Investment Opportunity Screenings™ and Business Plans

Definition

Investment Opportunity Screenings are a key step in determining the opportunity, around which a business is developed.

It helps to obtain a realistic view of the strengths, weaknesses, opportunities and threats of a business idea.

The analytical process of screening investment opportunities often triggers creative ideas and insights on how a concept or strategy might be modified to significantly enhance its profit potential.

Swiss Consulting has extensive experience in guiding enterprises through the process of crafting a personal entrepreneurial strategy for Vietnam .

Since 2001, Swiss Consulting has conducted over 50 investment opportunity screenings and 20 business planning assignments for SMEs in Vietnam .

Many of our clients were successful in obtaining substantial loans or equity investments based on the business plans they drafted with our support.

Methodology

Our Investment Opportunity Screening Tool™ is adapted from Jeffrey A. Timmons, New Venture Creation: Entrepreneurship for the 21st Century – 4th edition, IRWIN, 1994) to the specific Vietnamese context. It scores a business idea (both for start-up ventures and expanding businesses) against different key factors that tend to drive successful businesses, including:

• Industry and market: Market needs, ability to reach customers, receptiveness of customers to the product and service, benefits for users, degree of value added for users, product life, market structure, market size, growth rate, market capacity, market share attainable, cost structure.

• Economics (business plan) : Profits after tax, ROI potential, capital requirements, IRR potential, free cash flow characteristics, sales growth, asset intensity, spontaneous working capital, R&D expenditures, capital expenditures, gross margins, time to break-even for cash flow, time to break-even for P&L.

• Harvest issues : Value added potential, valuation multiples, and exit strategy.

• Competitive advantage issues : Fixed and variable costs, control over prices, control over distribution channels, entry barriers, contacts and network.

• Entrepreneurial team, management team : Quality of entrepreneurial team, industry and technical experience, experience in Vietnam , cultural experience and cultural fit, integrity, intellectual honesty, fit to personal life style.

• Fatal flaw issue : No excessive downside risk, the ability to absorb failure, opportunity costs, and stress tolerance of entrepreneur.

• Strategic differentiation : Degree of fit, team, service management, timing, technology, flexibility, opportunity orientation, pricing, distribution channels, room for error (how "forgiving" is the strategy).

Since 2001, Swiss Consulting has conducted over 50 investment opportunity screenings and 20 business planning assignments for SMEs in Vietnam . Many of our clients were successful in obtaining substantial loans or equity investments based on the business plans we drafted.