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  • Writer's pictureDr. P.K. Shrivastava

What does a Dairy & Food business plan include?

Dairy & Food Business is certainly profitable, provided the entrepreneurs devote time on project planning. They must plan their business taking support of some Dairy & Food Business Consultant, who has hands on experience in planning/executing/ running/ monitoring and evaluating several projects.


While Planning for Dairy & Food Business (preparing "Detailed Project Report" for financial linkages for 5 or 7 years), we must decide the "Assumptions" first. Based on these assumptions the project should be planned. There after taking the background of the local Vs global scenario, current market trends, resource availability with entrepreneurs, the project need to be planned for 5 or 7 years taking all physical and financial parameters. A few points for physical & financial planning are given below -


Physical

  • What is the raw material volume we are planning and that will be sourced from whom?

  • What is product-wise is required by the market?

  • What our product list is (normal, fermented, condensed, analogues, indigenous sweets products etc.) ? Decide these as per the market needs.

  • What plant & machinery is needed to handle these products?

  • What level of automation is needed to run the project?

  • What all markets are to be captures & what are the needs?

  • What are the ratio we are going to allot for various categories of products?

  • Who would be our suppliers and consumers?

  • What would be number of animal heads to be reared (for animal farm project only)?

Financial

  • What is our Revenue?

  • What is our cost (include all possible costs- small or big)?

  • What is our recurring cost?What is our fixed costs?What is our gross margin?

  • What is our margin after interest, depreciation and tax (net margin)?

  • How does our cash-flow chart will look like?

  • When we would be achieving break-even?

  • Which year the project will show positive & how much?

  • What will be the % of margin (gross & net)?

  • Who are our debtors and creditors?

Financial needs

  • How much is our total capital investment need?

  • How much is our working capital need?

  • How much is needed to service our costs?

  • How much is needed to service our bank liabilities?

  • How much fund we would need to replace our plant & machinery, etc. (depreciation)?

  • How much is needed for servicing statutory needs (taxes, etc.)?

  • How much we need to share with joint investors?

Allocation of resources

  • Which investment we should do first & which in the last (prioritization of investment)?


Needless to say, if the Dairy & Food Business planning is done as per above points, one can be assured that the project would turn profitable (provided the implementer sticks to the guidelines, assumptions and standard operating processes indicated in the plan).  


Disclaimer: The article lists only indicative points, not exhaustive. The article is applicable for business plans only, not for the development plans. Since the planning is based on assumptions and current market scenarios, there could be further details needed for a sustainable plan, using real data. Entrepreneurs must take support of a professional consultant for planning for their business.

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