A Sample Yam Flour Production Business Plan Template

Do you want to start a yam flour company and need to write a plan? If YES, here is a sample yam flour
production business plan template & feasibility report.

Yam is a tropical annual climbing plant that is tuber bearing in nature. It is commonly eaten in West
Africa especially in Nigeria. Due to growing changes in lifestyle and stress levels, people now prefer
already processed yam flour that makes food making easy.

Yam flour is milky white in colour and slightly sour in taste with a slightly fermented flavour. Made from
fermented fresh yam tubers, it can be prepared the same way semovita, foofoo, dawavita and the rest
are prepared. It can be eaten with stew or soup.

Table of Content [hide]

Why Start a Yam Flour Production Company?

1. Industry Overview

2. Executive Summary

3. Our Products and Services

4. Our Mission and Vision Statement

5. Job Roles and Responsibilities

6. SWOT Analysis

7. Market Analysis

8. Our Target Market

9. SALES AND MARKETING STRATEGY

10. Sales Forecast

11. Publicity and Advertising Strategy

12. Our Pricing Strategy

13. Startup Expenditure (Budget)

14. Sustainability and Expansion Strategy

Why Start a Yam Flour Production Company?

The market demand for yam flour has been growing massively over the years due to factors like growth
in population, lack of time, convenience, quick preparation etc. It is mostly beneficial to wives who have
so many things to handle in the house, most especially career wives that joggle work and family chores.
Yam flour is also an active ingredient in the preparation of biscuits, cake, bread etc.

According to reports, over 30 percent of harvested yam tubers in Nigeria are wasted or spoilt due to lack
of mechanism for preserving and processing them. However, these days, farmers now know that the
best way to preserve yam is to convert them to flour. West Africa accounts for 90-95 percent of the
world yam production and

Nigeria is a leading producer with over 66 percent. A business that processes yam into flour can be
lucrative in rural communities where yam is prevalent. Aside from attracting development to that area,
it will also bring employment to the youths in the area that probably would have migrated to town in
search of greener pastures. Farmers would be relieved, as they will not have to watch their food crops
waste.

The supply gap in the industry keeps widening globally due to the ever-growing population, and
therefore creates demand that you can easily fill if you have the need equipment and expertise. The
only raw material you need to start this lucrative business is yam. The major producers of yam in Nigeria
are Adamawa, Plateau, Benue, Taraba, Cross-River, Edo, Kaduna, Delta, Ogun, Ondo, Oyo and Osun
States.

A Sample Yam Flour Production Business Plan Template

1. Industry Overview
Yam is an important source of carbohydrate for many people of the Sub Sahara region especially in the
yam zones of West Africa. It remains the second most important tuber crop in Africa, after just cassava
root, with production reaching above one third of the level of cassava.

Yam tuber is without doubt a starchy food, its key nutritional function being the supply of calories to the
body. This characteristic contributes to the sustaining of food supply, especially in the scarcity periods at
the start of the wet season.

Yam tubers grow up to 2.5m (8.2ft) in length and weigh up to 70kg (154lb). It has a tough stem that
softens after heating. They are annual or perennial tuber-bearing and climbing plants with over 600
species out of which six are economically important in terms of food and medicine.

It is one of the principal tuber crops in the Nigeria economy, in terms of land under cultivation and in the
volume and value of production. These tubers are grown on over 5 million hectares in about 47
countries of the world with Nigeria as the leading world producer.

Note that most of the yam produced around the globe comes from Nigeria, which is the highest
producer and exporter worldwide (about 70 percent of global production) followed by Ghana and then
Cote d’Ivoire. Oyo North remains the major and highest yam-producing zone in Nigeria as well as in the
whole South West of Nigeria where the common species are Dioscorea rotundata (White Yam) and
Dioscorea alat (water yam).

In these areas, the variety of yam cultivated depend on the yield, commercial value as well as excellent
food products. Yam production in this area is on commercial production that can sustain any yam-
processing venture resulting in high profits. There are specific varieties of the two yam species
(Dioscorea rotundata and Dioscorea alata) which are best suited for particular yam products.

