Whenever individuals belonging to rural areas think of turning into entrepreneurs they look towards the city. In fact, every year several individuals are migrating towards the cities for better job and business opportunities owing to the lack of enough earning sources within the rural areas.
However, business opportunities need to be seen even in the unlikely situations and to be created. A farmland in the rural areas can also be converted into a place for a thriving business by just thinking about possible business ventures ideal for the location.
A poultry farm is one such profitable business idea that can be carried out on spare farm land or in a rural district or it can even be started within the city if individuals have enough vacant space to construct and run a poultry farm, because in cities space is always a constraint.
Poultry Farming Business
Poultry farming is defined as the raising of birds domestically or commercially, primarily for meat and eggs but sometimes also for feathers. Some of the birds raised at a poultry farm include chickens, turkeys, ducks, etc.
The poultry farming business is quite rewarding once you are aware of the essentials about the business.
The most basic essential factor to consider is that the poultry business, especially chicken farming, consists of two chief types, namely-
Broilers are when poultry (chiefly chicken, but other birds too) are raised for their meat and layers is when the birds are raised for their eggs. Thus, while venturing into the poultry business, first the type of poultry farm to be started must be decided upon. Then, the process to actually start the particular poultry can be initiated.
Owing to the lucrative nature and popularity of a poultry farm, rural entrepreneurs are keen to start the business. Additionally banks too are willing to provide loans to entrepreneurs for the same. The Government too supports and encourages a poultry business because-
- It provides employment opportunities in backward areas
- It improves the production of poultry products which have a ready market
- It provides quality meat that is made in hygienic conditions to the consumers
- It helps improve sale of poultry meat and products in urban areas by supporting poultry dressing and marketing outlets
- With the availability of loan and funding opportunities, poultry improves productivity and facilitates rearing of other poultry species like quails, ducks, turkeys, which have a good potential
- Owing to the demand for poultry products around the world, it provides an opportunity to export the produce and thus indirectly the poultry business contributes towards the economic development of the country
Due to the support from Government agencies and banks, the poultry business is highly recommended especially for aspiring entrepreneurs, farmers and youth looking for business opportunities in the rural areas. But, starting a business requires funding from banks (or non banking financial institutions or NBFCs) and to acquire funding a well-planned and thorough application needs to be submitted. However, the application process for a poultry farm loan requires certain fundamentals to be covered and information to be provided.
Essential Factors To Consider While Applying For A Poultry Farm Loan
There are a lot of things to keep in mind when planning to start a poultry farm and even when applying for a loan for the farm.
Requirements For A Poultry Farm
A poultry farm needs a number of equipment and facilities for rearing the birds which need to be taken into account, especially when deciding on the capital to be invested and while making a loan application.
A poultry farm needs space or housing for the birds. The location for the housing facility for the birds is critical as it must have access to basic amenities such as water, and food and also other essential facilities such as availability of labour and open spaces for the birds to move around in. Such a space is usually available in the outskirts of the city or in farmyards and rural areas. An estimation of the exact space required must be made by the aspiring poultry farmers. Apart from the space a list of the equipment required on the farm must be kept handy too. A basic list of essential equipment required includes-
- Lighting System
- Cages and coops
- Waste disposal
Apart from this, the housing facility for the birds is also an important factor and expense of the same needs to be considered. The type of housing facility too varies, ranging from an extensive housing system, semi intensive system, deep litter system, battery caged housing system and wired or slatted housing system, all of which require different equipment and thus the cost for the same also vary accordingly.
These essentials need to be listed on paper too because while applying for a loan for the poultry farm the expenses for these needed to be taken into account. It has been roughly estimated that for a small scale poultry farm the basic capital investment required is approximately between thirty five thousand rupees to one lakh five thousand rupees. A slightly bigger farm can require capital investment upto one lakh forty thousand whereas a large scale poultry farm business can require upto seven lakh rupees as investment.
The next vital step for a poultry business loan application is to frame a business plan, once the space requirements, location and list of equipment required for the business is decided and kept ready. A business plan is like a roadmap for the business where the objectives and goals of the business are chalked out and discussed at length. The plan even mentions in detail how the business,(the poultry business in this case), will be conducted. The business plan even mentions the proposed name of the poultry farm, the type of business entity proposed for the business, the location of the farm (once it has been finalized) along with information regarding the likely number of employees that will be employed for the business, how the business will be carried out on a day to day basis and the vision for the business. The marketing plan for the business and study of the existing competition, along with their marketing strategies must also be mentioned in the business plan. Since the business plan gives a detailed idea of the business, it helps during application of a business loan. Officials become familiar with the business and the vision as well as goal of the entrepreneur and thus can decide on whether to approve the loan for starting the poultry business or not. Therefore, a business plan is a vital document that needs to be prepared carefully and submitted while applying for a loan for the business.
Breakdown Of Capital Required
While applying for a loan it is important to mention a complete breakdown of the capital required for the business. This must include the amount required for purchasing (or renting) space for business, as well as funding required for purchase of the birds as well as the equipment. Day to day expenses such as wages, bills like electricity, maintenance and repair, etc. must be included in the estimation of the funding required. The cost for future expansion or upgradation of the business must be also included in the capital requirement sheet.
Once the capital required for immediate and future needs of the business are ascertained, the actual loan application process takes place. Even though banks are likely to favor and approve loans for starting a poultry business, the entrepreneur must submit all the documents required while applying for a loan along with the detailed business plan.
The future plans and goals of the business must also be considered. Loan approving officers are likely to be more impressed with a poultry business plan and loan application that mentions bthe future aspirations and resolutions for the business because it displays skills of thinking things ahead and also gives an idea of the confidence and vision of the entrepreneur regarding the business and its future outcome.
Additionally, the loan application document can even mention the registrations and licences required for the business, such as FSSAI, GST registration, etc and the likely expenses to be incurred for each of these registrations
Along with these essentials the loan documents and paperwork must also be kept ready. The basic list of documents required while applying for a loan include-
- Bankable project report
- KYC documents such as either a PAN card or Aadhar Card
- Address proof where in case of owned property it could be Index-II.
In case of rental property it could be light bill & rent agreement
- Quotation of machinery, equipment, furniture & other assets to be purchased
- 2 passport size photographs of applicant
- ITR/ form 16A- mandatory for existing business
- 6 months bank statement
- Shop Act/ gram panchayat NOC
- Business specific license such as FSSAI for poultry business.
If the process of applying for the loan seems overwhelming, assistance can be sought at deAsra for loan application guidance.