Today more than ever it is necessary to have instruments and methodologies that allow entrepreneurs or those responsible for promoting investment initiatives, to have the most accurate forecast possible of the profitability of a new project. In this sense, it is possible to affirm that the adequate conception of a business plan, as well as the identification of the associated risks and their preventive management, has become a key and fundamental instrument for the success of entrepreneurs..
A business plan is a series of activities related to each other for the beginning or development of a company or project with a planning system aimed at achieving certain goals, its proper conception and implementation must take into account, as a preventive measure, the risks associated with the implementation of these activities, as well as the way to deal with them in order to eliminate or minimize their negative effects on the scope and objectives proposed for the negotiation / Project.
The plan will be the instrument through which the stages of development of a business project will be defined and it is a guide that facilitates the creation or growth of the same; the identification and management of risks, the instrument that will help us achieve the objectives with greater precision, less effort and associated expenses.
Both constitute a cover letter for potential investors or to obtain financing. In addition, it reduces the learning curve, minimizes the uncertainty and the risk of starting or growing a company, as well as facilitating the analysis of the viability, technical and economic feasibility of a project.
The business plan and the analysis of the risks associated with it, must convey to new investors, shareholders and financiers, the factors that will make the company a success, the way in which they will recover their investment and in the case of not meeting the expectations of the partners, the formula to end the partnership and close the company, but also the necessary security and confidence that it has been planned how to act at all times in the face of the possibility of problems or difficulties, which if not foreseen in advance, they can undermine the success of the Business / Project. In short, something like not leaving everything to the solution of a problem when it arises, although it must be clear that it is not possible to foresee everything.
The business plan should justify any future goals that you set; Risk management must make it clear that any incident that may threaten the achievement of these future goals has been evaluated with professionalism and practicality. Both, as a whole, must adequately explain and support any proposed reasoning or forecast with logical, objective and convenient information. Its conception must have a dynamic approach, since it must be updated and renewed according to the needs of the moment. Likewise, it must provide a general panorama of the market and the requirements of the new company, product, service or, where appropriate, its growth.
Both documents can be produced for a start-up company or for one that is already operating and has development plans. In this sense, it is important to highlight two different moments:
1. When the company is operating and growing, they serve to rethink objectives, goals and needs, as well as to have identified and request, if necessary, additional loans or investments for expansion and / or special projects.
2. After a certain period of operation, it is advisable to measure the results, analyze them, evaluate them and compare them with the original plan to know the possible deviations, the causes that motivated them, the consequences and the corrective and preventive measures that have to be taken..
A distinctive element of business plans is that each one can be different, since it will have the personal touch of the person responsible for its preparation and will be designed based on the size and business of each company, which makes it impossible to establish an identical format for all cases, although it can be said that in practice most are similar. Another distinctive element is that the veracity of the information included in the business plan is of vital importance for its success.
Investors and financiers should know the projections and methods that were used to estimate the forecasted profit. In the same way, they also need to know and understand the assumptions, logic and supports that were used for the realization of the projections.
To make the business plan more objective and easy to analyze, it must include historical and comparative information, with statistical and graphical data from the last three to five years, in money and percentages, on different aspects of the company and / or the market..
Importance of planning
It is understood by business strategic planning, the design of strategies so that companies have the ability to adapt to changing conditions and be able to access, win and stay in new markets.
The business strategies of a company must be outlined on the basis of the specific needs of a defined target group in the market.
Sometimes an outside-in strategy will be employed, where the internal structure ensures effective and successful execution of business strategies.
Strategic planning must be oriented to innovation and generation of new proposals.
We are in the era of creativity, marked by the development of technology and knowledge, where research and the generation of ideas are a fundamental part of strategic planning.
Most entrepreneurs do not give the importance of plans in the initial phase of a business, but it is important not to overlook it if you want to be successful. Usually, the plans applied during the initial stage determine failure or success. It is a very valuable opportunity to develop a calm analysis of the way in which you intend to manage and operate and how to fulfill the master plan related to the mission of the company.
Planning can mean success and peace of mind for entrepreneurs. Planning is important to take into account precisely because no one can anticipate all possible contingencies that arise. The learning curve can be much more expensive, complicated and painful without a well-conceived business plan. Failure to do so, whether due to ignorance, fear, insecurity, occasional difficulties, will motivate that at some point the company may feel as if it were navigating a rough sea without a compass to guide its way.
Content of a business plan
Different formats can be used to prepare a business plan, since there is no universally accepted content for its preparation. However, there are a group of elements that in one way or another must always be considered, even regardless of the size and corporate purpose of the company; Such adaptation must be carefully analyzed by those responsible for its preparation.
