why starting animal feed business plan?
before starting to talk about how to start animal feed business, let us first introduce animal feed and the animal feed market, what is animal feed? Animal feed is nothing but food consumed by livestock in the process of animal husbandry. The success of commercial livestock farming depends to a large extent on the consistent provision of the highest quality nutritious feed.
While U.S. farmers spend about $220 billion a year on animal feed, globally, the picture isn’t all that different in Europe, Central America, and Asia. In fact, a 2010 study by the United Nations Programme estimated that, By 2020, there will be more demand that will grow by 75%, making animal feed production a great business that you just need to plan correctly.
In India, animal feed production business is an ancillary service of the primary industry. Commercial production of high quality animal feed is a profitable business which gives the growth of the animal husbandry industry and population demanding more resources. As demand increases, the price of these feeds will rise steadily as well, benefiting business owners. Hence, the future prospects for the business look good as the demand for animal products is increasing.
so according to the above information, just thinking about how to start animal feed business plan on a small scale. Don’t worry about starting. We will guide you on all the details such as where to get training for your animal feed manufacturing business, what is a legal license and registration. Mandatory, how profitable is animal feed business, how much investment in animal feed business? and what equipment needed to start animal feed business. Of course, you can start your animal feed business plan anywhere: for example in USA, in India, in Nigeria, in South Africa, in Kenya, and in Philippines and so on.
how profitable is animal feed business?
how profitable is animal feed business? it is not fixed, generally, the annual profit of a small feed factory is directly linked to the annual production capacity. That is to say, the higher the annual output, the higher the annual profit. Usually, the annual output of a small feed factory can reach about 2,000 tons. If the profit in tons is calculated, then the profit in one year is about $100,000-$150,000, and this is just only for a small feed factory with 2000 tons annual production, if you invest in a larger factory, the profit of animal feed business is greatly prospect.
how much investment in animal feed business?
You need two types of capital to run any feed production business: fixed capital and working capital. Fixed capital is the one-time investment needed to manufacture your product. It is used for machinery, setting up plants and similar expenses. Working capital is used to pay salaries, overhead, raw materials, transportation, storage, etc.
If you want to invest in a larger animal feed business, you will need approximately $70-1.5 million to start this business. Purchasing quality mixers and machinery from suppliers requires most of the money. After that, you must continually supply the ingredients needed to make your food. Please note that the approximate figures above refer to the supply of machinery and materials and do not include the location of the plant or the area where the business is established. Factories can often be located in rural areas at low cost.
But if you just want to invest in a smaller animal feed business, the starting barrier for a small feed mill is still low compared to the investment costs of a large feed mill, which often run into the millions. Typical investment costs are around $20,000 to $100,000. Of course, the costs are only estimates, and the exact costs are subject to the actual situation.
what equipment needed to start animal feed business?
Small feed factories generally refer to the kind of production and processing factories that are similar to family workshops. The required site requirements are not high. You only need to purchase 1 pulverizer, 1 mixer, 1 pellet machine and 1 sealer, and then purchase some processing raw materials. Such as fish meal, corn, soybean, whey powder, rapeseed meal, etc., basically have the ability of feed production and processing. but if you invest in large feed factory, you need more equipment. you can check our list of feed mill machinery here.
how to start animal feed business plan?
1. Need to know the specific procedures for setting up a factory
this is the first step of how to start animal feed business plan, To open a small feed factory, you need to go to the local industrial and commercial bureau for industrial and commercial registration, then obtain a production and operation license, and apply for a tax registration certificate at the taxation department. For the related procedures of tax exemption of products, generally considering the protection of feed brands, it is recommended to go to the industrial and commercial department at the county or provincial level to apply for trademark registration.
2. Pay attention to the choice of venue
The location of the cattle feed business plan should be closest to the customer. Also, you need your business to be as close to suppliers as possible. The further away you are from your customers, the more you will have to pay for advertising and delivery. Generally, a small feed factory needs to have an independent factory area, the production workshop needs to meet the requirements of the production process, and the traffic should be convenient. Lighting, dust removal, ventilation and firefighting measures.
3. people and equipment
equipment is most importance in how to start animal feed business, equipment requirements are simple and efficient, with a focus on production performance that allows equipment manufacturers to select affordable parts and maintain easy-to-maintain service. Relatively speaking, the return on investment for feed mills is still relatively high. If we can continue to improve the quality of our products while working to build our team and do precise work in our local regional market, the outlook is still very promising.
4. Conduct thorough market research
Conduct market research on the livestock in your area and plan to provide your ideas to investors. Explain how unique your strategy is compared to other players. Choose the most attractive areas to market your plan and calculate your revenue projections to set your initial market share.
5. Supply and Raw Materials
It is critical to consider buying in bulk during the harvest season to get the highest prices for plant-based materials. Include this in your business plan. You will need to describe the sources of materials and possible suppliers after a market assessment.