BUSINESS PLAN: MODEL A
A Community Meat Initiative
A Partnership between GrowShare Capital and Baraka Farm LLC
This is an Estimate for Illustrative Purposes
Executive Summary
This plan outlines a partnership between GrowShare Capital (acting as the "Investor Coordinator") and Baraka Farm LLC (the "Processor") to provide a community-focused meat processing service. GrowShare Capital will aggregate demand, manage logistics, and serve as the financial intermediary. Baraka Farm LLC will provide the physical facilities and labor.
The primary business model is based on "Custom Exempt" regulations from the Alabama Department of Agriculture and Industries (ADAI). This service is for animal owners' exclusive use, and all meat is labeled "NOT FOR SALE."
The cornerstone of this venture is the strategic investment in a low-cost DIY walk-in cooler, which is essential for food safety and meat quality. This plan also includes a financial analysis of an alternative "Commercial Sales" model to evaluate its potential profitability and highlight its different, more stringent legal requirements.
Pros and Cons of the Custom Exempt Model
Pros (Advantages)
- Community-Centric: Provides a needed service directly to a trusted network, fostering local food sovereignty.
- Quality and Process Control: Members have full transparency and control over the entire process.
- Lower Regulatory Bar: While still requiring registration and adherence to safety standards, the "Custom Exempt" model is less complex and costly than becoming a fully inspected facility.
- Clear Partnership Roles: The division of labor is distinct, allowing each partner to focus on their strengths.
Cons (Disadvantages & Risks)
- Significant Upfront Investment: The venture requires a substantial initial capital investment in equipment.
- Regulatory Burden: Strict adherence to ADAI regulations is mandatory. Failure to comply can result in fines or shutdown.
- Single Point of Failure: The operation depends entirely on the Baraka Farm LLC facility.
- Reliant on Consistent Volume: Investment payback is directly tied to processing a consistent number of animals.
Business Description & Partnership Roles
Coordinator: GrowShare Capital (acting as the "Investor Coordinator")
- Organizes community members ("owners").
- Manages all financial transactions.
- Handles communication and scheduling.
Processor: Baraka Farm LLC
- Operates the physical slaughter and processing facility at Saleem Farms.
- Responsible for humane slaughter, chilling, aging, cutting, and packaging.
Operations Plan (Custom Exempt Model)
1. Coordination & Scheduling
GrowShare Capital gathers owners and schedules a processing day.
2. Animal Purchase
GrowShare Capital coordinates the purchase of live animals.
3. Slaughter
The animal is humanely slaughtered at Baraka Farm LLC's registered facility.
4. Chilling & Aging
The carcass is immediately chilled and then aged in the walk-in cooler (10-14 days for cattle, 3-7 for sheep/goats).
5. Processing
The aged carcass is cut and packaged according to the owner's instructions.
6. Labeling & Pickup
Every package is marked "NOT FOR SALE," frozen, and owners are notified for pickup.
Financial Analysis: Custom Exempt Service Model
This is the official, recommended business model.
Startup Costs (Investment in Baraka Farm LLC)
| Item | Estimated Cost |
|---|---|
| DIY Walk-in Cooler Build | $1,650 |
| Processing Equipment | $2,500 |
| Admin & Licensing | ~$50 |
| Total Estimated Startup Costs | $4,200 |
DIY Cooler Breakdown
| Insulation, Lumber, Sealant | $700 |
| Window A/C Unit (12k+ BTU) | $500 |
| CoolBot Pro Controller | $450 |
Equipment Breakdown
| Stainless Steel Tables, Saws, Grinder (Used) | $1,500 |
| Chest Freezers (2, Used) | $700 |
| Knives, Wraps, Bags, Scale, etc. | $300 |
Investment Payback for Investors
The path to profitability is clear and direct. Your initial investment is recouped from the net profits generated by each animal processed for the community. Here's how it works:
Payback Calculation:
The payback model is straightforward: the initial $4,200 startup investment is recovered from the net profit generated by processing animals for the community. With a total net profit of $645 per cow processed, the investment is paid back once the venture has processed approximately 7 cows.
$4,200 (Investment) ÷ $645 (Profit per Cow) = 6.51 Cows
Path to Sustainable ROI:
After this break-even point is reached, all subsequent net profits are distributed to investors according to their share, creating a sustainable, long-term return on your initial investment.
Financial Analysis: Alternative Commercial Sales Model
Critical Warning
To legally sell meat by the pound, the facility must be USDA or State-Inspected, not just "Custom Exempt." This requires a much larger investment to meet stricter regulatory standards.
Scenario 1: Selling "Hot Processed" Meat (Without a Cooler)
Conclusion: This is highly illegal and dangerous. The meat would be poor quality and unsafe. This model is unprofitable even before considering the immense legal fines and liability.
| Total Potential Revenue (400 lbs @ $5/lb) | +$2,000 |
| Animal Purchase Cost | -$1,600 |
| Net Profit | +$400 |
| GrowShare Capital Share (75%) | $300 |
| Baraka Farm LLC Share (25% for labor cost) | $100 |
Scenario 2: Selling "Cold Processed" Meat (With a Cooler)
Conclusion: While this model is legal if the facility is fully inspected, the profit margin at a flat $5/lb rate is too low to justify the massive investment needed for an inspected facility. The payback period would be extremely long.
| Total Potential Revenue (400 lbs @ $5/lb) | +$2,000 |
| Animal Purchase Cost | -$1,600 |
| Net Profit | +$400 |
| GrowShare Capital Share (75%) | $300 |
| Baraka Farm LLC Share (25% for labor cost) | $100 |
Payback Analysis on Initial Investment:
To recoup the initial $4,200 investment in the cooler and equipment, based on the $300 investor share per animal, the venture would need to process 14 animals just to break even.
$4,200 (Investment) ÷ $300 (Investor Share) = 14 Animals
This extended payback period, combined with the high cost of becoming a fully inspected facility, makes this commercial model significantly less attractive than the Custom Exempt service model.
Path to Profitability in Commercial Sales
The analysis shows that a flat rate of $5.00/lb is not a robust commercial model. To be profitable, the business would need to adopt differentiated pricing based on the cut of meat. For example:
| Ground Beef | ~$5-7 / lb |
| Roasts | ~$8-12 / lb |
| Steaks (Sirloin, Ribeye) | ~$15-25 / lb |
This strategy would significantly increase the total revenue from a single animal, making the venture financially viable, though it requires a more complex business model and a significantly larger initial investment to become a fully inspected facility.
Ready to Explore the Alternatives?
View the goat/lamb and poultry-focused business plans for models with different operational dynamics.