Agriculture farm
Investment:
One time investment:
Cows:10 4,50,000 (45000 each cow x 10)
Buffalos :5 2,00,000
Grass area for lease : 5000 per yr for 3 acres
Water supply: 30,000 – boring + pipe lines
Milk machine: 10,000
Tractor : 1,00,000
Electric line +shed cost: 10,000
Msc(milk cans, buckets, etc) 5000
8,00,000/-
Montly cost:
Extra eating material for cows: 2000 - Thavudu etc
Employees Working at shed: 6000 – (3 x 2000 each +yearly min profits share)
Electricity bill (bore water+lights) 1000
Cows insurance cost: 1500 -(15 x 100/- per month)
Petrol : 1000
Msc: 1000
13,000
Monthly income:
Each cow gives 15 l average : 3375/--(15l x 15 =225 x 15 /- = 3375 /-)per day
101250 - (3375 x 30 =101250) per month
101250 – 20,000(monthly expenses) = 80,000/- per month
Break even month:
10th month would be our break even month – 80,000 x10 = 8,00,000 /-
Cows takes 9 months to deliver and get eligible for giving birth after 24 months of its age. So after 1 yr we can expect atleast 2 calves (baby cows). But they don’t give milk for 2 yrs.
Cows starts giving milk only after given birth to atleast one calf. So we need to buy cows which give milk(means which has given birth to atleast one baby).
Cows will not produce milk when they are pregnant.
So, if calves are there, we need to feed them for 2 yrs (need to investment here)
If cows are pregnant. Income will decrease as they don’t give milk for 9 months.
After 1 year:
Think that per month we are getting 80,000/- for whole year – 80,000 x 12 = 9,60,000.
Think that we got two calves – 2 ( 2 cows didn’t given milk for 9 months) – 9,60,000 – 1,21,500(15 l x 2 cows = 30 l per day = 30 x 15/- = 450/- per day=450 x30 = 13500 x 9 months= 121500) =8,40,000
Think that two are currently pregnant – they don’t give milk for next 9 months = 8,40,000 – 1,21,500 =7,20,000/-
S0, in first yr we get only 7,00,000 /-.
In 3rd and 4th yrs:
These 4 calves start giving milk, so we can expect 10,00,000/- per annum as income, even though we follow above structure of having 2 calfs and 2 pergnant cows.
Share holder’s share:
Lets think we are giving share to only two persons who are really working hard at farm.
1st yr:
1. name of the person - 15% x 7,00,000=1,00,000 – there will be no profits in first yr , but we need to give.
2. name of the person- 15% x 7,00,000= 1,00,000.
So, we get only 5,00,000/- in first year.
As first yr is not a profit yr for us. We can decrease first yr share percentage to only 9%. Or we can fix the amount in first yr as 50,000/- each.
2nd yr:
1. name of the person - 15% x 7,00,000=1,00,000 – there will be no profits in first yr , but we need to give.
2. name of the person- 15% x 7,00,000= 1,00,000.
Still we get only 5,00,000/- - this yr we are into profit of 2,00,000.
3rd yr:
In 3rd year, we have choice like, we can either increase our cows or sell if we can’t manage more than 15. if we sell two cows we get around 1,00,000/- more. If we buy two more cows, thru’ milk we get 1,00,000/- profit.
If the plan is to put 50 or 100 cows in second yr:
Think that we need one person for 10 cows (as we use milk machines).
we need minimum 5 persons, who need to concentrate fully on this work. We need to pay share percentage for 2 persons and better to give partnership to one person as we need somebody to feel that it is his business and 2 on monthly wage.
Income we get on 50 cows per yr –
50x15l = 750l x 15/- = 11250 x30 =3,37,500 per month.
Per annum: 3,37,500 x 12 = 40,50,000
Think that we will not get milk from 5 cows.
5x 15l= 75l x 15/- =1125 x 30 = 33750 per month.
Per annum: 33750 x 12 = 4,05,000
So, 40,50,000-4,05,000=36,45,000 per annum
Out of which we need to pay to insurance, think 1 lac then-35,45,000.
In this amount we need to give 15% share to 2 people. Then I will come to
35,45,000 – 11,00,000(5.3 lakhs each) = 24,81,000.
Deduct your maintenance cost and tax =7,00,000 . thus it will become 17,81,500/-
This will be our net approximately = 18,00,000
Buying cost of 50 cows= 50 x 45,000 = 22,50,000. you will get your investment only when you successfully complete 2 yrs.
Think that we were able to run only for 5 yrs:
18,00,000 x 5 = 90,00,000 + 24,75,000 (55x 45,000 - sale of 55 cows) = 1,14,75,000
Out of which deduct if you have taken loan and interest = think we have taken 10 lacs loan and it has become 12 lacs with interest and think 50% partnership you have given others. Then you will get –
1,14,75,000 – 12,00,000 = 1,02,75,000 x 50/100 = 51,37,500 /-
After 5 yrs 50 lakhs is the amount you get after investing 5,00,000 in this business.
Drawbacks:
1. labour- if labour is not turning up then its very difficult to clean, feed,taking milk and selling it to heritage guys.
2. management – trust worthy person should be there to manage your daily accounts
3. Jersey cows are very sensitive to climates, so we should take care of them very well like our babies.
Very profitable business:
Reasons: We do insurance for cows, so we will not be in any loss even if we loose cows.
When we doesn’t want to run the farm, then we will get back our invested amount by selling our cows, so no loss. From first day onwards we get money through milk, in which business we get returns from first day itself. Land lease,cost kept on building sheds, bore for water, rooms to store feed may be extra cost for us.
