29.01.2024

Life cycle of an innovative project. Place of a business plan in the life cycle. Life cycle of a business project Place of a business project in the life cycle of a company

The creation of new projects involves a preliminary economic justification for their feasibility, subsequent planning of the necessary costs for their implementation and the expected final results. Business planning allows economists-managers not only to justify the need to develop a particular innovative project, but also the possibility of its implementation in current market conditions.

The main objects of business planning in free economic relations are highly profitable and competitive innovative projects. As is known, the modern market, based on the observance of balance between supply and demand by all producers and consumers and the comparison of their incomes and expenses, will always give preference in lending and financing to those production, entrepreneurial or commercial proposals that in the future will give the greatest socio-economic result . Business plans are primarily designed to facilitate the entry of highly competitive new types of products and services into the market.

Consequently, any innovative business project must have an appropriate business plan to justify the optimal indicators for the production and sale of goods and services in both the domestic and foreign markets. In market relations, the business plan itself turns into a kind of product, the promotion of which into the external banking, credit or financial investment environment surrounding the enterprise should bring maximum income to the developers of the new project.

Business plans are a new type of intra-business or intra-company planning for our manufacturers, which is most widespread in small and medium-sized enterprises. Business plans are developed for various innovative objects or processes related to the design or creation of new companies and their divisions, the development and supply of required goods and services to the market, the reconstruction of enterprises and the expansion of product output, improving technology and organization of production, improving the quality of goods and productivity labor. They substantiate a certain socio-economic goal, which, as a rule, has a completed creative result: profit growth, increasing market share, satisfying customer requirements, accelerating product turnover, creating new jobs, etc.

The chosen socio-economic goal of the company for the upcoming period of its production, economic or other activities should be most fully reflected in the business plan being developed. For newly created or opened firms and enterprises, a comprehensive business plan is developed in accordance with the project, including detailed technical and economic calculations for all sections and indicators of the design, construction and development of new production of goods and services. In operating enterprises, business plans are usually created with the aim of achieving relevant strategic, tactical or operational directions or objectives related to the further development of production or functional units, restructuring or expansion of the organization, etc. With stable and sustainable operation of the enterprise, the business plan can be aimed at updating fixed production assets and developing new technologies. If there is a significant decline in production that occurs during the transition period, the business plan should include the search for new markets, expansion of product sales, etc. In some cases, the development of comprehensive business plans is required, in others - local business projects. All manufacturers and entrepreneurs need business plans to open any new project or business.

A business plan, as defined by I. V. Lipsitz, is a document that describes aspects of a future commercial enterprise, analyzes the problems that it may encounter, and also establishes ways to solve them. The business plan must ultimately give the correct answer to such important questions of market relations as the possible cost of the project and planned income. Every entrepreneur should know how much a new project will cost and whether this business will bring income, and if it does, then when and what is the degree of risk? The answers to these questions of rational management in complex market relations are given by a properly drawn up business plan. Advanced foreign experience shows that in market conditions all manufacturers need to draw up plans for both long-term and current activities. This means that all our entrepreneurs should also have a business plan. Drawing up a business plan is the first step of every aspiring entrepreneur into the field of innovative, economic, commercial or investment activity. The development of such a plan requires not only a comprehensive economic assessment of the future business project by professional managers, but also the direct participation of the entrepreneurs themselves and senior managers of the enterprise or firm. Joint participation in the preparation of business plans by economists and entrepreneurs is especially necessary at domestic enterprises that have many years of experience in drawing up tactical and strategic, in particular five-year and annual plans. Therefore, the question arises about the continuity or correlation between the systems and methods of planning the socio-economic development of enterprises that are widely known in Russian industry and new business plans.

During the period of the formation of market relations, the theory that business planning had replaced intra-farm planning began to spread among some of our economists. However, many years of practice have confirmed not only the possibility, but also the necessity of the coexistence of these planning systems at domestic enterprises. The mechanism of business market planning, as V. M. Popov rightly believes, includes the theory, methodology and practice of planning and management activities, covering general patterns and Russian specifics of market economic relations. The guidelines, methods and tools of management, which are based on the market laws of supply and demand, have changed. In these conditions, business planning or business plans must combine all stages of the implementation of entrepreneurial projects: from the selection of a strategic or tactical goal to its full implementation in the relevant market. Business planning includes such stages as selecting and justifying the type of activity, identifying the most realistic projects for its implementation, economic assessment of costs and results, developing a detailed business plan, ensuring the implementation of planned activities, adjusting planned indicators and clarifying the actual efficiency of using a business project.

Thus, planning practice confirms the close interaction between business plans and socio-economic plans that have developed at Russian enterprises in recent years. However, there are also differences between these types of plans, indicating that each of them has its own subject and place both in the sphere of intra-company planning and in the entire market economy system.

Firstly, business planning, in contrast to intra-production or corporate planning, does not include the entire set of general goals of an enterprise or corporation, but one of the most important tasks that determine the specific content of planning a new type of activity or business project. A business plan focuses mainly on developing a new strategy or tactics for the development of an enterprise, while socio-economic planning may include various types of joint current and future activities.

Secondly, business plans are developed for innovative projects, clearly defined by the time frame for their implementation, after which work on this business project is completed. Intra-company planning is carried out and carried out continuously at all levels of business management. As one annual plan is completed, firms, after appropriate adjustments, move on to the implementation of the next plan, etc. A business plan has not only clear temporal, but also narrower spatial boundaries, whereas any intra-company plan does not have such clear restrictions.

Thirdly, the main purpose of a business plan is for entrepreneurs to open a new business and obtain the necessary production resources and, first of all, money to complete the project. The search for reliable investors requires the most careful justification of many financial indicators, taking into account the existing degree of risk not only in internal production and economic activities, but also in external credit, financial and banking structures. In-house plans are needed more for one's own use, while business plans are needed for external investors and creditors.

Fourthly, business plans are developed directly under the leadership and with the personal participation of the entrepreneur - the founder of the company. In-house planning, as a rule, is carried out by professional economists-managers and planners of linear and functional divisions of the enterprise. The personal participation of each businessman-entrepreneur in the development of a business plan for his new enterprise contributes not only to the development of a real strategic and operational goal, but also ensures in the future the most “perfect organization of the implementation of a business project based on the comparison of costs and results.

Fifthly, domestic specialists do not yet have scientifically based methods for developing business plans in relation to our conditions of new market relations, since most methodological and educational recommendations primarily reveal planning experience in the existing foreign market. At the same time, at Russian enterprises in the context of a decline in production, the existing experience of on-farm planning is not widely used. Therefore, at present, an integrated approach is required to the development of the theory and practice of not only business planning, but also the entire system of intra-economic planning at domestic enterprises and firms with different forms of ownership and organizational characteristics.

In market conditions, the main planning tasks of each enterprise come down to solving the following issues:

what type of product or what new business to choose to enter the domestic and foreign markets;
what will be the market demand for the goods and services offered and how it will change;
what resources and in what quantities will be required to organize a business project;
how much the necessary resources will cost and where to find reliable suppliers;
what will be the costs of organizing production and selling products and services in the relevant markets;
what the market price for this product might be and how competitors will influence it;
what the total income may be and how it should be distributed among all participants in the business project;
what production efficiency indicators will be and how they can be improved.

At the initial stages of drawing up business plans for certain business projects, approximate answers based on the performance of aggregated calculations by economists-managers are sufficient. In the future, specialists will need to carry out detailed or refined calculations of the main planning and economic indicators. The content of the business plan, its composition and degree of detail are determined by the interaction of factors such as the type and volume of products, the magnitude of market demand and supply, the level of development and scale of production, the source of business financing and the solvency of the enterprise, etc. For a preliminary feasibility study of a business project, as domestic practice confirms, the following market indicators are required:

general initial data and conditions for the project;

product sales market and production capacity;
material factors of production and required resources;
location of the enterprise and transport connections;
design documentation;
enterprise organization and overhead costs;
labor requirements and sources of coverage;
planning the timing of the project;
financial and economic assessment of a business project.

The given indicators of the business plan determine not only the content, but also the sequence of performing the necessary planning and economic calculations. Therefore, for the high-quality development of business plans, reliable initial marketing, production, financial and other economic planning information is necessary. In this regard, we will consider the approximate structure of business plans in force at foreign companies, revealing in more detail both the initial information and the planned indicators developed on its basis.

Title page: name and address of the company; names and addresses of the founders; the essence of the proposed project; project cost.

