Business plan according to the ffppmp standard
In the context of the economic crisis, the focus of financing has shifted from projects, the creation of new industries to programs to improve the efficiency of existing ones.
In Russia, the European Bank for Reconstruction and Development (EBRD) is directly working on projects in which its participation can amount to 10 million euros, providing financing on average for a period of 5 to 8 years. Given this scale, direct work with the EBRD is only possible for large enterprises and the upper echelon of medium-sized enterprises. The bank focuses on financing businesses through loans or equity participation. Funding is provided for both existing businesses and new projects.
In accordance with its own standards, the EBRD finances no more than 35% of the cost of a new project or long-term capitalization of the company. New projects accepted for consideration usually have a total budget of at least 20 million euros and an average payback period of five to seven years. Due to the fact that the EBRD is a development bank, it has the opportunity to apply a wider range of financing instruments in its work, including participation in equity capital, but in each case, the bank expects a return on the proposed project and return of funds within a reasonable time.
The repayment schedule and the cost of financing are discussed individually with each project initiator, while the margin is determined after project examination (due diligence) and credit analysis. The Bank provides long-term financing in rubles and foreign currency, and as part of its strategy assumes work at rates close to the market average, provided for comparable periods.
In general, the EBRD is engaged in development projects, but in 2021, due to the crisis, the bank also began to consider projects for refinancing short-term debt. A company can apply for this type of financing, provided that the pre-crisis financial history allows its management to be considered effective, and the reasons for the difficulties are associated with the lack of adequate refinancing of short-term debt in the market.
The appraisal process for any EBRD project involves two stages, similar to the technology used by private equity funds. First, the EBRD systematically reviews the concept of the project, then makes a full examination taking into account the principles of a conservative banking approach (sound banking). The task of the expertise is to confirm that the borrowing company is capable of sustainable development in the long term and to service the received debt. World banking practice clearly demonstrates that the size of a company is not always decisive in the ability to bear additional debt burden, since, for example, low profitability can reduce the creditworthiness of existing debt obligations.
The main requirements when making a decision on financing include the following: - a high degree of interest of the owner in his business, willingness to participate in the project with his own funds (at least 40% of the project cost), the disposition to effectively formulate and monitor the implementation of the strategy company development; - the company itself must be financially stable; - at the helm must be competent management capable of effectively predicting the consequences of management decisions in the medium and long term and demonstrating good results of their activities, taking into account the corporate financial model; - the business must submit management accounts and an annual audit in accordance with IFRS, which are important conditions for starting work with the EBRD.
It is important for the bank to have a sound project, as well as to obtain sufficient clarification about the factors that determine future success. An integral part of the information provided is a market strategy, including an analysis of the competitive environment and an explanation of the advantages of the project and the company in the market. If the project involves the creation of a product that will be new, the EBRD, with the help of external consultants, analyzes the chances of success of the product in this market. As a result, the financial forecast is based on the results of market analysis and the main parameters of the company's marketing strategy.
It usually takes 4 to 6 months from the moment a project concept is considered to a decision. On average, four months is the time to approve follow-ups from existing EBRD clients who meet the bank's conditions and have experience with it.
The average time for approving projects with companies that have not previously worked with the EBRD is 6 months. At the same time, the speed of work is associated both with the analysis carried out by the EBRD, and with the promptness of the provision of information by the borrowing company and the duration of the negotiation process on the terms of financing.
In some cases, the company's work with the EBRD begins at a very early stage, at which the company may not always meet the bank's requirements. If the applicant for financing is just about to introduce a high-quality corporate governance system and the transition to IFRS, then the EBRD may be in a waiting mode until these processes are completed. In this case, the applicant submits the project for reconsideration, taking into account the fulfilled preliminary requirements regarding the transparency of the ownership structure, good corporate governance and the availability of IFRS reporting.
Standards and methodologies for preparing business plans
adopted in the Russian Federation and on international investment and financial markets. You can download it in the Word file at the bottom of this article.
By numerous requests, for information, we bring to your attention various requirements for standards and methods of preparation, execution and development of business plans prepared by the Moscow Legal Center Malina.
A business plan is a document that describes a specific business idea and possible ways to implement it.
The main function of a business plan is to assess how realistic it is to implement a given business idea, and if so, what kind of profitability the project promises and what risk it entails.
The importance of a comprehensive and thoughtful business plan cannot be overstated. A lot depends on the business plan: external financing, provision of credit from suppliers, management of operations and finance, development and marketing of the business, and ultimately the implementation of the company's mission.
However, despite the critical importance of a business plan, many entrepreneurs hesitate to the last to write a written document.
This is not least due to the fact that they simply do not know where to start, and therefore find various excuses for their inactivity - for example, lack of time or the rapid development of the market, as a result of which any business plan to the moment it is written and approved it will inevitably become outdated.
Business Plan Standards in Russia
Concise and accessible describes the business, the most important tool when considering a large number of different situations, allowing you to choose the most promising desired result and determine the means to achieve it.
So-so socially oriented.
(United Nations Industrial Development Organization (UNIDO) - an organization supporting the development of developing countries. The general structure adopted for this standard is described. The standard is especially emphasized on the detailed description of the idea. It is the most common technique.
The Correct Decision company has been dealing with financial and investment planning on a professional basis for many years.
