Business plan and its analysis. Learn how to properly analyze a business plan. Investment Specialist

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 projects supported by these institutions. investment projects.

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 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 is enough to do more brief description prospective project participants.

The analysis of the investment project itself includes verification of the initial data, analysis of the organizational and legal form of the project implementation, construction financial model and evaluating the project according to the selected criteria. 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 is carried out possible ways raising capital (issuing shares, bonds, obtaining a loan, etc.) in accordance with the existing practice of corporate finance (corporate finance), as well as with the terms of placement valuable papers(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 Novosoz this enterprise, whose founders include a potential investor, contributing a specified 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 future financial results activity of the enterprise with given predictive 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.

management methods accounting

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 cash flow, present value calculation, 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 share 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 various kinds cash flows (cash flow after taxes, net cash flow, ordinary cash flow, etc.), calculation of relevant indicators when building a financial model for evaluating an investment project, business, or a report on the sources and use of funds, calculated on the basis of a profit statement and the balance sheet of a going concern.

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

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Implementation of a preliminary expert assessment of the business plan

At this stage, the assessment of the state of the industry of the economy set out in the business plan (the first parameter of the assessment), to which the organization that submitted the business plan belongs, and the position of the organization within the industry (the second parameter of the assessment) are checked.

Analysis of the state of the sector of the economy is carried out by referring it to one of the following provisions:

germinal;
developing;
mature;
grown old.

The second parameter involves assessing the competitiveness of the organization within the industry, by referring it to one of the following provisions:

dominant;
strong;
favorable;
unstable;
weak;
unviable.

When comparing the obtained parameters, a matrix is formed life cycles organizations.

State of the industry/assessment of competitiveness	germinal	developing	aged
dominant

favorable
unstable

unviable

Projects from among the promising ones will be in the upper columns of the matrix, on the left side. If you are at the bottom right - the project is unsuccessful.

Marketing Analysis

The purpose of analyzing the commercial viability of a business plan is to study the following questions:

Will the organization be able to sell the product of the business plan under review?
Will the company receive a sufficient amount of profit from the sale of the product?
Is the project compatible with internal and foreign policy states?

If the answer to at least one of these questions is negative, the business plan is subject to rejection.

Implementation of a technical assessment of the effectiveness of the business plan

At this stage, the correctness of the conclusions made in the business plan on the following issues is determined:

On the application of technology suitable for the implementation of the project;
on the analysis of regional conditions, including in terms of price and availability of materials, energy, labor resources.

Implementation of a financial assessment of the effectiveness of the business plan

The implementation of a general algorithm for the implementation of a financial analysis of a business plan is a real business school:

Assessment of the financial position of the organization during the previous 3-5 years of the organization's operation;
project payback assessment.

Assessing the payback of the project, within the expected period of its implementation, an analysis of the planned cash flows is carried out. These volumes should cover the size of the total investment.

From the point of view of financial parameters, the project can be accepted if the total cash flows generated from the issue of securities provide coverage of the required rates of return.

The economic efficiency of capital investments is analyzed by the following methods:

- The method of assessing the payback period of investments:

where PP is the payback period, years;
I0 - initial investment;
CFt - net cash receipts from the implementation of the investment project in year t.

- Method for determining the average annual profit:

Where T is the duration of the investment period;
Рt is the cost estimate of the results obtained from the project during the period of time t;
Zt - total costs on the project during the period of time t;
m is the number of intervals during the investment period.
A business plan can be considered economically attractive if this parameter is positive.

- Simple rate of return on investment (ARR) method:

where EBIT(1-H) is income after taxes, but before interest payments, equal to the product of income before interest and taxes (EBIT) and the difference between the unit and the income tax rate H;
and - the value of assets at the beginning and end of the period under review.

- Net income method (NV) (net value, NV):

where: D - total income for the project;
З - total costs of the project.

- Net present value method (NPV):

where E is the desired rate of return (discount rate);
I0 - initial investment of funds (investment costs),
CFt is the net cash flow at the end of period t.

- The method of assessing the return on investment:

- Internal rate of return (IRR) method:

The question of assessing the quality of tools for determining economic efficiency is the subject of numerous scientific discussions. In the most general and simple form, the system of parameters for selecting an appropriate business plan option can be represented as follows:

Acceptable values of the payback period are characterized by a period shorter than the billing period and shorter than the return on investment;
if NPV>0, then the project is effective and can be accepted: the higher the NPV value, the more effective the business plan;
if the value of the profitability index PI>1, then the project is effective;
if the value of the indicator IRR> discount rate, then the project is expedient.