Introductory part: main provisions of the proposed project.
Analysis of the state of affairs in the industry: the current situation and trends in its development; potential competitors; intended consumers.
Essence of the proposed project: manufactured products; work and services performed; necessary premises and equipment; required administrative and production personnel; information about the entrepreneur himself and his partners.
Production plan: content of technological and production processes; proposed subcontractors and partners; cost of fixed production assets; product range and volume; list of materials used; raw material suppliers.
Marketing plan: expected product prices; possible distribution channels; product advertising; forecast of new types of products; target indicators.
Organizational plan: type of ownership; information about partners (shareholders); degree of responsibility of partners; composition of governing bodies; organizational structure of the company; distribution of responsibilities and functions.
Financial plan: income and expense plan; cash receipts and payments; balance plan; breakeven point; main sources of funds; procedure for using income.
Risk assessment: weaknesses of the enterprise; the likelihood of new technologies emerging; alternative strategies; reliability of partners and suppliers.
Applications: list of basic documents.

In Russian small and large businesses in recent years, the practice of drawing up business plans taking into account the specifics of new market relations has expanded significantly. Let us give as an example the main indicators of business plans developed at enterprises in the Samara region:

name of the investment project and its brief description;
the purpose of the project and the timing of its implementation;
investment payback period;
expected results from the implementation of the project (increase in production and profit, growth in exports, improvement in quality characteristics);
estimated cost of the project (total cost, including raising funds from the regional budget);
maximum minimum loan term;
form of loan repayment guarantee (mortgage of land, real estate, equipment, insurance);
investment plan and loan repayment period by month of the year;
main product markets and competitors;
project implementation results (new jobs, purchase of technology, equipment);
cost structure by main expense items.

The presence of standard content of a business plan expands the scope of its application not only in large but also in small enterprises. At the same time, it should be borne in mind that the current Russian legislation does not stipulate not only the forms and procedures for business planning, but also the very obligation of developing such plans. However, the business plan has already taken its strong place in Russian entrepreneurship.

The main document that focuses on the main provisions of the investment project is the business plan. Let's look at what needs to be required from a team of managers who have received the development of a business plan for an investment project.

The general procedure for streamlining the investment activities of an enterprise in relation to a specific project is formalized in the form of a so-called project cycle, which has the following stages.

Project cycle. Stages

Formulation (identification) of the project. At this stage, the top management of the enterprise analyzes the current state of the enterprise and determines the highest priority directions for its further development, forming a strategic plan. The result of this analysis is formalized in the form of a business idea, which is aimed at solving the most important problems for the enterprise. Already at this stage it is necessary to have a convincing argument regarding the feasibility of this idea. At this stage, several ideas for further development of the enterprise may appear. If they all seem equally useful and feasible, then parallel development of several investment projects is carried out so that a decision on the most acceptable of them is made at the final stage of development.
Development (preparation) of the project. After the project's business idea has passed its first test, it is necessary to develop it until a firm decision can be made. This decision can be either positive or negative. At this stage, gradual refinement and improvement of the project plan in all its dimensions - commercial, technical, financial, economic, institutional, etc. is required. A matter of extreme importance at the project development stage is the search and collection of initial information to solve individual project problems. It is necessary to realize that the success of the project depends on the degree of reliability of the initial information and the ability to correctly interpret the data that appears in the process of project analysis.
Project examination. Before starting a project, qualified expertise is a highly desirable stage in the project life cycle. If the project is financed with the help of a significant share of a strategic investor (credit or direct), the investor himself will conduct this examination, for example with the help of some reputable consulting firm, preferring to spend some amount at this stage rather than lose most of his money during the project. . If an enterprise plans to implement an investment project primarily at its own expense, then an examination of the project is also highly desirable to verify the correctness of the main provisions of the project.
Implementation of the project. The implementation stage covers the actual development of the business idea until the project is fully operational. This includes monitoring and analysis of all activities as they are carried out, and control by supervisory authorities within the country and/or foreign or domestic investor. This stage also includes the main part of the project implementation, the task of which is ultimately to verify that the cash flows generated by the project are sufficient to cover the initial investment and provide the return on investment desired by investors.
Evaluation of results. The results are assessed both upon completion of the project as a whole and during its implementation. The main goal of this type of activity is to obtain real feedback between the ideas included in the project and the degree of their actual implementation. The results of such a comparison create invaluable experience for project developers, allowing them to be used in the development and implementation of other projects.

Business plan for an investment project

The main document that focuses on the main provisions of the investment project is the business plan ( how to write a business plan >> ).

Business plan for an investment project provides detailed explanations of how the business will be managed to achieve the required efficiency. The purpose of this section is to show what place the “financial part” occupies in the overall volume of the business plan and how the remaining sections of the business plan supply the “financial part” with information.

In general, a business plan is drawn up for external and internal purposes. The external goal of a business plan is intended to justify the trust of investors and creditors, to convince them of the potential capabilities of the company and the competence of its employees. The internal goal is to make a convincing justification for ways to develop the business “for yourself,” i.e. If possible, eliminate doubts about the correctness of the development path and assess possible risks.

Four important steps to justify an investment

In other words, the lack of a carefully thought-out business plan, systematically adjusted in accordance with changing conditions, is a significant shortcoming that reflects the weakness of the company's management, which ultimately makes it difficult to attract financial resources and achieve long-term stability in a competitive environment.

In short, a business plan is the starting point and basis for all planning and execution activities of an enterprise; it is the most important source of accumulation of strategic information and a method of direct management influence on the future position of the enterprise, describing ways to achieve profitability.

In general, the financial, operational and investment policies of the enterprise must correspond to the directions and strategic goals outlined in the business plan. A business plan is a test of managers' knowledge and understanding of the business environment, as well as the company's position in the market. The business planning process ensures close attention of the management system to all its shortcomings and forces us to consider the specific characteristics and factors influencing the competitive abilities of the enterprise. Thus, the requirements for a business plan are a condition for self-improvement of the management system and the creation of an effective management strategy. Significant efforts and resources are involved in the development of a business plan. And therefore, subsequent planning requires less effort in collecting and processing information.

Development of a business plan for an investment project. Key sections of the plan

Below is a recommendation containing a list of what the owner (manager) should require from the management team that has received the development of a business plan for an investment project. We will offer these recommendations as the format and content of the final document, describing what sections it should consist of and what information should be placed in each section.

SECTION “GENERAL CHARACTERISTICS OF THE PROJECT”

This section provides general information about the project and the company implementing it.

general characteristics of the company and possible prospects for further development of the project;
locations of enterprises, their characteristics - area, nature of development of the adjacent territory, existing infrastructure, proximity of traffic flows;
general characteristics of the existing assets of the enterprise (installed equipment, condition of fixed assets, applied technologies, intangible assets, etc.);
current level of production capacity utilization;
the essence of the investment project;
general characteristics of the activities and work necessary to launch a new or expand an existing business.

SECTION “MARKETING ANALYSIS AND PROJECT PLAN”

The purpose of compiling this section is to analyze market trends, consumers, suppliers, competitors and the goods and services they offer. Based on the results of the analysis, the market strategy of the project is formulated.

The purpose of drawing up a marketing plan is a quantitative forecast of prices and sales volumes, as well as drawing up a budget for marketing costs for the entire period of assessing the effectiveness of the project. The data in this section is the basis for developing the “Financial Plan” section of the business plan.

— industry analysis:

determining the boundaries of the target market of the project (Russian market or foreign market, market boundaries);
a list and brief description of the main products offered to the target market;
characteristics of the market environment, size, maturity of the target market;
the nature of competition in the industry, the list and characteristics of the main competitors, including potential ones (range and production volumes, product quality; main consumers, market share, applied marketing policy, non-price factors of competitiveness; characteristics of the production base and technologies used; strengths/weaknesses );
characteristics of target consumers of products at whom the project is focused;
analysis of industry trends and forecasts for the next few years;
characterization of the degree and forms of legislative regulation of the industry;

— characteristics of the market for materials used in the production of products:

characteristics of the market environment, the nature of competition in the market;
main suppliers of materials on the market;
characteristics of the enterprise's partner suppliers;

— strengths and weaknesses of the project compared to competing enterprises;

— possible threats to the project from competitors, suppliers, consumers of products and the state;

— characteristics of the benefits received by the company from the implementation of the project, the possibility of obtaining additional effects through the interaction of the production project with the existing business of the company.

The marketing plan provides a forecast (for five years, the first year - monthly) of sales volumes of products and services and associated costs:

planned market strategy;
list of products planned for sale, their characteristics, units of measurement, packaging;
planned sales volumes by project year (for the first year - monthly);
seasonality of product sales;
planned pricing methodology, planned product prices;
planned conditions for selling products (discounts and payment terms);
forecast of changes in prices for energy resources consumed in the production process;
marketing costs that must be incurred before production starts, including the costs of organizing a sales network;
planned amounts of current sales costs (to ensure planned sales volumes) after the start of production.

