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INTRODUCTION: In order to start a new business one should recognize that

he will have more freedom of choice in defining the nature of the business than if he
purchases an existing firms. It should be remembered that there are both pluses
and minuses in choosing this alternative. One should view a particular business in
terms of whether it will enable him achieve his personal objectives.

a) The entrepreneur should be fully conversant with the product line. It


is not enough that he knows the method of manufacture, he has to
know how to operate the machines, etc.
b) He should have adequate shop floor experience to guide the machine
operators in tool techniques or the die maker on the specific needs of
his press tool.
c) He should know how to ensure the stipulated quality of his products.
d) He should be well versed in taxation and other laws governing small
scale industries.
e) He should be willing to put up with polluted environment and small
inconveniences.
f) He should be willing to put up with bureaucratic regulation and insult,
and move with the wind.
g) He should know how to avail himself of the various benefits available
for the small scale industry.
h) He should possess the following qualities- experience, shrewdness,
resourcefulness and most important perseverance. There is no
substitute for hard work.
i) He should have the guts to withstand the polluted climate in which he
has to build his unit.
j) He should be familiar with the raw materials he requires, their
specifications, how to ensure their quality and where to get them at
reasonable prices.
k) He should know how to keep accounts, how to maintain stores, how to
prepare the balance sheet, etc.
l) He should have knowledge of marketing channels, distribution network
agency practices packaging.

As a medium entrepreneur, I am going to start a new business. My business


is 100 cow commercial dairy farms. The plan and prospectus of this
business has been described below:
THE PLAN AND
PROSPECTUS OF A 100
COW COMMERCIAL DAIRY
HERD
Following points should be considered for planning a commercial dairy
herd-

a) Arrange the fields, fences, building and lots as you think they should
be for most efficient dairy operation.
b) Indicate the number of dairy animals to be kept on farm.
c) Show the approximate number of acres in each field and pasture.
d) Show a three year crop rotation plan for each field.
e) Show all water ways, trees, fences and gates.
f) Locate the building sothat the prevailing winds will not carry flies,
odors to the dwelling from the barns.
g) Floor plans of building are not needed but number each and identify it
on the plan sheet.
h) Show the location of the public road serving the farm and the distance
to the nearest milk market.
i) Show all watering places for stock and source of the farm water supply.
j) Indicate north on your plan and the direction of prevailing winds.
k) Work out a prospectus for the dairy, estimate the annual production,
income, feed costs, labour, taxes, interests, depreciation etc.
Livestock:
Total number of cows 100
Cows in milk 60-65
Dry cows 35-40
Bullocks 16
heifer 30
Calves (male and female) 60

A) DURING 1ST YEAR :

Female calves under first year 28-30


Male calves under first year 28-30
N.B: Loss of calves has been taken into consideration

B) DURING 2ND YEAR :

Female calves under 1ST Year 28-30


Male calves under 1st year 28-30
Female calves under 2nd year 28
Male calves under 2nd year 28
28 male calves under two years 2,80000.00
sold@tk10000.00 per head

C) DURING 3RD YEAR :

Female calves under 1st year 28-30


Male calves under 1st year 28-30
Female calves under 2nd year 28
Male calves under 2nd year 28
28 male calves under under two years 4,20,000.00
sold@tk15000.00 per head
Felmale calves under 3 years 28

N.B : 10 Female calves less than three years are kept for replacement
and 18 sold @ tk 30000.00 per head:
5,40,000.00

10 culled cows sold @ tk 16,000.00 per head :


1,60,000.00

Thus total sale proceeds during third year farming :


11,20,000.00

D) From 4th year on : same as 3rd year-


11,20,000.00
CAPITAL EXPENDITURE :
Live stock :
a) 100 cows (shahiwal) @ TK 45,000.00 45,00,000.00
per head
N.B : It is better to buy cows 50% of
which are pregnant (early but
confirmed) heifers and the rest are in
1st year or 2nd lactation
b) 16 bullocks @ TK 35,000.00 per head 5,60,000.00
50,60,000.00
TOTAL

LAND : 40 acres of land for fodder production and 5 acres of land for
farmstead.

@ TK 3,37,500.00 Per acre =


1,35,00,000.00

But here we assume that we have land.


