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Small Business Financing: Risks Assessment At Business Plan Drawing Up

At development of the business plan it is necessary to give special attention to a risks assessment, connected with project implementation. It will be additional plus at dialogue with creditors or investors. Besides, it will help you to be more prepared in a crisis situation.

The thought over technique of struggle against consequences of brave situations will help to facilitate project implementation considerably.

The first stage at a risks assessment is determination of critical factors that is the factors capable theoretically to make negative impact on the project. They can be external and internal.

External factors concern: idle time because of suppliers of raw and materials, climatic cataclysms, demand pattern change in connection with any reasons, actions of competitors etc.

Internal factors concern: contractual delinquency from subcontractors, illness of key participants, hidden defect of technology etc.

At the risk assessment possible statistical way ? carrying out the analysis of last indicators of other market makers in the given industry and it has similar parameters. The similar approach is simple enough; however, absolutely identical enterprises can?t happen.

More exact method is an expert evaluation. At the estimation not less than three experts is desirable. As those specialists in the given sphere of production, lawyers, specialists on credit questions, analysts can be involved. The choice of experts is necessary for proving in such a manner that it would be clear to the potential investor.

Experts determine probability of approach of each critical factor chosen by you, using five degrees of probability: 0, 25, 50, 75, 100. Accordingly, ?0? is that the event won’t come, ?100? is that event necessarily happens.

Further, by results of estimation all experts determine average risk probability. Each group of factors has a certain share of weight in summary project risk. Multiplying average probability on a weight indicator of the factor ? we get a risk point. The sum of balls gives summary project risk.

The financial plan:

The basis of the business plan of firm is constituted by financial indicators together with the marketing plan. The financial plan allows judging how much given project or business is realizable.

Financial and economic positions of firm determine:

1) enterprise Assets;

2) the Basic production assets and capacities;

3) Quantity and cost of produced goods;

4) Number and geographical placing of production and sales departments and branches;

5) Degree of development of an infrastructure of the enterprise.

6) Security own raw-material base and energy sources, etc.

It is important to consider and analyze both demand, and the similar goods and services of this or that goods of the expected competitors.

Usual, starting production, the firm already has data on the future buyers with which are concluded the preliminary arrangement on sales and also on suppliers of completing items if it is necessary. Therefore the realization forecast constitute for three years forward, and it is desirable to conduct for the first year breakdown on months or quarters.

The days when governments have been flooding people with all sorts of grants are over. At least for some time. But that does not mean that one should forget the idea of getting small business grants.

Everything is possible with wise approach; small business grants including.

Read this blog for more helpful tips about grants, how to apply for grants, grant samples, traps and ticks of the grants. This information will help you to get small business grants or any other grants in a more convenient way.

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