SECTION “ORGANIZATIONAL PLAN OF THE PROJECT”

This section describes the organizational aspects of the project.

comparison of possible organizational and legal options for the implementation of the project (rent/purchase of equipment, separation of a separate legal entity or implementation of the project within the current structure of the company, etc.);
organizational measures that are necessary for the implementation of the project (removal of workers from the staff/employment, search and hiring of additional workers, etc.), timing and cost of these activities (cost of searching and hiring additional workers, severance pay, etc. .);
related activities and work (licensing, certification, personnel training, etc.), the timing of their implementation, their cost and the planned payment schedule;
activities necessary to start selling products (creating a trading house, organizing a sales network, concluding agreements with distributors, etc.), their timing and cost;
the current organizational structure and staffing of the company division on the basis of which the project is planned to be implemented;
planned changes in the organizational structure, planned management and decision-making methods;
planned staffing of the company's division after the implementation of the project, wage fund by personnel groups;
characteristics of contractors and equipment suppliers with whom it is planned to work during the project.

SECTION “TECHNICAL PLAN OF THE PROJECT”

This section of the business plan describes the technical and technological aspects of the launch

production and its functioning.

— characteristics of existing fixed assets, in particular existing equipment;

— description of the production technology, “bottlenecks” of the existing technological process;

— level of production capacity utilization achieved in the last few years;

— technical measures that need to be carried out to start production (repair of existing equipment, laying additional communications, construction and repair of buildings and structures, etc.), timing and cost;

— a list of additional equipment that must be purchased to start production, and its characteristics:

manufacturer, brand of equipment;
equipment performance;
standard consumption of energy resources;
prices of equipment and related amounts of VAT, customs duties and other taxes and fees;
conditions and terms of payment for equipment;
Delivery, installation and commissioning times:
cost and terms of payment for delivery and installation of equipment, commissioning;
requirements for routine maintenance of equipment (necessary measures, frequency, cost of maintenance);
requirements for personnel involved in working with equipment (number, required qualifications; if additional training is necessary, the timing and cost of such training);

— the impact of changes planned for implementation within the project, existing “bottlenecks” of the technological process;

- increase in production costs depending on production volumes:

justification of production costs of certain new types of products;
justification of the cost of current types of products, taking into account the commissioning of additional equipment and planned changes in production technology;
justification of fixed shop and general production costs by item (costs of intra-shop management, costs of inventory, lighting, security, etc.);

— additional stocks of materials and equipment that must be provided and maintained in accordance with technological requirements.

SECTION “FINANCIAL PLAN OF THE PROJECT”

The section provides calculation of profitability and break-even indicators of production and sales of products, as well as calculation of indicators of the effectiveness of investing funds in the project.

investment needs of the project, sources of financing and investment development schedule (the overall investment needs of the project are calculated based on the data of the marketing, organizational and technical plan. The schedule for attracting investments from various sources is also determined here. If necessary, a schedule for putting property into collateral is constructed in the same subsection and the necessary coverage of the loan with collateral is justified);
forecast of income from the implementation of the project (the income of the project from the sale of products is forecast. The source of information is the forecast of prices and sales volumes given in the marketing plan of the project);
costs of production and sales of products (the amounts of variable and fixed costs for production and sales of products are determined, the cost of production is calculated);
forecast of profit and cash flows from the implementation of the project (profit from the implementation of the project is predicted based on data on project income and costs of production and sales of products. In the same subsection, indicators of profitability and break-even of products are assessed - sales profitability, break-even point, safety margin; cash flow forecast from product sales involves the construction of a forecast report on the flow of money for the entire period of assessing the effectiveness of the project).
assessment of project financial performance indicators (NPV, IRR, DPB indicators are calculated using the traditional method and the equity method).

In addition to the information presented in the previous sections of the business plan, the following additional information is required to develop the financial section of the business plan:

the amount of own funds available to finance the project;
the required rate of return on equity capital invested in the project;
lending conditions available to the company (maximum loan amount, cost, loan term, loan repayment terms);
data on the property provided as collateral for obtaining a loan (list of collateral, its characteristics, estimated value);
the required amount of investment in working capital before starting production;
expected level of inventories and their turnover;
terms of interaction between the company and suppliers (terms of payment for materials, discounts, duration of deferred payment).

SECTION “PROJECT RISK ANALYSIS”

The purpose of compiling this section is to analyze the risks of the project (including quantitative ones). Quantitative risk analysis is carried out on the basis of a calculation model for assessing the financial efficiency of the project. Its goal is to determine the sustainability of the project in terms of return on investment to possible negative changes in the indicators of its income and costs (in particular, prices, sales volumes, production cost indicators and product sales).

— quantitative analysis of project risks is carried out in the form

scenario analysis (analysis of project effectiveness at various values of income and costs);
analysis of the project’s sensitivity to possible changes in income and costs;
statistical modeling, within which the overall risk of the project is determined (the risk of negative values of performance indicators due to random fluctuations in income and costs).

An investment project of this composition, having the necessary depth of elaboration, will be accepted for consideration by any investor.

The preparation of a business plan is preceded by the following work:

- analysis and assessment of the current state of the enterprise;
- analysis of market opportunities and problems;
- analysis of the impact on business activity of the state of the industry (sub-industry) to which the enterprise belongs, factors of the macroenvironment of the enterprise;
- determination of directions and formulation of quantitatively justified goals of the enterprise for the planned period;

Develop action plans and resources.

A business plan is developed in accordance with the assignment for its preparation issued by the customer, taking into account the results of marketing research conducted by the developer of the business plan. By agreement and with the customer, when developing a business plan, two or more alternative versions of the project proposal can be prepared, varying the composition, structure, functional purpose of individual elements of the territory, levels, volume and demolition of the corresponding building stock, and the nature of reconstruction activities.

In this case, the business plan should provide a comparative description of the options. The content of the business plan should reflect the results of the only option chosen by the customer for implementation.

The business plan is developed in three phases:

Initial information is collected and analyzed, a marketing strategy is formed, and alternative design solutions are developed.

An investment program is being formed, which includes calculations of one-time and current costs and income, distributing them by type of ownership, queues and years of construction, followed by discounting.

Based on the collected information, the performance indicators of the project proposal are considered. Business plan materials are presented in the form of text, tabular and graphic material.

Every business plan has its own environment. The closest environment of most local projects is the parent organization (enterprise), where the project is part of the life cycle of business activity. The project may be closely related to the release of new products or the provision of new services and the implementation of changes necessary for these purposes. Thus, the project is also associated with the life cycle of the product (service).

The duration of each cycle is related to the ability to generate ideas, their promotion and implementation.

Ideas are the most important and most hidden resource of an enterprise. A creative atmosphere that generates ideas and the ability to implement them characterize the business potential of an enterprise, the effectiveness of investment projects and the usefulness of manufactured products. They become crucial when assessing approximately identical projects and enterprises. What is of the greatest value cannot be taken into account in the system of technical and economic indicators of the enterprise. You can evaluate equipment, capital investments, land plots, express market share, orders or financial results in numbers. But what costs the most is not amenable to precise valuation: the abilities of people, the ability of a given team to generate useful ideas - the only, solid, long-term basis for financial results.

If we draw an analogy between an enterprise and a car moving to its destination, then in the place of the engine it is necessary to put the employees of the enterprise, in the place of the body and the moving system - buildings and equipment, and financial resources should be considered fuel. For the system to start moving, all that is missing is a spark that occurs when the ignition is turned on. The idea will allow movement throughout the entire mileage (life cycle) of a serviceable vehicle (enterprise).

The people who meet each morning to keep the plant running are there to put forward their ideas hour after hour.

However, to achieve success, an idea must be put into practice. Therefore, sometimes it is less important for an entrepreneur to propose an idea that will change the current situation than not to be mistaken in the effectiveness of ideas that are implemented every day. The Thief is one of the many dramas of an engineer who decides to become an entrepreneur that illustrates this point. With a lot of experience, he built the car using several innovations (new ideas), including disc brakes and seat belts. He decided to set up production on his own, regardless of anything. Competitors took advantage of all the engineer’s financial and legal blunders to ruin the project in its infancy. He poorly assessed the situation, obstacles and necessary means and died ruined.

According to the American rule, a good idea is one for which the time has come - not too early and not too late. The ideas that an enterprise needs are those that correspond to the current situation in the enterprise.

Life cycles have their own boundaries and relationships. Establishing such boundaries is very important in defining the scope and competence of the project manager and his team.

It is also important to clearly differentiate and establish relationships between overall enterprise management, project management (enterprise change) and technical management (process management).

