When planning to farm with goats, many aspects have to be considered. These considerations include housing, feed, and animal health. These crucial aspects will be discussed in this series in due course.

The first step in any successful farming enterprise, is setting up a business plan. This will allow you to work efficiently and goal orientated, and will grant you access to development loans.

What is a business plan?

A business plan is a document of how a business owner, manager or entrepreneur intends to organise a new business and establish activities for the venture to succeed.

Businesses need plans to optimise growth and development according to priorities. A business plan is not only to look for financial assistance or for initiating a business start-up, but it is an evolving working document that should be reviewed regularly and adopted to circumstances as and when the internal and external environments change.

To raise funds for a new business venture or to raise additional capital, your document must meet the requirements of a funding institution or sponsor.

A good business plan involves research on the external and internal business environment like competitors, suppliers, consumers, et cetera, which can be translated into a detailed action plan showing the areas of competitive advantage and how you will combat problems. You can use the business plan to identify opportunities, analyse the life cycle of the business and each activity in the business, and plan for capital requirements.

Common mistakes in the drafting of business plans

Cash flow

Most prospective entrepreneurs focus mainly on the infrastructure that is required and ignore the cash flow which is critical to the daily operations of the business. Cash flow assists in managing your financial resources, that is debtors and creditors control.

Vague business plans

Prospective entrepreneurs or writers of business plans often wrongly assume that the reader/funding institution/investor knows what the business venture is all about. Therefore, it is important to provide as much detail as possible and elaborate wherever necessary to clarify the needs of the business.

Unrealistic assumptions

Almost all writers of business plans assume that the business will succeed, hence they make unrealistic assumptions. It is advisable to benchmark against existing or similar businesses in the industry for acceptable standards. The goals of the business must be realistic and achievable. Rather start small and then expand.

Risks

Many business plans ignore the risks or do not make provision for the risks. It is critical that the business plan should include all risks and provide information on how some of these risks can be mitigated.

Competition

Many prospective entrepreneurs fail to incorporate information on competitors, either through their lack of knowledge of them or they are not aware of the significance of competitors to their business. It is, therefore, imperative, as a new or existing business, that you are aware of the competition and that you accentuate your competitive advantages in your business plan.

Suppliers

Suppliers play a critical role in your business. It is important to know who and where your suppliers are as they contribute to the effective and efficient running of your business. Inconsistent and lacking inputs from suppliers will impact negatively on production and could result in non-delivery of products to the market. Hence building and strengthening relationships with your suppliers contribute to the long-term sustainability of your business.

Recommended production systems size

The size of your goat farming business will depend on a number of variables, the amounts of capital available being the main determining factor. You need to keep the carrying capacity of the natural vegetation in mind as well. The carrying capacity differs greatly between the climatic regions. It is important that you do not exceed the carrying capacity of the land that is available to you. This will lead to increased feeding costs, and it is very expensive to regenerate overgrazed pastures.

Keeping this in mind, there is also a minimum number of goats that you can keep in order for the business to remain viable. In a region where there are a lot of competitors, a farmer may need to lower his profit margins to stay within the competitive price range. Lower profit margins necessitate higher volumes for the business to remain profitable.

Farmers need to attain the correct balance between the minimum number of goats that they can keep while remaining profitable, and the maximum number of goats that they can afford to keep.

The points below refer to aspects that prospective farmers need to keep in mind with specific reference to goat farming.

Access to land

Having access to adequate grazing is crucial to keep feeding costs low. Goats are also notorious for breaking through fences, so robust barriers need to be in place in order to keep the goats in and predators out. Apart from the threat of predators, goats are also easy targets for stock theft. Having land that has water readily available is a great benefit as it will eliminate the costs of boreholes or water pipelines.

Housing and other equipment needs

Good quality housing is expensive, but in the long run it saves money. Goats can be kept out of the elements which will lead to a healthier herd. Secure housing will also help to protect your herd from predators and thieves. The housing must have a dry floor and proper ventilation. Feed and water troughs are essential equipment that you will need to budget for. Apart from this, you will also need handling facilities such as holding pens, a crush, and a loading ramp to ease working with the animals.

Breeding stock

The goal is to buy initial breeding stock that can be mated to produce more goats. Buying from a reputable breeder might be more expensive, but it ensures good genetic material that can result in better returns on initial investment in the long run. It is recommended to consult with a local expert to get the best value for money expert to get the best value for money when buying animals that you intend to breed. You will also need to consider which goat breed will best suit the purpose that you want to keep them for. Indigenous goats and Boer goats are normally kept for meat production while Angora goats are used for mohair production. It is also important to ensure that the goat breed of your choice is well suited to the environmental conditions.

Feeding costs

Even if you have access to enough land that can provide the goats with adequate grazing, you will still need to buy feed to supplement their nutritional needs and ensure good growth and weight gain. This can be expensive. Farmers generally tend to calculate how much feed they will need in a production cycle and then buy in bulk to cut costs and ensure regular availability.

Once you have done the research and compiled a strategy that will enable you to start and successfully grow a goat farming business, you can move on to the implementation of your ideas. For more information, contact your local agricultural offices or ask for advice from experts in the industry in your area.

Sources:

https://bizbolts.co.za/startinggoat-farming-business-plan-pdf/22