Crowdfunding and Group Finance for Poultry

Three kinds of money people will offer you, and they are not the same

Money from friends is the easiest money to lose, because nobody writes down what they gave. Before you accept a single cedi, decide which of three things is being offered, because each one creates different duties and different risks. Mixing them up is how a generous neighbour ends up with a claim on your house.

Most of the money a small poultry project raises is either a gift or a pre-order, and that is the healthy end of the market. The investment end needs a lawyer and the regulator before the first offer goes out, not after the first complaint.

Pre-orders are the safest kind, if you can deliver the birds

A pre-order works like this: the buyer pays now for birds or eggs you will deliver later, and you agree a date, a quantity, a price and a refund rule. It is ordinary commerce. It only becomes risky when the date depends on a hatch you have not yet booked.

Book the chicks first, then sell the places. Once you have a confirmed hatch date and a confirmed quantity, you know how many pre-orders the batch can honestly carry. Our deposit process for day-old chicks explains how we fix the order and the date, and it is the same logic you should apply to your own buyers.

Be careful with the size of a single order. Orders of one box of 50 can be placed directly through the order form, and orders of 1,000 chicks or more are quoted individually. If your pre-sale list is bigger than one box, ask for the quote in writing before you open the campaign, because the price on the day you open may not match the price on the day you deliver.

• Name the breed, the hatch date, the delivery date and the number of birds in every offer.
• Set a clear cut-off for orders, and stop taking them when the batch is full.
• Take a deposit only on the terms you have written, and give a receipt for each one.
• Keep a list of who paid, how much, and by which method, in the same book as the farm's costs.

When it becomes an investment, and why that needs more care

The moment a backer gives money expecting a share of profit, a fixed return or a stake in the farm, you are no longer running a pre-order. You are raising investment, and the rules are different. In Ghana, offers of investments to the public are regulated by the Securities and Exchange Commission. Calling the same money a ‘donation’ to avoid that does not change what it is.

We are not lawyers, and this article is not advice on any particular offer. What we would say to any farm considering investment is this: do not make the offer on a WhatsApp group, do not promise a percentage, and do not accept a cheque from a relative into a personal account. Speak to the Securities and Exchange Commission and to a lawyer who works with small businesses before anything is written or sent.

Crowdfunding campaigns in particular should not promise returns on birds. A campaign that tells backers they will earn a monthly sum from a flock is making a promise that depends on prices, disease and weather, none of which you control. Reward your backers with birds, eggs or thanks, and keep the financial promises to the bank.

Running a campaign: what backers need to see

A campaign that works tells a backer exactly where the money goes and when the birds arrive. Vague appeals about a dream of a poultry farm rarely raise enough, and they make people ask questions you are not ready to answer. Put the numbers in front of them.

Show the full cost of the batch, the hatch and delivery dates, the house or space the birds will go into, and the feed and vaccine plan. Use your own photographs of the house, not stock images, because a backer who visits will notice the difference. If you are buying day-old chicks, say so, and say which hatchery and which breed. Our Sasso day-old chicks page describes that breed's starting price and what a box holds.

• The goal, the amount already raised, and the amount still needed, updated every week.
• A line-by-line budget, including delivery, feed, medicines and a contingency for losses.
• The hatch date, the dispatch date and the date you expect backers to collect or receive birds.
• Who to contact, with a phone number that answers during the campaign.
• What happens to the money if the campaign closes short, written in plain words.

Group finance: a rotating fund for the next cycle

Another route to money is a group of people who each put in a fixed amount per round, and one member receives the full amount each time to buy birds. It is the same idea as a rotating savings group, and it suits a small group that wants to restock every cycle without borrowing from a bank. It works only when every round is recorded and every member can see the book.

Here is an illustration with six members and Sasso chicks. The figures use the starting price of GH₵13 per chick, which is confirmed at order, and a box of 50 at GH₵650. If your group needs a loan to start, compare the cost with the options in our guide to funding and loans for a poultry farm.

The extra GH₵10 a round stays in the account as a small reserve for transport and paperwork. Six rounds give six boxes and 300 birds, and every member receives one box in turn. The arithmetic is simple. The risk is in the timing: the member who receives the box in round one carries the others' trust until the rest have paid in. Agree the order of receipt by lot, write it down, and do not let anyone jump the queue because they have a sick relative.

