Goat Farm Making Chees and Yoghurt - Essay Example

? Goat Farm Making Cheese and Yoghurt Introduction The business will involve goat farming for the purposes of making cheese and yoghurt. The goats will produce milk which will be used to make yoghurt and cheese for sale. Farmers are adopting large farms to practice commercial goat farming. Dairy goat farming is a sector that has a big potential for growth (Hempler, 2002, p. 1). Steps There are various practical steps that an individual needs to take into consideration when starting a business. These may involve having to visit various goat dairy firms to get an experience of what is involved in the whole idea. It also involves taking into consideration the short-term and long-term goals. The visits to various goat dairy firms will also help one to learn various demands of the business and how to build goat milk houses, cheese plants, and yoghurt plants. These visits will also help to understand the challenges they are likely to encounter in the business (Hempler, 2002, p. 1). Individuals should consider location of their business. This will ensure that they are able to plan their marketing strategies and be able to determine the available market for the given products. Physical location of any business is an important aspect in marketing. It also determines the means of accessing markets for the products, which ensures business success. It is important to identify the target markets for the products which are being produced, as well as to assess the available markets. This can be achieved by carrying out a market viability survey. During the analysis, one is able to create good relationships with the customers and gather responses from them regarding the products to be made. This ensures that the farmer is able to gauge and evaluate the returns they are likely to get from the business (Hempler, 2002, p. 1). While finding the market for products, individuals should also try and get to know their competitors or people in the similar business and the quality of products they produce. This helps one to make high quality products which are superior to those of competitors and hence fetch high market. In cases where there is no available market for the cheese and yogurt, one can create these markets through promotions. This will involve having to capitalize on the uniqueness of the products. An entrepreneur should identify equipment, materials and resources needed for the business and the potential supplier. This will ensure that the farm gets the necessary requirements at the right time. Ensure that the supplier of equipment and other materials is able to provide the farm with spare parts and repair services before having these equipment and materials installed in the farm. The equipment and items needed for the cheese and yoghurt plants should be approved by the department of agriculture and markets. The farmer should also seek help of an agricultural inspector. During these sessions it is important that one indicates what they intend to accomplish. This will help the inspector to give the farmer the best methods and means to apply in order to attain success (Roberts, 2001, p. 70). Consultations with the veterinary officer would also help the farmer select the suitable breeds for the business and provide more information on their health, vaccinations and feeding. Obtaining insurance for the business is an important step in the process. Farmers should, therefore, ensure that they have adequate liability coverage and product liability (New Zealand Food Safety Authority, 2009, p. 18). Regulatory Framework The farmer should also consider various rules and restrictions regarding farmland. There are accepted agricultural practices which every farmer should ensure they are observed on their farms. According to Act 250 on the Land Use and Development, farmers should ensure that they obtain a permit allowing them to use the land. The farmer should also obtain a health permit from the ministry of health allowing them to produce cheese and yoghurt. They should obtain a manufacturing license and medical certificates for the workers who will be employed on the farm. The farmers should obtain a copy of various regulations which govern yoghurt and cheese production in their country, and seek clarification from the relevant authorities for issues they do not understand (Doeden & Schlake, 2004, p. 11). To achieve success in the business, the goat dairy farmers should practice good Dairy Farming Practices. These practices are for the purposes of ensuring that the products are safe and suitable for consumption. The international framework for ensuring safety of the dairy products is found in the Codex Recommended International Code of Practice – General Principles of Food Hygiene (CAC/RCP 1-19669, Rev. 4, 2003) and the Codex of Hygienic Practice for Milk and Milk Products (CAC/RCP 57-2004). Food standards legislation imposes certain requirements for the labeling, composition and safety of dairy foodstuffs. The legislation protects consumers from being misled by the producers in regards to the products sold to them. According to the Food Labeling Regulations of 1996, Part 11, Section 5, all products being sold to consumer should be clearly labeled (Jha, 2005, p. 30). The labeling should include the name of the food, ingredients, storage conditions, manufacturer and any other needed information. Farmers should contact the Food Safety and Inspection service of the country. Processed foods should be regulated by the Food and Drug Protection division of the country under title 21 of the Code of Federal Regulations. Various bodies regulate the production of cheese and yogurts in