Taking the above into account, the business plan presented below is intended to serve any company. For this reason, all the points that large companies should consider are included.
A strategic business plan requires answering the following questions:
What business are you in?
What business do you want and should be in the future?
What is the current strategic position of the company?
What changes are seen as the most viable in the markets?
What forces and trends are seen as the most feasible?
What critical elements are detected?
What business opportunities can be inferred?
What probable and possible events can be configured?
How do you see the future of the company?
What future conditions can be foreseen?
What innovations should be generated?
What actions can be taken to redirect operations to achieve the originally set goals?
What alternatives are there to have more effective and efficient operations with better economy and quality?
What preventive and corrective measures must be taken?
How to take advantage of the strengths of the company as a whole?
How to have better ways of control?
How to make better use of resources and facilities?
How to have better marketing strategies?
How to get to know the market better and how to beat the competition?
How to increase sales and what are the new goals?
What kind of advertising and promotions are needed?
How can future competitor strategies be detected?
How can the identified training needs be corrected?
What are the appropriate training courses?
How can staff productivity be increased?
How to meet the needs of efficient and responsible staff?
When and how to implement continuous improvement processes?
How can a total quality culture be generated?
How to improve the service?
How to develop integrated administrative systems?
How to detect the need for mechanization and standardization?
How to define investments in technology, machinery and equipment?
How to start the development of new projects?
How to have better shopping strategies?
How to decide the strategic acquisitions of other companies?
What actions or costs can be shared with other companies?
How can future financing needs be met?
Each and every one of the answers associated with the previous questions may be assigned a certain level of uncertainty, since in very few and rare occasions it will be possible to have all the required, precise, necessary and timely information so that the answer can be given with a 100 percent security level. Consequently, any derived action will have an associated risk during the execution of the adopted decision, which will influence, to a greater or lesser extent, the achievement of the proposed objectives. Hence, the need to address the problem based on the need to carry out adequate risk management, through which it is possible to reduce the negative effects that may occur on the decisions taken and the actions to be carried out.
Risk
"Risk, is the contingency or proximity of damage"; and contingency is the possibility that something happens or does not happen. In this way, it is obvious that in all matters relating to risk treatment, to minimize possible damage, it is necessary to analyze and understand the risk factors to try to minimize their effects by making relevant decisions.
There is a close relationship between risk analysis and the study of uncertainties, for which many authors consider it as equivalent. It is essential to understand that risk management is equivalent to making decisions that seek to minimize the effects that they may cause; In this way, it is important to carry out this analysis in very early stages of the Business / Project, which will really make it possible to guarantee the preventive nature that it should have; consequently, it must start from the conception stage itself and be systematically evaluated and enriched. This is particularly important when it is planned to carry out or start a negotiation, where the preventive nature is of paramount importance, as well as the search for accurate and relevant information.
From the conception stage to the deactivation of a Business or Project, there will be certain risks that the desired objectives are not met, or are partially affected; This risk will be the greater the more imprecise the scope and objectives have been defined and set from the beginning, and also the degree of monitoring and control of the "risk parameters or variables" that is carried out during the execution phase itself. of the Business / Project.
It is important to specify that in this work we are defining as risk any factor that could endanger the successful conclusion of a negotiation or Project in relation to excess costs, deadlines, or lack of quality / functionality / safety, and even in terms of that any of these factors or others may mean damage to third parties. Thus, it is advisable to understand that the really dangerous risk is one that exists but remains unidentified and therefore is unknown, which can be seen frequently in those whose chances of occurrence are small, are not taken into account and, however, can be cause of a catastrophe.
Obviously, it is preferable to know the probability of the existence of a risk, however minimal it may be, to seek the appropriate response to it on a preventive basis, before suffering its effects. Especially during a negotiation process this aspect is very harmful and counterproductive. Sometimes, during a negotiation process, certain assumptions are made that certain requests and ideas will be accepted by the counterpart, thus obviating the possibility that at the time of the negotiation the same may not agree with such request, proposal or idea for which we are led to an improvisation that is not always favorable. For this reason, it is important to try to anticipate each aspect, and although this is not always possible, it is very advantageous.
To minimize the negative effects caused by risks on the objectives of a negotiation or Project, it is proposed to carry out the following steps:
a) Identification of risk parameters or factors; These, in general, will be different depending on the negotiation or the Project.
b) Detailed analysis of risks, which will allow to know them in the best possible way.
c) Seek the appropriate response to each risk, that is, risk “management”.
