Step Six: Market Analysis. Analysis of the business plan of the enterprise HR-, PR-, GR-, IR-specialists

You have drawn up a business plan and are looking for investors. Look at it through the eyes of a person who will decide whether to invest in your project. By what parameters do investors evaluate business plans?

The investor considers various investment objects (investment projects) in order to choose a method of investing funds that will provide the highest return at an acceptable level of risk for this investor. Analysis of an investment project begins with a review of the characteristics of the investment environment (investment climate).

The investment environment in relation to a specific investment object is considered at the general economic level, at the industry level and at the local level, i.e. as the activity (business) of the company in a competitive environment. In accordance with generally accepted international practice, a survey and verification of the truth of all information (due diligence) about the investment object is carried out in order to prepare for the implementation of the investment project and its financing.

1. General economic analysis of the investment project

The process of analyzing the investment environment begins with a study of the state of the national economy as a whole. International investment and financial institutions are especially attentive to this when choosing countries for the implementation of investment projects supported by these institutions.

General economic analysis usually considers:

economic growth rates

level of socio-political stability

level of legal stability

inflation rate

stability of the national currency

state of the country's balance of payments

interest rate on a loan

size and dynamics of public spending and investment

market infrastructure development

2. Industry analysis of the investment project

The industry in which the investment project is supposed to be implemented should be considered from the following positions:

industry growth rates and prospects

state of markets

level of competition

availability of special tax regimes and other elements of state regulation

3. Microeconomic (local) analysis of the investment project

An analysis of all significant aspects of the company's activities, which is a promising investment object, is presented in the form of either a business plan or a feasibility study (feasibility study - an analogue of “feasibility study”) and reflects the following aspects:

history of the company

legal status

financial condition

status of contracts

the state of the manufacturing sector

manufactured products

managment structure

state of the social sphere

marketing policy

The completeness of the conducted microeconomic analysis depends on how the investment project is planned to be implemented: with the creation of a new legal entity or within the framework of an existing one. In the first case, a detailed consideration of all these aspects of the company's activities will be required, in the second, it will be enough to get by with a more brief description of the proposed project participants.

The analysis of the investment project itself includes verification of the initial data, analysis of the organizational and legal form of project implementation, construction of a financial model and evaluation of the project in accordance with the selected criterion. If the project meets the selected criteria, then the information obtained forms the basis for drawing up a business plan.

Along with the preparation of a business plan, an analysis of possible ways to raise capital (issuance of shares, bonds, obtaining a loan, etc.) is carried out in accordance with the existing practice of corporate finance (corporate finance), as well as with the terms of placement of securities (underwriting).

Investment project analysis

1. Checking the initial data

The information used in the analysis of an investment project must be verified. This is especially true for the following data:

amount of investment in the project (construction costs, R&D, etc.)

costs of production and sale of products/services

depreciation rates

loan interest rates

available and forecast prices for products manufactured under the project

2. Marketing analysis

The project may fail if there is no demand from potential consumers for the products manufactured under the project. Therefore, the construction of a financial model should be preceded by work to determine the demand and market opportunities (marketing analysis). The latter is carried out in the following steps:

1) assessment of competition and other external factors:

degree of competition

potential sources of competition

presence of state regulation

2) definition of marketing strategy:

marketing strategy

pricing strategy

company location analysis

follow-up marketing strategy

3) market research:

search and analysis of primary information

assessment of the market reaction

4) sales forecast:

sales volumes by periods

sales volumes by products and services

sales volumes by consumer groups

market share

The reliability of the information obtained during the marketing analysis determines the reliability of financial calculations for the project.

3. Analysis of the legal form

The organizational and legal model of the project implementation may vary depending, first of all, on the following initial prerequisites:

1. The project is implemented on the basis of an existing enterprise - an investment object, and the provision of investor funds is carried out through the sale of securities of this enterprise or within the framework of lending.

2. The project is implemented on the basis of a newly created enterprise, the founders of which include a potential investor, contributing the agreed amount to the authorized capital.

In addition, it is necessary to decide on the organizational and legal form of the enterprise created for the implementation of the project (LLC, OJSC, CJSC, etc.).

The use of one of these or other organizational and legal models and forms in the future leaves an imprint on the entire further process of investment planning.

4. Financial analysis

Financial planning is an integral part of the investment planning process and is a simulation of the future financial results of an enterprise under given forecast values ​​of the main parameters and the corresponding restrictions. Financial planning is carried out by creating and using a financial model and interpreting the results of calculations.

