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Executive Summary
OZION LA PALM is a farm project located at... The company is seeking funding of
N .. for immediate cultivation of the land, building and purchase of Cassava
stems and other assets necessary for their Cassava cultivation and garri processing
operation.
During the Year 1 start-up phase, OZION LA PALM Farms will require a period of time to
raise and cultivate the products the company intends to market for sale. As soon as the
company has accumulated sufficient product to sell, OZION LA PALM Farms will establish a
customer base at local point of sale in Ebonyi state. The projected Profit and Loss for Year 2
and Year 3 for OZION LA PALM Farms reflects the company operating at the expected full
capacity. After the demand of this market has been adequately serviced, OZION LA PALM
Farms plans to consider expanding operations by including various other venues to market
their Garri including but not limited to obtaining shelf space at small local markets and
stores businesses within Ebonyi State and possibly expanding the product line to include
fufu processing.
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CHAPTER 1
1.0 Introduction
1.1 Objectives
The objective of OZION LA PALM Farms for this business plan is to obtain funding for
the following:
Leasing a land
Purchasing machinery and equipment.
Purchasing Cassava stems, herbicides etc
Purchasing fencing.
Hiring employees.
Advertising and marketing expenses.
Irrigation
1.2 Mission
The mission of OZION LA PALM Farms is to establish a Cassava cultivation and garri
processing business capable of servicing the local community by creating jobs and
producing healthy, high-quality products that customers will benefit from.
The key to success for OZION LA PALM Farms will be to produce healthy, high-quality
products with minimum waste while providing customers with service that is superior
to the competition.
1.4 Location:
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Location of the farm is . The choice of this location is because of its good
road network for easy market access and distribution ease.
The farm will provide employment in the first year for at least 5 persons. By five years at
full capacity it would employ about 20 persons. Contractors and suppliers will also
benefit. Nationally, it will reduce cash flight or loss in Forex and generate about N10million
per annum in revenue. The banks, insurance companies and Agricultural consulting firms
shall all be beneficiaries with the attendant tax going to the government. O ZION LA
PALM Farms shall also have helped the jobless local youths find a means of expressing
their entrepreneurial skill which will help reduce joblessness and discourage social vices.
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CHAPTER 2
O ZION LA PALM Farms is a business operation that will provide the local community and
beyond with Cassava end product like garri and fufu. The company will establish a
customer base at the local farmers' markets in Ebonyi and expand operations through
internet marketing and strategically placed adverts to other venues in Nigeria. The
company's products may be acquired at various local point-of-sale markets, they may be
picked-up at the business location or they may be freshly delivered to the customers in
other parts of Nigeria.
3. ACCOUNTANT : N 40,000
Bore 1 400,000
7 hole(pumping
machine and
installation)
Total 3,860,000
Total 580,000
CONSUMABLES
CHAPTER 3
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3.0 Market Analysis Summary
Cassava cultivation and garri processing is a big business that has generated individual
incomes of up to N20, 000,000 a year for a network of farmers, input suppliers and fufu
traders in Nigeria between 2013-2015. The presence of garri or fufu in daily diet has been
strongly associated with reduced risk for hunger for the middle income earners. Some
components of cassava are strongly antioxidants and function to modify the metabolic
activation and detoxification/disposition of carcinogens and even influence processes that
alter the effect of malnutrition especially Cassava specie laden with vitamin A. With all this
benefit no wonder that governments in the country are making efforts to Increasing its
production. An important observation, however, is that commercial cassava production
and garri processing is intensive and is at its peak through all seasons. Three factors
discourage intensive production during the wet season. One is the high incidence of pests
and diseases; another is that farm sites are located in low-lying areas that are flooded
during the rainy season; and thirdly, and most important, is the decline in cassava prices as
a result of increased supply to the urban markets from the rural areas during the wet
season. Some problems associated with the business include lack of access to land, credit
and appropriate technologies.
The target market for garri is very huge as almost every home and everyone takes this
product. However, more people are likely to take one colour of garri than the other
depending on their location. We intend to carry out a thorough market survey that will
allow us determine the quantity that would be needed to be processed for each colour
of garri.
Even though almost everyone takes garri in one form or the other, we are still required
to market our product so as to become a preferable brand to our customers, either
existing or potential. Our target market includes; households, schools, restaurants,
hotels, caterers, students, single males and females.
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3.2 Target Market Segment Strategy
O ZION LA PALM farm will establish a customer base at the various local farmers'
markets and proceed to solicit customers through internet marketing. The website will
include pictures of the farm and their products as well as a brief description of the
products and services offered by the company. The company's products may be
acquired at the various local point-of-sale markets, they may be picked-up at the
business location or they may be freshly delivered to the customers all over Nigeria.
CHAPTER 4
The company shall produce a total of line of 2 products, Garri and Cassava. Garri is the
principle line of business and the produced end product known as Garri shall be packaged
in four different packets that shall be differentiated by weight. The smallest packet shall be
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a 0.5 kg packet, the next one shall be a 1 kg packet, and the next packet shall be a 2 kg
packet and 5 kg packet of garri. The pricing of these products shall be as shown in the
revenues and cost estimates section which has been done on a per kilogram basis.
The competition for O ZION LA PALM farm consists of several rural farmers and
households. The lower yields and higher prices are factors to consider for the company
to compete in the market. O ZION LA PALM farm will have a competitive advantage
because cassava products like garri and fufu is easily affordable with the increasing
trend of garri and fufu consumers and the premium pricing for healthier, more
nutritious products. This will permit O ZION LA PALM farm to operate successfully in
their target area.