Classification of risks according to their origin.
Depending on their origin, risks can have multiple classifications. Taking into account the genesis and objectives of the work, some of the most related to it are mentioned below.
• Risks derived from the management structure, selection of the team and the general organization that constitutes the environment of the negotiation or the Project, especially, those derived from actions of Administrative Authorities (licensing, approval of documents, authorizations to execute actions, carry out transactions, timely financing, interpretation of originators, etc.) In addition, interfaces between responsibilities of departments or individuals, definition duplications with different definitions, areas of the Business or Project not considered, discrepancies: Partner, Planners, Investor (Property) / Builder, lack of communications, etc.
• Technical risks derived from the technological aspects of the business or the Project (technologies and innovations not known or studied sufficiently, not sufficiently contracted, without all the required information, not fully defined, etc.).
• Contractual risks, derived from the essence or the drafting of the contract for the execution of the business or the Project (may include from the conception and definition stages, if they are pertinent to the analysis), such as: contradictions between clauses, ambiguities, inaccuracies, uncertainties, discrepancies between actual conditions and those described in the Contract.
• Financial Risks, derived from the correct disposition of funds, exchange rates between currencies, non-fixed interests, and others, related to the Business / Project.
• Risks on the availability of resources, if these were not available at the appropriate level, the precise moment, quantity, training and quality required. In addition to which supply, limitations in the purchasing process imposed by Contract or by laws, regulations and standards of the country, potential for losses due to supplies (theft, vandalism, damage). Human resources must be carefully analyzed.
• Risks in labor relations, which may be causes of strikes, unforeseen stoppages, dissatisfaction of personnel that cause a decrease in performance and productivity of work, decrease in Quality, complex interfaces with third parties or within the management team itself, etc.
• Risks derived from the social impact of the negotiation or the Project.
• Risks derived from a deficient study of the competition, the market and the party with which the negotiation will be carried out.
• Risks derived from the Client, which may include aspects such as: financial stability, level of independence, interference, quality expectations, interpretation of the Contract, willingness / desire to fulfill its obligations, changes in its management policy.
• Risks derived from subcontracting, which may include the obligatory nature of Contracts or Subcontracts at will regulated by Laws and Regulations, that the contracted or subcontracted entities do not have the relevant technical qualification, poor financial capacity, no experience in similar Projects, do not comply with the deadlines or quality specifications, etc.
• Risks derived from special causes, such as client regulations, uninsured risks, litigation caused by third parties, guarantees and bonds, permit requirements and others.
• Risks derived from the ability to execute the Business or the Project, which may include elements such as: experience in business and / or similar projects, introduction of new management techniques, availability and qualification of key personnel, knowledge of the area where the project will be developed. Business / Project, degree of completion of the Business / Project and deadline for its execution, design quality, complexity, construction variants, level of completion of the required documentation, requirements of new technologies, completion of pending information and staff preparation, availability of access to information that is required when requested or needed, need for work permits, licenses, etc.
Anticipated actions / responses.
• Eliminate risk.
Abandoning the negotiation or execution of the Project (Owner / Promoter), as the case may be; not bidding (Contractors).
• Reduce risk.
Find alternative solutions that present risks with less potential damage.
• Share the risk.
Creating joint ventures (Owner). Offering professional services or any other through temporary associations ("Join Venture"), or any other pertinent and convenient modality.
• Transfer risk.
Use of subcontractors (Contractors), which is highly advisable in the case of construction projects.
• Insure the risk.
Timely insurance policies.
• Accept the risk having a contingency factor (contingencies).
Assign an amount for contingencies, and collect it in time or money.
• Accept risk without having a contingency factor (contingencies).
Contingent actions / responses.
Risks can be reduced by:
* Contracting or subcontracting procedures, through the use of methodologies that allow prequalification and evaluation, which makes it possible not to select those contractors (subcontractors) that may be a source of risks because they normally do not work with quality and / or do not meet deadlines agreed in quantities and prices, which will affect the fulfillment of the global objectives of the Business or the Project.
* Analysis and studies of variants, which in the case of construction projects is highly advisable and useful, since it gives the possibility of selecting construction techniques and technologies more in line with the Project and improving operations with risk that, because they are dangerous, can cause accidents labor.
* Strict controls of the term and the cost, that facilitate the forecasts in useful time for the adoption and execution of corrective and preventive actions.