2. Executive Summary

Nigeria has not been able to exploit its abundant yam tuber population to become a major player in the
international processed yam sub-sector. The major reasons include; non-availability of appropriate yam
storage, lack of low cost processing equipment and absence of modernized forms of yam processing. To
the amelioration of these, we plan to start Emeka and Sons™ Yam Flour Production Company.

Emeka and Sons™ Yam Flour Production Company, Inc. is a registered business that will process and
produce yam flour in Abakaliki, Ebonyi State. This business aims to promote investments in Instant
Pounded Yam and Yam Flour in Nigeria.

In an effort to achieve these, we have carried out extensive feasibility research and put together a
business plan to highlight the profitability inherent in this investment. All information used in this
business plan were sourced from various reliable sources, which aside from our due diligence, includes
statistics taken from the office of Food and Agriculture Organisation and the National Bureau of
Statistics in Nigeria.

This business plan provides a financial and economic analysis of the opportunities available in this sector
for us and identifies the potential technical strengths and challenges that we may encounter. We chose
to locate our business in Abakaliki after our extensive research because it provides us with close
proximity to yams from Ebonyi, Benue and Enugu.

Abakaliki still remains a centre of agricultural trade for such products as yams, cassava, rice, palm oil and
palm kernels. Abakaliki lies at the intersection of the Enugu, Afikpo and Ogoja Roads. In recent years,
there have been massive infrastructural developments ongoing in the urban centre; these include road
construction, shopping malls and market places, trans-Sahara fly-over bridges at presco and spera-in-
deo junctions amongst others.

As the city keeps booming in growth, we at Emeka and Sons™ Yam Flour Production Company, Inc. will
receive an added boost of traffic. We are aggressively planning for a 50 percent increase in sales the
second year of business. We believe that by creating good supply channels, we can comfortably increase
sales by more than N3, 000,000 over three years while maintaining a gross margin of 80 percent.

Through a philosophy of “nothing but the best” regarding both product and service, we plan to make
sure our yams and every other product produced in our facility remains exceptional. Our plan is to be
profitable within the first year of operation. We also plan reinvest in the company and expand to three
more facilities across the country by the third year.

3. Our Products and Services

Although most of the yams produced in Nigeria are fresh yam, informal yam processing has formed an
integral part of culture. These informal processors process yam into yam flour majorly, and this is where
our company Emeka and Sons™ Yam Flour Production Company, Inc. falls in. At this initial stage of our
business, we plan to offer the products elaborated below, but will grow our business offerings as our
business expands in coming years.

Yam Flour

Yam flour is brownish in colour and produced from dried yam. Yam flour is often fortified with vitamins
(e.g. A, B, B2, B3) or minerals (e.g. iron), or occasionally blended with other flours. With regard to the
properties of the product, yam flour should have a moisture content of around 10 percent, and should
be free of moulds (fungi), etc. Dried yam products have a shelf life of approximately one year.

Frozen Yam Chips

This is a product derived from yam tubers frozen to preserve them before actual preparation or use.
Frozen yam is a product that takes off the stress, as it is easy to prepare. Frozen yam chips when
prepared are also called French fries.

French fries are batons of deep-fried yam. French fries are served hot either soft or crispy and generally
eaten as part of lunch or dinner or on their own as a snack and they continuously appear on the menus
of fast-food restaurants.

Instant-Pounded Yam Flour

In Nigeria, pounded yam is consumed by almost every tribe in the Country. Its consumption cuts across
all regions, age groups, economic and social classes. It is served in parties, ceremonies, hotels,
restaurants, and as a family menu.
The traditional method of making pounded yam which requires physical pounding with pestle and
mortar by two or more persons depending on the quantity, is very laborious and mostly unhygienic. We
have learnt and perfected a process technology for production of Instant Pounded Yam Flour (IPYF to
remove the drudgery associated with the traditional pounding method.

4. Our Mission and Vision Statement

Our Vision at Emeka and Sons™ Yam Flour Production Company, Inc. is to build a massive yam
production facility that will provide the people of Nigeria with grade one-yam flours and well prepared
yam related products.

