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Assessed a business plans feasibility

Situation

  • The applicant’s business plan suggested creating a high-tech company with sales in Russia and abroad, producing financial results that would attract investors. However, the client was not confident in the reliability of the applicant’s forecasts or in the optimism for the business model chosen by them

Goal

  • To check how realistic the applicant’s facts are and how feasible their business plan is
  • To provide recommendations to optimize the business model offered by the applicant - should investment take place in the project

Our approach

  • Analyzed Russian and global markets for LED and diode lasers regarding supply forecasts, the segments where demand is coming from, how revenue is distributed, profit levels and strategic control over the value chain, along with competition and key success factors in each unit of the chain
  • Analyzed the applicant’s current business plan from the point of view of availability and the potential to develop competencies, technology and other resources. Identified niches in the market and in the business model that potentially could aid the applicants. Identified the key success factors necessary for the applicants to design to create the business model
  • Identified the number of these niches in terms of revenue, profit and required investment. Analyzed the applicant’s business plan regarding how realistic the assumptions are and how achievable the sales, profitability and investment targets are, as well as highlighting the key risks
  • Provided proposals to optimize the applicant’s key business model and also to change the business plan in order to minimize risks to the client and maximize confidence in the goal of receiving a return on the invested capital

Results

  • The unrealistic forecasts made by the applicant were exposed along with the serious risk that the sales aims, profit levels and investment volumes would not be achieved
  • Recommendations were developed and adopted by the client to change the applicant’s business model and business plan, significantly reducing risk to the client and increasing the prospects that the project can be successfully achieved

 

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