* Information Systems of the negotiation or of the Project, which provide the pertinent data to any special situation that is related to risks and, in particular, with those that may affect the fulfillment of the objectives: deadlines, cost and quality / functionality / security. This system must be designed in such a way as to detect if there is unnecessary and irrelevant information to make coherent, necessary and timely decisions.
* Management of the Budget assigned to "Contingency / unforeseen", this implies the creation of an initial budget for this concept, and carry out the management so that at source, the amount assigned globally can be reallocated for each specific risk. For its control, an account could be created for each of the risks, which would allow the progress of this budget to be properly monitored. These accounts would be different from those used to control costs and terms.
* Use of qualified personnel with good experience, avoiding as far as possible, people with a lot of experience, but bad. Establish education and training programs that help develop the knowledge and skills of each person to understand and face the main risks, as well as the important task and the creation of work teams and not work groups.
* Practices, by means of which they are rehearsed through practical or theoretical exercises, simulating real conditions, the execution of operations linked to risks that may cause significant damage.
* Periodic updating of the Risk Plan, with a frequency that will be determined by the specific characteristics of the Business or Project in question.
* Work Hygiene and Protection Plan, which allows to act preventively in relation to the needs of means of protection of workers and hygienic and sanitary conditions in which they will carry out their activities.
List of typical risks for their identification and management.
The criteria set out below are intended to collect part of the international experience on the subject and the author's own, acquired during the time dedicated to consulting and advising various companies, as well as to the executive work itself; It is not unique, nor static, so it can be enriched by those who decide to apply this work.
Each "agent", protagonist or party interested in the negotiation or the Project may review this list to add or delete elements, depending on the particularities of the business or Project in question. You can also provide different lists from the different points of view of the interested parties: partner, Property, Engineering, Project Director, Builder, and others.
I. Factors derived from the potential of the new business or project.
1. The result of the feasibility study and its relationship with the objectives, scope and configuration of the Business / Project.
2. The convenience of investing in the business (profitability).
3. The way to carry it out.
4. Analysis of the sector the company will enter.
5. General plan for introducing the company to the market.
II. Factors derived from new business opportunities
1. Strategic associations with other competing or complementary companies.
2. Convenience of acquisitions of other companies related to the business.
3. Creation of new complementary companies.
III. Market derived factors.
1. Market analysis.
2. Characteristics of the market.
3. Market composition (geographic concentration, population characteristics, socioeconomic levels).
4. Diversification of the market in relation to previous years.
5. Market strategy.
6. Future expansions.
7. Factors that affect the market and how it will work under certain circumstances.
8. Information on the evolution of demand, supply and marketing.
9. Unexploited markets and penetration capacity.
10. Market share by product.
11. Participants and percentage of participation in the market.
12. Market segmentation and apparent consumption.
13. Size of the target market and potential market.
14. Market trends.
IV. Factors derived from the product / service.
1. New and improved services, to meet the needs and expectations of customers;
2. Use innovation and creativity to develop competitive products and services.
3. Produce or acquire products and services according to designs and developments;
4. Communicate, market and sell products and services to existing and potential customers;
5. Perform maintenance of products and services when appropriate.
6. Market acceptance of the company's products and services.
7. Breadth of the product line.
8. Ability to generate and develop new products.
9. Product features, descriptions and applications.
10. Comparison with the competition in quality, economic aspects and market penetration.
11. Availability for the market of new products.
12. Balance of the mix of products and / or services.
13. Projects to develop new products and services
14. Services that the company offers or will offer.
15. Status of patents.
16. Competitive advantages over those existing in the market.
V. Factors derived from sales
1. What is the customer base.
2. Who are the most important customers.
3. How much the company depends on certain customers.
4. How loyal customers are and how it can affect their loyalty.
5. How is the scheduling of customer orders.
6. How the client portfolio will be expanded.
7. Comparison of sales for the last five years.
8. Objectives by product and service.
9. Goals for each area and vendor for the next two years at least.
10. Goals by distribution channel.
11. Sales forecasts and differences from previous forecasts with reality.
12. Sales method.
13. Sales by products, services and money (daily, weekly, monthly, quarterly, semi-annual and annual, compared to previous years).
14. Sales divided by vendors (zones and customers).
15. After-sales service costs.
16. Post-sales complaints.
SAW. Factors derived from marketing
1. Marketing plan and objectives.
2. Acceptance of the image of the product and the brand.
3. Strategies to strengthen the image and sales of the company.
4. Strength of the company's brands.
5. Diversification, evolution and launch of new products.
6. Advertising campaigns.
7. Efficiency and costs of the advertising and promotion area.
8. Distribution situation (costs by zones and territories, and cost of the network).
VII. Factors derived from main competitors
1. Analysis of the competition (main characteristics).
2. Analysis of customer satisfaction compared to the competition.
3. Channels and forms of distribution of products and services.
4. Comparative table of advantages and disadvantages (advertising, promotions, sales network, quality, price, credit conditions, presentation, service, etc.).
