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1. INTRODUCTION
It is clear generally that unemployment is unacceptably high and that
it is here to stay except we do something about it. The Nigerian economy as
it is presently run does not have the capacity to absorb chains of thousands
of unemployed youth. In other words, the Nigerian graduates of today can
no longer rely on the Nigerian labour market to provide him or her job. He
has to invent an alternative source of employment which is self employment
or entrepreneurship. Entrepreneurship is in accordance with the Nigerias
economic recovery programme objectives that necessitated a radical shift
from total dependence on government for white collar job to self
employment. An entrepreneur is a person that perceives business
opportunities, takes advantage of the scarce resources, bears the noninsurable risks in his enterprise and directs the human and material
resources in his business objectives.
To qualify as an entrepreneur, it is not just sufficient to be a business
man just managing an enterprise. You are an originator of profitable
business ideas. It is against this background that I have chosen this very
attractive area of self employment called snail farming or heliciculture. It is
one of the easiest and least expensive types of farming that provides
employment opportunities to all categories of people and generates foreign
revenue without you running from pillar to post. Snails farming business
are healthy, less risky, less expensive and environmentally friendly.
1.1. BACKGROUND OF THE STUDY
In the face of serious and growing threat of graduate unemployment in
Nigeria today, the need for the Nigerian graduate of today to seek avenues
for self-employment and self-fulfillment now seems impelling. In the 1960s
the problem of unemployment in Nigeria was basically that of primary and
secondary school leavers. One popular explanation then was that these
school leavers were ill-equipped and lack specific skills to offer the labour
market. The explanation is now irrelevant today as even well equipped
graduates in almost all disciplines now find that the Nigeria labour market
no longer has enough jobs for them.
Thus rather than employees vainly searching for skill that are there,
the situation has become one of the skill vainly searching for jobs that are
not there and this call for entrepreneurship. It was not as if I was
particularly enamoured of the snail farming business idea but, at least, this
is the only area I can say I had training that I can apply with ease and there
was space to practice it. The study was designed to determine the feasibility
of snail farming in Bori, Rivers State, Nigeria and to assess the impacts of
entrepreneurship on the people therein.
1.2. BRIEF HISTORY OF SNAIL
The African giant snail (Achatina achatina) has coiled shells in their
adult stage. They are hermaphrodite and so, they do not require a partner to
copulate. They are oviparous and can lay eggs between 10 and 30days after
mating. Eggs laying takes place during the rainy season or when provided
with the required food, which are mostly juicy vegetables, constant water, a
favourable weather condition of an average of 250C to 300C and humidity of
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80%. The species lays about 200 to 400 eggs in one batch 2 to 3 times a
year. It takes about 11 days for its egg to be hatched in the humus-rich soil.
All species of snail get matured for harvesting by the 5th to 7th months and
are actually ready for consumption or marketing. Snails could live as long as
7 to 10 years in their natural habitat. Snails have different names for
examples the French snail (Escargot) and the American Pomode.
The Roman snail (Helix pomatia), the garden snail (Helix aspersa) and
the African giant land snail (Achatina achatina and Achatina fulica).Snails
produce enzymes zymolyse used industrially to lyse the cell wall of
organisms, thereby breaking the genetic barrier and allowing mating and
fusion of otherwise two non compatible organisms.One interesting things
about snails is that they have no noise, no adour, no irritation and hardly
fall sick. Snail business is therefore a GEM in the kingdom livestock and the
risks of production are low
1.3. VISION AND MISSION FOR THE BUSINESS IDEA
1.3.1. Vision of the business:
1.
To contribute my quota to reduce graduate unemployment in Nigeria
by engaging myself in this viable venture of snail farming.
2.
To expose the idea of snail farming in Nigeria as great income
opportunities and to show people on how to prosper through it despite
the economy.
3.
To direct employees on how to augment their income without affecting
their present job.
4.
To practice the adage that says the more we are in the league of
millionaire the merrier it becomes and the better for the peace and
prosperity of our Nation.