The use of the financial model allows:

analyze and predict financial results

perform a sensitivity analysis

reduce time and money spent on storing and processing information

reduce the risk of human error

reduce the time for calculations

The basis of the financial model is developed in such a way as to take into account all the factors that have a significant impact on the enterprise. In its most complete form, the financial model allows not only to calculate the results with given forecast parameters and draw up forecast financial reports, but also to choose the most appropriate investment schemes and types of funding sources in accordance with the established criteria. Some models include statistical forecasting methods that are used to build trends in key parameters based on past performance data.

The financial modeling process has several stages:

Conceptualization (the goals of creating a model, the parameters of input and output information are set).

Model creation.

Trial run and validation of the model.

Making changes to the model (if necessary, based on the results of the check).

Model use.

When building a financial model, elements such as, for example, are usually taken into account.

accounting methods

depreciation procedure

tax payment calculations

debt repayment schedule

stock formation strategy, etc.

When performing work on financial modeling, all information, assumptions, and the format of documents should be presented in such a way that it is easy for a specialist to reflect the specific characteristics of the enterprise in the model, and then calculate the projected results when the specified conditions are realized.

The main difference is the use of various methods of financial analysis when evaluating investment projects and business (calculation of cash flow, calculation of present value, risk assessment, etc.), since accounting methods do not provide an adequate description of ongoing and expected processes in the future. However, the application of financial analysis methods is often not possible without the use of accounting documentation, relevant forecasts, compiled as part of the financial planning of the enterprise.

For example, for any enterprise, it is important to estimate the amount of receipts and expenditures of funds, based on an analysis of the enterprise's activities for previous periods and forecasts. For these purposes, cash budgets are compiled - forecasts of receipts and payments for future periods (month, week). The calculation of the cash flow of the enterprise is carried out on the basis of the cash budget.

Compared to a cash budget, cash flow is usually built for a single investment project, and not for an organizational unit of an enterprise. The calculation of cash flow is carried out most often in order to evaluate the return on investment, and the cash budget is used in the planning process. This is one of the many points that demonstrate the need to clearly think over the goals and scheme of the created financial model, the relationship between the elements, take into account the specific conditions for the functioning of this enterprise, the implementation of the project.

Scheme of the main relationships between input and output parameters in the financial model

*When building a financial model, information on the required capital investments and funding amounts is a special type of initial information, since depending on the purpose of building the model, the initial initial data available, the volume and use of this information will be different. For example, the calculation of the amount of taxes due on the implementation of an investment project is carried out on the assumption that the project will be financed by equity capital. Interest on the loan is not taken into account in the calculation of income tax on this investment project.

** Analysis of the movement of resources includes the construction and calculation of various types of cash flows (cash flow after tax, net cash flow, ordinary cash flow, etc.), the calculation of relevant indicators when building a financial model for evaluating an investment project, a business, or a report on sources and use of funds, calculated on the basis of the income statement and the balance sheet of the operating enterprise.

5. Criteria for comparison and selection of investment projects

To compare and select investment projects, an investor usually uses the following criteria:

net present value

internal rate of return

profitability index

average accounting profitability

payback period

The proposed business plan was developed by the enterprise as a report to the bank planning to finance the investment project of OSK LLC by providing a loan. As you know, if the borrower is not able to submit the above document, then this indicates a low professional level of the enterprise administration and makes it impossible to obtain a bank loan, in addition, in the future the bank will evaluate the issuance of a loan to such an enterprise as a more high-risk operation, which will necessarily affect the amount of interest on the loan upwards.

The purpose of the investment project for the development of OSK LLC is to achieve a sustainable volume of production and sales of building materials and, as capital investments are mastered, to increase the volume of production and sales of products. It is planned to reach the specified volume of sales in 2009 by improving the quality and durability of products and expanding sales markets as a result of improving marketing activities. The calculations made in the business plan of indicators characterizing the economic, commercial and budgetary efficiency of the investment project for the development of OSK LLC showed that the project is highly effective and attractive for financing. The assessment of commercial risk in the business plan for the development of LLC "OSK" was carried out according to the stages of implementation of the investment project using expert assessment methods. An analysis of the most significant simple risks of an investment project in terms of unforeseen costs (5.87), lack of working capital (3.33), currency risk (1.67), consumer solvency (1.67) showed that the risks most likely will not manifest themselves . Risk assessment was carried out on the basis of the developed expert system.