5. Distribution of market sales.
6. Strengths and weaknesses in relation to the competition.
7. Growth possibilities and new business opportunities.
8. Possible entry of important competitors in the market.
9. Who are the most important competitors.
VIII. Factors derived from purchases
1. Planning of purchases.
2. Definition of supply sources.
3. Selection of the main suppliers.
4. Precision of terms and form of delivery and reception.
5. Agreed quality guarantees.
6. Logistics.
IX. Factors derived from accounting and finance
1. Correct disposition of funds
2. Currency
3. Financing modality
4. Security of bank transfers and remittances to the country
5. Exchange rates between currencies
6. Interest rates
7. Inflation
8. Bankruptcy
9. Available funds
10. Changes in raw material prices
11. Price changes of the finished product (s)
12. Non-fixed interest
13. Financing guarantees
14. Control over financing and its management
15. Source of financing
16. Relationships and knowledge about the source of funding
17. Level of independence of financial source
18. Amount of financial resources needed to implement the business plan.
19. From where, how and when the financial resources will be obtained.
20. Capacity to generate and attract financial resources.
21. Analysis of the equilibrium point.
22. Comparative tables of income and expenses, costs and expenses, gross and net profits for the last three years.
23. Debt in the short and medium terms.
24. Financial stability and soundness.
25. Structure of general costs of the company and by business line, areas, clients (cost system).
26. Indicators and financial ratios (net income, return on capital, etc.).
27. Investments in securities and real estate.
28. Short and medium term liquidity.
29. Profit margins.
30. Margins per product.
31. Levels of compliance and deviations in budget management.
32. Economic and financial profitability.
33. Credit application, under what conditions and with what institutions or people.
34. Assets (machinery, transport equipment, computing equipment, real estate, etc.).
35. Accounts payable of the operation.
36. Stockholders' equity, paid and social capital.
37. Mortgages.
38. Current balance sheet and cash flow (along with the last three years comparison).
39. Audited financial statements for the last three years.
40. Updated financial statements (three months old maximum).
41. Projected financial statements (3 to 5 years).
X. Factors derived from credits and collections
1. Analysis of solvency and liquidity of clients.
2. Short, medium and long term credits.
3. Accounts receivable.
4. Amount and conditions of credit to clients in relation to previous experiences.
5. Percentage of overdue portfolio and uncollectible accounts.
XI. Factors derived from the strategy used for the execution of the project.
1. General Contractor.
2. Project Management: with several contractors.
3. Facultative Direction.
4. Ownership - with multiple contractors.
5. Hierarchical structure
6. Matrix Structure
7. “Add-hoc” group.
8. Differences in work methods and styles.
9. Not having a Quality System and / or a documented Quality Plan.
10. Failure to conceive a representative of the highest management for quality management.
11. Lack of definition or lack of precision in the functions and responsibilities.
12. Lack of definitions of interfaces and collaborations.
XII. Factors derived from the size of the business / project
1. By physical magnitude.
2. By personnel to be employed (quantity, diversity, qualification, qualification, education).
3. Complexity in execution.
4. Aspects that you may consider important considering the characteristics of the Business / Project.
XIII. Factors derived from the type of contract.
1. Fixed price.
2. Unit prices.
3. Guaranteed maximum price.
4. Reimbursable costs (Administration)
5. Lease and special contracts.
XIV. Factors derived from the Contract.
1. Uncertainty with the scope of the work (cost, term, quality).
2. No evaluation of the ability to satisfy requirements.
3. Unfavorable clauses of the Contract.
4. Imprecision in how to solve problems between the parties.
5. Imprecision in how to make and transfer the modifications.
6. Conditions of the land (where the Project will be executed) different from those described.
7. The Property / Promoter remains undamaged.
8. The Property / Promoter does not compensate for delays caused by it.
9. "Force Majeure" is not taken into account.
10. It is not possible to ensure "Force Majeure".
11. Indefinite or unspecified clauses, not documented, agreed or accepted at the signing of the Contract.
12. Uncertainty or non-definition of the precise moment in which the Property or its Representative will review the works for acceptance or rejection after completion.