BUILDING :
A. Stanchion barn for feeding and milking 7,82,000.00
(for seventy cows doubled rowed
facing out system) 115 ft x 34 ft @ tk
200/ft2
B. Loafing barn (loose housing system for 3,50,000.00
30 dry cows and 40 heifers with padock
in front provided with feed and water
trough)
1. Unpaved and roofed (as bedded
area ) for 30 cows and 40 heifers 2,80,000.00
50ft2/head @ Tk 100/ft2
2. Paved and open area for paddock 80
ft2 (@ Tk 75/ft2)
C. Old calf shed for 30 calves (loose 1,57,500.00
housing system 35 ft2/head,
30x35=1050 ft2 divided up to 6 rooms,
each room 15ftx12ft. with unpaved
paddock in front ) @ Tk 150/ft2

D. Baby calf shed for 70 calves, 14 rooms: 2,31,000.00


110ft2(11x10), each for 5 calves having
individual stalls in room @ Tk 250/ft2
(i.e 110x14x150 tk)
E. Maternity barn for 10 cows 100 ftx10ft 2,00,000.00
(each maternity box stall size 10ftx10ft)
provided with feed and water trough in
each room. With paddock in front @ Tk
200/ft2
F. Isolation shed for 5 animals individual 64,000.00
box stalls each 8 ftx8ft i.e 64 ft2/head.
Thus 64x5=320 ft2 @ Tk 200/ft2.
G. Bullock shed for 16, 50 ftx12ft provided 90,000.00
with a paddock in front @ Tk 150/ft2
H. Feeds storage and feed mixing room 3,00,000.00
50ftx30ft=1500ft2 @ Tk 200/ft2
I. Hay barn 50ftx20ft=1000ft2 @ Tk 1,00,000.00
100/ft2
J. Milk distribution room, 100ft2 @ 20,000.00
Tk200/ft2
K. Milk utensils room, 10ftx10ft=100ft2 @ 20,000.00
Tk 200/ft2
L. General store : 20ftx15ft=300ft2 @Tk 60,000.00
200/ft2
M. Office room : Two attached sanitary 44,000.00
bathroom (10ftx10ft)= 100ft2 and
12ftx10ft=120ft2 @ Tk 200/ft2
N. Furniture 1,50,000.00
O. Residence 49,50,400.00
77,98,900.00
TOTAL
Dairy utensils, equipment and machineries:
A. Dairy utensils, equipment 1,50,000.00
B. Spray cooler if possible 1,70,000.00
C. Grass chopper, two, if manual tk 50,000.00 1,80,000.00
one, if power driven Tk 1,80,000.00 one
D. Milk van (one ) 1,80,000.00
E. Bullock cart (two) 30,000.00
F. Plough And Accessories 30,000.00
G. Tractor 12,00,000.00
19,40,000.00
TOTAL

Total for building and equipment (which will be considered for


calculation of depreciation cost)
Total for building, equipment and livestock (which will be considered
while calculating interest)

RECURRING EXPENDITURE
1. Feed cost :
A. Cultivation cost of growing 36,500 mounds 3,65,000.00
(100 mounds/d/150 adult animals), green
forage in 40 acres of land @ TK 10/mound (for
365 days)
B. Concentrate mixture (8 mounds/d) @ 18,98,000.00
TK650/mound/ (for 365 days)
C. Expenditure on calf feeding in one year 1,20,000.00
23,83,000.00
TOTAL

2. Personnel :
A. Manager (one ) @ TK 15,500.00 per month 1,86,000.00
in the scale of 11000.00
B. Byre overseer (one) @ 7,996.00/month 95,952.00
C. Milk recorder (one) @ TK3300.00/month 39,600.00
D. Milk man (five) @ tk2780.00 per month per 1,66,800.00
head
E. Cleaner and other attendants (08) @ TK 2,66,880.00
2780.00 per month per head
F. Driver for milk van (01) @ Tk 2780.00 per 33,360.00
month
G. Compounder (one) @ TK 3500.00 per month 42,000.00
TOTAL 8,28,592.00

3. Depreciation cost in equipment


a) On TK 19,40,000.00 @ 10% a) 1,94,000.00
b) In building TK 77,98,900.00 @ 2 % b) 1,55,978.00
4. Artificial insemination charge 30,000.00
5. Depreciation cost and appreciation value in
livestock has not been mentioned since
they balance each other
6. Interest on capital investment @ 10% on TK 13,50,000.00
1,35,00,000.00 (excluding the price of land)
7. Medicine and stationary 40,000.00
8. Miscellaneous 1,50,000.00

TOTAL RECURRING EXPENDITURE: 51,


31,570.00

INCOME
1. a) Sale proceeds from surplus and culled 11,20,000.00
animals
b. sale proceeds from fluid milk 480 liters/d 51,84,000.00
(8 lit./cow) price TK 45.00/Liter
2. Cowdung 1,20,000.00
64,24,000.00
TOTAL INCOME

NET PROFIT: (64,24,00.00 51,31,570.00) =


12,92,430.00

Conclusion: A successful entrepreneur should have the


knowledge of the strategies of business policy. He has to know the future
valuation of todays money. He should have vast knowledge about project
planning, project evaluation and project monitoring. He has also to know
about the breakeven point of a business that means he has to know the
overall accounting procedures of a business. Then a successful
entrepreneur may reach his specific goal.

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