5.
To let people know that Nigeria is greatly blessed with resources yet
unexplored and to reveal the economic importance, nutritional
composition and medicinal values of snails.
6.
To promote and encourage bilateral relation between Nigeria and other
countries by way of trade.
7.
To reduce financial crises in our society and encourage sole trader
business through example and practice.
8.
To improve the standard of living of people through the provision of
highly prolific Achatina achatina snail that does not contain fat and
cholesterol.
9.
To transfer the technology to retirees, house-wives, young school
leavers, inventors, traders, local dwellers, applicants, Family
Economic Advancement Programme (FEAP) / NGOs and workers who
need extra income to augment their merge salary.
1.3.2. Mission of the business:
1.
A strong desire for self-employment
2.
A desire for responsibility and independence (i.e.;
independence).
3.
A desire for the glamour attached to entrepreneurship.
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1.7.2. Reasons for the locations: These two locations were chosen after the
SWOT analysis. The former address was selected based on the following
reasons:
1.
Availability of space
2.
Availability of water and humus-rich soil
3.
Presence of juicy vegetables and aromatic plants as laurel that are
used as feeds for snails
4.
Calmness and secure environment
5.
Access road and communication network
6.
Favorable weather condition for snail breeding
7.
Availability of manpower (both skilled and unskilled).
While the later location was selected based on:
1.
2.
3.
4.
5.
6.
7.
1.8
MARKET ANALYSIS
1.9.1. Product: The matured snail shall be sold raw and also in its
processed form. The processed snails shall be properly washed using alum
and salt and weighed accordingly, refrigerated and supplied to entries, food
stores, and place of need.
1.9.2. Price: The price for each adult snail depends on the weight and
quality. For example, matured raw snail in-shell cost N 500 to N 600 per one
while the same size of the processed snail cost N 600 to N 700 per snail
respectively.
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1.9.3. Place: The main production shall be Koro Farm Garden, where there
is no noise but adequate maintenance including security. While the
marketing office shall be in an open place, 34 Mayor Street, Bori where all
my customers can have easy access.
1.9.4. Promotion: Both advertising and sales promotion shall be use. The
nutrition benefit of snails will be made known. Discount shall also be given
with respect to quantities purchased. Some dry snails shall be made
available to customers who wish to taste the product.
1.10. DEMAND AND SUPPLY
The demand for snail meat and its products are higher than the
supplies as such; the market potential of snail is inexhaustible, locally and
internationally. My observation shows that out of 100% snail needed in Bori
market for both local and international consumers in a year, only 68% was
available. There is, therefore, the need for increased production in other to
meet up the 100% snail demand.
1.11 MARKET SHARE (GAP ANALYSIS)
My forecast for a period of one year shows that s total 100 units of
snails was marketed in Bori market by both my competitors and me. Of
these 100 units sold my business 60 units while the other competitors sold
a total of 40 units all together in year ending. The Gap analysis, i.e., my
market share is 70% while that of my competitors 40%. It was then
concluded that my sales levels out that of my competitors and that they are
seriously defeated. Hence, the business was successful. The 4 Ps
marketing strategy was used to achieve this high sale.
1.12. FORM OF BUSINESS AND ITS ESTABLISHMENT
The business is a sole
proprietorship business. The idea was
considered lucrative prior to its high income earning capacity and simplicity
of operation.
1.13. LEGAL FORM OF THE BUSINESS
The legal form under which this snail farm business shall be
organized is sole proprietorship. I will serve as the manager and chief
executive officer (CEO) of the business coordinating the labours and day-today affairs. As a sole trader, I oversaw the production function, marketing
function, personnel management function and other miscellaneous
functions as showed in the organizational structure below:
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1.14.