13. Indefinitions of Technical Advice.
14. No Representative of the Property in the execution of the business or Project.
15. Technological and / or constructive solutions subject to changes during execution.
16. The Property / Promoter is not responsible for variation of quantities.
17. Non-existence or vagueness in the fund of stimulation to the workers and their distribution.
XV. Factors of the area where the Business / Project will be executed.
1. Culture, habits, customs, beliefs, interests of the local population.
2. Economic conditions in the area.
3. Government stability. Political risk. (In the case of Associations, Mixed, UTE and others, it will be from the Governments involved)
4. Medical, police, fire service.
5. Attitude of the local population.
6. Access to the area (transport and communications)
7. Accommodation conditions (temporary facilities, dwellings, entertainment, dining rooms, comfort, etc.)
8. Conditions for the execution of business or commercialization (offices, equipment, comfort)
9. Other infrastructure.
XVI. Location factors.
1. Traffic in the area (people, vehicles, animals, others)
2. Aggression to the environment.
3. Adjacent operations / works.
4. Dangers: to health, safety, personal integrity.
5. Status and validity of support services / facilities.
6. Guarantee of necessary services (water, energy, telephone, email, Internet, fax, telex, mail, mass media, etc.)
7. Citizen security.
8. Involuntary movement of people to and from the area.
XVII. Meteorological factors.
1. Abnormal conditions (snow, rain, winds, temperatures, global radiation, penetrations of the sea, earthquakes, etc.)
2. Risk of extreme conditions.
XVIII. Monetary factors.
1. Costs associated with the preparation of the negotiation.
2. Costs associated with preparing the documentation, opening and operating the business
3. Costs of preparing the offer in relation to the expected benefit if the Contract is obtained.
4. Price increase.
5. Inflation (very important for long-term contracts).
6. Exchange rates (important when all or part of it is contracted in foreign currency or if there are supplies from abroad).
7. Cost indexes in the area.
8. Delays in payments.
9. Withholdings.
10. Advance Awards.
11. Fines for delays.
12. Costs of general expenses of the Project.
13. Indefinitions of advances by the Property for the beginning of the execution.
14. Contractual penalties (for damages, diversion of resources, theft, vandalism, etc).
15. Shared savings.
16. Expected benefits
17. Utilities
18. Distribution of profits.
XIX. Factors derived from the capacity to execute the Business / Project.
1. Experience in running similar businesses.
2. Familiarity with the characteristics of the specific business.
3. Availability of duly qualified key personnel at the precise moment and for the required time.
4. Knowledge of the area where the negotiation or commercialization will be carried out.
5. Degree of completion of the Project, Contract or Business Portfolio.
6. Quality of the Project, Contract or Business Portfolio.
7. Possibility of participation in the preparation of the Execution Project (design)
8. Time to complete the Project necessary for the offer (technical preparation).
9. Complexity, constructibility.
10. Requirements for new technologies.
11. Competition.
12. Need for work permits, area release licenses, and others.
XX. Factors that affect the term.
1. Deadlines, milestones and important events.
2. Available working days.
3. Official non-working days.
4. Potential to produce stoppages due to third parties or external situations.
XXI. Regulatory factors.
1. Permits, passes systematically established for personnel that can cause delays or even non-compliance.
2. Regulations related to the environment that regulate yields and other emissions.
3. Use of obsolete, outdated regulations or documentation.
4. Laws and regulations related to the formation of companies and the conduct of business.
XXII. Labor factors.
1. Labor laws, facilities and restrictions on hiring labor
2. Availability of labor when required (opportunity).
3. Characteristics of work relationships.
4. Qualification / qualification / relevant education / professionalism of the workforce.
5. Ethics at work / sense of belonging / productivity.
6. Applied and applicable salary scales and how to implement them.
7. Potential for adverse activity.
8. Abuse of dangerous substances (alcohol, drugs) among the workforce.
9. Staff motivation, remuneration, stimulation, compensation.
10. Adequate communication and position of the responsibility assumed before the work to be done.
XXIII. Factors derived from the Client.
1. Financial Stability.
2. Specialization in Project Management.
3. Interferences.
4. Quality expectations.
5. Interpretation of the Contract.
6. Willingness / wishes / possibilities to fulfill their obligations.
7. Changes in its management policies and / or in its management team.
8. Level of independence to make quick decisions.
9. Technical and management competence of the entity representing the Client (if any).
XXIV. Factors derived from the needs and expectations of customers regarding products and services.
1. Availability of market research, customer surveys and other ways of acquiring information to determine the needs and expectations of products and services, both now and in the future;
2. Studies have been carried out to align the satisfaction of the needs and expectations of products and services by customers, with the markets and market sectors in which the organization has decided to operate.
