Submitting a Proposal
In order to properly assess a proposal, IBA requires detailed information about the proposal. It would assist IBA in quickly assessing any proposal if as much of the following information is included in the initial submission:-
- General Overview
- Core Business
- Business Plan
- Historical Financials
- Cash Flow Projections
- Viability of Joint Venture Partners
- Market Analysis
- Independent Valuation
- Management Experience
- IBA Participation
General Overview
The general overview of the proposal should outline such things as the nature of the business, the location, the finance requirements, the time frame required to establish the venture, and the duration of the venture if it has a limited life (e.g. a construction contract).
Core Business
The proposal should outline the core business of the joint venture partner(s) and explain how the proposed enterprise is compatible with their current operations. If the venture is in a new industry, the proposal must outline the reasons for the diversification.
Business Plan
The business plan should address and incorporate the following information:
- Business Overview
- Vision
- Company Background
- Business Description
- Product or Service Offering
- Technology and Intellectual Property
- Business Strategy
- Industry Analysis
- Market Entry Analysis
- Route to Market
- Strategic Alliances
- Exit Opportunity
- Marketing Plan
- Competitive Analysis
- Target Market Segments
- Value Proposition
- Pricing
- Promotional Plan
- Operational Strategy
- Critical Success Factors
- Major Risks and Mitigation Strategies
- Major Milestones
- People
- Current Management Team
- Key Hires, Recruitment, and Retention Strategy
- Financials
- Revenue Model
- 10 year cash flow forecast, including net present value/internal rate of return (NPV/IRR) assessment
- Key Assumptions and Sensitivities
- Capital Raising Requirements and Strategy
Historical Financials
During the evaluation process IBA must ascertain the current financial status and future viability of the various parties to the proposed joint venture.
In order to complete this task IBA will require a minimum of three years audited financial statements of the business prepared to the standard of a reporting entity as defined by the International Accounting Standards. In addition to this information, or as a substitute where audited financial statements are not available, as in the case of new or proposed entities, IBA may require the following:-
- References from business associates eg. major suppliers, major clients
- Discussions with the primary lenders of the business
- Discussions with the auditors of the business
- Discussions with the accountants / financial advisers of the business
Cash Flow Projections
The proposal should provide a cash flow detailing the projections for the next 10 years of operation.
The cash flow should outline the assumptions behind the calculation of all items of revenue and expense including reference to any historical cash flow of the business. Expenditure should be separated into operational and administrative elements.
The cash flow should detail the project's capital expenditure requirements, including a provision for the replacement of any capital items (e.g. plant and equipment, fit-out).
If the venture is required to service any debt, including any proposed or anticipated borrowings, the principal and interest repayment must be included in the cash flow.
Viability of Joint Venture Partners
During the evaluation process IBA must ascertain the current financial status and future viability of the various parties to the proposed joint venture.
In order to complete this task IBA will require the audited financial statements of the business prepared to the standard of a reporting entity as defined by the Australian Accounting Standards. In addition to this information, or as a substitute where audited financial statements are not available, IBA may require the following:-
- References from business associates (e.g. major suppliers, major clients);
- Discussions with the primary lenders of the business;
- Discussions with the auditors of the business;
- Discussions with the accountants / financial advisers of the business.
Market Analysis
The proposal must provide an overview of the market in which the venture will participate. It must include a brief on:-
- Major competitors (including their market share)
- Effect of seasonal variations
- Degree to which macro-economic issues effect the business
- Barriers to entry
- Dependency on existing suppliers
- Ability to pass on cost increases to end users
IBA will require independent analysis of the market during the evaluation process. The joint venture partners are expected to assist IBA's consultant in obtaining any necessary information.[top]
Independent Valuation
If the proposal is to provide finance to expand an existing business, an independent valuation will be required by an appropriate valuer. The valuation is not required to be provided with the initial proposal, however, it would assist IBA in expediting the initial assessment of the project.
Management Experience
The proposal should provide a detailed outline of the experience and qualifications of the joint venture partners' key personnel and their tenure.
IBA Participation
The proposed role of IBA in the venture should be described, including the amount of capital sought and what is being offered to IBA or its partners.
If you wish to discuss a business proposal or require further information to assist with developing a proposal please contact IBA Investments on 1300 662 746 or investments@iba.gov.au