The project life cycle, which is part of the product life cycle, which in turn is part of the enterprise life cycle, is the shortest. A correct understanding of the role of a business project in the life of an enterprise makes it possible to effectively organize its preparation and implementation with the involvement of permanent employees of the functional divisions of the enterprise in close cooperation with its management.

There are 4 phases of the project cycle: concept, development, implementation, completion.

The development of an investment project from the initial idea to its implementation can be presented in a cyclical form, including three separate phases: pre-investment, investment and operational (see Fig. 1).

Each of the three phases can be subdivided into stages covering feasibility studies, consulting, engineering and production activities.

Various types of activities are carried out in parallel in the pre-investment phase, continuing in the subsequent investment phase. The business plan plays an important role at this stage.

1.Analysis of investment opportunities (Identification)

2.Analysis of project alternatives and preliminary selection (Feasibility Study)

3.Pre-Feasibility Study

4.Business Plan

5.Report on investment opportunities (Appraisal Report)

1. Negotiations and conclusion of contracts

(Negotiating & Contacting) 1. Acceptance and launch (Commissioning &

2. Engineering Design Start)

3. Construction 2. Replacement

4. Marketing (Pre-production Marketing) 3. Expansion, innovation

5. Training (Innovation)

Fig.1. Main phases of the project cycle.

We are most interested in the pre-investment stage in this work. This is due to the need to competently develop a business plan for an innovation, draw up preliminary feasibility studies for its implementation, work out all the calculations and take into account all alternatives that can attract an investor. The success or failure of a business project ultimately depends on marketing, technical, financial and economic research and its interpretation, especially in the feasibility study of the project. Necessary expenses should not become an obstacle to the verification and evaluation of the project in the pre-investment phase, as this will help to save significant amounts, including funds required for costs after the start of the project.

A good Russian proverb is appropriate here: “Measure seven times, and cut once,” because without a detailed elaboration of these provisions, your innovative project may end before it even begins, because not a single investor will decide to invest sums of money (especially large ones) in then, “I don’t know what.”

Before proceeding with financing, investors will check the financial business plan of an innovative enterprise and conduct a feasibility analysis in order to judge the feasibility of investing in it.

Accordingly, if the study of investment opportunities has provided sufficient evidence of the viability of the project, then investment promotion and implementation planning begin simultaneously. However, the main efforts are concentrated on the final evaluation of the project and the investment phase (Fig. 1). To reduce unnecessary costs with limited resources, a clear understanding of the sequence of events in the development of a business project is required, starting with the formation of concepts, through the transfer of the project to the operational phase. It is also important to understand the roles to be played by the different actors: investors, commercial banks, equipment suppliers, export credit insurance companies and consulting firms.

At all phases of project implementation it is necessary to resort to the services of consulting and engineering firms.

Thus, we move on to the main thing in this work: in order to attract investor funds, we need to know the requirements for drawing up a business plan for innovation and analyze it for feasibility.

Moscow State University of Economics, Statistics and Informatics.

Course work.

Discipline: “Innovation Management”.

On the topic: “Features of a business plan for an innovation project.”

Completed by a student from the group: DMM-403

Checked by the teacher:

Guzhov V.V.

Moscow, 2005.
Content:

Introduction………………………………………………………………………………..3

1. Life cycle of an innovative project. Place of a business plan in the life cycle……………………………………4

2. Requirements for a business plan for an innovative venture......6

3. Algorithm for drawing up a business plan……………………….…8

4. Features of the content of the business plan for an innovative project…………………………………………………………………………………10

Conclusion…………………………………………………………………………………29

List of references……………………………31

Introduction

The transition to market forms of economic management in Russia required a revision of not only the forms and methods of the main areas of production, economic and financial activity, but also a change in attitude towards the creation and use of innovations in practice.

In this case, innovation should be understood as a new method, a new order, an invention, a new phenomenon that can be used to improve the production and sale of products and services, improve the quality of management in general, and maximize profits and market value of the company.

Managing the development and implementation of innovations commonly called innovation management. This is a relatively new concept for Russia, but it has already become widely used. At the present stage of development of the Russian economy, the use of innovations as objects of innovation management can be considered in two most characteristic areas.

To the first area Innovation activities include the development and use of innovations associated with increasing the technical level of production and raising the quality of consumer goods and services.

To the second area Innovation activities include the development and use or transfer of forms and methods of innovation already mastered abroad for organizing the management of the country's economy in market conditions. In modern conditions, those who know how to quickly respond to changing circumstances, are not afraid of risks and embrace new achievements of science and technology are competitive. In competition, organizations are forced to increase the technical level of production and products or service systems, develop the organization of production and management, improve the quality of products and services, reduce production costs, improve the maintenance system, reduce operating costs, increase the beneficial effect of their products, and maintain the required level of sales prices, ensure the level of marketing and advertising and information activities. Competition forces organizations to enter the innovation market and engage in innovative activities. However, numerous challenges require investment. Business owners are unable to concentrate the capital necessary to solve their problems. This is explained by the fact that the innovation process is relatively long and lasts at least three years. But there are specially created investment structures (both at the private and state levels), the main purpose of which is to invest financial resources in the most promising innovative projects that can bring solid returns on invested capital in the future.

To attract a potential investor, a development company needs to competently draw up a business plan for an innovative event. This is necessary to interest investors in the advantage of investing money in this particular project and not in any other project, to show them the feasibility and profitability of such a decision . Without the above document, the idea of investing funds (even if at first glance an attractive innovative project from an optimally developed portfolio of innovations for the enterprise) may seem absurd, if not ridiculous, to your investor.

This work is devoted to the main features and important notes when drawing up a financial business plan that can attract a potential investor .

1. Life cycle of an innovative project. Place of a business plan in the life cycle.

Each of the three phases can be subdivided into stages covering feasibility studies, consulting, engineering and production activities.

Various types of activities are carried out in parallel in the pre-investment phase, continuing in the subsequent investment phase. The business plan plays an important role at this stage.

1.Analysis of investment opportunities ( Identification )

2.Analysis of project alternatives and preliminary selection ( Feasibility Study )

3. Preliminary Feasibility study (Pre-Feasibility Study)

4.Business plan ( Business Planning )

5.Report on investment opportunities ( Appraisal Report )

1. Negotiations and conclusion of contracts

( Negotiating & Contacting ) 1. Acceptance And launch (Commissioning &

2. Design (Engineering Design) Start)

3. Construction (Construction) 2. Replacement equipment (Replacement)

4. Marketing (Pre-production Marketing) 3. Extension , innovation (Expansion,

5. Education (Training ) Innovation )

Fig.1. Main phases of the project cycle.

Before proceeding with financing, investors will check the financial business plan of an innovative enterprise and conduct a feasibility analysis in order to judge the feasibility of investing in it.

At all phases of project implementation it is necessary to resort to the services of consulting and engineering firms.

Thus, we move on to the main thing in this work: in order to attract investor funds, we need to know the requirements for drawing up a business plan for innovation and analyze it for feasibility.

2. Requirements for a business plan for an innovative venture

The business plan should be more convincing and detailed, the greater the share of funds the project initiator expects to receive from venture investors. After all, it is natural for the latter to reason like this: since the project initiator is not able to invest sufficient funds of his own, then he should at least not be stingy in spending his own time and effort to develop the appropriate business plan. Otherwise, a venture capitalist who is encouraged to risk capital without any special collateral or guarantees may naturally end up with one of the following: unfavorable conclusions:

The initiator of the project is trivially lazy, but then he will also be lazy while working with the funds entrusted to him,

The initiator is professionally incompetent and for this reason funds cannot be entrusted to him,

The promoted investment project is in fact ineffective or too risky, and they do not want to show this to the venture investor in a detailed business plan,

Outright fraudulent plans are being hatched towards the venture investor.

There are many recommendations for writing a business plan, but no amount of conscientious study and adherence to these recommendations will replace ordinary common sense in understanding what questions an experienced (or hiring specialist analysts) investor wants to have a convincing answer to.

Even if this is an institutional investor, we must not forget that each company has its own bureaucratic procedure, that managers are responsible to shareholders, etc. So it is in these cases that you may have to present the most well-developed business plans that meet, at a minimum, eight basic questions:

1. What is the investment efficiency of the project compared to the usual market interest rate, which characterizes the simplest investment alternative, for example, a bank deposit?

2. How capacious (in terms of identified needs and effective demand), favorable in terms of market conditions, promising (growing) and easy to develop is the market for the product or service that is about to be launched?

3. If the sales market is quite competitive or (even more so) already monopolized, then how significant and what are the competitive advantages of the new enterprise and its product that allow one to count on ousting existing competitors from the market?

4. How satisfactory is the resource market selected in the business plan in terms of price level and supply volume, reliable in the sense of non-deterioration of these parameters and access to supplies and services?