We provide a range of services on the territory of the Republic of Tatarstan and the regions of the Volga Federal District (Volga Federal District):
- business planning (development of business plans and feasibility studies - feasibility studies, project memorandums) - for making a decision on the feasibility of implementing a project or starting a business based on criteria for assessing the investment attractiveness of a project ( business), as well as to attract funding, receive government support in the form of benefits, subsidies, grants, preferences and other types of support
- financial and investment planning
- development (design), implementation and maintenance of planning systems, accounting, control, analysis of income and expenses,
- development (design), implementation and maintenance of budgeting systems for current and capital costs,
- design (development), implementation and maintenance management, tax, accounting systems
- project support - information and consulting, if necessary - operational, technological (controlling, monitoring)
Business planning - development of business plans (investment) projects:
The main task of business planning is to build a dialogue and ensure agreements between the participants of the investment process (investor and investment seeker) in a public and universal language:
- in the language of financial calculations and indicators of the project's investment attractiveness (payback, profitability, liquidity - DPBP, PI, NPV, IRR, ROI, WACC, etc.)
- in the language of key performance indicators (KPIs) of the project team's work (sales volume, turnover, profit, market share, relative indicators of profitability, turnover, the level of quality of services provided, the absence or small share of comments, defects, returns, etc.) .)
Sources of financing for the implementation of projects are foundations, investment companies, banks and private investors. Searching for an investor is a difficult and slow path to project implementation, but sometimes the only possible one.
A substantive conversation with an investor always begins with a business plan for a project (sometimes a business plan is the only thing that can be shown to an investor on paper).
We recommend that you check with the potential investor the requirements for the format and content of the submitted business plan.
Investors are different and they all have different requirements for the business plan of the project, they all have their own preferences.
For example, for an investor related to government authorities, we offer a business plan format that is "familiar" to him (for example, the Ministry of Economic Development of the Russian Federation or the regional Ministry of Economy - for example, BP according to the standards of the Regulation "On the procedure for providing state support to enterprises and organizations implementing investment projects in the Republic of Tatarstan "(approved by the Resolution of the Cabinet of Ministers of the Republic of Tatarstan No. 284 dated May 7, 1999), the marketing part contains official statistics, links to reports from relevant departments and committees, Strategic Development Programs and other official documents ). Often, it is the employees of these ministries and departments that carry out an independent examination of such a business plan for an investor.
For a business-related investor, we offer a business plan format that is used by his partner bank, marketing is based on independent market research, a deeper analysis of competitors, competitive advantages.
In any case, a business plan for an investor is a more "sharpened" document for a customer than a business plan for a bank. Our experience shows that the following blocks are especially important for an investor:
Business plan according to EBRD (European Bank for Reconstruction and Development) standards
One of the generally accepted standards in business planning is the framework developed by the European Bank for Reconstruction and Development. This organization is one of the largest investors in Europe and the Central Asian region. The EBRD attracts a lot of foreign investment and uses its own funds to develop these regions. Investments come both to support and develop existing enterprises, and to create new companies and industries. The EBRD's close ties and engagement with government institutions allows it to participate in creating a better business climate. In particular, in order to improve the investment climate and simplify business planning, the European Bank for Reconstruction and Development has developed and proposes to use its own business plan structure.
European Bank for Reconstruction and Development (EBRD) - founded in 1991 as an investment vehicle, initiated by 61 states and two international organizations. Designed to support democracy and market economies in 29 developing countries.
EBRD Proposed Business Plan Standards:
- Cover Page
- Confidentiality Memorandum
- Enterprise 4. ... The history of the development of the enterprise and its state at the time of the creation of the business plan, a description of the current activities 4.. Owners, management personnel, employees of the enterprise 4.. Current activities 4.. Financial condition 4.. Loans
- Project5. ... General information about the project 5.. Investment plan of the project 5.. Market analysis, competitiveness 5.. Description of the production process 5.. Financial plan 5.. Environmental Assessment
- Funding 6. ... Loan receipt and repayment schedules 6.. Pledge and surety 6.. Equipment and works to be financed by credit funds 6.. SWOT analysis 6.. Risks and measures to reduce them
We will be happy to help you with your questions.
The employees of the company "Vernoe Reshenie" provide consulting services for projects, develop strategies and development programs, plans - action programs (roadmaps) for development, other necessary documentation, conduct research and advise on business issues.
We offer you to use the range of the Company's services:
- consulting and informational support of participants in state competitions for state support in the form of tax benefits, grants and subsidies, other types of support, support of the applicant's project in competitions of Ministries, departments, foundations, and other organizations RT and RF,
- development of a development concept (strategy), business plan, feasibility study (feasibility study), memorandum, presentation, project passport, preparation of a package of project documentation,
- conducting market research (marketing) - searching for niches, assessing the market
- attracting strategic and financial partners, investors in the project, business
For any questions that arise, please contact:
Send your questions or information about your project, terms of reference (TOR) for the development of a business plan or other documentation, a request for a call back:
g. Vladivostok, st. Tigrovaya, 7 +7 (924) 730-41-77, 200-41-77
Center of Consulting Services "MOBI" (Management. Valuation. Business. Investments.)
A summary is a summary of the essence of the business plan, including the following information:
Description of the organization that applies for the provision of funds: a description of the project, including information about whether it is about expanding an existing business or starting a new one; description of the enterprise, its specific characteristics, main stages of development
Brief information on the qualifications of management personnel, their characteristics in relation to this project, information on the shares of management personnel in the capital of the enterprise;
Description of the market situation (in relation to the domestic and foreign market) and the situation in the industry