BUSINESS PLAN

ON
RICE MILLING BUSINESS

PRESENTED TO

NIRSAL MICROFINANCE BANK FOR

AGSMEIS LOAN

BY
AUWALU AYUBA SAID

Address: K/Nassarawa Qtrs Madugu Street

08098147060

September, 2020

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Table of Contents
CHAPTER ONE......................................................................................................3
1.0 EXECUTIVE SUMMARY...............................................................................3
CHAPTER TWO.....................................................................................................5
2.2 OWNERSHIP STRUCTURE...............................................................................5
2.3 Our Business Structure..................................................................................5
2.4 Our Vision Statement....................................................................................5
2.5 Our Mission Statement..................................................................................5
2.6 THE PRODUCTS AND SERVICES......................................................................5
2.10 SWOT ANALYSIS......................................................................................6
CHAPTER THREE..................................................................................................8
3.0 MARKET ANALYSIS.........................................................................................8
3.1 Target Market Segment Strategy..................................................................8
3.2 Marketing Strategy........................................................................................8
CHAPTER FOUR..................................................................................................10
4.0 Investment Cost...........................................................................................10
4.1.1 Source of Funds............................................................................................
4.2 REPAYMENTS SCHEDULES...........................................................................11
CHAPTER FIVE....................................................................................................11
5.0 FINANCIALS..............................................................................................11
5.1 Underlying Financial Assumptions...........................................................11
5.2 RISK MATRIX................................................................................................12
5.3 Financial Projections................................................................................13
5.4 Conclusion...................................................................................................15

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 CHAPTER ONE

1.0 EXECUTIVE SUMMARY

The agricultural industry, of which rice business are division of, is no doubt
among the leading economic industries all over the world; it is the industry
that produces rice etc for the nation. The material rate of fortune derivable in
the venture is the key motivator behind people’s involvement in the scheme.

AUWAL RICE FARMING is in rice milling business and operated at K/Nassarawa

Kano, Nigeria. Involved in farming business since before its incorporation.

AUWAL MIKAIL is proud of raising higher quality and nutritious rice in and
around KANO especially for Hotels, Restaurants, and other eateries. It is in the
plan of the promoters to expand the business to reach all the parts of Nigeria.
The Farm products such as, and farming speak for themselves and serves as
self-marketing tools for the farm.

The farm has a vision of becoming a major producer of the best tasting and
finest quality and affordable rice not only in KANO STATE, Jigawa & Katsina
States, but in all parts of Nigeria and neighbouring countries. The farm has
achieved a healthy profit for its owners and provides a rewarding work
environment for its employees. AUWAL RICE MILLING has been recognized and
dominated the large share in the farming market; this is due to the quality of
the product as well as the affordability in terms of price of the product. This
makes the Farm to have goodwill over its competitors {offering satisfactory
services at a competitive price}.
We have done our detailed market research and feasibility studies. It has
shown that, still there is high demand of our farms’ product; hence, the
company plans to take full advantage of its business by expanding its
production with increase in the capital for its activities.

We plan to leverage on the vast opportunities available in the agriculture

industry, to contribute our quota in growing the Nigeria’s economy, in national
food production, and also to supply from Nigeria to other countries and above
all to make profit. At AUWAL RICE MILLING our customer’s best interest will
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always come first, and everything we do will be guided by our values and
professional ethics. We will ensure that we hold ourselves accountable to the
highest standards by meeting our client’s needs precisely and completely.

The purpose of this business plan is to source funding of LOAN AMOUNT

THREE MILLION NAIRA ONLY (3,000,000) to improve and expand our well
standard rice farming business.

Repayment of loan will be through cash flow of the business on a scheduled

basis.

Seven global general & supply is planning to be well-positioned to become one

of the leading farms in Nigeria, that is why we are able to source for the best
hands and machines to run the farm with, We have put process and strategies
in place that will help us employ best practices when it comes to farming
processes as required by the regulating bodies in Nigeria. This document will
demonstrate the need for such. It will serve as a road map that will set the
course for further planning and for the implementation process. Our strategy
will be based on the objectives of getting reasonable profit and to ensure
customers satisfaction.

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 CHAPTER TWO

2.2 OWNERSHIP STRUCTURE

AUWAL AYUBA SAID own and run by himself-100%.

2.3 Our Business Structure

AUWAL AYUBA SAID has planned to hire qualified and competent hands to
occupy the following positions after assessing the fund;

 General Farm Manager

 Farm consultant

 Sales and Marketing Executive

 Farm attendants

 Security personnel

2.4 Our Vision Statement

Vision is to become one of the leading rice farming brands not just in the
Nigeria but also on the global stage.

2.5 Our Mission Statement

AUWAL AYUBA SAID is a registered farm that is committed to raising rice for
both Nigeria’s’ market and the global market. We want our rice to flood the
nooks and crannies of Nigeria and other countries of the world.

2.6 THE PRODUCTS AND SERVICES

Specifically, we produces a wide range of livestock products some of which are:

1. Parboiled rice

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2.10 SWOT ANALYSIS

Below we evaluate the strengths, weaknesses, opportunities, and threats that

affect the business of AUWAL AYUBA SAID.

Strength:

 Our strength as a rice farming company is the fact that we have healthy
relationships with loads of major players (agriculture merchants) in the
farm; both suppliers of rice within and outside of Nigeria.

 We have some of the latest rice farming, tools and equipment that will
help us raise and produce healthy rice in commercial quantities with less
stress. Aside from our relationship (network) and equipment, we can
confidently boast that we have some the most experienced hands in our
payroll.

