Let’s consider the approximate contents of phases of life cycle of the investment project.

The first phase is before investment, previous the basic volume of investments cannot be advanced precisely enough. In this phase the project possibilities are developed, studied, preliminary technological researches are carried out, negotiations with potential investors and other participants of the project are carried on, suppliers of raw materials and the equipment get out. If the capital investment project provides attraction of credit in the given phase the agreement on its reception is entered into; legal registration of a capital investment project is carried out: preparation of documents, registration of contracts and enterprise registration.

The expenses connected with realization of the first stage, in case of positive result and transition to project realization capitalize and also it is a part of preindustrial expenses and then through the amortisation mechanism concern on product cost.

The second phase is investment when there is an investment or project realization. In the given phase the concrete actions requiring much bigger expenses and having irreversible character are undertaken, namely: the documentation is developed design-estimates; the equipment is ordered; industrial platforms are prepared; the equipment is delivered and its installation and balancing and commissioning is carried out; personnel training is conducted; publicity is led.

On this phase constant assets of the enterprise are formed. Some expenses, them still name accompanying (for example, costs for personnel training, realization of advertising campaigns, start-up and adjusting) can be partially carried on self-cost production (as costs of the future periods) and are partially capitalized (as preindustrial expenses).

The third phase is operational (or industrial). It begins with the moment of commissioning of the capital equipment (in case of industrial investments) or property acquisition or other kinds of assets. In this phase start-up in enterprise action is carried out, production or rendering of services begins, the bank credit in case of its use comes back. This phase is characterized by corresponding receipts and current costs.

Duration of an operational phase exercises a significant influence on a project general characteristic. The further time is its top border and is carried the more cumulative size of the income.

Essential to advance that moment on reaching which receipts already directly cannot be connected with initial investments (a so-called investment limit). At installation, for example, the new equipment term complete moral and physical depreciation will be such limit.

The general criterion of life expectancy of the project or the period of use of investments calls importance, from the point of view of the investor the money incomes received as a result of these investments. So, at realization of a bank expert examination about credit injection term of a life of the project will coincide with an indebtedness maturity and the further destiny of investments bank does not interest. Established terms approximately correspond to the payback periods which have developed in a given sector of economic activity or a reflexivity of long-term investments. However in the conditions of the increased investment risk average duration of projects accepted to realization will be more low than in stable economy.

It is very crucial that government, despite this recession is not leaving to help small businesses. And small business grants can be a true helper today.

But, surely, you should remember that today the fight for small business grants as well as for other types of grants is more fierce. This is logical – more businesses need them. So before you start your fight for the small business grants, please visit this blog for more
details about grant industry.

Errors in development of the business plan for the venture investor

Too often company wants to show itself as something unique, with total absence of a competition in the market. It has a negative shade. If it isn’t present or there is only few companies on the given segment of the market, it means, that there is no enough clients. Availability healthy (as it will sound banal) a competition is positive aspect as determines the big size of the market. And it gives confidence to the investor in liquidity of the company.

And what about excessive underlining of partner relations with the world famous companies. It certainly sounds remarkably to have Nokia in partners, but details of these relations are also important. The business plan should explain not availability of a loud name of the partner, but value of these partner relations. For example, delivery for Nokia of paper clips for 10 dollars a month isn’t valuable.

Development of financial strategy and company value assessment on the future results should coincide with its history. Planned results, they only are planned, and one of the best indicators in the future are indicators of last periods. It should be shown that the company has achieved that what they received when the basic events have occurred. The history gives to the investor confidence that the company at least will repeat it and in the future.

Too superficial review of key figures of the company can be also a problem: Besides working careers of team members, it is necessary to show their growth (professional and career) it is commensurable with the company. Even if they have appeared in the company recently, all of them equally somewhere grew and were improved. Business is done by people.

The requirement to confidentiality: The majority of investors, as a rule, are the open companies. They will refuse to sign the confidentiality agreement of the received data. If you insist on closeness of the business plan it means that at opening of your developments, there will be a loss of advantages; such business isn’t steady and attractive.

It doesn’t concern the patented technologies. In the business plan it is not necessary to discuss confidential aspects of technologies, it is necessary to consider technology pluses comprehensively. In the way beginning on investment attraction the complete information about technologies isn’t required to the serious investor. Everything is good in its season. At the subsequent stages it is possible to consider signing of the confidential agreement, but in any way at a business plan stage.

At each investor the requirements to the business plan, familiarize with them because what is pleasant to one can irritate others. Show an individual approach to the investor.

The times when governments have been flooding people with all types of grants have passed. At least for some time. But that does not mean that you should get rid of the idea of getting small business grants.

