Jan 11
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Sources of Ostrich Farming Revenue
Establishing the sources of revenue for your ostrich farming enterprise is clearly essential. Over the years as new entrants have started ostrich farming, establishing a business plan to provide cash flow is the challenge. This has led to business plans based on selling stock – breeders, chicks and ostrich eggs to new farmers. The arrival of ostrich to a new country creates excitement with investors rushing to start ostrich farming. In the early 1990s these investors were a combination of smaller farmers battling to keep pace with the rapid developments in agriculture and seeking new opportunities and those with no previous experience in agriculture lured in by promises of great profitability.
As referenced in “What is An Ostrich Farming Business“, some entered the industry to market ostrich products as we recognized their market potential. Others entered to produce ostrich with various business models. Often these business models were based on selling offspring to other farmers…a strategy that can only succeed if there are end consumers buying the products.
Production Processes identifying Internal and External Revenue Streams
The illustration indicates a number of revenue streams in the production process. All revenue is dependent on the end consumer buying the ostrich meat, ostrich feathers, ostrich skins (leather) and oil. Every process in that chain is dependent on the end product reaching the consumer at the right price and quality.
Items in green relate only to feed ingredients which for an ostrich farmer will be as much as 70% of their input costs. Those ingredients are revenue for those farmers producing crops. When produced on farm, they must be input at the same cost they would receive if sold at the farm gate. Economies of scale have a significant impact on the cost of bought in feed/feed ingredients.
Items in white are the manufacturing processes. These processes start with Feed Manufacture. All these manufacturing processes can be independent operations or they can be within the same company. They are all interdependent on each other and the sales of those products in various shades of red.
Items in blue are products that are sold on to other businesses within the production process. All these product sales are dependent on successful core product and by product sales.
The products in red are the end products sold to our end consumers. These are the products that provide the sources of revenue that bring money into the production cycle from external sources.
The products in dark red are the core products and those in the lighter red indicated the additional sources of external revenue.
The graphic illustrates just why it is essential to build a business plan based on the end product sales to our consumers. It is these consumers that complete the ostrich farming financial cycle that enables the business to become sustainable. All the other processes build value and interdependent on the success of those final product sales to the consumers identified. If the consumers do not buy, ostrich farming has no business.