5. What are the technical and commercial risks of the enterprise (project) and how and at what costs are you planning to minimize them?

6. How much funds, when, in what form (money, equipment, know-how, etc.) and why exactly so much and in this form is required from a venture investor to start and subsequently develop an enterprise?

7. What are the immediate prospects for the financial condition of the planned enterprise and the possibility of making a profit from it, what is the objective starting period of the temporarily unprofitable activity of the enterprise that must be taken into account? Will it not be necessary, while saving the project and the invested capital, for some time to even prevent the insolvency of the enterprise being started by additional “infusions” of liquid funds into it?

8. How well-thought-out in terms of profit maximization is the planned policy of the enterprise in terms of the best combination of planned sales prices, volumes of product release to the market, the structure of current costs and the size of attracted start-up investments?

The most important of these questions are four - the first two, the sixth and the seventh. Clarity on them already gives the investor a fairly complete idea of what project he is being offered to participate in, how realistic the requested amounts are and the prospects for receiving a return on them in the foreseeable future. Therefore, a business plan should, at a minimum (with any free but logical structure) answer exactly these four questions. In more detailed business plans, sections relating to other issues on the list under consideration can be prepared later - including, to attract additional venture investors (lenders rather than partners).

Let us comment in more detail on the generally accepted (especially in international practice) professional requirements for the materials presented, as well as the logical sequence and interconnectedness of the development of their entire complex.

3. Algorithm for drawing up a business plan

The logic and internal interconnection of the entire complex of materials included in the business plan of a venture enterprise can be displayed by the algorithm for working on it, shown in Fig. 2.

As can be seen from the diagram above, the following points are of particular importance:

The entire preparation of a business plan is divided into two parts: from block 1 to block 5 and from block 6 to block 8;

The first part of the business planning algorithm, which can even be called “romantic” (in the sense of its non-attachment to the current financial indicators of the enterprise as an object of investment, taxation and audit), performs the function of showing the prospects for working with the selected product, as if all the problems with the formation of the necessary the starting and expanding assets of the enterprise, as well as maintaining its stable financial condition, were resolved;

Rice. 2. A simplified algorithm for drawing up a business plan for a venture enterprise

The second part is aimed at “landing” the previously discussed prospects in terms of the requirements for the necessary investments covering the deficit of the project initiators’ own funds, as well as demonstrating the possibilities of ensuring the financial stability of the enterprise (and only depending on this - the possibility of distributing part of its profits as dividends for investors);

It is significant that it is in the second part of the algorithm (when, as a rule, it turns out that the financial and balance sheet prospects of the enterprise in the near future are not so rosy) that we return to the question of prices, product output volumes, the structure of current costs and the balance sheet of the enterprise, trying to optimize them taking into account available and minimally required additional investments (contents of block 8);

In the algorithm of a business plan, the feedback connections between its blocks are extremely important (and it is important and convincing to show both them and their understanding by the plan’s compilers to the venture investor). There are, as it were, three “bundles” of such feedback: connections from the blocks of the first part of the algorithm to its first, “starting” block so that the initial data for calculating the investment efficiency of the project are initially clarified); connection from the final block of the algorithm to sections devoted to planning financial balances, general (excluding and including taxes) and distributed profits of the enterprise (at the same time, adjustments are made to the financial indicators, thereby improving the indicators based on the results of optimizing the enterprise’s policy regarding sales prices, the structure of current costs and output volume); connections from the final block of the algorithm, again to its first block (another clarification of the initial data for the integral assessment of the investment efficiency of the project);

Otherwise, it is important that the logical sequence of work on the business plan indicated in the diagram is implemented clearly, without omissions or any “emasculation” of the standard stages and sections of the business plan.

4. Features of the content of the business plan for an innovative project.

The answer to the first of the above questions should be included in the business plan immediately after a brief summary of the essence of the investment project, and the corresponding numerical indicators reflecting the integral effectiveness of the project must be placed in its summary prospectus. Moreover, the form of presentation of the material should be such that there are no misunderstandings about the completeness of the set of performance indicators and their content. In other words, these indicators should be exactly those that are used in modern serious investment analysis, and not those that are convenient and easy to calculate for the authors of a business plan (such as the average annual, without taking into account the time factor and discounting the flow of future income and expenses, the expected return on investment ).

Of course, their calculation must be disclosed, perhaps in a special appendix, thereby convincing the investor of one’s competence and integrity. As for serious indicators of the effectiveness of investment projects, some rather lengthy deviation from the chosen topic of comments on business plan issues will be required.

The basic concept of investment efficiency in a market environment, including capital, credit and money markets, is the previously discussed net present value (NPV) investment projects that can be investments in real assets. It is important to keep in mind that although the net present value of a particular investment project is calculated in absolute terms, it reflects the comparative benefit that the investor receives over the useful life of the project in comparison with some standard (publicly available) income from a similar investment for the same amount. term. Typically, the basis in this case is the current market interest rate.

The idea behind the comparison mentioned is also simple. If expected cash flows GT for the investment project being evaluated, due to the capital investment (starting investment) Io, will turn out to be less in the period (year) than the interest profit that a regular loan of the same funds can bring Io at the market interest rate r, then the net present value of the investment project will be a negative value. If they are exactly the same as the percentage return mentioned, then the net present value of the project in question will be zero. And only when this project is more effective for the investor, i.e. when expected in periods t profits from the project are higher than standard interest profits on the amount issued Io loan, the net present value of the investment project will become positive. It will be greater, the more efficient (profitable) the project is compared to the profitability of the capital investment Io in the loan market (which is equal to the rate i).

It is obvious that in real investment projects the expected profits for the project in one future period (year) t may be higher than the corresponding interest (using the compound interest formula) payments on a loan of similar size ( Io); in another period (year) t they will be less than the equivalent interest payments for the given period. What is significant, however, is only the total amount of the difference between the comparable values over the useful economic life of the project (while the previously made investment Io allows you to continue to receive revenue from the sale of the developed product and, along with it, profits or losses).

To have a basis for calculating the net present value of any investment, you need to forecast the cash flows GT. To do this, for each future period t you need to have an idea about what will it contain:

The planned part of ongoing capital expenditures (for example, for the implementation of the next stage of preparation and expansion of production, as well as organizing sales of the product);

Current costs associated with conducting the operations being developed;

Possible volume of revenue from the sale of the main product, intermediate and by-products, services and acquired rights;

Transaction costs (for organizing the necessary transactions).

If the investment project concerns the development of the production of a particular product, then an idea of the listed factors that determine cash flows GT, should allow calculate them using the formula :

Gt =Pt x Qt - E Pnt x Qnt - It

h =1

Where t- chronological serial number of the calendar period (for example, year) within the period T useful life of starting investment I O (t = 0,1,2,..., T); Go = - Io ;

Pt - the projected price of a product at which it can be sold in quantity Qt in the future t ,

Qt - real to expected conditions of the period t sales volume by price R t

{ h } - a variety of purchased resources (raw materials, materials, labor, rental and subcontracting services, components, semi-finished products, goods for part-time work and resale) necessary for the production and sale of the target product of the project;

h = 1, ..., N - conditional serial numbers of the necessary purchased resources;

R ht - projected unit price h-something purchased resource in the future period t when will the quantity be purchased Qht this resource;

Qht - planned for the period t procurement needs h-th resource, which will correspond to the volume Qt product release;

It - continuation in periods t financing capital costs for the project (for example, the next stages of design, construction, equipment purchases, installation and commissioning works, commissioning phases of new facilities, etc.).

When using this formula, you should also take into account some fairly difficult circumstances .

Firstly, it is recommended here that future prices for products and resources be reflected at the price scale that is in effect at the time of calculation, and no attempts are made to increase them taking into account expected inflation. An error in assessing the future inflationary background common to the entire economy can sharply distort the idea of the effectiveness of a specific investment project, since it is difficult for an individual enterprise or expert to make a correct and reliable (for each period) t over a long period of time T) forecast of future inflation. It is unlikely that even large specialized research centers can do this.

It goes without saying that if future GT measured in prices of the base period, then expected inflation should not be taken into account in the discount rate i(calculation of profits in real terms with their discounting at the real discount rate). The formula will have to contain only those predicted changes in prices for the product and resources that will be determined by the enterprise’s policy of maintaining or increasing the profitability of the product included in its price, or will result from an analysis of the expected shifts in the supply and demand conditions for resources and product. Also important is the influence of sales and purchase volumes forecast for the enterprise, which are able to adjust the prices of specific contracts, depending on the size of the latter.