Implementation of institutional analysis

As part of the institutional analysis, the possibility of successful implementation business plan, taking into account organizational, legal, political and administrative factors.

Conducting an impact assessment internal factors carried out within the following blocks:

1. Management Capabilities:
experience and qualification indicators of the first persons of the organization;
motivation top managers;
factors of compatibility of top managers with the goals of the business plan.
2. Opportunities of labor resources.
3. Capabilities of the organizational structure of the organization with a thorough analysis of decision-making processes and delegation of authority.

Performing a risk assessment

The following types of risk are consistently assessed:

Production - associated with the possibility of non-fulfillment of obligations to consumers of products;
financial - related to the possibility of default on credit obligations;
investment - associated with the possibility of depreciation of investment and financial portfolios;
market - associated with the possibility of fluctuations in prices, rates and exchange rates;
political - associated with possible losses from political changes.

The algorithm for analyzing the degree of influence of business plan risks is implemented according to the scheme:

The outcome of the risk analysis is a description of the uncertainties inherent in the business plan. Further carried out evaluation of the effectiveness of the business plan for the limit values of each risk parameter, the NPV and IRR indicators are calculated for various conditions for the implementation of the business plan.

The next step is to analyze the scenarios for the implementation of the business plan:

optimistic;
standard;
pessimistic.

Only a pessimistic scenario can be taken as the basis for the conclusion about the possibility of successful implementation of the business plan.

* Calculations use average data for Russia

Step 6: Preparing the Market Analysis Section of the Business Plan

Any business plan should have a section describing the target market, analyzing its general trends and conditions, and determining how these trends affect the results of your operations and the profits of the new company.
If you professional marketer with extensive experience, this part of the work will not cause you any difficulties. For everyone else, we provide detailed recommendations with illustrative examples.

Market characteristics

First of all, collect as much information as possible about the current market situation, the main industry trends, forecasts and prospects for its development. Investors are interested in the size of the market you are going to enter with your products - regional, Russian, CIS or worldwide, the level and trends of the industry, price dynamics over the past five years.

Answer the question, what are the sales trends of your main products or services in the market over the past five years? Describe what projections the trend analysis makes for the next five years and indicate sources of information. Describe how these changes may affect your company's operations in the future.

For example:

The industry engaged in the production of goods or the sale of a product or service in ____ showed rapid growth from ___ rubles. up to ____ rubles, which is ___% for ___ years.

According to data from specialized publications (research companies, trade organizations, reports, marketing agencies), over the next ___ years, the market volume is expected to increase by ___%. As expected, by the end of ___ the volume of the industry will be ____ million rubles.

The most promising and rapidly developing segment of the product or service market is ____, which allows us to consider this direction as optimal for opening a new type of business.

The level of attention to be given to market and industry analysis in your project depends on size and prospects of your enterprise.

Of course, if you are going to open a shoe repair shop on your street, it is hardly worth describing in detail the volumes and forecasts for the development of the global market for such services.

However, even if your business will cover only a district or city, assessing the situation in this area on a large scale will not only add solidity to your business plan, but will also allow you to assess the prospects for expanding the company, developing new areas of work in the future, and the range of goods and services offered.

Ready-made ideas for your business

If your business does not require large investments and/or you do not have accurate data for a new industry, then you can do without deep analysis, accurate data and references to authoritative sources. Moreover, you can use your own estimates and forecasts of the situation based on your research.

For example:

Since the product we offer appeared on the market relatively recently, and the market for its sale is just beginning to form, it is rather difficult to accurately estimate its sales volumes for the next few years. The size of potential sales can range from ___ to ____ rubles. However, it is safe to say that the market is expected to grow rapidly.

At the moment, sales in monetary terms are increasing by ____% annually, and the number of products sold is growing by ___ units per year. Growth slowdowns are not expected over the next few years.

Moreover, since the market is just beginning to be mastered by an increasing number of large manufacturers, experts predict a further increase in sales by ____% per year.

In the business plan for large enterprises it is necessary to describe what market share the company will be able to occupy and assess its export potential (plans for the business to go outside the country).

Here it is worth mentioning the specifics of the chosen industry (entry threshold, seasonality factor), as well as the special goals of your presence in the market, if any.