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Buyer function
Controlling function
Selling function
Production management
Research &
development
Maintenance
Stock keeping
Plant
Marketing management
Product
Place/distribution
Promotion
Price
Personnel management
Staffing
Training
development
Wages/salaries
administration
Employee
welfare
Personnel
records
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Name
Function
Time in production
Qualification
Names
Building
PT
SK
Sira
Buying
PT
USK
Uche
Collecting
PT
USK
Nasir
Feeding
FT
SK
Bola
Maintaining
FT
SK
Nuaka
Selling
FT
USK
Sule
Recording
FT
SK
Sole
Managing
FT
SK
Basir
Promoting
FT
SK
Ada
Distributing
FT
USK
Auwa
Processing
PT
SK
Audu
Securing
FT
SK
Bale
Sanitizing
FT
USK
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ENVIRONMENTAL ANALYSIS
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is use in the manufacture of other raw material. Its enzymes are use in
genetic engineering for cell wall treatment. The supposed waste aspect of
snail after processing is essential in agriculture and particularly in fish
farming.
4.7. EMPLOYMENT GENERATION
Snail farming business is a form of self-employment and as such, will
provide work for all category of people in the society including retirees,
House wives, Young School Leaves, Inventors, Traders, Local Dwellers,
Applicants, Family Economic Advancement Programme (FEAP)/NGOs and
Workers who need extra income to augment their Merge Salary.
4.8. PROVISION OF PRODUCTS AND SERVICES
Snails are one of the best meats in the kingdom of livestock. It has
been noted that snails has the highest level of meat protein without fat and
cholesterol and it is being recommended for medication. The African giant
snail is always in high demand in Europe, because what they have there is
the Helix species (x8 smaller than the giant snails). The land snail, Achatina
achatina species can provide a substantial source of protein to complement
Nigerian carbohydrate meals. Its fast rate of reproduction also makes
available the high quality form of meat protein to consumers. The nutritional
composition of raw snails (per 100 grams of edible portion) is shown in
Appendix.
4.9. FOREIGN EXCHANGE SAVINGS
The detailed cost of the business includes the direct materials costs,
direct labour costs and indirect costs, which gives the total cost of the
business.
4.10.
(1A).
2
BUYING COSTS
(N)
Breeds of snails
10/breed
Plastic aquarium
450
Manual
water 680
sprinkler
Sponge or rag
150
Pebbles holes
450
Cactus flowerpot
700
Humus rich soil
450/kg
Ashtray
or
small 380
plastic box
TOTAL
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3
QNT./ITEM
300
40
50
4
COST/ITEM
(N)
3000
18000
34000
14
55
54
85kg
18
2100
24750
37800
38250
6840
164740
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3
N
6,000
2,000
2,500
8,500
8,000
Nanu, building
160
Sira, buying
160
Uche, collecting 160
Nasir, feeding
160
Bola,
160
maintaining
Nuaka, selling
160
2500
Sule, recording
160
2,000
Sole, managing
160
7,800
Basir, promoting 160
6,500
Ada, distributing 160
2000
Auwa,
160
2500
processing
Audu, securing
160
7500
Bale, sanitizing
160
6000
Total
Note: (1) Direct labour cost =
7
N
160
160
-
2,500
2,500
-
160
160
-
160
160
160
160
2,500
2,000
2000
2500
7,800
6500
-
160
7500
160
6000
960 hrs
503000
960 hrs 13500
Total pay for time in production = column 5
Total = N 50300
(2) Indirect labour cost= total pay for time not in production = column 7
Total = N 13500
(3) Direct labour cost per hour = total pay for time in production/total
hours in production per month
= N 45.3
= N 4350
960 hours
4.12.
N 1000
N 1250
N 1000
N 50
N 45.5
N 35.5
N 1500
N 13500
N 1066.7
N 6000
N 25447.7
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4.13. DEPRECIATION
A refrigerator shall be purchase and use for five years in preserving
the processed snail before distributing to customers. The cost price for the
refrigerator is N 64000.
