Rus Articles Journal

Throughout razmyshlizm about investments into start - ap projects

it happened to examine about business Not so long ago - the plan of one investment project assuming construction of huge industrial complex. Business - the plan describes introduction and mass production of the certain innovative development which is subject to application according to the author, in transport branch.

To a question of preparation of the document, the developer, it is necessary to tell, it was prepared very seriously.

Here both the choice of a site for construction, and all stages preceding commissioning, both the organizational plan, and accounting of costs, and marketing justification together with the social importance and financial model with options of attraction of investments.

Everything would be remarkable if not one “but“. This “innovation“ assumed

….

…. production of the device which changes an orbit of rotation of electrons around an iron atomic nucleus. Thereof there is an effect of the helicopter screw and vertical draft which will reduce the weight of metal objects is formed.

… There is such disease at which the patient can draw accurate and logical conclusions, but their prerequisites have no slightest relation to real life.

And here. For achievement of the purpose the innovator penetrated into the directions, absolutely non-core for himself. For example, financial management and bases of production management. Construction and marketing analytics. And as for the nonspecialist, penetrated rather competently.

At the exit turned out comprehensively developed document. It is a pity only that its subject has no slightest relation to laws of elementary physics, and the place of such innovation in cabinet of curiosities of pseudo-scientific nonsense.

Of course, in volume business - the plan was a set of inaccuracies, omissions, mistakes. But in general, they would be not critical if, actually, not idea of the project.

To what there was this example?

A to what happens absolutely on the contrary much more often. The idea of business, maybe, and sensible, but at authors who advance this idea, extent of its preparation for practical realization in most cases aspires to zero.

On the Internet full - is full of information on how to dress “naked idea“. Of course, there is enough “water“ written by the students or confused copywriters who are slightly changing others works for the websites. But there is enough also sensible information. How it is possible not to use it?

Seems, Google or Yandex use already everything. Only absolutely lazy or silly person is not capable to gain an impression about what is necessary to it information and what primary data should be collected to estimate the idea on market viability and to gain an impression about formation of costs for its implementation.

But here for some reason to many authors business of ideas to be engaged in it somehow the lack of time. Some consider that it is possible to pay the consultant who will glance him in the head and will read all unexpressed thoughts and wishes there. Then everything will collect data, will make market researches, business - the plan will write, will find the investor, everything will construct, will organize and will transfer to the ingenious initiator of the project control of already working business.

And still there are individuals who consider that the investor is obliged to be engaged in all this. Like, time it is a venture or business angel, his it and problems, respectively.

To a huge regret, we live not in the fairy tale, and it can be by definition.

For the reason that at all stages of implementation of the project there is such thingummy as responsibility. Show me the consultant assuming a full liability for how other people will realize his calculations? You will not show because it is absurdity.

By the way if the author of idea does not wish to go into organizational detail of the project at all, then it is necessary to address not consultants, and the design companies, or specialists in management of projects.

Though as responsibility for decision-making on all stages lays down on such structure involved from outside, and control over further management of the project will be assigned to performers too. Optimum - before commissioning. Ideally for the investor - to full payback. And, at all not the fact that already other involved experts will not be necessary for process business which it will become since launch.

Arises a natural question of where in this scheme the author of idea of new business can see himself?

At most - as the hired manager who is responsible for technological processes. And it still provided that he is competent of them.

Differently, it is possible to count on some hypothetical dividends which are paid to a royalty, or the equity stake of the company fondly. But all this from area of unrealizable imaginations.

on itself idea what it would not be ingenious, but so far it is not capitalized, do not cost anything. Full zero.

Why to the investor to pay constantly the author of idea for the introduced zero?

do not pay For zero anywhere and never.

Here it is necessary to tell that the idea can receive the cost long before investments, capital in it.

For example. you have an idea assuming construction of new plant. Yet it does not cost anything.

But when you on hands have all pre-investment researches, contracts of intentions with suppliers of the equipment, contractors on construction design, the executed detailed business - the plan, is chosen the land plot and agreements with land users on the subsequent alienation of the land plots in your advantage are reached (or the solution of local session on development of the project of branch) - this package of documents already has determined price. it is rather difficult to

to determine by its time in terms of money (theoretical calculations exist, but on that they and theoretical).