their countries. For cheese to be marketable, it must take 60 days to mature (New Zealand Food Safety Authority, 2009, p. 13). According to the Food Hygiene Regulations of 1974, the First Schedule provides requirements for the registration of food businesses. Farmers willing to manufacture, prepare and pack or store various food products should ensure that they comply with the First Schedule in the regulations. They should ensure that the farm has good water supply, good drainage, and proper disposal of wastes, changing facilities, toilet accommodation and proper working area (Roberts, 2001, p. 100). Business Entities The legal system provides various business entities which include partnerships, sole proprietorship, cooperatives, corporations, and limited liability companies. When establishing a business, it is crucial to take into consideration the form of ownership of the business. This will enable one to understand issues regarding tax and liability, concerns of ownership or directors, the laws of the state governing the business entity. During the process of choosing a business entity, an individual should match the present and future needs of the business, legality, finances and taxes (Kole & Nott, 2001, p. 2). Sole Proprietorship This business entity involves a self-employed person operating a trade where all the tax consequences fall on that proprietor. The person takes care of all the liabilities, debts, profits and losses. He/she is responsible for all actions carried out in the business. It is easy to set up and dissolve when need arises. The losses from the business can be offset from other sources and hence the business can continue running. The management is centralized and the owner has full authority to withdraw money from the business anytime. However, the owner of the business has the sole responsibility of withholding and paying all income taxes (Kole & Nott, 2001, p. 1-3). When starting a sole proprietorship, one does not have to pay any fees to start working. One only needs to register the business and obtain a business license and a tax registration certificate. The books of records are only accessible to the owner and hence the business secrets can be kept. The owner shares all profits and solves problems affecting the business. The owner of the business can get help with running the business from the family members, which helps reduce the costs of operations. In case of death, the business can still continue since it can be run by the family members. Partnership According to Section 3(1) of the Partnership Act, a partnership refers to the relationship that exists between two or more people carrying out a common business with the main aim of making profits. For any partnership to exist, it should be an association of persons who are carrying out a common business with the view of making profits. According to Section 2 of the Partnership Act, partners are entitled to equal share of the profits, losses and the capital of the business. The parties are also indemnified by the firm in respect to their personal liabilities incurred and payments made by them for the purposes of the business. When a partner advances to the firm some money, the partner is entitled to interest on the amount of capital one has invested into the business. This will only occur after profits have been made (Kole & Nott, 2001, p. 5). Partners’ stake in management of the business is not paid for their services rendered to the firm. To introduce a new partner in business, all other members of the business must be consulted. Problems affecting the business are only solved by all the partners. Changes cannot take place in the partnership unless agreed by all partners (Corporations Act, 2001, Section 2, Part 3). Every partner is entitled to access, inspect and get copies of the book of records. Partners may dissolve the partnership anytime they want or after a period elapses. This occurs upon death of one partner, insanity or when one commits acts that may prejudice the company. When in a partnership, one is not allowed to conduct a business that is in competition with the partnership business. When one of the partners assigns his shares to another person, this person is not allowed to access the books of accounts but only gets a share of the profits. Corporations According the Corporations Act (2001, p. 75), managers make all decisions affecting the whole business and have the ability to affect the financials standing of the organization. A person has a substantial holding in a body corporate if the total votes attached to the voting shares have a substantial interest. A corporation is created through the statutes. Its identity is separate from the business owner’s entities. A corporation has powers similar to those of a natural person and cannot function on its own. Owners and workers who perform the corporate tasks are legally separate from the corporation. Individuals’ shares can be easily transferred from one person to another. The corporation can be formed by an unlimited number of persons (Corporations Act, 2001, Section 45 A). The shares of a corporation may be owned by a few individuals who run the activities of the business. Employees and other shareholders of a corporation must be licensed to provide professional services offered by the corporation. Individuals can only transfer shares to individuals licensed to carry out the activities of the corporation. Limited Liability A limited liability company is an amalgam of partnership and corporations, which is formed through the statute or law. This business entity provides more advantages over partnerships. The limited liability cushions their members from