Åêîíîì³÷í³ íàóêè/ 10. Åêîíîì³êà ï³äïðèºìñòâà

Post-graduate student Kostetska I.I.

Lviv National Agrarian University, Ukraine

Business-planning in investment projects

Today majority of Ukrainian agricultural enterprises feel acutely the lack of proprietary funds for the investing to the fixed and circulating assets and that is why they try to find external sources of investments. At the same time high value and strict conditions of credit granting force to seek alternative sources of financing. Non-bank investors are such sources.

Investors can be individual, group or legal person, which invest financial and other assets in the investment project in order to get profits.

Investing of the manufacture on the base of commercial contracts about joint venture activity is the simple form of attraction of investments, which stipulates that agricultural commodity producer, who is limited in funds, and financially-stable enterprise are financing production expenditures. Output is a reward to the partners for expenditures on material and money resources. Shares of the production of every partner are determined proportionally to their contributions to joint venture. Partnership relations are regulated by the commercial contract on joint venture activity.

As a rule, such investment projects are minor and without great investments, but the very professional management present on the agricultural enterprise plays an important role for the investor. Company’s activity to be effective, we need to launch several joint projects, as a rule, with different investors. It requires time and a lot of efforts.

Enterprise with foreign investments – enterprise of whichever organizational and legal form, created under the rules of Ukraine, if during the year there is a qualifying foreign investment in its authorized capital. Qualifying foreign investment is not less than 20% of the authorized capital. Degree of the Cabinet of Ministers of Ukraine “On regulations of foreign investment” (article 1) defines minimal amounts of qualifying foreign investment dependent on the type of investments and subjects of investing (not less than 50, 100, 500 thousand dollars and 1 million dollars).

There are such types of investment projects in scientific literature: innovational and organizational, research, educational, mixed.

Majority of business-projects are investment (spending) in nature. Size of investments required to implement business-plan depends on their classification and mainly scale, duration and complexity of the project.

Investment projects typically include projects with the primary purpose is investing in different types of business for getting profit.

Business-plan is a primary document for creditors and basic for entrepreneurs. Approval and viability of the project depend on accurately drawn up document.

If the company decides significant rise in production of new or traditional products, but it has not enough own potentials for doing it, then there are such ways out: attraction of capital investments in order to get new potentials or seek for partners to whom it transfers manufacturing of separate details, carrying out technological processes, and also development of an appropriate business-plan. The second way, as a rule, ensures accelerated solution of tasks and requires less means. In this case the demands to the future production are determined at the stage of the draft of business-plan.

With the help of business-plan we can appraise the perspective situation both within the company and outside of it. The leader of the company needs it for the orientation in joint-stock property conditions and somehow while establishing the company. It is the very business-plan, by means of which the leadership of the enterprise takes decisions; what part of the income to be left for the accumulation and which one is distributed in the form of dividends to shareholders. This plan is used for the improvement and development of organizational and production structure of the enterprise.

Today we live in new time where there is no stability. Written business-plan gives an opportunity to foreseen the development of an activity for several years ahead. Nowadays many investors consider that business-plan is an intellectual exercise and is not related to the real life.

The circumstances in the very business are also altered. Analysts have written a lot, asserting that business changes faster in comparison to the past. Mainly, it is done owing to the usage of Internet and wireless means of communication.

The very investors have changed too. On venture capital market it has been supposed that business-plan is a necessary clause in the search of investments. However, within the last decade new methods of cooperation with investors have occurred: sites in Internet, program PowerPoint for making presentations, on-line exhibitions. Nowadays investors spend much time in the search of the profitable investment and do not wait when thick business plan will appear on their table.

Today an investor needs weighty arguments to spend his money. Not taking into account the talks about business models, profitableness of securities and the growth rate, majority of professional investors are under emotional influence. They would like to invest under powerful economy and growing stock market conditions. When the reality is opposite, they desire to suspend their activities.

For the entrepreneur it means that he should make much more efforts in order to get the necessary financing. He will be waiting, convincing and for some time trying to conduct business without investments until his persistence and firmness make an appropriate impression on the investor.

The practice shows that on the modern stage of the development of entrepreneurship in Ukraine, most of all, businessmen need business-plan. They expect to attract foreign investments as majority of foreign investors prefer traditional scheme of the granting of funds, where the crucial moment is the consideration of business-plan.

Analysis of investment projects under conditions of risk is employed by one of such methods: not-risky equivalent or discounting factor made at risk. Optimization of investment budget has place when for some reasons the amount of investments is limited from above.

It should be remembered that even the most reasonable business-idea may be lost because of unconscious actions of its implementation. The person, who considers that high estimated return on investments, calculated in terms of business plan is the pass to get investment resources, is mistaken. Only investor’s confidence in the high qualities of business agents can promote the positive decision concerning the project and possibilities to entrust his money to the entrepreneur for further work on the idea. The investor chooses for himself a partner and it may be only a person, competent in his business and management of future business.

Taking into consideration this fact, in practice of review of business plans investors very often are beginning to study them from this section. No matter how attractive is the concept of business; they do not tend to be bound by any obligations concerning the company unless being confident in people who are to implement the very plan. But investors say that they invest money in managers, but not in unacceptable ideas or production.

A rich life experience is put in these considerations. It demonstrates the great importance of personality in achieving entrepreneur’s success.

Literature:

1. Business-planning: theory and practice: Monography/V.A.Vysiashchev. 2^nd edition. – Donetsk: LTD “Nord Computer”, 2001. – 412pp.

2. Financial business-plan: Tutorial / Edited by full member of Academy of investments of RF, doctor of econ. sciences, prof. V.M.Popova. – M.: Finances and statistics, 2000. – 480pp.

3. Olkhovikov O.V., Hrytsyshyn O.B. Essentials of the economy of agro-industry: Tutorial for pupils of vocational school / Edited by V.V.Parzhytskyy. – K.: Teacher’s press, 2005. – 320pp.