Business idea: milk production
Most of us consume dairy products, be it directly milk, yogurt, sour cream, etc. Either way, this is a great idea for starting your own business. But it should be noted right away that milk production requires a lot of investment and time. In addition, it is extremely important to properly organize the business, then the business will bring not only good money, but also pleasure.
What do you need to start?
The first step is to select a plant. It is most profitable to rent a suitable premises, and with successful business development, after a while it will be possible to slightly expand the production area. Now many say that it is profitable to order modular factories, the delivery set of which includes equipment at once.
Of course, there are several indisputable advantages here, for example, the workshop can be located almost in any place convenient for you. In addition, there is no need to deal with the technological line. But the cost of such a purchase is unreasonably high. Another mandatory requirement is to undergo sanitary inspections, because milk is a food product that must be manufactured in accordance with all GOSTs and rules. After that, you need to register the business.
It is good if it is a limited liability company ("LLC"). This is due to the simplified taxation system. In principle, the premises are there, the business is registered, our next goal is the production and sale of milk. Let's start from the very beginning and take a closer look at each stage of the business. This way you can get as much information as possible about what to do and how.
Livestock purchase and profitability
It is safe to say that with the right organization, this business is profitable. This is due to several factors. One of them is people's desire for proper and healthy nutrition. However, the high price of the product leads to the fact that not everyone can afford it.
According to statistics, the amount of milk consumed per person increases annually by about 3-7%, for us this is a very good figure. And now about the most important thing - the acquisition of livestock. This is a very important point, although many are trying to do without it, buying a finished product in bulk from farmers. Also a way out, but more on that later.
To begin with, you need to start with at least 300 heads, 500 is optimal. Although a lot depends on the performance of your equipment, the higher it is, the larger the herd and vice versa. If it is necessary to increase milk production, then this is done very simply. More cows - more product. But with the growth of the number of cattle, it is necessary to increase the barn, this should not be forgotten. Consider a business that relies on milk from one's own herd, not a farm herd. The fact is that this direction is more promising. You are definitely confident in the quality of the product, and you will not experience difficulties with the supply of raw materials.
Determining the range of products and personnel
Your business plan must necessarily contain a separate item called "assortment". According to statistics, there are practically no large factories that produce only milk. This is due to the fact that such a solution is not the best. Now you will understand why. The fact is that after processing the same milk, you can sell whey, cottage cheese and other by-products. Cheese products are in great demand, and they, by the way, are produced in dairy factories. It is not necessary to exclude sour cream from the list, as well as butter. All this will definitely find its buyer. But additional equipment and workers will be required.
By the way, about the staff. It can be said with 100% certainty that a milk production facility will not function without qualified specialists. Even if you put in your best effort, you still need to hire workers. Since we have continuous production, we need a schedule for 3 shifts, and a technologist with a laboratory assistant can work on a 5/2 schedule, but a foreman and several workers must be in place every shift.
From this we can conclude that we will need about 3 foremen and 9-11 ordinary workers, as well as one laboratory assistant and technologist. At first, to reduce costs, you can independently perform the function of a worker, as well as deal with the supply of raw materials and other issues. Let's go ahead and take a closer look at the milk production process, because there are several subtleties.
Milk production flow chart
The process itself represents several stages that must be performed sequentially. Of course, in our case, we will talk about the raw milk that we received recently. At the first stage, the product is supplied with the help of special equipment to a centrifugal separator. Here the cream is removed, which is used to increase the fat content of the product.
To remove foreign substances after separation, the milk goes to heating, and then to the pasteurizer, where all microbes are removed by heat treatment. Then the cream is added. In some cases, it is advisable to use an automatic fat separator. As practice shows, most manufacturers produce products with 1-6% fat content.
Since the organization of milk production is a rather complicated procedure, you should be prepared for the fact that you will have to spend a lot of money. For example, to dissolve fat in a product that will float above in the form of large droplets, you need to purchase a narrow grinding nozzle. This is an optional procedure for pasteurized milk, but is mandatory when sterilizing the product. At the final stage, packing is carried out. You can use glass, plastic or cardboard containers. The latter is more preferable due to its environmental friendliness.
Milk production costs
Of course, this issue cannot be ignored. Today, not every aspiring entrepreneur is ready to invest millions in business. For this simple reason, most open a small business with an initial investment of no more than 500,000 rubles. But in this case, you will have to spend at least 6-8 million rubles, and this, you see, is a lot of money.
The most expensive is the production workshop. It includes three main modules with equipment and one side module. This includes a sanitary warehouse, laboratory, and household, among the side - a warehouse module. All this costs at least 3-4 million rubles, and the productivity will be about 1,000 liters per day. In addition, it is necessary to take into account the cost of livestock, about 2 million rubles with the organization of a cowshed.