Everything is doable with nicely balanced attitude; small business grants including.

Go to this blog for more helpful tips about grants, how to apply for grants, grant samples, ups and downs of the grants. This information will help you to get small business grants or any other grants easier.

If you want to find for your business start up the investor which could invest some financial resources in your projects then you should know how to make everything properly and what kinds of investment there are so you should definitely know what exactly business plan and business strategy you should conclude for getting this very financial aid. That is why it will be interesting for you to read this article.

Realization of the purposes of investment assumes forming of investment projects which provide investors and other project participants with the necessary information for decision making about investment.

The concept of the investment project is treated doubly:

1. As the activity (event) assuming realization of a complex of any actions, definite purposes providing achievement;

2. As the system including a certain kit of organization-legal also and settlement-financial records necessary for realization or describing of actions.

There are various classifications of investment projects. Depending on the signs taken as a principle of classification, it is possible to allocate following kinds of investment projects.

Under the relation to each other:

* independent supposing simultaneous and separate realization and characteristics of their realization don’t influence against each other;

* mutually exclusive i.e. not supposing simultaneous realization. In practice such projects often carry out the same function. From set of alternative projects one can be only performed;

* the investment which complementary realization can occur only jointly.

It is also divided on realization terms (creations and functioning):

* short-term (till 3 years);

* medium-term (3—5 years);

* long-term (over 5 years).

Also divided on scales (more often the project scale is determined by the size of investments):

* the small projects, which action is limited to frameworks of one small firm implementing the project. Basically they represent plans of expansion of production and increase in assortment of issued goods. They are distinguished by rather small terms of realization;

* average projects – it is more often projects of reconstruction and modernization of existing production. They are implemented stage by stage, on separate productions, in strict compliance with in advance developed schedules of receipt of all kinds of resources;

* large-scale projects — projects of large enterprises in which basis is “the new idea” of productions necessary for satisfaction of demand in the internal and external markets;

* megaprojects – it is the target investment programs containing set of interconnected final projects. Such programs can be international, state and regional.

It is also divided on the basic orientation:

* the commercial projects which chief goal is profit earning;

* the social projects focused, for example, on the problem resolution of unemployment in region.

* the ecological projects, which basis are constituted by inhabitancy improvement;

* others

It is very reasonable that government, despite this recession is not leaving to help small businesses. And small business grants can be a real helper right now.

But, of course, you should remember that today the fight for small business grants as well as for other kinds of grants is more fierce. This is logical – more businesses need them. So before you start your fight for the small business grants, please visit this blog for more helpful tips about grant industry.

The investment can also depend on degree of influence of results of realization of the investment project on internal or foreign markets of financial, material products and services, work, and also on ecological and social conditions:

* the global projects, which realization essentially influences an economic, social or ecological situation on the Earth;

* the economic projects, which realization essentially influences an economic, social or ecological country situation and at their estimation it is possible to be limited to accounting only this influence;

* the large-scale projects, which realization essentially influences an economic, social or ecological situation in separately taken country;

* the local projects, which realization doesn’t render essential influence on an economic, social or ecological situation in certain regions and (or) cities, on level and structure of the prices on goods markets.

Feature of investment process is its associativity to the uncertainty which degree can vary considerably, therefore depending on risk size of investment projects and it is also subdivided:

* the reliable projects characterized by high probability of reception of warranted results (for example, projects fulfilled under the state order);

* brave projects for which high degree of uncertainty as costs, and results is characteristic (for example, the projects connected with creation of new productions and technologies).

In practice the given classification isn’t settling and supposes the further detailed elaboration.

Realization of any investment project pursues a definite purpose. For different projects these purposes can be various, however in the whole they can be united in four groups:

1. Goods preserving in the market;

2. Expansion of production volumes and improvement of quality of goods;

3. Release of new goods;

4. The decision of social and economic tasks.

The definite purpose can be reached different ways,

Therefore the most part of implementable projects has clashing character when different ways of achievement of the same purpose are studied.

Some common features are inherent in all investment projects, allowing them to standardize. It:

* availability of a time log between the moment of investment and the moment of reception of incomes;

* cost project evaluation.

The time interval between the moment of occurrence of the project and the moment of the termination of its realization is called as a project lifecycle (or a design cycle). The termination of existence of the project can be:

* commissioning of objects, the beginning of their operation and use of results of project implementation;

* achievement by the project of the set results;

* the termination of financing of the project;
* the beginning of works on entering into the project of the serious changes which have been not provided by an initial plan, i.e. modernization;

* a conclusion of objects of the project from operation.