Measures have also been developed for the legal protection of the rights of the investor, ensuring guarantees for the implementation of the project. And as security for the fulfillment of obligations under the loan, the Board of Directors of OSK LLC decided to pledge to the lender for the entire term of the loan agreement a package of documents certifying the right to own a certain share of OSK LLC. The financial condition of the enterprise in the developed report is characterized as difficult, although there have been no significant changes in the structure of the balance sheet over the past year.

The balance currency decreased by 4.9 million USD. This, as well as a slight decrease in the share of non-current assets (by 13.36%), is mainly due to the disposal of obsolete and worn-out equipment.

As part of liabilities, the share of sources of own funds decreased by 15.23%, in absolute terms - by USD 7.0 million.

The cost of fixed assets decreased by 6.5 million USD, but at the same time, the equipment wear coefficient decreased, which improved the structure of fixed production assets.

The current assets of the enterprise for the period increased from 4.7 million USD. to 6.1 million USD, and their share in the value of property increased from 20.36% to 33.72%, or by 13.36%, which can be explained by the influence of inflationary processes.

In the composition of current assets, the share of reserves and costs in the total amount of the company's funds increased from 14.60% to 26.40%, although in absolute terms it increased from 3.4 million USD to 4.8 million USD.

Marketable assets of the enterprise decreased from USD 10.3 million to USD 9.7 million. The decrease was due to the collection of receivables, which in the current environment is a positive sign.

There is some improvement in the material and technical base of the enterprise, some of the worn-out funds and inefficient intangible assets have been eliminated, although the enterprise needs to significantly improve the efficiency of using all non-current assets;

The enterprise manages to make current payments to the budget in full;

There are no arrears in wages;

The structure of external liabilities worsened due to an increase in the share of short-term loans;

There was no significant change in the volume of own working capital;

The funds of the enterprise are not used effectively enough, the turnover of both the capital as a whole and its individual parts is still low;

The company is experiencing liquidity problems, which can significantly worsen without a significant change in the financing scheme (attraction of long-term sources). Since the underdevelopment of the Russian stock market as a means of attracting investments does not allow using the stock mechanism to finance production by placing equity or debt securities, it seems most effective to change the structure of financing an enterprise by attracting long-term loans or loans.

Simultaneously with the solution of the problem of increasing the share of LLC "OSK" in the Ural market of building materials, the marketing department of the enterprise developed a plan for the development of channels for promoting products in the market of other regions of Russia, which can be considered as an additional reason for the transfer of LLC "OSK" by the bank to a low-risk group.

The organization also provided the bank with a phased schedule for the implementation of the future investment project. This chart illustrates the priorities placed by management in relation to investees.

With regard to the income of OSK LLC received during the implementation of the investment project, it is indicated that they are determined by the ratio of selling prices for products and the cost of its manufacture (by type), as well as planned production volumes. The project was evaluated on the basis of integral indicators reflecting the economic efficiency that is planned to be achieved as a result of its implementation. The discount factor (discount rate) adopted in the calculation of project efficiency is 0.15 (15%) and coincides with the average yield of government short-term bonds predicted for the project implementation period.

Last update:  02/17/2020

Reading time: 24 min. | Views: 40170

Hello, dear readers of the Internet magazine about money "RichPro.ru"! This article will talk about how to write a business plan. This publication is a direct instruction to action that will allow you to turn a crude business idea into a confident step-by-step plan for realizing a clear goal.

We'll consider:

• What is a business plan and why is it needed;
• How to draw up a business plan;
• How to structure it and write it yourself;
• Ready-made business plans for small businesses - examples and samples with calculations.

At the end of the topic, we will show the main mistakes of novice entrepreneurs. There will be a lot of arguments in favor of creating quality and thoughtful business plan that will bring the realization of your idea and success affairs in the future.

Also, this article will provide examples of finished works that you can simply use, or you can take as a basis for developing your project. Ready-made examples of submitted business plans can be free download.

In addition, we will answer the most frequently asked questions and clarify why not everyone writes a business plan, if it is so necessary.

So, let's start in order!

The structure of the business plan and the content of its main sections - a step-by-step guide to compiling it

1. How to write a business plan: detailed instructions on how to write it yourself 📝

7. Conclusion + related video 🎥

For every entrepreneur who wants to develop himself and develop his business, a business plan is very important. He performs many responsible functions that no other person is able to do differently.

With it, you can get financial support and open, develop your business much earlier than you can collect a significant amount for the business.

Investors generally react positively to a good, thoughtful, error-free business plan, as they see it as a way to make easy money with all the troubles invented and described.

