NAME: ADELANA ADESEWA MONISOLA

DEPARTMENT: NURSING

MATRIC NUMBER: 18/MHS02/013

A business plan for fish farming

The objective of this feasibility is to establish and educate potential entrepreneur/ investors on the

cost benefit analysis of investing into this project. The project is about establishing an inland cat

fish farm in the potential area of Ogun state, Nigeria which provides suitable environment.

The project would serve as facility to utilize the everyday resources in the form of feed for inland

fish farm that usually ends up as cultural waste. On the other hand, it would generate

employment for the local inhabitants and more over would possibly cause cash inflow as well.

Ultimately the investors would also smile to the bank at the end of the project.

A total sum of 10,310,000.00 (Ten Million Three Hundred and Ten Naira) is required for this

project, the project would break even at the end of the third production cycle which is about one

and half year into the project; at the end of the 3rd year the investors would have made a total

sum of 33,806,625.00 (Thirty Three Million Eight Hundred and Six Thousand Six Hundred and

Twenty-Five Naira) which is 30% return on investment.

This project is environmental friendly and the risk associated with it is low, however, the project

will be managed by seasoned practitioners in the industry with over 10 years of experience in the

field of Fish Farm production and Management, thus the risk would be mitigated towards
ensuring that the investors make above average returns on their investment.

Sponsorship

The project is sponsored by Senator Ibikunle Amosun, a senator representing Ogun State and also

an accountant. Senator Ibikunle Amosun is concerned about promoting farmers of the state.

Market Analysis

The Target Customer. The target customers for fish are:

• Households,

• Hotels,

• Restaurants and

• Pharmaceutical companies.

Initially the project will focus on local market, depending upon its successful operation it would

be market in other customer groups of the country at national level.

Marketing

The marketing of Fish follows the traditional channels of distribution. Generally, fish are

distributed in the market through middlemen and wholesalers. The role of middlemen and

wholesalers is to identify buyers and negotiate the price. Fish are transported to the urban market

and are sold to retailers. The time spent in getting fish from the farm to the retail shop varies

from area to area. Although collection and handling of fish has improved with the use of loader

vehicles, but it is an established fact that greater the distance between the farm and consumer,
more complicated will be marketing system including their collection, handling and

transportation to the middlemen or consumer as per perishable nature of the product. The trick in

marketing is availability of current market information of fish supply and demand, which will

determine the selling price.

The approach that will be adopted here will be that of forward integration the company will have

her own marketing team that will source for the market and ensure that the products are delivered

to the customers. With this method the bottle neck associated with middle men will be eliminated

and the cost price of the product to the final consumer will be lower compare to our competitors

in the market.

Market Opportunities

Following are some major opportunities for the proposed project:

• Diversified demand of the product from the food industry and medicine.

• Availability of abundant raw material.

• Lack of specialized producer.

• Established market and demand.

Market Threats.

The proposed project will be facing the following threat:

• Substitute’s availability.

• Price fluctuations and macroeconomic instability.

Site Location: Special consideration was taken in the identification and location of proposed

facility. It located at Ota in Ijako village a swamp area that is not prone to flooding. The site has

the following unique features that is conducive for fish farming

• Located in a swamp.

• The area is not subjected to flooding

• There is enough elevation in the area.

• The soil texture of the area is china clay soil which is the most preferred for fish farming.

• There is round the year adequate supply of water.

• There is good road network access leading to the farm location.

• The PH of the water was found to be very good and will be favorable for fish farming.

Technical Assistance

Human resources capabilities are key to the successful execution of this project, the project team

consists of people with relevant qualifications and experience in the field of management and

expertise is in fish farm. Detailed below are the list of the resources and their capabilities.

• Nurudeen Fashola – Managing Director

o Over 10 years of management experience in the field of Fish production.

o Masters in Business Administration (Specialization in Entrepreneurship Management)

o BTech in Animal Production and Health. • Kolade Folorunsho – Farm Manager.

o Over 7 years in the field of Fish production and Management.

o BSC in Fisheries and Aquaculture.

• About 3 Farm attendants with over 5 years of experience in fish farming production.

Project Timeline

The project will be completed within 7 months preferably between March to October because it

is during raining season.

Estimated Project Costs and Revenue

Total Capital Outlay: The project will require a total capital outlay of 10,310,000.00 (Ten

Million Three Hundred and Ten Thousand Naira) as detailed below.

Capital Investment Amount(N)

Land 1,000,000

Building 500,000

Equipment/Machinery 375,000

Furniture 30,000

Construction of 10 ponds 500,000

Total Capital Cost 2,405,000

Purchase of Fingerlings 750,000

Purchase of feeds 6,000,000

Medications 200,000

6 months staff salaries 300,000

Fuel/Transport/Maintenance 555,000

Cost of Sales expenses 100,000

Total Working Capital 7,905,000

Total Investment 10,310,000

The following assumptions were used to arrive at some of the figures above

• The working capital is for the production of 30,000 Tons of table six of fish with each pond

expected to produce 3,000 Tons.