Our mission at Emeka and Sons™ Yam Flour Production Company, Inc. is to provide our customers with
high-quality flours, produced in a clean and sustainable environment.

We plan to make enough profit to generate a fair return for our investors and to finance continued
growth and development in quality products.

We have put plans in place to ensure a friendly, fair, and creative work environment, which respects
diversity, new ideas, and hard work.

Our Business Structure

At Emeka and Sons™ Yam Flour Production Company, Inc., our business structure will be a relatively flat
one, since most of our personnel will be involved in production and there will be a relatively low
headcount in management. We will be managed by our two founding partners.

These partners, Emeka Edochie and Sampson Onuoha represent sales/management and
finance/administration areas, respectively. These two men will provide funding from their own savings,
which will cover start-up expenses and provide a financial cushion for the first months of operation.
Below is the administrative work force we need at Emeka and Sons™ Yam Flour Production Company,
Inc.,

MD/CEO

Production Manager

Account Manager

Admin Manager
Marketing manager

Audit Manager

Store manager

5. Job Roles and Responsibilities

Chief Executive Officer

Implementation of Board decisions and policies

Provide administrative and direction guidelines

Ensure achievement of set objectives

Management of resources to ensure achievement of goals

Liaise with government institutions and other relevant agencies.

Production Manager

Coordinate the entire production processes

Ensure adherence to production standards

Supervise processing and production staff

Ensure timely and efficient production

Ensure achievement of production targets

Keep proper records of factory maintenance

Handle stock order and re-order

Account Manager

Tasked with preparing financial reports, budgets, and financial statements for the organization

Provides managements with financial analyses, development budgets, and accounting reports

Tasked with financial forecasting and risks analysis

Performs cash management, general ledger accounting, and financial reporting

Tasked with developing and managing financial systems and policies

Tasked with administering payrolls

Ensures compliance with taxation legislation

Handles all financial transactions for the organization

Serves as internal auditor for the organization

Admin Manager

Responsible for personnel issues

Handle staff recruitment, transfers, disengagement

Handle staff performance appraisal and promotions

Handle staff welfare and liaise with labour union

Marketing Manager

Manages external research and coordinate all the internal sources of information to retain the
organizations’ best customers and attract new ones

Model demographic information and analyse the volumes of transactional data generated by customer
purchases

Identifies, prioritizes, and reaches out to new partners, and business opportunities et al

Tasked with supervising implementation, advocate for the customer’s needs, and communicate with
customers

Documents all customer contact and information

Represents the DBS in strategic meetings

Helps increase sales and growth for the DBS

Audit Manager

Ensure compliance with company’s controls

Provide independent assurance that an organization’s risk management, governance and internal
control processes are operating effectively.

Provide regular evaluation and appraisals of internal control.

Store manager

Maintains receiving, warehousing, and distribution operations by initiating, coordinating, and enforcing
program, operational, and personnel policies and procedures

Controls inventory levels by conducting physical counts, reconciling with data storage system.

Maintains physical condition of warehouse by planning and implementing new design layouts;
inspecting equipment; issuing work orders for repair and requisitions for replacement

Completes warehouse operational requirements by scheduling and assigning employees

Maintains warehouse staff by recruiting, selecting, orienting, and training employees

Contributes to team effort by accomplishing related results as needed

Human resource (work force) required for Production Process is as follows:

Production Supervisor

Quality Control officers

Production Assistant/Operators

Factory Hands

6. SWOT Analysis

At Emeka and Sons™ Yam Flour Production Company, Inc., we were able to take stock of our strengths,
our weakness, our opportunities and the threats that we are likely going to be exposed in the industry.
This is to get us ready for the competition ahead and how best to tackle it. Summarized below is the
result of our SWOT Analysis:

Strengths

Availability and easy accessibility to raw-materials

Access to cheap labour

Thorough knowledge of target market and their peculiar needs

The organization structure shall be function-based and each employee shall have a clearly defined
strategy and goal plan.