When evaluating market share, try to be as objective as possible and do not wishful thinking. To do this, justify your forecast with the results of your research and expert assessments.

Determine the total size of the market, its growth rate, the size of the market in one year, three years, five years, the percentage of profits you expect to receive in one year, three years, five years, and the percentage of profits that competitors have.

For example:

According to data obtained by __________, local /regional /federal/ international market product or service generates annual sales in the amount of ____ rub. (dollars or euros). According to our estimates, the company _________ will be able to take ____% of the market over the next ___ years.

Characteristics of product consumers

Determine if your target market is consumer or industrial (called B2B market - "business to business").

If the product or service you are offering is intended to end users, then give their age characteristics, level of education, family composition, gender, income level, describe their lifestyle, professional activities, general needs, purchasing behavior.

For example:

The target audience of our company includes men and women aged ___ unmarried (married / having children), with secondary vocational / higher education, with an income of _____, working on a full-time basis (part-time / unemployed / students / pensioners).

They live in large cities (suburbs/medium and small towns/districts), tend to read ____, listen to ____, watch ____ and often (occasionally/rarely) use the Internet.

Describe the factors that guide your potential customers when buying products or services similar to yours. If your product is already on the market or if there have been marketing research and focus group testing, indicate in your business plan their results and the opinion of potential buyers about the goods and services offered.

Marketing strategy

An effective pricing policy is an important factor success marketing activities enterprises. In this section of your business plan, give the calculation and justification for the prices you set for goods or services.

The prices you set for your products will directly affect your sales volume and profit margins. To determine your pricing policy, you need to set goals, develop a pricing system that takes into account all the costs of the enterprise, choose a pricing strategy to create a presence in the market.

For example:

Before pricing our product, we calculated the cost per unit. We then studied the prices of similar products on the market.

If our product had an average market price, and its sales were the minimum predicted volume, the company would make a profit of ___ in ___ days/months/years.

But since the product developed by us has additional unique characteristics, including _____ (multifunctionality, reliability, long service life, etc.), we considered it possible to set a price for it ___% higher than the average market price.

Before approving the cost, we conducted a survey among potential users of the product. The questionnaire included questions about the benefits associated with additional product features and the demand for new features.

Thus, we found out whether the established price is acceptable to consumers.

According to the results of the study, it turned out that 50% of the respondents showed interest in the new product and considered its price fair. 20% of this group have already sent orders for our products. Thus, our proposed system of pricing and discounts for the product is _________.

Attach a price list to the business plan, if you already have it approved.

Describe the sales distribution system currently and the planned distribution pattern in the future. The secret to good distribution is simple: you need to get your products and services to the people who need them in right time, in the right quantity and at minimal cost to you.

The traditional distribution scheme includes sales to consumers directly, through agents or a network of distributors, through a wholesaler or retailer. The volume of sales through each of these channels depends on the number of consumers your product is aimed at, the concentration of the market, the price and complexity of the product, financial resources and the need for control.

For example:

The company's main distribution channels are ____. We chose to use channel A because its target market has similar characteristics to our potential customers. Channel B was chosen by us for the reason that it has exclusive rights to trade in the market of this region. Channel B provides a high quality customer experience and has the widest market coverage in the region.

Now you need create a marketing plan for your product, which covers the promotional tools you intend to use, sales promotion, service and warranty, and public relations.

Write about what you want to convey to your customers and / or about the possible topics of advertising messages. List the advertising media you plan to use and explain why you chose those media.

For example:

During the period of seasonal promotions and sales, we will ______. For special events, our company will use the services advertising agency to develop the whole concept advertising campaign or individual materials.

When choosing an agency, we plan to contact Special attention on his professionalism (experience in related fields, client base, creativity, etc.).

Sales promotion is a combination of several activities provided by the promotion plan. The main purpose of sales promotion is to improve the wholesale and retail sales of products.

To do this, methods such as selling through catalogs, distributing flyers with information about promotions, decorating shop windows and expositions in trading floor, placement of banners and signs (that is, everything that is not directly related to advertising, but contributes to sales growth and awareness of your company).

This also includes participation in trade shows and demonstrations.

Describe special promotions or your company's offerings that may increase the sales of the products or services you offer. Specify the duration and frequency of these sentences, their target audience and ways to inform potential buyers about them.