Secondly, it is necessary to foresee what volumes of sales and purchases at given prices and when (parameters like Q) will be able to provide the enterprise. This issue requires separate study based on an assessment of the competitiveness of the product, the capacity of demand for it in specific market segments, the likely presence and behavior of competitors, the possibilities of organizing sales and procurement (depending on previously made investments in this It), chances of maintaining and gaining access to sources of profitable and high-quality supplies, as well as to sales markets. For such an assessment to be correct, it is necessary, in particular, to provide for special marketing research.

Third, when analyzing expected cash flows GT it is necessary to correctly take into account the prospects for accumulating experience over time in performing operations with the target product of an investment project and mastering relevant new technologies. These prospects will affect the dynamics of the relative decrease (per unit of output) of the indicators included in the formula under consideration Qht .

The point is to realistically assess the gradual reduction of both labor and material costs as part of future ones (by periods t) variable and constant (respectively, depending and not depending on the volume of output) costs of the enterprise for the target product of the project. As for a more detailed study of the possibilities of applying the formula and calculating the net present value of investment projects in general, it would be advisable to get acquainted with the methodological recommendations for determining the efficiency of capital investments, which in our country were developed and approved back in 1988 (already in relation to the transition to market economy). These methodological recommendations were the basis for later, current and currently official Methodological Recommendations for the Evaluation of Investment Projects (second version), approved on June 21, 1999 by the Ministries of Economy and Finance of the Russian Federation, as well as the State Committee of the Russian Federation for Construction and Architecture.

In order to provide a more “solid” presentation of feasibility studies and business plans, it is advisable, at any opportunity, to quote the named methodological recommendations or refer to them as a source of information, if these materials are intended to attract domestic (especially government) investors and (or) guarantors .

So, the efficiency of capital investments, traditionally understood as the ratio of the economic effect to the one-time costs that caused it, if expressed using the net present value of the investment project

(E = NPV /Iо), is nothing more than the profitability of modern expenses, additional compared to the profitability of a loan of funds I O at the market interest rate.

As a simplified (without taking into account the time factor) method of assessing the effectiveness of an investment project, you can sometimes use a direct correlation of the average cash flow for a period (most often for a year) GT _ for the project to the amount of the initial (starting) investment I O, i.e. (E = GT _ / I O). However, this method is too crude to be used for making responsible investment decisions when the economic environment is dynamically changing and investors themselves are concerned about losses due to the withdrawal of investment funds from circulation. In the same way, any other indicators that are not based on such a correlation are ultimately untenable.

An issue that typically causes difficulty when assessing the performance and net present value of an investment is the accounting for inflation. There is even a misconception that in conditions of high inflation (more precisely, high or at least uncertain inflation expectations), assessing the effectiveness of investments generally loses its meaning. In the standard case, both the initial investment and the flow of future profits should be calculated at the prices of the necessary resources and possible sales (of the product being developed or produced, property, etc.) that are valid at the time of evaluation of the investment project. If this requirement is consistently met, the impact of future inflation is eliminated. After all, the net present value of an investment is called real for the reason that it must be calculated in current prices. Of course, in this case, as already indicated, the discount rate i should not contain an inflationary component.

However, there are two non-standard cases when the inflation factor should be reflected specifically.

Case one: it is predicted that prices for the resources necessary to produce a product intended for sale will grow faster than the market price of this product (or the price at which the planned quantity of it will actually be sold). The second case is related to, that future profits are planned in advance to be used to purchase a certain product, the price increase for which is expected to be higher than the general inflationary background.

Both situations are quite easily modeled by introducing a correction value into the formula for the net present value of the corresponding investment project, calculated in prices of the base period (1+ dt ) , to which the discount divisor of the formula after raising it to the power t just indexed. The basic NPV formula then takes the form:

N R V= -I O + E P t / (1+ i)(1+ dt)^t

Where dt- difference between expected values for the period t the rate of growth in prices for the necessary resources and the manufactured product and/or the difference as of the period t in the projected index of the increase in the price of a good that will be purchased with the profits from the investment, compared with the expected rate of general inflation.

The most accurate answer is obtained when they still try to predict future profits (losses) in prices of future periods (taking into account different inflation for the product and purchased resources), using a discount rate to discount them i, which also includes the all-time average T inflation in the economy as a whole.

For the convenience of comparing it with the actual market interest rate, the effectiveness of investment projects is often expressed by a specific relative indicator of the so-called internal rate of return ( internal rate of return , IRR) for an investment project.

The idea is to find out what loan terms for the same amount of capital expenditure are equivalent to in terms of efficiency (i.e., in terms of expected profit flow) for a given investment project. In other words, we need to answer the question: at what interest rate would it be equally preferable (equally profitable) instead of investing in this project to simply open a deposit for the same period in a reliable bank in the amount I O required for investment in the project being assessed.

This hypothetical interest rate is called internal rate of return for a specific investment. The difference between it and the actual market interest rate at the time of assessment then indicates the comparative effectiveness of this investment project in comparison with the average efficiency of simple capital investments in the credit market.

Technically, internal rate of return IRR is calculated by equating the formula to zero to determine the net present value of the analyzed investment project and solving the resulting equation regarding that discount rate IIR, at which the net, present value of the project will go to zero (which will mean that this project is equally preferable with simple lending of the invested capital at the interest rate thus calculated):

NPV = - Io + E P t / (1+ IRR )^ t = 0

t =1

To solve such equations, special nomographic tables or a special type of calculators (“business calculators”) are used, in which basic financial functions are programmed.

Managers are very inclined to the described simplified procedure for assessing the effectiveness of investment projects as it is extremely clear.

However, one should not exaggerate the convenience of such clarity, since the presented method has many hidden disadvantages. For example, solving power equations (such as this formula) gives several roots, i.e. ambiguous and for different intervals NP V it is necessary to choose the most adequate of several solutions obtained. The manager may not be able to cope with this or will simply ignore this need if he relies on simplified programs for solving financial functions contained in “business calculators”.

A development of the internal rate of return indicator is the “return index” indicator, indicating for how long the profitability of the project under consideration is greater or less than the profitability of a simple financial alternative to investing the same funds. Profitability index W calculated as :

W = ( IRR – RFIR ) / RFIR

Where RFIR- risk-free rate of return in the economy - nominal, taking into account inflation, or real, without taking it into account - depending on whether the expected profits and losses for the project were predicted in future prices or in prices of the base period, respectively ( GT), usually taken at the level of yield on government bonds or insured bank deposits.

Sometimes the effectiveness of investment projects is also measured by the indicator payback period of investments(in comparison with any payback standards adopted by the company or corresponding to consumer preferences and plans of individual investors). More special methods are also used, involving the analysis of the so-called annuity, as well as compliance of the complete financial plan of the investment project with some more detailed financial goals of the investor (who, for example, wants to maximize the income from the investment attributable to a specific calendar year, and not in general over the entire useful life of the investment project). Since these methods are used relatively rarely in practice, they are not discussed in this paper.

Returning to comments regarding the main logical issues of a business plan, we now turn to characteristics of the planned sales market(second question from the list of questions for the business plan). This characteristic plays a key role in the business plan as a tool for convincing investors. It is this that creates the fundamental basis for investor confidence in an investment project. Everything else is considered later and can be somehow modified if an experienced investor with business intuition is attracted from the very beginning by the increased and reliable capacity and prospects of the market. Therefore, the market analysis section is the main and only detailed section in a special preliminary, more compact document that should be presented to potential venture investors at an early stage of attracting interested parties. This document in Russian terminology is now called feasibility study (TES) of an investment project; in international commercial terminology it is usually called feasibility study.

The basis of market analysis is two points:

1) selection of a target territorial or industry market and, possibly, its more specific segment;

2) identifying, taking into account the perspective, the main characteristics capacity and price elasticity of demand(the limits of changes in the probable sales volume depending on changes in the price of the product). The higher the elasticity of demand, the better, since it gives the company more opportunities to maximize sales by slightly reducing the selling price, and also allows it to withstand price competition during sales with less loss in profit.

Both points are interconnected. The implementation of the first of them assumes that one should choose the market and its segment that has the potential for the greatest capacity (maximum possible sales volume) and growth of effective demand.

The corresponding conclusions should be substantiated by at least qualitative (not quantitative) analysis.

In addition, for easier entry into the chosen market, it is desirable that a “niche” free for the planned project is shown in the market and within its corresponding segment.

In contrast to a somewhat intuitive approach to choosing a target market, the main characteristics of the capacity and elasticity of demand for a future product should be determined as thoroughly as possible, based on quantitative and documented(and often quite expensive) special marketing research. This research can be carried out using different methods: direct questionnaires; interviewing; with the construction of maps of preferences of consumers with different incomes, savings and creditworthiness, on the basis of which, when maximizing the level of utility achieved for consumers, separately for their various groups, demand curves for the enterprise’s product will be analytically derived if it is new to the target market, etc.

