PREPARING A BUSINESS PLAN

A business plan is essential to the start-up, growth and modification of any business whether it be a small private farm or a large state farm or an agricultural processing facility. The business plan specifically defines the business. It identifies and clarifies goals and provides the direction for their achievement.

A well developed plan will serve three primary functions. First, it will act as a feasibility study. Writing the plan forces the business owner or director to translate ideas into black and white allowing substantiation and evaluation of the assumptions upon which the plan is based. It helps to determine the need for, and proper allocation of resources and, by allowing the owner to look for weak spots and vulnerabilities, helps reduce the risk of unforeseen complications.

Second, the plan will serve as a management tool. It provides a guide for implementation and standards against which to evaluate performance. Properly utilised, it can help alert the owner/manager to potential problems before they become detrimental, and potential opportunities before they are missed.

Third, the plan is the tool for obtaining financing for the business. Whether seeking bank financing, private domestic or foreign investors, government financing or venture capital, a detailed, well-drafted plan is necessary. (Wt.)

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United States Department of Agriculture

Commercial Agriculture Development Project 2

Luctukiv Pereulok Maliv, Ukraine 25002 Tel/Fax: (380-02) 42-80-80 E-mail: eller@te.net.ua

March 2, 2000

Harry Mead, USAID

19 Rubyy Val St.254 Kyi'v, Ukraine

Dear Mr. Walters,

I have discussed the issue of using funds allocated for wages, transportation, technical assistance, and other expenditures in the KNO Project for larger capital purchases for the four cooperatives with you and Ken Boyle and I am seeking formal approval to do this. I have also discussed this idea with the boards of the four cooperatives and they have agreed that this would be a better way to use the funds in the budget.

Artsis is working on a deal with Monsanto for no-till planting equipment. I agreed to make the down payment for that deal, which is $10,000.00. We have been working on this for a long time (it seems like forever) with CNFA and Monsanto. The payment has already been made to Monsanto.

I have already purchased seed treating equipment and two tractors for Ivanov Coop. They got the equipment from bankrupt collectives and got a very good deal on all of it. The seed treating equipment was still in crates and was purchased from Germany two years ago for $27,000.00. We got it all for $7,000.00. The Ivanov Coop will specialize in hailing, storing and selling seed. They got the two tractors from a bankrupt collective in Ivanovka for $3,000.00 and will provide a plowing service for their members this year.

Sincerely,

John Wales USDA/CADP Odessa

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