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This GCSE coursework is about setting up a free-range egg unit in the Retford area.The aim of this project is to establish if it is feasible and cost effective to start up such a business and identify a suitable market for the product; taking into conside

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Introduction This GCSE coursework is about setting up a free-range egg unit in the Retford area. Free-range eggs are produced by hens that have access to nesting areas, scratching areas and outdoor exercise areas giving them opportunity to express their natural behaviour and instincts, by foraging for plants and insects etc. The aim of this project is to establish if it is feasible and cost effective to start up such a business and identify a suitable market for the product; taking into consideration legal requirements for animal welfare. In order to complete this project I will need to research the following areas:- * Cost of suitable agricultural land in Retford; establishing if it would be best to rent or purchase. * Type of housing including fixtures and fittings for egg laying, perching, egg collection and automated feeding system for the hens; including costs and planning limitations. * Market research of the product and its future, including public perceptions, supply and demand. * Existing and future legislative changes regarding egg production In order to investigate the above area I will use a variety of both primary and secondary research methods. I will research the cost of land in Retford by contacting local land agents and by making reference to the John Nix Farm Management Pocketbook in order to establish current values. I will research suitable hen housing costs etc using the internet especially the British Free-Range Egg Producers Association website. I will identify and contact suppliers by phone to establish set up and maintenance costs. I will also contact the local council to find out about planning requirements and limitations. I will gather information about public perception etc by designing and using a questionnaire; reporting my findings accordingly. I will find out about the existing and future legislative requirements for egg production from the internet including the British Free-Range Egg Producers Association website. Identifying a Gap in the Market My business idea is to establish a free-range egg producing unit which will meet the R.S.P.C.As freedom food standards and supply eggs direct to a wholesale packing company. ...read more.


Farm gate/local farmer's market sales are a possibility. My research shows that local people would prefer to purchase locally available foods and they would also be willing to pay on average up to 40p more than supermarket prices for free range eggs. However this would produce only small demand /sales figures and is not likely to be financially viable; although it could be considered in addition to selling direct to a packaging company. Doing both in not likely to be possible since selling directly to a packaging company would normally mean that the sales contract may prevent you selling to others. * Size of product sold:- A regular continuous supply of eggs to a wholesale packaging company would be needed. I aim to produce and supply 25 dozen eggs per bird ungraded (but on average medium sized eggs) x 4,000 birds; giving a total of 100,000 dozen eggs per year. Monthly this equates to approximately 8,300 eggs * Ensuring the product has competitive prices:- This would not really be a factor if sold directly to a packaging company. Farmer's market sales would need to be regularly checked for other competitive prices and if lowering prices to compete, costs would have to be cut elsewhere (e.g. searching for better deals of feed prices etc) in order to prevent a negative effect on profitability. My research shows that the majority of people would be prepared to pay up to 40p more per dozen for free-range eggs. Therefore by selling free-range eggs at 30p or less per dozen would further increase the numbers of people likely to purchase free-range. * Pricing Strategy:- There are many different pricing strategies but the two most applicable to my business are: Geographical pricing; this is where variations in price are occurs due to location. Locating my business close to the A1, the closest packaging company is at Mansfield approximately 20 miles away. ...read more.


Business Plan The final part of my coursework was to create a business plan. I included the theory of business plan and then I created my own using a template from Microsoft Office online Final Conclusion The strengths of my business are: * Relatively easy to set up * Relatively low initial investment * Relatively low risk * Responsive to legislative changes * Entering into a growth sector The weaknesses of my business are: * Possible reduction in production because of potential predatory threat * High breakeven point * Sole trader liable to debts * Reliant of initial investment from the bank To improve I would:- * Take steps to try and lower the break even point. For example, negotiate a higher price for the eggs from the packaging company in return for long term contract. * Seek alternative sources of initial investment; personal finances and financial support from family * Reduce the risk of debts by lowering initial borrowing as above point I think my business will be a success because my business will be entering a growth market very early on in the growth period. My financial predictions have been put together from a reliable source and my cash flow forecast is in the black with the initial four months of trading. Profit made can be put back into the business, providing more capital to aid expansion; through egg grading and packaging onsite which would in turn increase profitability. I can support this with already undertaken research findings and further research. Content Page Number Introduction 2 Identifying a Gap in the Market 3 Market Research 4 Farmer Interview and Analysis 5-6 Consumer Questionnaire 6-8 Consumer Questionnaire Results & Analysis 9-13 Location 14-16 Comparison of Potential Locations & Choice 17 Business Ownership 18-20 Marketing 21-22 Source of Finance 23-24 Financial Predictions 25-26 Business Costs 27 Profit and Loss / Break Even 28 Business Plan 29-36 Overall Evaluation and Conclusions 37-42 ?? ?? ?? ?? 2 ...read more.

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