Common mistakes when drawing up business plans
This article lists the major mistakes that allowed when drawing up business plans. These include:
- Wrong idea about realization of products, its revaluation opportunities;
- Insufficiently thought-out marketing policy, overly rosy forecasts for product sales-it's all a matter of distrust on the part of credit inspectors;
- Excessive overpricing of retail selling prices of the goods.
On paper this is good economic performance in credit and investment project. There may be several reasons that could explain the overpricing. In the first case, the banal self-deception, or using false information on the market situation. Either the originator is focusing on results from the sale of one base. The second case is a deliberate misrepresentation of price parameters.
Do this to any price to obtain a loan or investment, usually for their misuse. Excessive understatement of the costs that are associated with the project. Typically, this refers to all costs-from the cost of raw materials to shipping costs and salaries. Special attention to expert attracts good relations with suppliers-this is often just a conspiracy.
All other expenses and costs specialist checks for compliance with accepted norms, ratios, etc. d. Most often underestimate, or even ignore the costs related to taxation. The project may influence such a thing as tax calendar. For example, if the date of received poorly, and have the reporting month, the entrepreneur can "get" to pay VAT in full.
A VAT credit for purchased goods will only be next month. All this can lead to the breakdown of loans, debt repayment schedule, sanctions, and other unpleasant things. Incorrect ratio loan period with time traffic of goods. Basically, the terms of loans for commodity operations accounted for 2-4 of the month. In this case, revenue is a means of repayment of the principal.
When successfully repaid the first loan, the customer already deserves some trust by the Bank. Second loan get easier. Taking a new loan, businessman makes new product turnover, and so continued until the onset of regular default.
In fact, the real period of the issued loan greatly exceeds the turnaround time of the product. And loan repayment is possible only if the accumulated net profit in the amount of the principal debt.
From this, it turns out that the feasibility study of the project (feasibility study) should be calculated over a longer period, hence the increased riskiness of the project. The main factor preventing the successful implementation of even the most brilliant business plan, it is unlikely that it is the responsibility of the owners. It is the economic and political instability in the country. Based on this fact, the Russian banks rarely consider the project payback period exceeding two years.