9.22 A comprehensive business plan must be developed and maintained with input from both parties at the outset of the formation of the JV. The JV business plan should form a key part of the evaluation and competition process.
9.23 The business plan will also need to be updated on a regular basis once the JV is established. This is a subject in its own right and is outside the scope of this Guidance. However there is an extensive body of guidance and best practice material available in text books or via the internet81.
9.24 The business plan may be arranged along the lines set out in Table 9.B below.
Summary of the proposal | ● Short, succinct and complete |
Background | ● History ● Understanding of business |
Picture of the Business to be created | ● What is the business? ● How it will be constructed? ● How will it be delivered? ● Where will it be delivered? ● What is the value chain? ● What are the key processes? ● What are the unique selling points? |
The Market | ● Description, size, growth ● Customers ● Competitors ● Strategic strengths/competitive advantage ● Delivery channels |
Trading Plan | ● future view of balance sheet, P&L and cash flow (typically covering next 3-10 years) ● Seasonality ● Trading forecasts ● Assumptions ● Sensitivities ● Required investor rates of return |
Management and Organisation | ● Organisational structure ● Key managers ● Staff levels and skills |
Budget | ● Capital requirements ● Projected revenues and costs ● Underlying Assumptions |
Financing | ● How much, when and how raised? ● Guarantees |
Business Strategy | ● Direction of the business ● Governance ● Why will it succeed? |
Risk | ● What are the risks? ● How could they impact? ● How will they be managed and resolved? ● What is the break-even strategy? |
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80 If the EU public procurement rules apply, the specific rules on selection criteria (i.e. used for pre-qualification or short-listing) and award criteria (i.e. used for contract award/selection of preferred partner), must be followed and the principle of transparency observed. These require the advance disclosure of criteria (and any sub-criteria) and their relative weightings and potentially any accompanying scoring methodology.
81 Many of the main clearing banks and the major professional services companies have guidance and pro forma business plans available on their respective websites.