The days when governments have been showering people with all sorts of grants are over. At least for a while. But that does not mean that one should get rid of the idea of getting small business grants.

Everything is doable with smart approach; small business grants including.

Go to this blog for more practical tips about grants, how to apply for grants, grant examples, 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.

Financing search is simple and difficult process simultaneously. It seems simple money it is a lot of them and they everywhere. Difficult is that it is necessary to convince those who have money to give it to you.
There are some ways of reception of financing. Some are difficult, others less difficult.

The core is in planning, this exact understanding of answers to three questions:

For what you will use money?

It is necessary to know precisely up to that where you are going to spend every cent.

How many money it is necessary?

It is necessary to know precisely when and how many it is required money. How many before start, how many in a month, in a year. Often business suffers crash, because of that the money in first month flow like river, and disappear, before business starts to bear fruit.

How you will return money?

Any investor interests not only that, how many he will earn, and how he will return the money back (plus that what he will earn). You should understand precisely how you will return the borrowed.

Financing sources:

You – you are the first source to which it is necessary to pay attention. Perhaps, disposal of the old unnecessary car and the ground area in 300 km from a city purchased on prospect and you will have the necessary money funds necessary for small business. Can cost to pledge in bank old apartment if there is a confidence of having success in business. Keep in mind that the majority of creditors won’t finance 100 percent of your idea so you should put up some money independently.

Your acquaintances – look back, maybe, your schoolmate perfectly feels and will be fast in notorious “gold billion”. It is possible to convince of genius plan to your friend.

The bank – If you have good credit history – then the bank is a place where it is necessary to go. Despite percent, probability to obtain the credit to the businessman with good credit history it is great enough and under quite acceptable conditions. As a minus, availability of restrictions on the sum of credits, requirements to pledge etc., etc.

Venture capital trusts – at venture capital trusts is a lot of Money, if the money have ended, know where to take. With expansion of globalization ever less the reasons to be afraid that at the successful business plan you don’t receive money because any fund has any restrictions, always there will be others. But, the venture capital comes not on long. Also that to receive from them money your business really should not only bring the income now, but also to be attractive in some years, attractive from the point of view of the goods.

The times when governments have been showering people with all sorts of grants have passed. At least for a while. But that does not mean that you must get rid of the idea of getting small business grants.

Everything is doable with smart attitude; small business grants including.

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

Small scale business grants: private investors.

Private investors or as them also call “business angels” is one of financing ways, somehow credit institutes, investment funds, etc. They are more passive and their investment possibilities seldom exceed 1 million dollars.

If you don’t have assets interesting to the creditor, there are no enough means to interest the institutional investor, a business angel, that is required to you to begin new (or to expand existing) business then they are the best choice at an early stage of business.

Let’s make the small classification of business angels:

The co-owner:

Basically it is departed from affairs, secure individuals. The investment is aim to earn money. It is usual acquire a certain part of business and prefer not to interfere with management

The businessman:

Usual it is successful businessmen (businesswoman) and owners of acting business. Unlike co-owners, are ready to incur more risk and to put more money as have a steady source of the income. Their main advantage consists in that they demand less and more freedom in activity allow remaining the observer if certainly all goes well.

The enthusiast:

Prefer not to interfere with managerial process, but with the big enthusiasm take part in strategy development. Basically interests new, earlier the heights not comprehended by them.

Director or the successful manager:

Proceeding from the experience, they believe that precisely know how to manage business. Active enough participants of process business, and at the same time useful, especially at an early stage of business as will help to avoid many problems.

The professional:

Professional investors are most useful at a stage of the development already constructed, business. As their participation in the project can often testify to possible success of the project though and it is not obligatory as their participation, can be considered as a step on a way to portfolio or to the strategic investor.

Financial aid for the small scale business: Sharing of risks

Speaking about prospects of a mass exit of banks on the market of crediting of the enterprises of a small-scale business, we can name two sufficient conditions. The first is the understanding of potential of this market and that circumstance that risks of crediting of a small-scale business is not extreme. They are quite operated by means of a diversification and application of competent technologies. By the way, share of the delayed credits of small enterprises — only 1,5 %. Therefore the will of a management of bank is defining.

The second condition concerns starting financing of small enterprises and the micro financial organizations. In this business, banks won’t manage without the state support in a kind of subsidizing of the rate and guarantees under given out credits.

It is very crucial that government, despite this crisis is not leaving to assist small businesses. And small business grants can be a real helper right now.

But, surely, you should remember that today the fight for small business grants as well as for other kinds of grants is harsher. This is logical – more businesses need them. So before you start your battle for the small business grants, please make sure to check out this blog for more
details about grant industry.