Calculation for depreciation:
Depreciation, = Total cost of buying the refrigerator
Number of years the refrigerator will be used
= N 64000 = N 1280
5 years
Depreciation cost form
Depreciation form
Refrigerator
Bought
Buying cost
Estimated to be used
Depreciation per year
1st year
2nd year
3rd year
4th year
5th year
1st year
N 64000
5 years
N
N
N
N
N
12800
12800
12800
12800
12800
=N 12800 = N 1066.7
12 months
Detailed cost of the business = Total cost of the business.
Thus, Depreciation per month
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UNITS
G
Kcal
Kj
G
G
G
G
G
G
Mg
Mg
Mg
Mg
Mg
Mg
Mg
Mg
Mcg
Mg
Mg
Mg
10
3.50
250
272
382
70
1.00
0.400
27.4
0.0
0.010
0.120
Mg
Mg
Mg
Mg
Mcg
mcg-DFE
Mcg
Mcg
Iu
mcg-RAF
1.400
0.130
6
0
6
6
0.50
0.00
100
30
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Mcg
Mg
Mg
Mcg
30
5.00
0.00
0.1
G
G
G
G
G
G
G
G
G
G
G
G
G
G
G
G
G
G
G
G
G
Mg
0.361
0.000
0.000
0.000
0.000
0.056
0.249
0.051
0.259
0.048
0.211
0.000
0.000
0.252
0.017
0.000
0.015
0.000
0.119
0.099
0.000
50
G
Mg
Mg
Mcg
Mcg
Mcg
Mcg
Mcg
0.0
0
0
0
0
0
0
0
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The following nutrient data above was obtained from the USDA National
Nutrient standard reference (2006).
APPENDIX II: FINANCIAL PROJECTIONS
CALCULATION FOR INDIRECT COSTS CHARGE
Indirect costs charge = total indirect cost/month divided by Total
direct material cost/month
From the labour cost form above,
Indirect cost charge = N 13500/ N 164740 x 100 = 8.2%
To cover up the total indirect costs for the business, 8.2% has to be added to
the direct material costs of each material. This will be work out in the
production costing form as shown below:
PRODUCTION COSTING FORM
1
Direct material
cost/month
N
Breeds of snails
10
Plastic aquarium
450
Manuel
water 680
sprinkler
Sponge or rag
150
Pebbles holes
450
Cactus flowerpot
700
Humus-rich soil
450
Ashtray
or
snail 260
plastic box
Product
2
Indirect
cost/item
(col. 1x8.2/100)
N
(10x8.2/100) = 0.82
(450x8.2/100) = 36.9
(680x8.2/100) = 55.76
3
Total cost/item
(col. 1x col. 2)
N
8.2
166605
37916.8
(50x8.2/100) = 12.3
(450x8.2/100) = 36.9
(700x8.2/100) = 57.4
(450x8.2/100) = 36.9
(380x8.2/100) = 31.16
1845
16605
40180
16605
118408
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1st year
240487.7
564000
804487.7
164740
50300
13500
6400
6000
298540
505947.7
2nd
150000
345000
495000
102000
50300
13500
165800
329200
3rd
132000
263000
395000
100000
50300
13500
2000
165800
229200
4th
100000
250000
350000
98000
50300
13500
161800
188200
Note: Cash at the end of the year = total cash in total cash out
= N 804487.7 - N 298540 = N 505947.7
This cash flow projection indicates that I cannot run out of cash at any
period or year in the business.
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5th
200000
541000
741000
110000
50300
13500
175300
565700
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500
400
300
200
100
PVF
1.000
0.909
0.826
0.751
0.683
0.621
NPV
PV
(250)
454.5
330.4
225.3
136.6
62.1
N958.9
= #958900
The NPV
of cash inflows (N 958900) is greater than that of the cash outflows (N
250000).
Thus, it generates a positive NPV of N 958900.
The business adds to the wealth of owner and therefore, it was accepted.
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SENSITIVITY ANALYSIS
This is the method of recalculating NPV or IRR be changing each forecast.
For example, let us assume that the cash inflows fall by 15%.