Basically, before you start, you will have to spend a small amount on milk production analysis as well as market scanning. You also need to find a point of sale and release an experimental batch (experimental), and if the customer likes everything, then you can arrange supplies. Sometimes you can open your own point of sale, but this is a separate topic for conversation. Let's take a look at a few more important details.
A little about the profit and payback of the business
The payback period depends on many factors. One of them is the established contacts with the buyer. The sooner you start selling the finished product at a price you can afford, the better. Let's take a look at everything with a specific example. Let's take a plant with a capacity of about 1,000 liters of milk per day. In this case, we will be able to produce about 30,000 liters per month.
The average cost of the finished product in a pack (liter) is 35-40 rubles, and the cost is slightly less - 19 rubles. In this situation, through simple calculations, you can get a figure slightly more than 2 million rubles. This will be a monthly output provided that 30 thousand liters of milk are sold. Since our business involves the sale of other fermented milk products, then in reality the figure will be somewhat different. But since in our particular case the gross cost of milk is approximately 1.1 million, and the costs are about 50%, then you will receive net 500-600 thousand rubles a month.
In this situation, your business will fully pay off in about 2.5 years, maybe even earlier. But these are terms that relate exclusively to milk sales. If we take into account that such products as sour cream, cheese, cottage cheese have a higher margin, then we can expect that in 1.5-2 years you will reach a net profit. From all of the above, we can make a simple conclusion that the production of milk and dairy products is a good way to make money, but at the same time it is necessary to pay due attention to quality and invest a fairly large amount of money.
Features of doing business in Russia
It should be said that the efficiency of milk production in the territory of the Russian Federation is somewhat lower than in other, more developed countries. This is due to many factors, one of which is negligence. If in Germany, for example, quality is an obligatory attribute of everything that is produced there, then in Russia some entrepreneurs may neglect this.
It is for this simple reason that those factories are valued where they make a quality product, regardless of the mood and profit of the director. You will surely face competition, and if it is healthy in Europe, then in our markets opponents are eliminated by a variety of methods. To prevent this from happening, choose a niche wisely for starting a business. You can tackle this issue either yourself or hire a professional.
Nevertheless, milk production in Russia should not be regarded as something supernatural or impossible. This is a very realistic goal today, especially considering that with due diligence, some government assistance can be achieved. It consists in the allocation of budget subsidies, as well as in the exemption from land tax. But this only applies to the development of agricultural business. By the way, if you register as a farm enterprise, you can sell raw milk without any problems. But the product will go through rigorous quality control before leaving the customer.
About equipment or technology for milk production
To make it easier to deal with this issue, let's divide the equipment into zones. The first zone includes the equipment that is needed for the acceptance of raw materials. At the very beginning of the line, several filters or a separator are installed. These devices remove mechanical inclusions, after which the product is sent for primary cooling to 4-6 degrees Celsius and is stored in a special container. The larger the volume of milk production, the more capacious the tank is. A low temperature is maintained there, which is needed to slow down the development of microorganisms (without changing the natural properties of the product).
Further there is equipment for separation. For what it is necessary, we have already spoken with you. By the way, you have the opportunity to install separators for separating the fat fraction or dehydrating separators. The most complex units, as well as expensive ones, are plate pasteurizers. Their effectiveness is determined by the duration, as well as the temperature, which is maintained for a certain time.
If you make cottage cheese, processed cheese, yoghurt and other products, then you need to install a volumetric thermizer. This device is designed for melting, emulsifying and heat treatment of fermented milk products for long storage. Basically, this is all the basic equipment that is needed in order for milk production and processing to be performed correctly.
What should not be forgotten
You may have noticed that the milk production line is quite complex. This suggests that there is a high probability of various kinds of failures in the form of leaks. This must be monitored especially carefully. Remember that even an hour of production downtime will result in heavy losses. Of course, not everything depends on you and no one has canceled the power outages, without which the main equipment will not work.
Gasoline generators are unlikely to help in this case, since they will not be able to provide as much power as needed. It is also worth remembering that cattle require care, so it is advisable to divide all cows into several groups. The first include the most milking, the second - the average, the third - the young, and the fourth - those who can be sent to slaughter. It is imperative to ensure proper nutrition, for this you will need a large warehouse to store hay in the winter.
Conclusion
As you can see, the economic efficiency of milk production is quite high. But you need to take into account a huge number of factors. For example, no one has canceled small expenses yet, and industrial injuries should not be ruled out either. All this will lead to the fact that in practice you will earn a little less than planned. But if there is no reduction of more than 5-8%, then this is quite acceptable. It is not necessary to invest 8 million, because you can start with a mini-factory. In this case, start from the only direction, let it be the production of pasteurized milk. With this approach, you will be able to invest less than 3.5 million rubles. Of course, the profit will not be so tangible, but over time, you can significantly expand production.