At the same time, this tool works. At some industries there are even certain quotations. Do not ask me because everything is subjective. Though, it appears, if to count the project with the horizon at which NPV will be comparable to investment costs, to consider the cost of the attracted money, to make two financial models, the received margin can be considered as the approximate price of idea.

What to do to startups, not the person interested to distract from creativity and whose ideas cannot be capitalized without considerable preliminary expenses?

to Look for the partner - the businessman with an experience and experience. Otherwise in any way.

If it is not possible to pick up the reliable partner, it is necessary to learn to do everything independently.

Should understand that for any without business exception organizationally - the financial model is completely identical. That production of furniture that a hothouse complex that iron and steel works that an aquapark that bank or insurance company that social the Internet a network for fans to cross stitch that development and sales of software products, perfumery shop or a paid toilet. Everything is identical.

Formation of costs can be divided into 4 main categories.

1. Costs of the preparatory period. I.e., acquisition and construction of all necessary fixed assets (single payments). It is registration of the enterprise, acquisition or repair of the room, the equipment, transport, necessary licenses, permissions and patents. In case of big projects - one and all expenditure from the beginning - till object launch in operation and the beginnings of production, (where we include both material, and non-material costs. Bribes too). Generally, one and all until when the project is started and will begin sales.

2. The costs directly relating on production (the more sold goods - the more spent for its purchase and delivery to the place of sale). It is direct prime cost. We do not forget that the raw materials sometimes should be bought for the future.

3 the General (administrative costs). The fact that it is possible to take for a relative constant. For example, advertizing, PHOT, rent, transport, communications other

4. Taxes, payment of a body of the credit and percent on it.

Revenues should be defined proceeding from results of market researches, at the same time, without forgetting about capacities of production or optimum loading of personnel.

You do the plate.

the Top line - revenue

Lower - costs

If you can make such monthly table - 70% of the financial plan are already ready.

It is clear, that to the person unsophisticated, and forgotten a school course of mathematics, all these formulas of the provided income on pro-procession of years, standards of profitability or calculation of payback can seem horrible. And requirements to full-fledged financial model of business, with their tables and schedules, in general remind the Japanese kabuki where everything is beautiful, but anything is unclear.

Actually all these externally terrible formulas represent a number of elementary actions (addition, division, multiplication). No more than that.

Of course, in financial management there are enough also difficult things. But to inform of understanding of the project, its cost, profitability and payback the investor, there is quite enough also above-stated (IRR, NPV, ARR, PI, PB). Everything is very simple.

On drawing up pre-investment documentation the same.

it is Enough to b to study for a start at least methodical recommendations of Tacis , to walk on points of standard contents business - the plan in the BFM Group standards, or to read V. Berens and P. Havranek`s works. For example, “ the Guide to preparation industrial equipment - economic justifications “ (that which from someone`s easy hand got used to be called the UNIDO standard ).

It is worth noticing that it would be good if not leapfrog with definitions of terms and absence of logical thinking at many businessmen wishing to attract financing in the projects.

There now, for example, recent case.

Not so long ago one citizen appealed to us to develop the business plan of its production project. Like, there is a potential investor who desired to see the document prepared according to the international standards planning business.

As the client claimed that all necessary information at it is present, and it should be given only to a normal format, sent it for filling the questionnaire. At the questionnaire rather simple tabular form in which it is necessary to enter the data sufficient in order that on their basis to calculate financial model. Well and in addition to answer questions for the description of the enterprise, an essence of the project, the organizational plan and, partially, definition of a marketing situation.

When the person saw this questionnaire, from his party outburst of indignation followed. For some reason he decided that this questionnaire which is most completed with it and is ready business - the plan.

And how? Plates are. Tsiferki in plates is. The most ready business - the plan for which still someone should be paid!

Tried to explain, sent examples - is useless. The client in rage got the bit between the teeth, having decided that he is dissolved.

Well, is its problem. I do not know as as there at it decided. There are enough delusioneds around us.

I not it meets. There are still narrow people who are not able to use the Internet, and search engines, respectively.

Misters are good! I do not advertize Google, but without it anywhere. About everything that I wrote here, pisano - it is rewritten to me in hundreds of options. The fact that you are not able to present, master and capitalize the ideas yet - it does not matter. Everything comes over time. The main and a subject, rather risky for you, - search of the partner capable to realize all your developments, and at all this not to throw you.

The choice of the adequate partner - very sore subject. Personally I not once burned on this question. I will try to tell soon about the mistakes in more detail.

Andrey Stadnik