Where to find financing? There are variants:

* Banks

* Venture capital trusts

* Leasing

* Etc. etc. etc.

But, pledge is required to banks; venture capital trusts don’t give 100 % of financing, etc. What to do? A direct way is refer to the private investor. Only where to find him this is a question. If there are acquaintances or relatives who can enclose in your business all is clear and if those are not present? It is possible also to wait when the investor will appear.

And try to think non-standardly. If you don’t know where to search for them, let them find you. Make a seminar (presentation) of your project. Your purpose is to interest these people to invest in your project.

It is not necessary to base your seminar on a theme: “give me money”. It is necessary to bring softly and correctly information to the investor that everything told by you at a seminar has under itself some soil for the investment and you are that person who understands a problem to the smallest details that is why for you it is necessary to entrust money under such remarkable idea.

And it shouldn’t be the seminar, under the name: “who has a lot of money come here!”. Show sharpness, don’t deceive people and show them a seminar theme in such foreshortening in which it will interest them. For example, it can consist of several parts: theoretical, practical, and concrete your project. The main thing it should be interesting, useful and you should over be competent.

That is what is necessary for a seminar:

* Time. Date and time should correspond to possibility to visit it.

* the Venue. All should be made in the standard traditions of carrying out of seminars.

* to Find potential investors. Where? First, there are many companies,a concrete personnel (that is – potential private investors of your project). Here they also should dispatch professionally prepared brochure of a seminar. Take the newspaper, magazine – give advertizing.

* to Create a packet for the investor – perfectly prepared printing copy of your seminar which will give out to listeners.

* Make business cards

* Make presentation (not on words), but use software solutions, for example, order a slide and screens. Create additional materials

Rejoice to questions. If there are some questions it means everything has passed not too badly.

Be afraid of questions, if you can’t confidently answer it is a complete failure for you.

And the main task of a seminar it is to trust in yourself and your own project.

Certainly, will come less people than you count, maybe, nobody comes. And so such wouldn’t happen, necessarily ring round and confirm participation of those to whom you personally dispatched invitations. In a week time make one more seminar, for new participants.

The times when governments have been showering people with all types of grants have passed. At least for some time. But that does not imply that you should forget the idea of getting small business grants.

Everything is doable with wise attitude; 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 easier.

Stages of business, task and financing

Let’s consider a way of working of a certain virtual business. We will specify each stage of a task which stands during this moment and also financing ways.

The family business:

* There is an idea and all. Nothing more isn’t present: there are no: business plan, market researches, experience of business dealing, the personnel, a command of managers, potential risks, tasks and finances management. At the best there is an experience of circulation with a product (the goods, service). The idea generator, the head, the contractor is one person.

* What it is necessary to make? To constitute the business plan, to estimate a market outlet, to study competitors, specify, how business will develop, to estimate its potential, to form a team having allocated obligations and to generate structure.
* Usual sources financing are less accessible. The risk level is too great and there is no definiteness in success as in general, and in time of achievement of results. Private investors, the personal savings, some micro credits can also accessible.

Beginning business:

* The business plan is developed. The command is collected. There is a certain structure of the company and the hierarchy is also created. Market research is conducted, clients (and already there are ready contracts and agreements). Preselling preparation of a product is produced.

* What it is necessary to make? Finish product that can be ready to sale to sale, to finish the business plan and marketing researches, to complete a command and to start the process.

* It is not interesting yet to the majority of investors. Only some venture capital trusts can show interest in the event that there is competently constituted business plan, professional command, potential, a know-how (if it is required and the proved ownership right). Search of means is the main task also will occupy from several months till 2 years.

The developing business:

* The Company grows; the product is claimed by the market. Clients are generated and their circle grows. The command is generated and works. The monetary flow is. Shortage of means for development is felt and the market allows developing.

* What it is necessary to make? It is necessary to increase a market share even to the detriment of profitableness, by performance improvement and reduction of costs, to construct the branched out structure and logistics system.

* At this stage the company is a tidbit for all investors and financiers, especially for venture capital trusts. For them it is the most preferable round of financing. Debt instruments are accessible, but they, at wrong planning can put an end to the company (during this period at the company an acute shortage of circulating assets).

It is very reasonable that government, despite this recession is not leaving to assist small businesses. And small business grants can be a real helper today.

But, surely, you should understand that today the fight for small business grants as well as for other types of grants is more fierce. This is logical – more businesses need them. So before you start your battle for the small business grants, please make sure to visit this blog for more
details about grant industry.