After O ZION LA PALM farm has accumulated sufficient product (garri) to sell, the
company will establish a customer base at local point of sale farmers' markets. After
this objective has been met, and the company adequately meets the demand within the
immediate local target market area, we intend to expand operations. It is our intention
to be the first company in the area to supply Vitamin A laden cassava garri to the
growing trend of consumers seeking healthier eating alternatives.
The companys strengths, weaknesses, Opportunities and threats are as shown in the table below;
Strengths Weaknesses
The companys main strength is the The business is a startup and the
concrete nature of its business future is always uncertain for most
proposition startup companies
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Opportunities Threats
The above strengths, weaknesses, opportunities and threats shall form part of the basis of
evaluating the business performance of the company in future.
CHAPTER 5
Discussed below is the key risks and issues that O ZION LA PALM FARMS may likely face.
The possible mitigation effort is also given.
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Financial Risk
In terms of the financial risk, this emanates from the fact that the owners contribution is
less compared to the funds required from potential investors. Hence, the gearing ratio is
therefore not as desirable.
Solution: To mitigate this risk, the project members shall strive to reinvest at least 60% of
the profits into the business so as to improve the gearing ratio. This business will strive for
a good return on investment. In the first year of operation, employee costs will be
minimized so as to ensure that this risk is minimized.
Market Risk
There is a potential market risk in terms of competition from local garri farmers and
suppliers we will have to compete for market share with these local businesses.
Solution: To mitigate this, the business will focus on a specific market segment and strive
to understand the customers better than the competitors.
The project will employ technological innovation with skilled, knowledgeable and
competent staff in significant areas such as business management, financial management,
costing, entrepreneurship and technical aspects relating to garri processing and farm
management.
Solution: It will be important for the owners, management and employees to be well
trained. Moreover, a loss of key personnel is likely to affect the business adversely.
Solution: To mitigate this risk, the business will promote and cultivate a culture of sharing
knowledge and skills amongst the members and employees. The business will approach
agencies such as SMEDAN for business training sessions. The business will also be part of
agriculture related trainings.
Economic Risk
Another risk facing O ZION LA PALM farms is an economic risk. On a global level, there
is currently an economic recession, as such the unemployment rate has gone up meaning
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that few people have buying power and the fact that consumers have tighter budgets as
compared to other excellent financial years. Furthermore, an economic risk may emanate
from the high electricity charges. This may ultimately outlook high inflation that renders
expenditure items and other costs to be expensive. The depreciating naira is also a factor to
consider as it also affects prices of procurements such as herbicides for the cassava farm
and other essentials. This risk is external and out of the control of the business.
Solution: There will be likelihood to implement energy saving measures such as the use of
energy saving bulbs, inverters, Solar panels etc. O ZION LA PALM FARMS will look into
alternative energy sources such as solar power and inverters. The business will strive not to
pass on the costs of production to consumers as it understands that affordability is one of
the key success factors in the industry.
Disease Outbreaks
There is a risk of outbreak of diseases that could adversely affect cassava farm even weeds
attacks too.
Solution: Personnel will ensure that the farm is well monitored for weds and that diseases
and make sure the farm is secured from other eventual security risks.
The competitive edge for O ZION LA PALM farms is the fact that it is Far from the city
center, the cost of labor is much cheaper, so the cost of production could be reduced.
The various competing farms in the area are all traditionally run operations that utilize
crude forms of farming. The organization will run automated operations and unlike
other competitors.
The companys main line of business shall be processing and packaging of Garri. As
soon as the business has grown, the company will begin to establish a customer base at
local point of sale farmers' markets. After this objective has been met, and the company
sufficiently meets the demand within the immediate local target market area and
beyond, we intend to expand operations. Expansion of the operations may include
offering the company's products at local stores markets, soliciting local restaurants and
eating establishments, approaching various local businesses to consider offering them
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their products at their outings and functions and targeting an expanded market area
through internet sales of the company's products.
We will build and establish a customer base with point of sale sites at various farmers'
markets throughout the local area. In an effort to insure customers are satisfied with
the freshness of their products, the business offers customers the option to have their
purchase freshly delivered or they may pick up their purchase directly from the
business location if they do not wish to carry their purchase with them from the point
of sale locations. They will also have a website for easier access into other markets in
Nigeria.
CHAPTER 6
3. . Equipment 3,860,000
Total 9,376,500
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4 4 7482675 168688.38 131275 37413.38 7351400
334751.3
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26 26 4594625 154248.13 131275 22973.13 4463350
240233.3
145715.3
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49 49 1575300 139151.5 131275 7876.5 1444025
1,802,983 51197.28
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CHAPTER 7
7.1 FINANCIALS
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INTEREST&TAXES
LOAN INTEREST 429,269.3 334,751.3 240,233.3
PROFITABILITY ANALYSIS
S/N Year 1
1. Gross Margin
Gross income 5,020,000
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Sales 9,000,000
55.8%
2. NET PROFIT Margin
Net income 3,344,584.56
Sales 9,000,000
37.2%
3. Return on INVESTMENT
Net Income 3,344,584.56
Total Assets 9,376,500
35.7%
CHAPTER 8
CONCLUSION
From the analysis, the business is viable and will break even in the first year if given the
necessary attention and energy.
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