The written agreement, clause by clause

A group or a pre-sale campaign needs one document that every participant signs, and that anyone can read without help. It does not need to be long. It does need to cover the points below, in plain language, with a date and the signature of each person who puts money in.

For more on how a group keeps its money and its members together, read our guide to poultry cooperatives and group buying. Our common beginner mistakes list also shows where group money usually goes wrong. The clauses above are a starting point, and an agreement that touches investment should be reviewed by a lawyer before anyone signs.

Red flags that should send you away from a deal

Most fraud in agricultural money looks friendly at first. The person offering the deal is known, the pictures are convincing and the invitation comes from someone you trust. These are the signs that should stop you before the money moves:

• A fixed monthly or annual return promised on birds, eggs or a flock.
• Pressure to pay today, or a discount that expires before you can ask a question.
• Payment into a personal account rather than a named business or group account.
• No written terms, or terms that change when you ask about them.
• No hatch date, no breed and no delivery plan, just a promise of ‘big profit’.
• Photographs of a farm the seller does not own, which you can find on a search engine in seconds.
• A reward for bringing in other people, paid from the money they put in.

If you see two of these, walk away. A genuine farm will be happy to wait a day while you check its details, and it will never mind you asking for proof of the batch or the hatchery.

Keeping backers informed from the order to the sale

Backers stay with a project when they hear from it. Silence between the payment and the delivery is what turns a patient supporter into a complaint. Set a simple schedule at the start and keep to it, even when the news is bad.

1. At the order: the confirmed price, the hatch date and the delivery date, sent in writing.
2. At the hatch: a short update with the number of chicks confirmed and any problems on arrival.
3. At the first two weeks: the brooding routine, the temperature and the first mortality figure, honestly reported.
4. Mid-cycle: a photograph of the house and a note on feed, water and vaccination.
5. At sale or dispatch: the final count, the weight or egg figures, and the amount each backer receives.

Share the batch record with backers, not only the photos. A record shows the vaccinations the chicks had, the batch number and the dates, and it stops rumours before they start. At the hatchery, every box travels with that record, so this is the easiest part of the campaign to keep honest.

A worked example: pre-selling 300 Sasso birds

Suppose you want to pre-sell 300 Sasso birds to neighbours and a local chop bar, and you collect deposits before the chicks arrive. The figures below are illustrative. The chick cost uses the starting price of GH₵13 per chick, confirmed at order, and the other lines are placeholders for you to replace with your own quotes.

The lesson is in the loss allowance. A campaign that sells exactly 300 birds to 300 buyers, with no spare, is a campaign that will fail in the first bad week. Plan the batch for the number you have promised, then add a margin, and decide in advance how the margin is handled. Either you refund the difference or you keep it openly as a reserve, and you tell the backers which.

When the campaign falls short or a batch fails

Sometimes the money comes in slowly, and the honest answer is a smaller batch. Do not hatch more birds than your backers have paid for, and do not start the chick order until the deposits cover it. If the campaign closes short, cut the order to what is paid, and tell backers the new number before the hatch date, not after.

Losses in transit and on arrival are the other risk. Count the chicks at the door on delivery, take a photograph and send it the same day. Our policy is that dead on arrival birds are replaced free in the next hatch, which only works if the count and the photograph were done on the day. Read our notes on day-old chick losses in transit so that your backers understand what is normal and what is not.

When a batch fails for reasons on your side, such as a brooder that was too cold on the first night, refund the backer or offer a place in the next batch on written terms. Either way, the record should show what happened and what was done about it.

A checklist before you ask anyone for money

Use this list before you open a campaign, post a group invitation or accept the first deposit. If a line cannot be ticked, the campaign is not ready.

1. The type of money is decided: gift, pre-order or investment, and the investment route has been checked with the regulator and a lawyer.
2. The hatch date and the breed are confirmed in writing with the hatchery.
3. The full budget is written, with a loss allowance and a contingency.
4. The account that holds the money is a named business or group account, not a personal one.
5. The written agreement covers every clause in the table above, and every participant has a signed copy.
6. The reporting schedule is agreed and written down.
7. There is a plan for a short campaign and a plan for a failed batch.
8. You have explained, without promising returns, what the people paying will receive.

To check your numbers before you ask anyone to pay in, our poultry business plan guide and feasibility study guide give you the cost lines to test. Our bulk day-old chicks page covers larger orders. For a current quote, use the order form or WhatsApp us on +233 24 915 1503, and the frequently asked questions answer the questions most first-time group buyers ask.

Questions farmers ask