Feasibility Template for Small Scale Meat Processor, 2013

This cash flow template (excel) is designed to help test the feasibility of establishing a small-scale meat-processing facility. The template assumes the facility will not slaughter animals, but will instead receive whole animal carcasses, halves, or quarters, which will then be further processed. This template can provide a quick analysis of a potential business, as well as the relevant criteria to consider. The template, however, should not be the sole tool used in your determination.

References & assumptions

The authors used references from previous studies, as well as industry, business, and farmer experts, to develop baseline numbers and an initial facility profile for the Cash Flow Template — check out how we got our numbers. Additional research and expert consultation is needed to validate estimates of capital, direct, and operational costs, and the impact of fluctuating demand for each specific site.

How to use the template

The workbook template has four separate worksheets, each of which permits some input of data. The input cells are colored blue. If you wish to change data or formulas in any other cells, you will need to unlock the worksheet (select Tools/Protection/Unprotect Sheet).

Revenue

1. In this worksheet you may specify the amount of time required to process each type of animal or finished product, the quantity expected to be processed each week, the price charged, and the materials cost.
2. The above assumptions will determine the total number of weekly production labor hours. You will need to manually adjust the amount of labor on the Operating Costs sheet to account for changes in total hours needed.

Capital Costs and Financing

1. Up to 2 long-term loans can be estimated on this worksheet. Working capital loans will be entered on the Operating Projections worksheet.
2. Depreciation is calculated using the straight line method based on IRS asset life guidelines.

Operating Costs

1. Specify ongoing operating costs in this spreadsheet
2. Labor for the facility, while generally thought of as a variable cost, has been placed in the Operating Cost area because with a very small facility of only a few employees, it can be difficult to make incremental changes in the labor pool. The Direct Labor can be adjusted by changing an employee to be ¾ time (75% FTE) or by adding an additional employee (200% FTE instead of 100%).
3. After entering Revenue assumptions, be sure to check that sufficient Direct Labor capacity exists. If not, you will need to add additional staffing.

Total Operating Projections

1. Using the Processing Capacity field, you may make adjustments for how much of the full capacity of the facility will be used. Do not increase above 100%.
2. Use the Ending Cash Balance line to determine whether you need tot ake out a line of credit (working capital) loan in a given year. The worksheet assumes that a working capital loan will be repaid in full with interest in the following year.

This Template was prepared for Community Involved in Sustaining Agriculture (CISA) by:

Ellen Dickenson, Spirit Joseph, and Jonathan Ward
Isenberg School of Management, University of Massachusetts Amherst

State funds for this project were matched with Federal funds under the Federal-State Marketing Improvement Program of the Agricultural Marketing Service, U.S. Department of Agriculture