NPV SENSITIVITY AT 15% (N000)
YEAR
0
1
2
3
4
5
NPV
CASH FLOWS
(250)
425
340
255
170
85
PVF
1.000
0.909
0.826
0.751
0.683
0.621
PV
(250)
386.325
280.84
191.505
116.11
52.785
N777565
Note: the NPV of cash inflows (N 77565) is greater than that of cash outflows
(N 250000). Thus, it generates a positive NPV of N777565, implying that the
business adds to the wealth of the owner(s) and therefore, it was accepted.
IRR CALCULATION (#000)
YEAR
(1)
CASH FLOW
(2)
DR=20%
(3)
0
1
2
3
4
5
NPV
(250)
500
400
300
200
100
1.000
0.833
0.694
0.579
0.482
0.402
PV
(4)
(2)x(3)
(250)
416.5
277.6
173.7
96.4
40.2
754.4
DR=16%
(5)
1.000
0.862
0.743
0.641
0.552
0.476
PV
(6)
(2)x(5)
(250)
431
297.2
192.3
110.4
47.6
828.5
DR=15% PV
(7)
(8)
(2)x(7)
1.000
(250)
0.870
35
0.756
302.4
0.658
197.4
0.572
114.4
0.497
49.7
848.9
- N848900
N204000
= - N 41.61
r = 15.00% +41.61% = -26.1%
Thus, - 26% is the business IRR which equates the initial cash outlay of N
250000 with the constant annual cash inflows of N500000, N400000,
N300000,
N200000,
and
N100000
for
5
years.
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PROFITABILITY INDEX, PI
This method of evaluating investment is also called Benefit-cost Ratio (BCR).
The acceptance rule is as follows;
May accept if PI = 1
By using the 10% rate of discount, PI is calculated thus:
P1 OR BCR calculation (N000)
YEAR
1
2
3
4
5
NPV
CASH FLOWS
300
400
300
200
100
PVF
0.909
0.826
0.751
0.683
0.621
PV
454.5
330.4
225.3
136.6
62.1
N1208900
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CASH FLOWS
(250)
500
400
300
200
100
PVF
1.000
0.826
0.751
0.683
00.621
0.564
1 year
PV
(250)
413
300.4
204.9
124.2
56.4
1.3 years
848900
Accept the project whose ARR (R01 is higher than the minimum rate
established by management
Reject projects with ARR (R01) less than the minimum rate
CALCULATION OF ARR (R01)
Period
Nasir
Depreciation
Lesoy
Taxes (50%)
Mdal
Investment
B
Investment
E
Investment A
:. ARR or ROI =
10,000
8,000
2,000
1000
1000
4000
12000
8000
4000
2000
2000
32000
14000
8000
6000
3000
3000
24000
16000
8000
8000
4000
4000
16000
20000
8000
12000
6000
6000
8000
32000
24000
16000
8000
36000
28000
20000
12000
4000
20000
3200x 100/ 20000 = 16%, the business was accepted.
Averag
e
14400
8000
64000
32000
32000
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REFERENCES
Baratou, J. (1988). Raising Snails for Food. Calistoga, California:
Illumination Press. (Translated from the French edition Les Escargots,
by F.Herb, published in 1981)
Food and Agriculture Organization of the United Nations (FAO) (1986).
Better Farming Series: Farming Snails Economic and Social
Development Series Nos. 33 and 34. Rome, Italy.
Lecture delivered by Oceanic bank Sokoto at the batch B 2010 Orientation
camp on 20th July 2010: Entrepreneurship development/smallmedium scale enterprise.
Chikodi, Ike, Samuel, Ella and Lawan, Yaya Ali (2010).A Feasibility report
summary-start your own business training manuals. NDE -Special
EDP for CBN venture prize award training manual, Kaduna, Nigeria.
Seldom, C. (1988). Raising Snails. Special Reference Briefs (National
Agricultural Library SRB 88-04). Beltsville, Maryland, USA: United
States Department of Agriculture (USDA).
Snail
farming
(Heliciculture)-Wikipedia,
Encyclopedia:en.wikipedia.org/wiki/heliciculture
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