• The staff salary consists of 20,000 Naira for 1 farm manager monthly and 3 farm attendants of

10,000 Naira monthly each.

• The total cost required for a pond is 695,000 Naira only.

Cash Flow

With the first seven months of operation this project requires the capital out lay to be released as
detailed in the cash flow analysis below. Thereafter the project will be buoyant after the sales of

the first production and it will be able to fund itself.

Inflow

Balance - - - - - - -

Investors Funds 2,445,000 1,895,000 1,670,000 1,670,000 1,670,000 650,000 150,000

Total Inflow 2,445,000 1,895,000 1,670,000 1,670,000 1,670,000 650,000 150,000

Out Flow

Start-up cost

Land 1,000,000 -

Building/infrastructure 500,000.00 -

Equipment/machinery 375,000.00

Furniture/fitting 30,000.00 -

Construction of 10 500,000.00 -

ponds

Sub-total 2,405,000.00 - - - - - -

Monthly operating

cost

Salaries 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00

Stock - 75,000.00

Feed - 1,000,00 1,500,000 1,500,000. 1,500,000 1,500,000 -

0.00 .00 00 .00 .00

Transportation - 40,000.00 50,000.00 50,000.00 50,000.00 30,000.00 -

Fuel - 15,000.00 20,000.00 20,00.00 20,000.00 20,000.00 -

Sales expenses - - - - - - 100,000.00

Sub-total 50,000.00 1,895,000 1,670,000 1,670,000 1,670,000 650,000.00 150,000.00

.00 .00 .00 .00

Total out flow 2,455,000 1,895,000 1,670,000 1,670,000 1,670,000 650,000.00 150,000.00

.00 .00 .00 .00 .00

Cash flow balance

- - - - - - -

Projected Profit and Loss for 3 Years.

Detailed below is the projected profit and loss account for 3years with the following

assumptions.

•A production cycle is for 6 months.

•The Income is based on the sales of 1 ton @ 400 Naira for the first and second production and

425 Naira and 450 Naira for 3rd, 4th and 5th, 6th respectively.

•A straight line method is used for the depreciation of the fixed asset. It is expected that a sum of

400,833.33 is depreciated at the end of each production.

•The sum of 38,062.5 is assumed for the bank charges – COT and VAT inclusive.
 1st 2nd 3rd 4th 5th 6th

production production production production production production

Cost of Stock 750,000 750,000 800,000 800,000 850,000 850,000

Cost of Feeding 6,000,000 6,000,000 6,250,000 6,250,000 6,500,000 6,500,000

Medication 200,000 200,000 210,000 210,000 220,000 220,000

Cost of Labour 300,000 300,000 350,000 350,000 400,000 400,000

/overhead

Fuel/Transport and 555,000 555,000 600,000 600,000 650,000 650,000

others

Cost of sales 100,000 100,000 100,000 100,000 100,000 100,000

Pond rehabilitations - 100,000 100,000 100,000 100,000 100,000

Total Cost of 7,905,000 8,005,000 8,410,000 8,410,000 8,820,000 8,820,000

Production

Income 12,000,000 12,000,000 12,750,000 12,750,000 13,500,000 13,500,000

Gross Profit 4,095,000 3,995,000 4,340,000 4,340,000 4,680,000 4,680,000

Less Depreciation 400,833.3 400,833.3 400,833.3 400,833.3 400,833.3 400,833.3

Less Bank Charges 38,065.5 38,065.5 38,065.5 38,065.5 38,065.5 38,065.5

Net Profit 3,656,104.17 3,556,104.17 3,901,104.17 3,901,104.17 4,241,104.17 4,241,104.17

Detailed below is the projected balance sheet of the project for the next 3 years showing the

status at the end of each production. The following can be deduced:

•At the end of the 3rd production the project will break even, that is, the investors would have

gotten back their investment.

•At the end of the 3rd year (6th Production) the investors would have made a total sum of

33,806,625.00 Naira which is 30% return on investment.

Conclusions

From the facts and figures presented above the following can be concluded and recommended.

• The project is viable and is environmentally friendly.

• The project demonstrates the fact that the local community will be engaged which shows

a sense of corporate social responsibility on the part of the promoters.

• The Financials are okay, as the breakeven point for the project is very good and it will give

value to the investors.

• The expected return on investment is 30%.

• The investor would start collecting back of their investment at the end of the first

production.

• The management teams that will be in charge of the project are well seasoned professionals in

the industry.