How to Increase the Profitability of Your Poultry Farm
So first there's the bottom line.
Hypothetically going from no houses to 1 - 20,000 sq. ft. house could yield about $15,000-19,000 in net profit annually. However, by just deciding to raise chickens commercially you're totally committed to a 24/7 operation - you have to always be around, day and night, and you'll have to learn about running controllers, adjusting static pressure, water quality and how to maintain just the right level of lighting.
In addition to this, we have to take into consideration your kit - you're going to have to have on hand wire cable, electrical supplies, PVC piping, feeder repair supplies and, of course, plenty of drinker line supplies too. Aside from the kit, we move onto the equipment list, which isn't exhaustive by any means, this being a tractor or front end loader, drills, grinders, blowers and a top notch, reliable power washer.
So this has given you an idea of the investment required to initially scale up the farm.
Now, let's say you want to expand and take advantage of the significantly increased potential profit margin associated with a much larger operation. For instance a 40,200 sq. ft. area requires less than double the amount of resources of a 20,000 sq. ft. area (it doesn't scale directly, the operation becomes more efficient) in terms of heating, cooling, lighting, motors, fans and very importantly, the overall time required to manage the house.
As a result of this increased efficiency, the gross profits will increase, so this will go towards covering your labor costs, which are a given as your operational size increases. This is very exciting, essentially, because by adding more capacity you can more than pay for the hired help that you would have to outsource to be able to get the job done properly. This is particularly important because you have to be able to run your farm with a high degree of precision, with each facet of the system working in sync with the other, without allowing any element to deviate too far from the ideal range required within any particular growth phase or season. You'll be placing yourself in more of a management role, overseeing your farm and workers.
This is why outsourcing specific services that are required during the grow-out cycle to highly trained experts in their areas of expertise becomes necessary. These people can get these tasks done faster and to a higher standard than the grower can do on their own. The outsourcing tightens up the timetable significantly, thus increasing the overall annual yield, thereby increasing profitability (even with including paying for the services that are being outsourced).
So let's look at an example, if you were to put up 6 – 40,200 sq. ft. houses this could theoretically yield as much as $200,000-240,000 in net profit annually if you could do it all yourself, and depending on how efficiently you can run your farm in today's market. However, it would be virtually impossible to do yourself, so reliable help is required.
So if you're sitting on the fence as to whether it would be a good move for you to begin growing your farm, here's a final thought for you, if for some reason you don’t succeed at this, bankruptcy is exactly the same regardless of size. So although the risk associated with scaling up can be intimidating - and yes, even downright scary at times, it's also a very calculated risk, and it’s worthwhile noting that most banks are generally more willing to help you succeed with larger amounts of debt, in the event you do run into unexpected complications down the line.
The most important thing to calculate before expanding your poultry farm is the current profit of your business and the demand of your products in the market, if you are not able yield enough profit to repay your bank loans then you should postpone your poultry farm expansion plans, on the other hand if the demand of your products are less than the standard then you should first focus on marketing more than expansion.