Weakness

The business is a start-up and the future is always uncertain for most start-up companies

The initial stages of the business requires an enormous amount of investment

Opportunities

The yam processing food production industry is still untapped

Fast growing middle class population within Nigeria

Huge population of Nigerians living abroad

Threats

This being a new entity there is a threat from new business entrants

Cheap imitation instant pounded yam flooding the market

Non-compliance with strict NAFDAC regulations on production

There is a threat of other more established companies starting this line of business thus leading to stiff
competition that the company might not be able to cope with.

7. Market Analysis

Market Trend

There are no reliable statistics to help in determining national demand for processed yam products.
Statistics obtained from Federal Ministry of Agriculture only gave the annual production of yam in
Nigeria. The Minister for State, Federal Ministry of Agriculture, Senator Heineken Lokpobiri, said, “About
48 million tonnes of yam tubers are produced annually in West African sub-region on 4 million hectares
of land.
Nigeria alone produces 36million tonnes on 3 million hectares of land annually accounting for 68
percent of global production. Meanwhile, the national demand for yam flour can be derived using some
basic assumptions. For instance, the food-processing group of Lagos chamber of Commerce and Industry
(LCCI) in a seminar held in 2015 projected that at least one person in every six families eat pounded yam
daily in Nigeria.

The population of Nigeria is estimated to be 180 million. Assuming that a family consists of six persons
(father, mother and four children) then there are approximately 30million families in Nigeria. We can
comfortably assume therefore that about 5 million people eat pounded yam daily in Nigeria.

An average daily consumption per person is 150gm; this is why most packaging is 900gm per pack for a
family consumption. The national demand could be estimated therefore, to be 750 tons per day,
excluding production meant for export.

8. Our Target Market

Growth of the middle class in modern Nigeria has fuelled the growing health awareness of the need for
hygienically well-packaged and prepared foods. These coupled with the geometrically exploding
population and the continued rural-urban drift is expected to fuel the demand for well-packaged
foodstuffs especially instant-pounded yam flour, a staple food in the country.

Yam flour is one of the food items that defy socio-economic class, religious and ethnic boundaries; it is
eaten daily in one of every six families in the country. In recent times, due to the numerous products
{yam chips, pellets, starch} that can be processed from yam tubers, and the growing need for
hygienically well packaged ready to use food product by the growing middle class, there is a gap in the
supply of instant pounded yam flour in Nigeria.

This insinuates a shift in the demand-supply equilibrium in favour of instant-pounded yam flour
producers and other yam related product makers. The Demand-supply gap has been identified to
continue to expand as the population of the country that is estimated to be 180 Million continues to
grow at an average of 3.5 percent per annum.

In addition, the rural – urban drift in Nigeria would help to deepen the market for instant-pounded yam
flour. Our ideal consumers are those who drive the various activities in the supply chain. In addition,
especially, it is important to note that prices are fixed based on the readiness of the consumer to pay.
This is often determined by the location and product specification.

competitive advantage

We believe that by creating good supply channels, we can comfortably increase sales by more than N3,
000,000 over three years while maintaining a gross margin of 80 percent. Through a philosophy of
“nothing but the best” regarding both product and service, we plan to make sure our yams and every
other product produced in our facility remains exceptional in the Nigerian market.

Although price may be a factor when competing against other brands selling processed yam products,
the same consumers who are willing to pay a good amount for easy chops are already conscious of a
better quality product. We strongly believe they will be equally as willing to spend a little extra for an
extraordinary food produced and processed to meet their varying needs.

We also believe that the comfort factor that we will be offering plays an important role in consumer
decision about our business. Our goal is to ensure that our brand and staff excel at being warm and
friendly. We will use the highest quality products; sometimes paring the ordinary with the exotic, but we
will always present our products in an unintimidating manner.

9. SALES AND MARKETING STRATEGY

Our marketing plan at Emeka and Sons™ Yam Flour Production Company, Inc. will centre on educating
our target audience and subsequent word-of-mouth. We plan to make our location known for its unique
buying experience as well as a superior yam flour production.