 Our lower cost of service policy leads us to higher turnover and higher
profits. A low-cost leader can undercut rivals on price.
 Our strong management help the farm reach its potential by utilizing
strengths and eliminating weaknesses.

Weakness:

 Mature markets are competitive. In order for us to grow in a mature

market, we have to increase market share, which is difficult and
expensive.
 Intense competition lowers our rice farming business profits, because
competitors can entice consumers away with superior products.

Opportunity:

 Fragmented markets provide many opportunities to expand and

increase market share. Fragmented markets have many small
competitive who lack the cost advantages of larger companies.

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  Greater innovation can help the farm to produce unique products and
services that meet customer’s needs.
 We know that there are loads of households, and businesses such as
hotels and fast food restaurants that can’t do without daily supply of
fresh water fish. We are well positioned to take advantage of this
opportunity

Threats

Some of the threats and challenges that we are likely going to face when we
reinstate our own rice farming company are global economic downturn that
can impact negatively on household spending, bad weather cum natural
disasters (draughts, epidemics), unfavorable government policies and the
arrival of a competitor within same location. There is hardly anything you can
do as regards this threats and challenges other than to be optimistic that
things will continue to work for your good.

2.11 PESTEL ANALYSIS

The success of a business strategy is hinged to a significant extent upon the

Political, Economic, Social, Technological, Environmental and Legal trends in
the business’s operating environment. In view of this, this segment of the
business plan will x-ray the global and local business environment around the
Company, and by so doing, establish what inherent opportunities or threats
exist for Legend Foam Industry Limited.

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 CHAPTER THREE

3.0 MARKET ANALYSIS

KEYS TO SUCCESS
 Good quality products of competitive prices
 Excellent customer service that will promote customer loyalty.
 We provide selling points within the town, supply shopping malls,
restaurants and hotels. Receive order from individuals and groups.
 Supply of our products to schools as part of current government plan in
feeding of schools.

3.1Target Market Segment Strategy

AUWAL RICE MILLING is targeting households, Restaurants, Hotels, Eateries,

Schools and Retailers in and around KANO. Approximately 85 percent of the
population resides in this category. We will target quality and price-conscious
consumers looking for our products. We also targeted local areas, joints and
bar establishments interested in differentiating ourselves from other
competition through higher rice products at affordable price.

3.2 Marketing Strategy

The marketing strategy is based on the objectives of the company, which is to

get reasonable profit and to ensure customers continue doing business with us
in the future. Emphasis will be placed on friendly and comfortable services that
will not only meet, but exceed customers’ expectations. This makes our farm
to have goodwill over its competitors of offering satisfactory services at a
competitive price.

PRODUCT PRICE

S/N PRODUCT NAME COST PRICE SALES MONTHLY SALES CAPACITY

PRICE

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 1 PARBOILED RICE 8,500 15,000 50

Promotional Strategies:
At the initial stage, we shall expand the market share with relatively low price
compared with the other competitors. This shall by no means negatively affect
the quality of our services or products.
In addition to the above and to improve our market share, we shall apply the
use of:
 Discount sales
 Special consideration on volume purchase and
 Employ the services of consulting firm for more efficiency and value
addition

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 CHAPTER FOUR

4.0 Investment Cost

EQUIPMENT NEEDED

S/ ITEM QAUNTITY UNIT PRICE LINE TOTAL

N

1 Parboiled Rice 25 30,000 750,000

2 Destoner Machine 1 850,000 850,000

3 Rice processing machine 1 200,000 200,000

4 Sewing Rice machine 1 150,000 150,000

Sub Total 1950000

S/ ITEM QAUNTITY UNIT PRICE LINE TOTAL

N

1 RENT 1 350,000 350,000

2 STAFF & Salaries 700,000 700,000

Sub Total 1050000

GRANT TOTAL N 3,000,000

4.2 REPAYMENTS SCHEDULES

5% of the facility together with the principal amount will be repaid (using
reducing balance method) for the facility annually over a period of 6 years
assuming 10 months moratorium.

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 CHAPTER FIVE

5.0 FINANCIALS

5.1 Underlying Financial Assumptions

 Rate of Inflation - 10%

 The exchange rate used is based on the current exchange rate prevailing
on the date of our computation.
 5% of the facility will be repaid for the facility annually over a period of 6
years assuming 10 month moratorium, after deduction of 4%
administrative cost.
 In the first year of operation after of the obtaining the loan, we expect
an increase turnover of at least 4% from the preceding year due to the
new machineries and equipment to be acquired. With improvement in
efficiency and change in the way of doing our business (paradigm shift)
in the subsequent years, we envisaged a progressive increase in our
turnover by 5%. Both the profit before tax and after tax are also
projected to increase correspondingly as the percentage increases in the
turnover.

5.2 RISK MATRIX

The following are the likely risk factor in the business

1. Water Shortage
2. Outbreak of diseases
3. Government policy

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5.3 Financial Projections

5.3.1. 6 years Financial Projection

The table below presents our financial projections given a highlight of expected
operating result for the period of the facility.
Table: Projected Cash Flow Statement

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BALANCE SHEET

CASH FLOW

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SUMMARY

6.0 CONCLUSION

From the financial projections shown in Table above, the business shows a
promising future in view of the projected annual turnover anticipated to be
generated after obtaining the loan, we sincerely believe that the business is very
viable and will be able to pay back the loan with the interest charges as
scheduled.

From the financial projection above, AUWAL RICE MILLING is a very promising
business venture that is considered to be commercially viable. It is therefore
recommended for financing as it will be able to make higher rate of return within
the appropriate tenor.

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