Jack Danny got tired from constant change of a place of work and he has decided to begin the business. Living in suburb, he saw that in district all time there are faults with deliveries of the bakery goods. Here he also has decided to open a bakery. However, having constituted the business plan, Jack has understood: he can cover with own forces only 15-20 % of all costs. Therefore it was necessary to go to bankers.

In words all banks were ready to give money and as has reached business — in one have told” unpromisingly “, in the second they at all don’t credit such business branches and in another the bank agreed to borrow a maximum of 70 % of the necessary sum. Having thought, I have offered partnership to one of friends, and missing 50 % all of us took on credit. However, we will try to extinguish it as soon as possible because to give every year 35 % to bank — it is very unprofitable”, — Jack tells.

If it is necessary to receive pair of hundreds thousand dollars for a business “start”, really, it is necessary to work fairly for it. Someone from banks agrees to give the credit of the state of emergency, working exclusively in service trade and someone — under export-import transactions and someone — to only non-polluting business.

Besides, the bank will demand liquid pledge and will credit, most likely, under the high rate and also foreign currency credits are accessible only to those who already performs export operations.

Whom they give money to?

From the first thirty of banks small-scale business crediting is declared at least by half. But beginning businessmen in the ranks of the clients are ready to see only few of them. However, in the first case the specialist of bank has refused to name even rough credit conditions. All dares exclusively in an individual order, after project studying.

In one of the banks the credit is given both to start new business and on expansion of already working one. The maximum amount — 0,5 millions dollars can reach a crediting period of seven years. The rate is attractive enough: 11,75-14,5 % in dollars and euro. Unconditionally, pledge is required: the real estate, a car, the equipment, even the deposit will approach. Though, the kind of provision and definitive conditions all the same depend on that how much perspective credit managers will consider the business project.

Other banks agree to credit, if business works not less than one-two years, a minimum — half a year. By our estimations, in crediting of new clients today actively and purposefully are engaged no more than 10 banks. Business startups “only are interested to credit the majority in the event that the company and the businessman already have another, core business”, — the head of department on development of small and average business explains.

It is very crucial that government, despite this crisis is not leaving to help small businesses. And small business grants can be a real helper right now.

But, surely, you should remember that today the fight for small business grants as well as for other types of grants has become harsher. This is logical – more businesses need them. So before you start your battle for the small business grants, please check out this blog for more
details about grant industry.

Special programs for the business start up

If business works already at least six months then there is a possibility to take a loan in other banks under the joint program from the European Reconstruction and Development Bank. Rates under such programs start from 17-20 % in a dollar or euro currency. If means are necessary on purchasing of the equipment, real estate and a car, it is necessary to bring to 30 % of advance. The maximum crediting period is till five-seven years, a credit amount — to $3-5 million or their equivalent.

Means are given by many banks, both on replenishment of circulating assets and on purchasing of basic funds. However, if in the second case it is possible to count on the maximum credit period for “injections” in circulating capitals banks give money only for a year-two.

Also in all cases it is necessary to provide the money received on credit with liquid pledge. And if the equipment, real estate or a car is on credit acquired, it can appear insufficiently and it is necessary to pledge something else — real estate or the car. Moreover and at that cost which will be exposed by the bank appraiser.

Bank’s severe selection:

For reception of the credit the businessman should give impressive quantity of documents: from the registration certificate and the inquiry on movement of funds under bank accounts to the reporting for the last half a year-year and the plan of financial receipts for the term of credit reception.

New or “developed” business it is even more difficult: the bank demands the developed business plan which will explain why these goods or service will be on sale is better and will make profit in a year-two. It is very probable that to the borrower beginning new business will suggest to finance on 25-30 % of the project for the personal means and the remained 70-75 % — at the expense of the credit. Will analyze cost efficiency of the project captiously — the decision depends on it. If the bank comes to a conclusion that profitability of the project won’t allow the borrower to serve the credit no credit will exist basically.

The estimation of mortgage property is conducted by bank and paid by the borrower. And it is quite probable that assessment value of apartment, office or the equipment will be essential below expected. So banks aspire to secure themselves in case of credit non-payment — that even at urgent sale of pledge on knockdown price money for its repayment has sufficed.

Some banks are ready to support the businessman-borrower — offer so-called “credit vacation” for using first year-two the credit. During this period the client can not repay the credit indebtedness.

The times when governments have been flooding people with all types of grants have passed. At least for some time. But that does not imply that one should forget the idea of getting small business grants.

Everything is doable with nicely balanced attitude; small business grants including.

Read this blog for more helpful tips about grants, how to apply for grants, grant samples, ups and downs of the grants. This information will help you to get small business grants or any other grants easier.