How to start Dairy Business in India [A Profitable Business?]

Are you thinking about opening your dairy business but not sure if it is a good idea or not?

Yes?

Then relax. By the end of this blog, the picture will be crystal clear.

Well, from a hot cup of tea in the morning to cold ice cream as your dessert at night, each one of us is consuming milk in some or another way. Contributing to 4% of India's GDP, India's dairy business is one of the most suitable potential choices available for business in the country.

So, the dairy business is definitely an idea to consider.

Now that you have decided to start your dairy business, here’s a detailed and informative guide on how to start dairy business. This guide will be your savior to any sort of apprehension that may arise in your mind relating to the dairy business India. We have covered all the steps in this comprehensive guide for your dairy farm business.

Following are the steps to start a dairy business -

1. Physical Plan

Before opening any potential business, a dairy business plan must be formulated. A plan could be formulated in consideration of several factors, the most important being the requirements of the market. The eventual goal is to serve the consumers, so it is quite beneficial to study the target area you want to set up your dairy farm business.

The deciding factors include the geography, household types, income, culture of the place, etc. Based on these factors, the following choices should be included in your physical plan:

• The type of animals you want to keep like cows, buffaloes, goats, etc.
• Number of animals - 10, 15, 20, etc.
• Facilities you want to include - milking facility, winter facility, housing facility, etc.

2. Choose location

Based on your physical plan requirements, an ideal location should be selected where all the facilities are available at a price that maximises your profit. The location you choose for your dairy business India should be within the area, city, or state you wish to set up your business.

The area of the land should be large enough to accommodate all the facilities. It could either be set up on a place you own or an area which is rented on lease to you. In the latter case, the terms of the agreement should be taken care of. A few ideal locations of the dairy farm in accordance with different benefits are:

• Near the cities: Assured market, fewer transportation costs, less loss, high prices
• In rural areas: lesser labour and input costs, land for fodder cultivation

An ideal location for setting up a dairy business is in villages that are located in proximity to cities, and are usually on highways.

3. Plan Investment

After a thorough estimation of the total costs you require for your dairy business, you should make a dairy business plan on how to arrange your finances. Your investment is directly dependent on the machinery, facilities, area, animals you opt for.

There are several government schemes and private help you can avail to arrange your finances. These are the sources of investment you could consider:

• Your own savings
• Bank loans
• Borrowings from non-institutional assets like relatives
• Self-help groups
• Subsidies by NABARD/Government

4. Obtain Licensing

Once you have decided on your capital source, you are ready for registrations and licensing. These licenses hold fixed fees and could be processed sooner with additional fees. These licenses are:

• Dairy Farm License
• Trade License
• Shed License
• FSSAI License
• Company Registration Certificate
• Registration with ROC or Registrar of Firms

5. Purchase of Assets

After the arrangement of finances and licensing, the next sole focus of how to start dairy business is to buy the required assets, animals, and machinery. This step is deemed as essential since it will determine the future of your dairy business in India. This requires three major decisions:

Purchase of animals

The decisions regarding different breeds of animals and kinds of animals will determine the quality of the milk produced. These are a few of the preferred species of the following animals:

• Cows: Cross-bred cows of Zebu and nondescript breeds with exotic breeds like Jersey bulls, Brown Swiss, Holstein Friesian, Sahiwal herds

2. Buffaloes

Mehsana, Elite buffaloes, Murrah, Nil-Ravi

3. Goats

Jamnapari, Boer Goat, Barbari

6. Purchase of Machinery

The machinery required for your dairy farm is dependent on the size of your dairy farm. The equipment required for your dairy farm is distributed in two broad categories:

• Milk processing equipment: Pasteurisers, homogenisers, and tanks, separators, milking machines.
• Farm equipment: Fodder truck, tractor implements, pressure washer, generator, mud pump, fodder block machine, fodder compacting press, milking cans, loader tractor, feed grinder, etc.

7. Adequate infrastructure

An ideal infrastructure to carry out dairy farm business activities becomes a necessity. Thus, the third major decision relating to your investment is the enhancement of infrastructure. The infrastructure required in your dairy farm is:

• Sheds: Dairy sheds, chaff cutter shed
• Ancillary structures: Milking parlor, straw store, feed store, milk room, manure pit, housing room
• Roads and alleys
• Water tanks and bore-well
• Farm implement and milk storage room, sterile facility
• Office

8. Hire employees

The dairy business is labor-intensive work that requires employees for several small and large activities. You could take help of OkStaff which is a one-stop solution for employee management. Employees should be included that meets the following requirements:

• Technically trained workers in areas like first aid, milking, etc.
• Helper workers trained or untrained
• Managerial staff like managers, heads
• Support staff
• Stockmen
• Veterinarian
• Transport men

9. Marketing

Your query of how to start dairy business will be incomplete without the business marketing. You can create a buzz about your business using several potential marketing strategies like commercials, brand campaigns, new ventures, and business proposals. These strategies would make your business truly a successful venture.

So, there can be no denying that dairy business in India could truly prove to be one of the life-changing business opportunities. With an uprising fondness of the milk products, the demand for dairy-business would be everlasting.

Also Read:

1) 35 Small Town Business Ideas That Every Community Needs
2) How to start a restro-bar in a tier-2/tier-3 city?
3) What is a Manufacturing Business? An A to Z Guide of a Manufacturing Business
4) OkCredit: Simple, Paperless & Secure solution for businesses

FAQs

Q. What is the minimum investment that one needs to make in this business?

Ans. The cost of setting up a small-scale dairy business in India is usually around Rs. 10 – 20 lakhs, while it exceeds Rs. 1 crore in the case of large-scale business. This money is dependent on the size of your dairy farm and the facilities you wish to provide. The more advanced the facilities are, the more is the investment.

Q. Does the owner of a dairy business require any company registration certificate?

Ans. The owner must get a company registered certificate by registering his firm as a sole proprietorship, private limited, limited liability partnership, partnership, public limited, NGO, etc., based on the company’s working style.

Q. Does the dairy business only need attention till the stage of marketing?

Ans. No, the dairy business does not end at the process of marketing. The business needs continuous implementation of new, improved, and modern management practices. These activities are limited by timelines; thus, they should be completed within them.

Q. What are the important tasks that need to be done before you want to start a dairy farming business?

Ans. The important tasks involve the development of a business plan, consultation with professionals, comprehensive business research, plan of healthy infrastructure, effective waste management and feeding system, obtain valid licenses, get your capital arranged.

These are a few of the tasks that are required to be done before you start a dairy farming business.

Q. What are the major requirements of this business?

Ans. The major requirements include the availability of land either owned or rented on a lease, availability of capital generated through in-house sources like savings and out-house sources like loans, self-help groups, borrowings, and availability of labour, either skilled or unskilled. Land, capital, and labour are the three jewels of the dairy business. Land is the asset where every activity is carried out, capital is the asset that makes every function possible, and labour is the asset that carries out all the activities.