personal responsibility for the company’s debts. Members are only liable in relation to their investments. The limited liability company is also exempted from double taxation. The profits are given to the members who pay their personal federal taxes. This exempts the company from paying the federal tax except for the state and local taxes. Members are also free to decide on how to share their profits (Kraakman et al., 2004, p. 47). The members are free to sell or transfer their shares. The company can borrow loans easily from other financing institutions by securing the business assets or the business as a whole. There is no limit as to the number of people who are allowed to form a limited liability business and all members are involved in the management of the company. They also provide room for foreign investors to invest in the business. Limited liability is also easy to form since it only requires a draft of the partner’s agreements. However, limited liability companies are new and the laws governing their formation keep evolving. There are no uniform laws governing the formation of these companies across the globe. Most laws require the limited liability company’s operation agreement to stipulate the period of time the business will be in existence. Therefore, there is a high likelihood of the company being dissolved when the time elapses. Cooperatives The Cooperatives Act, 2009, Section 6, outlines the principles that differentiate cooperatives from other business entities. These principles are: deliberate and open membership, independent control of members, economic contribution, education, training and information, co-operation among cooperatives and community social responsibility. For a cooperative to trade, it must be registered with the Department of Commerce. Decisions are made through voting. A decision which gets many votes or which is agreed upon is taken up by directors. A cooperative is controlled by a person who has a right to exercise more than half of the votes cast during an annual meeting or who is appointed or elected by the majority of directors. Dividends are shared according to the maximum percentage fixed in its articles or according to the shares members own (Kraakman et al., 2004, p. 54). Members are expected to provide capital required by the cooperative. Interests on loans are limited to the maximum rate fixed in its articles and they do not exceed the prescribed maximum rate of interest on member loans. Profits arising from the cooperative may be used for development of the business or paying interest to the members, or for the community welfare. The articles of cooperatives may restrict the classes of members if these restrictions relate to any business as stipulated in the articles or are applicable in law (Kraakman et al., 2004). A cooperative can be formed by three or more individuals who are adults and are not bankrupt. The best form of a business entity to found in this case is sole proprietorship. This is because it requires little capital to start. The business does not require a long process of registration. The owner is able to keep the book of records and other affairs of the business a secret. It is also easier to cover for the losses using other resources which ensure continuity of the business. The business can be run by other family members who will provide assistance (Kraakman et al., 2004, p. 76). The business can be inherited by family members in case the owner dies. One is able to share all the profits. In conclusion, every business entity is regulated by the laws of the state. It is important for every person intending to start a business to understand the laws governing a particular kind of business. This will help people observe the law and reduce legal costs and losses they may incur for the closure of their businesses by government agencies. References Doeden, C., & Schlake, M. (2004). The art of creating a goat cheese business: A north central initiative small farm. UNL Center for Applied Rural Innovation Profitability Case Study. Retrieved from http://www.mredc.umd.edu/CultivatingEntre/USDARuralInfoCenterResourceList.pdf. Hempler, D. (2002). So you want to start a goat dairy? Retrieved from http://www.ansci.cornell.edu/goats/Resources/GoatArticles/NewGoatOwnerStuff/HowToStartGoatDairy.pdf. Jha, V. (2005). Environmental regulation and food safety: Studies of protection and protectionism. Ottawa: International Development Research Centre. Edward Elgar Publishing Limited. Retrieved from http://idl-bnc.idrc.ca/dspace/bitstream/10625/26807/4/121677.pdf. Kole, G. A., & Nott, S. B. (2001). Farm organization options. Staff Paper 2001-43. Department of Agricultural Economics, Michigan State University, East Lansing, MI. Retrieved from http://ageconsearch.umn.edu/bitstream/11794/1/sp01-43.pdf. Kraakman, R. H. et al. (2004). Anatomy of corporate law: A comparative and functional approach. New York: Oxford University Press. Retrieved from http://www.amazon.com/The-Anatomy-Corporate-Law-Comparative/dp/0199260648. New Zealand Food Safety Authority. (2009). Proposed regulatory framework for unpasteurized milk products. NZFSA Public Discussion Paper No 02/09. Retrieved from http://www.foodsafety.govt.nz/elibrary/industry/unpasteurised-milk-products-round-2/raw-milk-products-discussion-document-final.pdf. Office of Legislative Drafting and Publishing. (N.d.). Corporations Act 2001. Act No. 50 of 2001 as amended (vol. 1). Retrieved from www.comlaw.gov.au/ComLaw. Roberts, C. A. (2001). The food safety information handbook. Westport, CT: Oryx press. Retrieved from http://blogs.unpad.ac.id/souvia/files/2009/12/the-food-safety-information-handbook1.pdf. Read More