We plan to reach our clients through fliers, newspaper advertisements and special holiday promotions.
Our business location will also play a very important role in marketing and promotion. We plan to target
progressive and generally well-educated and affluent consumers who are interested in trying new
products and experiences and are dissatisfied with the limited selection and lack of solid and quality
goods seen in Africa.

Our major marketing objective is to sell the company as well as the product. Just as KFC is known for its
great chickens, Emeka and Sons™ Yam Flour Production Company, Inc. will come to be known for its
well-processed yam flours.
10. Sales Forecast

Our Sales Forecast at Emeka and Sons™ Yam Flour Production Company, Inc. reflects modest estimates
for the first year of operation beginning in January 2021. After we must have established our facility as
the number one place to buy yam flour, we plan to project aggressive sales increase for the following
years. For our second year of operation, we estimate sales increase of 30 percent and of 50 percent in
the third year

At Emeka and Sons™ Yam Flour Production Company, Inc., we are planning a 15 percent increase in
quarterly marketing fee each of the two following years while keeping costs constant. Note that our cost
of sales is based on an average yam cost of 30 percent for single purchase and 20 percent for bulk
purchase.

We also project a consistent product cost percentage of these amounts for the following two years.
Keeping product costs low while sales increase is very crucial to the success and profitability of Emeka
and Sons™ Yam Flour Production Company, Inc.

We estimate that our total first year sales should reach N671, 087. Our second year will see sales
increase to N2, 562,521. The third year, with the addition of such a significant number of outlets, we will
see sales increase to N3, 881,752.

11. Publicity and Advertising Strategy

We observed that new entrants into the market usually employ one of the following strategies.

The Product Range Strategy

The product should compete favourably with the existing brands. It should also be able to satisfy
customers’ demands and fall within the quality brands in the market. However, it is necessary we create
a niche for the brand even when the same technology is being used in the processing.

The Pricing Strategy

Good pricing policy allows the product obtain the necessary market share in terms of volume. The
company must be focused in determining whether the pricing policy is based on costs push, or market
pull or combination of the two.

Promotional Strategy

We will promote sales using various means including granting of credit facilities, bulk discount, product
launching, and attractive packaging. In relation to sales promotion, packaging would be designed to
create a favourable product image and establish corporate identity. Packaging also establishes the
products‟ differences in case of narrowly differentiated products. It also offers protection at all stages of
distribution.

Distribution Strategy

This is a strategy to get the products to customers without much inconvenience to customers and at a
reasonable cost to the company. The distribution channels could be any of the following:-

Directly to the ultimate consumers

Directly to the retailer who finally sells to the ultimate consumers.

Direct sales through the wholesaler or agent

A combination of any of these alternatives

Sources of Income

At Emeka and Sons™ Yam Flour Production Company, Inc., we hope to earn income and profits by
offering Nigerians different products from our yam flour production. We have made sure our products
will remain unique and rich and we believe our exceptional customer service will set us apart in our
business location.

Our plan is to be profitable within the first year of operation. We also plan reinvest in the company and
expand to three more facilities across the country by the third year.

12. Our Pricing Strategy

Our business goal is to increase profits while also offering our clients the best products and services
there is in our line of business. We have made plans to ensure our pricing will be comparable to the
competition in the market, but with the value-added feature of immediate and quality products.

Payment Options

Our plan at Emeka and Sons™ Yam Flour Production Company, Inc. is to create payment policy that will
favour our clients. Our clients are the baseline of our business and we plan to make every process easy
and accessible to them. We understand greatly that different people prefer different payment options
as it suits them. Here are the payment options that we will make available to our clients:

Payment by cash

Payment via Point of Sale (POS) Machine

Payment via online bank transfer (online payment portal)

Payment via Mobile money

We have taken our time to align with numerous banking and payment platforms that will help us
achieve our plans with little or no hitches.

13. Startup Expenditure (Budget)

Our startup costs depend on important assumptions. For instance, we assume a slow-growth economy,
without major recession. We hope there are no changes in technology to make products immediately
obsolete. We have done our research and have decided on the various places we want to spend our
startup capital, and they include:

Land and Building – N999,400

Plant & Equipment – N300,000

Generators – N150,000

Other Depreciable Assets -N330,000

Other Facility -N108,000

Pre-operational- N104,000
Working Capital -N333,600

Going by the report from our research and feasibility studies, we will need about N2, 500,000 to start
Emeka and Sons™ Yam Flour Production Company, Inc.