For example:

In order to increase the sales of our products or services, we plan to organize the following special offers and promotions (discounts, special events, exclusive offers, discount card system, sales, distribution of free trial products or services, contests, charity events).

These events will be held weekly (daily, monthly, every three months, every six months, during sales downturns) and will last an average of ___ days. We plan to inform our customers about the next promotions with the help of _____.

The direction of Public Relations (public relations) is closely related to the others, but is usually considered as a separate component of promotion.

This includes issuing and distributing press releases, holding press conferences, participating in radio and TV programs, attending various public and commercial events, and creating other favorable informational occasions that will attract the attention of the public and the press.

For example:

The main purpose of our public relations activities is to increase general public awareness of our products and/or services.

In addition, we plan to emphasize our competitive advantages and inform potential customers about the latest trends and new developments of our company and the entire industry as a whole.

As part of the ongoing PR campaigns, press releases, test samples, multimedia products are sent out, publications are initiated in the media, interviews are organized with top officials of the company, product reviews are prepared and press conferences are held.

Often this section contains information about the service and warranty service that you offer to your customers. Do not copy data from the previous section. Try to present these services as an additional competitive advantage that will attract the attention of consumers.

For example:

As a rule, the average warranty period for this species item is one year. We are confident in the high quality of our products and extend the warranty period to two years.

Characteristics of competitors

Description of the competitive environment is an integral part of any business plan. Indicate who your direct and indirect competitors are. Assess their market share and profit margins. Analyze their strengths and weaknesses, describe what technologies and equipment they use, what promotion methods they prefer, what kind of staff they have, what kind of response you can expect from them after your product is launched on the market.

It is quite possible to conduct such a study on your own. Look for information in directories and industry publications, talk to customers (including former ones) of a competitor company, conduct a survey among buyers, carefully study competitors' products, pay attention to their advertising and promotion methods.

For example:

Our main competitors in the product or service market are companies A, B and C. Competitor A is known for its aggressive pricing policy.

Competitor B has developed and implemented the most efficient service plan. Competitor B has been in the market for the longest time and has a favorable reputation and a large number of loyal customers. However, none of the competing companies expands the range or offers additional services.

Our direct competitor in the region is _________________ located in _______.

It has the following advantages: advantageous location (located at the intersection of major transport interchanges, close to suppliers), competitive prices, fast delivery, competent managers.

The disadvantages of a competing company include a low level of service (complaints of customers about a long repair period under warranty), outdated equipment, lack of affiliate programs etc.

Here you can describe your main competitive advantage by comparing your offer with those of other companies.

For example:

Despite the fact that our company is still unknown in the market, we have two distinct advantages compared to our competitors.

We buy goods in large quantities, which allows us to reduce the cost of a unit of production and transportation costs and, therefore, set a lower retail price for the goods than competitors.

We also offer the highest level of customer service, offer a free telephone information service, sell through our website and regularly run promotions and sales.

It might be useful to read:


Technical Specialist	providing general information about the industry and the product being launched; determining the reliability of analyzes and forecasts for the development of the industry; implementation of expert evaluation of information specific to the industry, product; definition of phases related to development, production, implementation, maintenance, operation
Investment Specialist	organization of professional calculations of investment indicators; carrying out a risk assessment; issuance of risk management proposals; formation of investment models
Financier	provision of information on the financing of the business plan; selection of appropriate forms of financing; procedures for coordinating funding with the legal aspects of the project;
Lawyer	analysis of the compliance of the business plan with the current legislation; study of issues related to the optimization of taxation
HR-, PR-, GR-, IR-specialists	HR manager - providing information on the availability and quality of human resources; PR-manager - implementation of PR-support, evaluation of changes in brand value; GR manager - providing information on the availability of GR resources; IR manager - actions to manage relations with co-investors
Marketer	determining the level of prices for materials and finished products; conducting industry analysis, competitive environment, suppliers, customer behavior

Business plan and its analysis. Learn how to properly analyze a business plan. Investment Specialist

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Similar Documents

Implementation of a preliminary expert assessment of the business plan

Marketing Analysis

Implementation of a technical assessment of the effectiveness of the business plan

Implementation of a financial assessment of the effectiveness of the business plan

Implementation of institutional analysis

Performing a risk assessment

Step 6: Preparing the Market Analysis Section of the Business Plan

Market characteristics

Characteristics of product consumers

Marketing strategy

Characteristics of competitors