We do not set out here the task of describing the relevant methods, however, we note that, from the point of view of the reliability and persuasiveness of the results of the conducted marketing research, It is especially important for the attracted venture investor to show:

-Firstly , validity (with references to any regulatory sources authoritative for a particular investor) of the methodology used;

-Secondly , statistical representativeness (typicality, sufficiency of the number of consumers surveyed) of the sample of respondents;

-Thirdly , the entire set (in special documentary applications that exclude the possibility of falsification) of the primary record of the results of “field” research on working with consumers (for example, questionnaires filled out and signed by respondents, letters of guarantee about readiness to purchase a product under certain conditions, etc.) ;

-fourthly , the solidity of the volume of work specifically (for the preparation of this business plan) done (indicating its cost, if it was financed as such, specialized consultants and consulting firms involved and inspiring confidence in this investor).

Of course, the very form of presentation of the final results of marketing research, as well as illustrations of the methodology used, should be as clear and advantageous as possible from the point of view of their presentation to the investor. It is recommended to use graphical methods of presenting information and analysis.

Confirmed and growing demand for the target product of the enterprise does not mean that the entire volume of identified demand can be “locked” to the enterprise being started. There will almost certainly be, or may be, other suppliers in the target market for this product. Consequently, the problem arises of proving to the venture investor what share of promising demand can be captured and retained by the enterprise and on the basis of what competitive advantages (third question).

It is impossible to do without analyzing the specific needs in the market and justifying the competitive advantages of the product being developed and the enterprise itself, allowing these needs to be met in the best possible way.

You can also point out (and provide relevant evidentiary information) the enterprise’s better access than competitors to critical purchasing resources, to consumers (for example, for individual work with them), to more modern and efficient technologies, to power structures regulating a given market and etc.

Obviously, the issue of confidentiality of providing such information to a potential venture investor is expected to be addressed. In this regard, even special agreements with the investor are possible regarding responsibility for disclosing this information even in the event of refusal to participate in the project (although the risk always remains here, and it must be commensurate with the amount of the possible investment).

Market analysis of purchased resources(fourth question) in a business plan is needed to convince a cautious and thoughtful venture investor (and also to test yourself) in the following:

The proposed business project is rational from the point of view of choosing the most economical resources (raw materials for the product being manufactured, providing services, the type of goods purchased for resale, etc.);

A careful selection of the most profitable supplies was carried out (at the lowest price, their optimal quality, the order of required payment most suitable for the enterprise, terms of service, etc.) and competitive suppliers of resources;

In the future, the situation on the selected resource market will not worsen (including due to changes in legislation and the conditions of government regulation), in any case, it will not worsen to a greater extent than the situation on the sales market of the manufactured product (for example, prices for critical components an increased share of the product's cost, resources will not with any significant probability grow faster than the possibility of increasing the sales price of the enterprise's product).

If everything is so, then confidence in the previously cited calculations of the effectiveness of the investment being made and in the subsequent calculations of the business plan will be strengthened. If the last of the three points noted is not confirmed, then for reasons of realism and the same strengthening of investor confidence in a still quite effective project, it is better to honestly show this in advance and in calculating the effectiveness of the project and the planned financial condition of the enterprise, make the corresponding clearly visible in the business plan adjustment for the likelihood of worsening conditions in resource markets.

Risk analysis(fifth question) is placed in the business plan for essentially the same purpose. Here it is also important to demonstrate a sober and realistic approach to the project, which convinces the investor of the reliability of the investment and also serves for self-control.

However, there are two additional significant features of risk analysis in a business plan:

1) the ability to conduct (at least at a qualitative level) an analysis of risks (risk factors, the likelihood of failure to achieve planned technical and economic indicators because of them, the amount of funds exposed to risks and the time of their exposure to risks) characterizes in the eyes of a venture investor who entrusts his funds to specific individuals or their managers, the degree of their professional competence;

2) the results of the risk analysis should logically conclude with conclusions on how to minimize and/or insure the identified risks and what additional funds will be required for this.

We emphasize that when analyzing project risks, a variety of methods can be used - from a mathematically rich analysis of uncertainties and the additional costs likely due to them to a simple discussion of the risks of an investment project and the financing required to minimize them (self-insurance through the creation of adequate reserve funds, planning duplicate activities and some specific (for example, futures) transactions in the sales and procurement markets, as well as insurance from trustworthy insurance companies).

It is equally important that the analysis of project risks in the business plan has feedback both with an assessment of the effectiveness of investments and with their requested size, as well as with the content of the section of the business plan devoted to the structure of the starting and subsequent expected balances, payment flows and profit accounts and losses of the newly formed enterprise (see comments on the sixth and seventh questions that the business plan should answer).

The material on the sixth and seventh questions represents, as it were, the “quintessence” of the business plan in the sense of practical conclusions. This material should serve as the “crown” of drawing up the entire business plan and clearly indicate the quality and degree of its refinement. The task is to do the following in connection with the financial, sales, purchasing and technological goals of the enterprise, which are outlined in the previous sections of the business plan, as well as taking into account previously identified risks and measures to minimize them:

determine in physical terms the need for the initial own and/or leased fixed and working capital of the enterprise (with a clear indication of their nomenclature - the types and quantities of necessary equipment, the type and size of the required areas, ownership rights to them, initial stocks of purchased raw materials, materials, components, finished goods, etc.);

justify the best or most realistic way to obtain the opportunity to manage and use specific initial fixed assets (acquisition of ownership on the terms of prepayment, payment upon delivery or in installments; lease without subsequent purchase; leasing with the obligation of subsequent purchase, etc.);

Based on the corresponding studied (and presented to the venture investor for control) prices of one or another method of obtaining the right to use the necessary fixed assets, calculate the need for start-up investments in the enterprise in terms of financing the acquisition of fixed assets ownership and provision of these capital assets with liabilities;

Based on the prices of the initial stock of purchased consumables, the planned duration of the technological cycle, as well as data on the expected first sales and the terms of their payment (taking into account possible prepayments and advances), determine the standard balance of cash working capital in terms of the beginning and end of the first quarter and the first year of operation of the enterprise (this supplements the calculation of starting investments and liabilities);

Based on an analysis of the amount of funds exposed on average at the current time to non-minimized risks, outline the size of the reserve fund, included in the start-up assets of the enterprise and the formation of which will also require start-up investments (providing liabilities);

Taking into account the desirability, as well as the cost of measures to minimize other unacceptable risks provide for those measures to minimize business risks that must be implemented already before receiving the first income of the enterprise, including their financing in the planned current costs of the initial unprofitable period of the enterprise, but at the same time increasing by their amount the amount of required starting capital investments;

estimate the necessary current costs for remuneration of employees and services of contractors that will have to be made during the initial period of absence of any income at the enterprise (at the same time showing that the composition of employees and contractors, as well as the level of payment for their services during this period, has been reduced as much as possible);

For the same period provide for the amount of funds that will have to be paid as fixed (independent of the output and sales) taxes and payments (tax on property acquired into ownership, rental payments, payments for natural resources), the source of which cannot yet be the income of the enterprise.

Thus, the starting structure and value of the assets of the planned enterprise are established, which, together with the value of all its current costs and due fixed taxes and payments (as well as all kinds of registration fees, etc.), expected in the period before the planned receipt of the first income, will amount to the total amount of start-up funds that must be invested in the enterprise. From this amount (taking into account assets in kind), the capital investments that the project initiators themselves are able to make are subtracted, and the amount of the necessary funds raised is obtained. If now they are reduced by a loan available without involving venture partners and creditors in the business, then the objectively necessary, necessary and sufficient amount of the initial investment requested from the venture investor will be justified.

All this taken together is most clearly expressed in the form starting balance of the enterprise, in which the asset reflects on what fixed and working capital the raised funds will be spent, and its liability describes from what sources these funds are planned to be mobilized.

At the same time, information used in drawing up the starting balance, coupled with plans for sales of products in certain volumes and at a certain price and plans for the purchase of consumables and services, the schedule and amount of rental payments, depreciation of own fixed assets, payroll, and other current costs (including including costs for insurance and risk minimization), as well as payment of taxes will make it is possible to calculate the planned profit and loss account as of the end of the first calendar (balance sheet) period. It may be the first quarter and/or year of the business project being started, depending on the expected duration of the technological and sales cycles of the product being developed, as well as on the payback period of investments in the project. Obviously, if these periods are short, then it is advisable to characterize the first quarter as the minimum existing period of financial planning and reporting.

Such a document will show the venture investor where the enterprise plans to start, what and why is necessary to start work, what is also required from the investor (in addition to the maximum that its initiator is able to invest in the business being started), this is how the enterprise will unfold in the first period of its existence , with what financial results (given the initial investments) it will come by the end of this period.

