Post-graduate student Skomarovskaya K, scientific supervisor Yerysh L.

Donetsk national university of economics and trade

named after M. Tugan-Baranovsky, Ukraine

Business plan is the first step of the business analyses

Every business starts with an idea. Business plan is a written document fully describing and analyzing a particular business. As a rule business owners are beginning to compline business plans when they need a bank loan.

First of all business plan must give answers for the following five important questions.

ü What is the main purpose of the loan?

ü What are the firm’s own success strengths and weaknesses?

ü What is the overall business concept? Manufacturing, retail, or service sector?

ü What is the current situation?

ü What is the current financial picture?

Title page contains the following information: current date, company logo, company name, company address, company email address, company telephone numbers, home and office of employees, company Web site address.

The structure of business of plan can be conditionally divided into 7 divisions.

The first important division of business plan must contain complete information about the purpose of loan, necessity and validity of taking credit. Collateral structure full and in detail described in this part.

The second chapter includes, as a rule, information about type of business company.

A manufacturing business will answer the next questions: Will the business make one or more than one product? What is the source of the competition? Will products be made for inventory or per order and how much of each should be made? Where will the business be located? Where is the majority of the customer base located? Where are the suppliers located?

A retail business will answer the next questions: How will the advertising needs be handled? How much actual inventory should be purchased? Should the store open in a mall or a free-standing location? Where will the store(s) be located? What foot traffic does the location have? How easy is it to get into the store?

A service business will answer the next questions: Are the skills better than competitors? Should the business insist on cash payments only? Is the client list big enough or should the business start fresh? Explain how the business’ product/service is different from competitors. Describe the management team, as well as their individual experience. Indicate exactly how much money has been invested and how it has been spent. Where will the business be located? What is the distance from the customer base?

The third chapter includes information about the legal structure of the business: general partnership, limited partnership, and corporation.

The fourth part describes the history of company, the stages of development and the production process. This section include next information: the problems in the development of the product or service, indicate which industry associations the owners of the business will affiliate with, any industry guidelines that must be complied with, the main suppliers to the business and their prices, terms and conditions.

Production process includes basic requirements for the business, that as consider land, equipment and office space. Management should be familiar with these costs. When will production begin on the product or service? How long will it take to produce the products? Who will make purchases on the components necessary for production? What will be the system for keeping track of inventory?

The fifth part «Environment and market» describes conducting a market analysis: market research that supplies information about the marketplace. This part involves competitive analysis, customer analysis, and industry analysis.

The sixth part «Marketing plan» describes the marketing strategies one will use to influence the customer to purchase the product or service.

The last part reports financial statement of business company. A business plan for an on-going business should include financial statements from the previous three years. Financial projections should be realistic. Balance sheet: A “snapshot” of the financial state of the business at a particular point in time. Income Statement shows the profit or loss for a particular time period. Statement of Cash Flows is a reflection of how much money the business has at a particular point in time.

Complete business plan will describe the purpose of the bank loan, identify the strengths and weaknesses of a business, guide management though the steps of developing and fine-running a business, provide a chronology of events and financial markers against which the firm can compare accrual results, well-proven and reasonable financial results from the taken credit, a calculation is possibility in time to pay shot on the taken credit and percent. Correctly, complete and reliable business plan is the first successful stage of business-analysis in commercial bank.

The literature:

1. James C. Barnes. A guide to business continuity planning, Wiley, 2001

2. Lynn M. Pearce. Business plan handbook volume 17 A compilation of actual business plans developed by business throughout north America, Gale,2011

3. Michelle Lee. Business plan handbook volume 22 A compilation of actual business plans developed by business throughout north America, Gale, 2012

4. Ian Whiteling. Start your own business 2010, Crimson Publishing, 2009