In addition, even before the establishment opens, you see what awaits you. What risks are possible, what solution algorithms will be relevant in a given situation. This is not only investor-friendly information, but also the right plan if you get into trouble yourself. In the end, if the calculation of risks is too daunting, you can remake a little, transform the general idea to reduce them.

Creating a Good Business Plan is an excellent solution for finding investments and developing your own action algorithms even in the most difficult situations, which are more than enough in business.

That is why, in addition to their own efforts it is worth using "other people's brains". A business plan includes many sections and calculations, research and knowledge, only with successful operation, with which success can be achieved.

The ideal option would be to study all aspects on your own. To do this, it is not enough to sit and read the relevant literature. It is worth changing the circle of contacts, turning to courses and trainings, finding specialists for consultations on certain issues. That's the only way really figure it out in the situation and dispel all your doubts and delusions.

A business plan is worth writing for many reasons, however home is a clear algorithm of actions by which you can quickly get from point A(your current position, full of hopes and fears) to point B(in which you will already be the owner of your own successful business that consistently and regularly generates income). This is the first step towards fulfilling the dream and the confident status of the middle class.

If you still have questions, then perhaps you will find the answers to them in the video: "How to write a business plan (for yourself and investors)".

That's all we have. We wish everyone good luck in business! We will also be grateful for your comments on this article, share your opinions, ask questions on the topic of the publication.

Tel. +7903 323 04 41

In the last decade, consulting companies, manufacturing enterprises and other business entities have compiled a huge number of business plans for investment projects intended for external financing. Credit specialists, investors need to conduct their in-depth assessment and select the best ones. Often, an independent examination of ready-made business projects is also required.

Let's take a look at some of the key points in evaluating a business plan in this article.

You need to start evaluating a business plan by identifying a software tool for developing it. If this is the Alt-Invest or Project-Expert program, the analysis of the plan will be simplified. If the calculations are made in an unknown program or manually, an additional analysis of all financial calculations will be required.

If the business plan is to be submitted to a bank for lending, to ministries or other government agencies to receive support, it is necessary to find out if there are requirements for business projects (competitive documentation) and whether the developed business plan complies with them.

A negative cash flow indicates serious mistakes made in the evaluated business plan, or the failure of the investment project - there is simply not enough money to implement it.

When analyzing a business plan, pay attention to the indicators of the economic efficiency of the project. The following are the standards necessary for making a positive decision on lending to an enterprise by a bank:

Analyzing sections of the business plan, it is necessary to determine the moment of starting a business project. The month of commencement of settlements (implementation of the project) in the business plan should be later than the date of its consideration by the end user (bank, investor, ministry). You also need to match the dates in the business project schedule with the dates of the investment.

When analyzing the developed business plan, it is advisable to compare the production capacities of the enterprise and the production volumes included in the project - whether they are overestimated.

The analysis of calculations when evaluating a business plan also provides for checking the mortgaged taxation system, applied tax rates and benefits, and the amount of insurance premiums. Often, business plan developers without experience simply miss out on some taxes, thus overestimating the financial results of the project and underestimating the budgetary effect of the business project.

One of the indicators of a well-developed business plan is an extended analysis of the market and competitors, the existence of reasonable demand for the product (service) produced.

When conducting an examination of a business plan for creating production attention, it is necessary to pay attention to the existence of a rationale for the necessary communications (electricity and gas supply, water supply) and the costs of their summing up.

When analyzing the Risk Assessment section of the business plan, the calculated break-even and sensitivity analysis are considered, as well as the parameters and range (%) for which it was carried out.

When using a discount rate in a project, it is necessary to check the accepted value of the typical risk, whether the refinancing rate and the level of expected inflation are correctly applied.

Analyzing the developed business plan, the type of prices used in project calculations is established. A business project must be calculated in comparable prices: constant, including (or excluding) VAT. Either current, excluding VAT, or current, but including VAT.

In business projects intended for state support, it is usually necessary to calculate the budgetary efficiency from the implementation of the business plan, as well as the socio-economic utility. Even if the tender documentation does not require these indicators to be included in the business plan, it is still desirable to calculate them.

The considered points of the analysis and evaluation of the business plan are not final, they are, of course, supplemented depending on the complexity and focus of the project under consideration. The specifics of checking a business plan also depends on the specific type (s) of activity laid down in it. Actually, this is the cost of evaluating a business plan.

But this approach is sufficient for a “superficial” examination of a business plan, in order to reject an unfinished or low-quality project already at the initial stage of the assessment.