Investment study / Business plan
An investment study / business plan is one of the most important analyses, i.e. documents needed for an entrepreneur of a quality assessment of the validity of entering into an investment.
During the drawing up of an investment study, the goal is to recognize and quantify all necessary elements for a project to come to life. Most people think it is enough to assess the sales income (100 pcs of a product x price of 400 HRK) and business expenses (e.g. RUC in trade), but the analysis is much more complex.
A quality analysis includes an analysis of investment location, detailed analysis of investment structure and validity of an individual investment segment in comparison to other similar projects, taking into account the financial aspect.
It comprises a detailed analysis of income with an analysis of justification of the final price of the product/service in comparison to the competing companies and the level of product/service they offer, detailed projection of the number, structure and cost of employees, calculation of necessary capital investments in future periods etc.
An important element during the drawing up of an investment study / business plan is putting the project in a real time frame, i.e. deadline plan that will define the time needed from an idea to the realisation of the project, i.e. the period until the project starts generating income.
The elaboration of business expenses on fixed and variable expenses is extremely important in order to optimally assess the working capital needed for the start of business; this is often neglected, which is why the investment is bound to fail at its very start. Of course, the management of the investment / project is also very important after its realisation, i.e. the knowledge, skills and experience of persons who will be directly responsible for project management.
The comprehensive analysis of all elements needed for the study should be reviewed not only from a financial point of view, but also from a functional one, taking into account the tax aspect of an investment and time needed to prepare and realise the project in regard to the market situation.