XXV. Factors derived from the strategy to cultivate and improve customer relationships that you take into account:
1. Determine and satisfy the day-to-day contact needs of customers;
2. Properly treat the information acquired through day-to-day contact with customers, including their complaints;
3. Maintain proactive contacts with clients, either in person or by phone, by letter, etc., to discuss and address their needs, expectations and concerns;
4. Track sales, services and other contacts, in order to determine customer satisfaction levels with the products or services and with the sales and service processes;
5. Try to maintain innovation and creativity in sales and service relationships with the customer;
6. Use regular surveys, other structured ways of obtaining data, and the information obtained through day-to-day contact with the client, eg; your complaints, to determine your level of satisfaction;
7. Use the results of surveys among customers and other forms of obtaining information, to identify and make improvements aimed at enhancing relationships with customers in accordance with their needs and expectations;
8. Collaborate with clients to form partnerships.
XXVI. Factors derived from commercial management
1. Design of the information that the members of the commercial and sales network should receive or are receiving
2. Real and objective possibility that all interested parties in the commercial and sales activity have timely and pertinent information to evaluate the fulfillment of the objectives associated with the commercial and sales activity.
3. Design and systematic application of an ABC classification tool for clients.
4. To have a coherent evaluation system of the delinquency and debt data of the clients.
5. Have an information system that allows the capture, control, issuance, appropriate and timely distribution, analysis, evaluation, discussion and continuous improvement of the main indicators of commercial activity sales, number of visits made, frequency of visits to the most important clients, percentage of new clients, offers issued and converted into sales, causes of non-progress of the offers and other indicators of interest for each entity depending on each scenario and moment.
6. Know which customers or products are the most / least profitable
7. Evaluate on a systemic and systematic basis the status, update and level of application of New Information and Communication Technologies in commercial management and the sales network, as well as the formats in which sales representatives receive and issue their reports, the tools with which they analyze them, the percentage of coverage of their needs and the organization, the ease of use of the aforementioned tools, the level of autonomy to analyze the data of their commercial activity, and the time they must dedicate to analyze your data into information, knowledge and intelligence.
8. Two other important elements for entities that dedicate their fundamental activity to commercialization are associated with the processes and frequency of their commercial reports, as well as the alerts that arise from it. In this sense, the following recommendations can be made:
XXVII. Factors derived from the commercial reporting process
1. Evaluation of the degree of automation that the administrative process of commercial reports has.
2. Evaluation of the number of manual data entry or list chopping tasks, if these still exist.
3. Quantification of the number of hours / person that are spent per month in these processes.
4. Quantification, differentiation, frequency, categorization and ranking of the errors that are made.
5. Evaluation of the administrative costs that this process causes to the company.
6. Know how easily a new report can be improvised and received by all members of the sales network and interested parties.
XXVIII. Factors derived from the frequency of reports and alerts
1. In this sense, it is important that systematic evaluations are made of the frequency with which the reports are distributed to the commercial and sales network, as well as whether it is really practical and sufficient.
2. Regarding alerts, it is appropriate to design the system in such a way that the commercial managers and the sales network receive an alert when one of their sales representatives deviates from their objectives, when one of the clients abruptly interrupts the frequency purchase, and when customers default on payments.
XXIX. Factors derived from the supply of materials and equipment by the contractor.
1. Variations in quantities.
2. Not having a comprehensive and up-to-date supplier evaluation
3. Differences between the supply requested and the one provided.
4. Quality.
5. Price.
6. Availability and possibility of obtaining.
7. Opportunity.
8. Uncertainty in the supply.
9. Limitations in the purchase process imposed by the Contract.
10. Potential for loss from supplies (theft, vandalism, damage, diversion).
11. Limitations and regulations in the purchasing process imposed by the country of origin / destination, or by the organization itself.
XXX. Factors derived from equipment, inspection, measurement and testing.
1. Availability / opportunity (basic and urgent).
2. Correspondence between the required equipment and the existing one.
3. Cost of rental of equipment and type of rental.
4. Technical condition of the equipment.
5. Timely repair and maintenance facilities.
6. Loss or damage.
7. Verification guarantees before use.
8. Updated technical data of available equipment.
9. Lack of precision in the calibration processes, frequency, method, acceptance criteria and actions if they are not satisfactory.