Now it’s time to reflect the subsequent financial plans of the enterprise, from which the investor will see the opportunity to receive a return on the invested capital either in the form of dividends (if appropriate profits are planned) or in the form of market gains from the sale of his participation in the enterprise (if the financial condition of the enterprise is from the point of view of in terms of the ratio of the structure of its assets and liabilities will be quite attractive).

In high-quality business plans, it is customary to present for the consideration of the venture investor planned profit and loss accounts, as well as planned balance sheets for the next two to three calendar years and for the quarters of the first year of operation of the enterprise (as of the end of the corresponding financial period). At the same time, it should be monitored and commented on why and as a result of what measures to develop the enterprise and change its marketing policy, as a result of what predictable factors of its external environment, the starting balance of the company and the balances of each of the previous periods are converted into planned balances of subsequent periods. Likewise, it should be explained why the expected profit and loss accounts in these periods differ from the profit and loss accounts projected at the end of the initial period and at the end of subsequent periods.

It is also obvious that the balance sheets of assets and liabilities in any specific planning period will have to correspond with the profit and loss accounts of that period.

As a result, the venture investor needs to be given material so that he can:

From the balance of the planned profit and loss accounts (including expected taxes) see what in a specific future calendar period(for which the venture investor has his consumer and investment goals) may be the projected amount of profits (losses) of the enterprise and, therefore, what are the maximum possible dividends at this time(even if the profits are not reinvested in further financing of the investment project), the enterprise (even if it becomes controlled by a venture investor) will be able to pay or, on the contrary, in case of losses, it may require additional investments;

judge from the enterprise's planned balance sheets for future periods about what the market value of a venture investor's participation in a given company might be whether it is possible to profitably sell its acquired shares (shares) or loans issued to it.

The more and more structured material is given to the venture investor (for financial analysis), the greater the chances - provided that the initiators of the project being started are confident in its effectiveness - to receive the necessary funds from the investor. It is also very important that the clarity introduced in this way into the financial plans and expectations of the investor will allow attracting only those investors who, after identifying the initially objectively expected small profitability or even unprofitability of the initiated enterprise, will not “panic” and

will not begin to withdraw its investments, not to mention the cessation of further previously planned capital investments.

Of course, such an approach narrows the circle of possible investors for the enterprise, but it increases the likelihood of achieving an influx of capital investments and maintaining them, as well as maintaining a schedule for the receipt of funds over time.

At the end of the business plan, it is advisable to include the so-called analysis of the break-even conditions of the enterprise (question eight), which should indicate that the basis of the presented planned profit and loss accounts for future periods of the enterprise’s operation is not just an arbitrarily chosen policy of the enterprise regarding the price of the product being developed , the dynamics of increasing the volume of its output and the structure of costs for its production and sale, and optimized (in order to maximize profits) plans regarding these parameters. Moreover, the analysis of break-even conditions ( break - even analysis ) enterprises can be supplemented with an analysis of the conditions of its solvency ( solvency analysis ) , aimed at the same thing, but carried out not in terms of accountingly reflected costs, income, profits and losses, but in terms of payments, receipts, positive or negative “cash balance” (cash balance) that are paired with them (but not coinciding with them) in a broad sense, which is the same as the balance in the current account plus the cash balance).

It is clear that both of these analyzes are especially important in relation to the first, most difficult periods of the enterprise’s activity. Analysis of the break-even conditions of an enterprise is aimed at creating and using tools that make it possible to model (even with the simplest linear equations or graphically) the relationship and find the best possible combination of the specified price of the enterprise's product, the volume of its output and actually planned sales, the share and size of fixed (independent of the volume product release) enterprise costs

(such as rent, depreciation, tariffs and salaries of employees, property taxes, payments for maintaining patents and licenses, etc.) and the amount of planned required initial and subsequent investments in production and trading facilities.

This analysis also introduces restrictions on the capacity and elasticity of demand for the enterprise’s product (depending on the planned costs of advertising and other forms of promoting the product on the market) according to the maximum achievable volume of product output, taking into account the planned investments. As a result, for different values of the specified price and other given parameters, the maximum possible profit margins, sales volumes, minimum acceptable fixed current costs and/or investments that will be necessary to at least prevent the enterprise from becoming unprofitable or to “reach” the desired control levels are determined. indicators on the total amount of profit and return on capital invested in the enterprise.

All this is modeled in dynamics for different successive future periods of the enterprise’s operation and taking into account its accumulation of operating experience. The best possible combinations of the considered parameters obtained from this analysis should give exactly those balances of current income and expenses that, in relation to the mentioned future periods, will appear in the planned profit and loss accounts presented to the venture investor. Previously made calculations of these accounts, which were perhaps based only on one initially intuitively chosen combination of the parameters under study, must be revised - which, by the way, can be very advantageously “presented” in a business plan.

The analysis of the conditions of solvency of an enterprise aims to justify for certain future periods the closest to the optimal required size of its reserve fund and its own working capital. This is a type of analysis of the break-even conditions of an enterprise, carried out in terms of expected payment flows for specific contracts, if by the time the business plan was drawn up they had already been worked out in terms of the procedure for paying for purchases and sales.

In other words, the parameters of the analysis of break-even conditions, taking into account the relevant details of the designed (or already concluded) contracts, must be adjusted so as to turn the planned revenue indicators into indicators of receipts into the bank account and cash register of the enterprise, and the cost indicators into the planned periodic amounts of payments from this account and from the company's cash.

Analysis described - very delicate, labor-intensive and thorough work, which, as a rule, is feasible only in relation to the very first, clearly imaginable periods of the enterprise’s activity. However, its result - a minimized current shortage of means of payment or a maximized balance of money in the account and in the cash register of the enterprise - significantly increases financial stability, and therefore the attractiveness of the project for investors.

Conclusion

Carrying out the business plan development stage in the pre-investment phase of an innovation project is designed to provide the data necessary for stakeholders to make investment decisions. The commercial, technical, financial, economic and environmental conditions of the project must be determined and carefully verified based on consideration of the alternative solutions explored in the pre-feasibility study.

The result is a business plan , the background conditions and objectives of which are clearly defined in relation to the main goal and possible marketing strategies, achievable market share, appropriate production capacity, plant location, existing raw materials, suitable technology and equipment, environmental impact assessment. The financial side of the study concerns the scale of investment, including working capital, production and marketing costs, sales revenue and return on capital invested.

The final estimates of investment and production costs and subsequent calculations of the project's profitability are only meaningful if the size of the project is clearly defined.

With the same structure and form of construction, there are no mandatory business plan samples. Moreover, the depth and priority of consideration of various issues varies from project to project. For most business plans, the form proposed in this publication is generally applicable, but it should be remembered that the larger the project, the more complex the information required will be.

The business plan should be developed with maximum precision as an optimization process with feedback, the interrelationship of individual parts, and an assessment of the commercial, technical and entrepreneurial markets.

When bottlenecks or inadequate profitability of the business plan arise, sensitive parameters such as market size, production program, equipment must be carefully analyzed and better alternatives must be sought to improve the project's feasibility and efficiency. All assumptions, data used and decisions chosen should be described and justified in the business plan so that it becomes clearer to the investor conducting his own analysis.

The latter, however, does not negate what we have repeatedly emphasized here: with all the standard logic and documentation of business planning (the volume of relevant appendices to the business plan), one should be as creative as possible in the form of presentation of the business plan, in accordance with probable preferences, requirements and tastes of specific venture investors attracted to the project.

In conclusion, we note that no structure of a business plan can be absolute, it should only be a canvas for the most advantageously presented and thought out in its logical internal relationships, in a free form, presented material, which is able, at the level of common sense and, of course, demonstrated professional managerial competence) to convince the investor of the prospects of investing in the project. This is the whole science and art of business planning.

List of used literature:

1) Burov V.P., Gal V.V. Business plan for an innovative project. TsIPK, 1998

2) Valdaytsev S.V. Analysis of break-even conditions and solvency when developing a new product. – St. Petersburg: International Center for Economics, Engineering and Technology, 1993

3) Valdaytsev S.V. Innovation business management. – M.: Unity, 2001.

4) Zavlin P.N., Vasiliev A.V. Innovation efficiency assessments. – St. Petersburg: Business press, 1998.

5) Ilyin N.I., Lukmanova I.G., Namchin A.M. Project management.-SPb.: Two Three, 1996

6) Popov V.M. Financial business plan.-M.: Finance and Statistics, 2001

7) Seven NOTES of management: A handbook for a manager. - 2nd ed.//JSC “Journal Expert”, 1997

8) Financial management.-CARANA Corporation-USAID-RTsP.-M., 1997.

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