You or someone you know have probably started a farming business expecting to make profits but are soon surprised by losses. This often happens because there was not a good business plan in place to inform you on what to expect. When farmers share their success stories, they often forget or are ashamed to discuss their failures. When a new farmer relies on these stories, they are surprised by the unexpected losses. If you intend to invest money in your farming business, plan to succeed using a business plan.

Business plans can be written for personal use or for third parties such as investors or funding institutions. Business plans can be lengthy documents. In our Kenyan (and in deed African) context, farmers simply want to know the financial projections of their businesses. A personal business plan is easy and realistic informing you on what to expect in your business. With basic skills in maths and excel, you can write your own business plan. A good personal business plan will have the following;

  • Start up costs

Start up costs finds out; what do I have? What don’t I have? This will help you estimate the amount of money you need before starting your business. These costs include one-time costs such as putting up structures and on-going costs such as feeds. Include only the costs that you cannot start a business without in the first few months. Below is a sample template.

Start-up expenses Amount (KES)
Building Structures/renting
Buying chicks
Total start-up expenses  
Start-up Assets  
Cash money
Long-term Assets e.g. land
Total Assets  
Total Requirements  
  • Cash flows

Just like the name, cash flow projections will tell you how money moves in and out of your farm business. It will tell you which months you will make money and which ones you will use it.

Month (do all the twelve) Pre-start 1 2 3 Total
Month name January February March
Incomes from Sales of meat
Incomes from Sales of eggs
Incomes from Sales of chicks
Total Money in (KES)          
Money out (KES)          
Total money out (KES)
Balance (KES)
Opening balance
Closing balance          
  • Sales and costs forecasts

This tells you how much money  you will put make sales. The costs here are the ones that only change with the sales volume (variable costs).

Sales Year 1 Year 2 Year 3
Total Sales
Direct Cost of Sales Year 1 Year 2 Year 3
Buying chicks
Total Direct Cost of Sales
  • Break-even analysis

This answers the question; “how much do I need to sell to cover all my costs?”  At this point you do not make a profit or a loss because your sales are equal to your costs. It informs you on the “best minimum” units to start with.

Break-even point = Sales – Variable costs – Fixed costs

You need to determine all the variable costs (costs that depend on sales) and the fixed costs (costs that do not depend on sales such as rent and administrative costs).

E.g. you sell each chicken at KES 800 and the variable costs are KES 400 per chicken and the fixed costs are 200,000. How many chickens should you sell to break-even?

Since at break even the profit is zero, we put zero on the left side.

0 = (no. of chickens X KES 800) – (no. of chickens X KES 400) – KES 200,000

0 = no. of chickens (800-400) – 200, 000

200,000 = No. of chickens X 400

200,000/400 = no. of chickens

No. of chickens = 500 (You will need to sell 500 chickens to break-even)

 Note that the above calculations are assumed.

The best way to get accurate information to help you draft a personal business plan is to talk to farmers who have succeeded in the business. Always estimate your costs on the high end and your sales on the lower end.

Did you find this information helpful or is it still Greek? Do not worry; you can contact us at for a customized business plan. You can find an Indigenous chicken business plan with start-up costs and cash- flow statement HERE


8 Responses to How to write a business plan for your farm

  1. Timothy says:

    Thanks for the post. I would like to do a business plan for chicken. How many months should I estimate the start up costs? Thanks

  2. Lucy says:

    Dear Agriluga, I am stuck with the business plan (it is greek for me). I would like to do start up costs and break even analysis. Is it possible to have the two only?

    • Agriluga says:

      Lucy, we are here for you. Yes you can have only the start up costs and the break-even analysis. But when calculating the break-even analysis, you end up doing cash flows, and it is wise to have them all. Talk to us via

  3. Miss Vee says:

    Hi Agriluga. Thanks for the info. Please educate us on how to get funding for farming business. Much appreciation

  4. Jessica says:

    Hi argriluga.Iam planning to start chicken farming in western kenya.Kindly advise which one is the best among layers,broilers and kienyeji.Considering
    climate and market

    • Agriluga says:

      Hi Jessica, you should have no problem with the climatic conditions in Western Kenya. Any of the chickens will do well. The markets are there especially in the big towns such as Kakamega. You might want to consider your accessibility to your markets and your capacity. Broilers are fast moving and will require you to be near markets. It is important to let people know what you will be selling as you start the project. All the best

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