10. Calibration and adjustment of equipment against internationally recognized standards.
XXXI. Factors derived from subcontractors / suppliers.
1. Technical qualification.
2. Verification of the premises, processes, products of the subcontractors / suppliers, according to the contract.
3. Financial stability.
4. Deadlines / Reliability.
5. Quality requirement.
6. Prices.
7. Opportunities.
8. Known evaluations in analogous cases. References.
9. Experience.
10. Independence.
11. They can provide guarantees.
12. Obligations to employ minorities / women / disabled, certain sector of society / specific specialties, etc.
13. Quality records of subcontractors and suppliers.
XXXII. Factors derived from the care and custody of facilities.
1. Existing facilities / buildings.
2. Storage of materials / equipment and means supplied by the Property / Promoter / partners or by third parties.
3. Custodian service entities.
XXXIII. Factors derived from special causes.
1. Customer complaints.
2. Uninsured risks.
3. Litigation caused by third parties.
4. Guarantees and bonds.
5. Permit requirements.
XXXIV. Factors derived from the possible partner or partner.
1. Knowledge of the local market
2. Knowledge of the habits, customs, interests, behavior and idiosyncrasies of entrepreneurs and real and potential clients.
3. Knowledge of the laws of the country.
4. Business, political and social hierarchy.
5. Level of information and updating of the business environment and the scenarios in which the Project will be executed.
6. Ability as an entrepreneur.
7. Social relationships.
8. Seriousness, attachment and sympathy towards the country promoting the negotiation or project.
9. Financial capacity.
10. Guarantees.
11. Relations with other markets and scenarios of possible interest
12. Experience in Similar Projects or Businesses
13. Level of independence
14. Quality, economic, financial, business and personal expectations.
XXXV. Factors derived from managers.
1. Who they are and what they have accomplished to date.
2. What are your motivations and aspirations.
3. Why is the right staff.
4. To what degree are they committed to the success of the company.
5. Financial commitments and investments that you have with the company.
6. Quality of group work.
7. Ability to develop the company.
8. Clarity and understanding of the corporate philosophy and mission.
9. Knowledge of the company's business.
10. Administrative culture.
11. Effectiveness of information systems and procedures in operation and control.
12. Management style and directive quality.
13. Successes and failures in achieving objectives and goals in previous years, projects and businesses.
14. Integration of the objectives of the different areas and hierarchical levels.
XXXVI. Factors derived from the information system that assures management and stakeholders of timely decision-making during the direction and management of the business or project.
1. Characteristics of information systems.
2. Characteristics of automated systems.
3. Type of reports and content.
4. Have all the information centralized in one place
5. Have simple, powerful and agile segmentation tools
6. Have all the information easily accessible
7. Allow data to be entered quickly and conveniently
8. Adapt to the needs of each user
9. Facilitate the control of the sales force
10. Have quick access to the history of each client
11. Track sales opportunities
12. Manage marketing campaigns
13. Be able to analyze the data of the sales area
14. Integrate with other applications of your company
15. Allow access from anywhere
16. Being able to adapt to your company's processes
17. Be scalable to the growth of your company
18. Be able to coordinate the areas of marketing, sales and customer service
19. Allow to know the profitability of each client
20. Streamline responses to customers
XXXVII. Factors derived from Computing
1. Percentage of company automation.
2. Software and hardware update level.
3. Existing or planned communication networks
4. Average age of the equipment.
5. Average usage time per user.
6. Evaluations of strategic alignment of computer systems.
XXXVIII. Factors derived from the Establishment of short and medium term goals.
1. Clearly define the expected end results.
2. Establish measurement criteria to know what your achievements are.
3. Identify possible opportunities to take advantage of in your application.
4. Involve executives who are going to participate in its application in its preparation.
5. Appoint a coordinator or person responsible for its application.
6. Anticipate difficulties that may arise and possible corrective measures.
7. Have programs for its realization.
8. Be clear, concise, and informative.
XXXIX. Factors derived from Technology
1. Knowledge and use of new technologies.
2. State-of-the-art technology acquisition plans.
During the design and conception stage of the business or elaboration of a Project, it is important to plan to check those elements that have been reported internationally as the most common failures that may arise from its subsequent implementation. Among these, they can be mentioned:
* They do not contain comparative analysis of historical figures.
* The budget is not well prepared.
* Social, economic and political factors are not considered.
* Not all costs and expenses required by the project are considered.
* No feasibility study is done.
* No mention of profitability and capital payback time.
* No market research is done.
* There is no reliable administrative, accounting and fiscal information.
* There is no information on the competition.
* The figures of the financial and sales projections do not have real supports.
* Lack of presentation and bad writing.
Prof. Dr. Ing. Arturo Luis Romero
