.8 Competitive Edge

SALAMA FEED MILL will have one of the most sought-after competitive edges in the
industry. We will have our own individual feed mill that can produce feed on requested.
All we need is a few ingredients and some time to make our specialty custom feeds.

Let's face it, lower prices + higher quality feed = money in the bank.

In the future we will market our products to new customers in various strategic ways.
This will aid in bringing in more customers...and will also aid in spreading the word that
we are expanding our business. Most of the existing customers will come from within a
30 mile radius of the company. Through delivery, we can offer our products and
services to anyone willing to pay for it.

Our next future competitive edge is that we will be running our delivery truck on a daily
basis (once we implement delivery and obtain the necessary business). Most of our
other competitors do not deliver or only deliver within a short distance from their
location. Again, we will serve our customers with a higher quality feed, high level
of professional service, and be willing to take it to their door.

Our strongest competitive edge is that we will operate as a team and that our
knowledge of the feed industry runs deep. With the resources available, the energy we
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 can contribute at our young age, the raw talent for business and deep understanding of
customer service, the potential to grow this already exciting business is tremendous.

3.9 Marketing Strategy

SALAMA FEED MILL will implement the following Marketing Strategies upon the
business kick off following order:

1. Direct Marketing: we will personally market (sell face to face) our products to
various feed stores and farms.
2. Customer Referral: we will provide customer incentives for direct referrals, in the
form of price discounts.
3. Website Marketing: we will implement our web plan and review the outcome to
determine the efficiency it has on our customer base.
4. Event Marketing: we will visit area to hand out flyers, business cards, and product
catalogs, and to meet potential customers face to face.

Through marketing our products in these ways, we project that SALAMA FEED
MILL will almost double its business within the first 7 years of operation.

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 CHAPTER 4

4 MANAGEMENT

SALAMA FEED MILL will be made up of 5 employees. The owner, the cashier, sales
person and two mill operators put in approximately 45 hours a week. As the business
kicks off and expand various marketing plans will be implemented, the product volume
will increase. There is sufficient room in the production mill to expand and produce
more feed daily. It is planned that the owner will oversee the production and day to day
business practices.

4.1 Personnel Plan

SALAMA FEED MILL will be run and operated by one person in the mill and one person
in the store. In time, as we implement our marketing plan, we will need to hire in an
additional person to assist in the mill, and possibly another person to assist in the store.
We also could possibly need to hire a delivery person in the year 2020. As growth
evolves other family members may be of age to assist in the processes or employees
may need to be placed.

As we expand we will employ more . We believe this way would best suite a company of
our size.

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 CHAPTER 5

5 FINANCIALS

The financial plan is to borrow N 8,000,000 now as a long-term loan from Sterling Bank,
at an interest rate of 5%, to start. We will repay this loan within seven years from the
cash flow of the business. This model will allow us to expand our services to include
delivery, giving us a further edge over the local competition and enabling us to further
expand into our target market, while increasing recognition of our name and services.

With aggressive target marketing and the sales strategies outlined above, we will
increase sales over 10% in the second and third year. We expect a bigger increase in
year two, with the extensive marketing strategy.

5.1 Important Assumptions

This business plan is developed for SALAMA FEED MILL assuming the following:

 Steady growth from good management, barring any unforeseen local or national
disasters such as the economic slowdown seen by most of the country..
 An adequate loan amount to allow for initial implementation of plans.
 Competition and buying patterns remain similar to those used for forecasting.
 Market research is on target and current.
 Customers will be gained through direct sales and advertising.
 Long-term interest rate will be no more than 5%.
 Income tax rate is 16%.
 Sales tax rate is 5%.

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5.2 PROJECTED PROFIT AND LOSS

YEAR 1 (N) YEAR 2 (N) YEAR 3 (N)

SALES 7,384,100 13,369,500 15,147,000
COGS 5,146,400 10,808,000 12,432,000
Gross Prof. 2,237,700 2,561,500 2,715,000
EXPENSES
Salaries 720,000 720,000 720,000
Legal 10,000
Stationery 50,000 20,000 5,000
Depreciation 19,950 39,000 70,000
Insurance 150,000 115,000 115,000
Utilities 105,000 60,000 60,000
Advert 90000 80000 120000
Rent 400,000 400,000 400,000
Equipment exp. 100,000 100,000 100,000
TOTAL OPERATING
EXPENSES 1,594,950 1,594,000 1,590,000
P&L Before Interest and Taxes 642,750 967,500 1,125,000
Interest Expense 42,857 57,143 57,143
Taxes Incurred 32,138 48,375 56,250
NET PROFIT/Loss 567,755 861,982 1,011,607

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5.3 PROJECTED BALANCE SHEET

ASSETS YEAR 1 (N) YEAR 2(N) YEAR 3 (N)

CURRENT ASSETS

Cash 1,234,150 1,470,150 1,509,150

TOTAL CURRENT ASSETS 1,234,150 1,470,150 1,509,150

LONG TERM ASSETS

Equipments 6,560,000 6,540,050 6,501,050

Depreciation 19,950 39,000 70,000

TOTAL LONG TERM ASSETS 6,540,050 6,501,050 6,431,050

TOTAL ASSETS 7,794,150 7,971,200 7,940,200

LIABILITIES AND CAPITAL

LOAN 7,145,000 6,005,000 4,865,000

Capital Cont. 200,000 - -
Retained Earnings 449,150 1,996,200 3,075,200

TOTAL 7,794,150 7,971,200 7,940,200

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CHAPTER 7

6. SUSTAINABILITY AND EXPANSION STRATEGY

The future of a business lies in the number of loyal customers that they have the capacity
and competence of the employees, their investment strategy and the business structure. If
all of these factors are missing from a business, then it won’t be too long before the
business close shop.
One of our major goals of starting SALAMA FEED MILL is to build a business that will
survive off its own cash flow without the need for injecting finance from external sources
once the business is officially running. We know that one of the ways of gaining approval
and winning customers over is to sell our processed and packaged products a little bit
cheaper than what is obtainable in the market and we are well prepared to survive on
lower profit margin for a while.
SALAMA FEED MILL will make sure that the right foundation, structures and processes are
put in place to ensure that our staff welfare is well taken off. Our organization’s corporate
culture is designed to drive our business to greater heights.

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