Generating Funding/Startup Capital for Emeka and Sons™ Yam Flour Production Company, Inc.

At Emeka and Sons™ Yam Flour Production Company, Inc., we hold true to our vision of bringing a new
concept with an old-fashioned feel in order to become the number one in our industry. Our founding
partners are experts in the food industry and we trust in their abilities to lead Emeka and Sons™ Yam
Flour Production Company, Inc. to its desired spot. We hope to raise our startup fund through the
following ways:

Equity Capital

Loan or Venture Capital

14. Sustainability and Expansion Strategy

The raw material we will need at Emeka and Sons™ Yam Flour Production Company, Inc. is undoubtedly
yam. In the production of yam flour, sometimes fresh yam is not used by some yam flour producers;
instead they use yams that are about to spoil. They tend to get them at cheaper prices.

However, we at Emeka and Sons™ Yam Flour Production Company, Inc. plan to use fresh yam. Fresh
yam is abundant in the Nigeria particularly in Benue, Enugu and Nassarawa States. It is estimated that a
tuber of yam weighs between 8-10kg per piece. 500 kg of relatively large tubers when processed is
reported to yield 150kg of finished product (instant-pounded yam flour).

In addition, the company will follow a systematic, scheduled approach, from setting overall cooperate
objectives at the beginning of the year to rewarding employees at the end of the year. We will steadily
offer staff trainings and enlightenment to grow the expertise and experience of our workforce. Below
are the key objectives of our sustainability trainings and staff improvements:

Types of Training/Development Activities

Staff training/development activities at Emeka and Sons™ Yam Flour Production Company, Inc. can be
employer- or employee initiated. In either case, has to be approved by the manager in charge of the
department or above with additional endorsement from the Human Resources Department or the Chief
Executive.

Employee-initiated training/development activities may include external programs that are organized by
external training institutes or by the company.

Employer-initiated programs may take the form of offering sponsorship for employees to attend
external programs or organizing such programs in-house.

Depending on the nature of needs and operational requirements, training/development programs may
also be implemented as job induction, job rotation, on-the-job coaching, counselling, individual or group
projects, and secondment.

Purpose

The main objective of training and development is to help develop key competencies that enable
individuals to perform current or future jobs successfully. In this regard, all training and development
programs organized by the Human Resources Department will be geared towards the following
objectives:

Strengthening the job skills/knowledge of employees;

Improving operational efficiency and productivity; and or

Developing the potential of employees for maximizing mutual benefit

Policy

The basic policy in administering and implementing any type of training or development is in accordance
with the strategic business objectives of the company. The Human Resources Department will work
closely with Heads of Division/Department in assessing areas that require training and development
support.

Checklist /Milestone

Business Name Availability Check: Completed

Business Incorporation: Completed

Opening of Corporate Bank Accounts: Completed

Opening Online Payment Platforms: Completed

Application and Obtaining Tax Payer’s ID: In Progress

Application for business license and permit: Completed

Purchase of Insurance for the Business: Completed

Conducting Feasibility Studies: Completed

Leasing, renovating and equipping our facility: Completed

Generating part of the startup capital from the founder: Completed

Applications for Loan from our Bankers: In Progress

Writing of Business Plan: Completed

Drafting of Employee’s Handbook: Completed

Drafting of Contract Documents: In Progress

Design of The Company’s Logo: Completed

Printing of Packaging and Promotional Materials: Completed

Recruitment of employees: In Progress

Purchase of software applications, furniture, office equipment, electronic appliances and facility facelift:
In progress

Creating Official Website for the Company: In Progress

Creating Awareness for the business (Business PR): In Progress

Health and Safety and Fire Safety Arrangement: In Progress

Establishing business relationship with banks, financial lending institutions, vendors and key players in
the industry: In Progress