Preparation of project

8/7/2019 Preparation of project

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Preparation of Project



Únderstand the meaning of Project

´Describe the project identification process

Éxplain the project selection phase

´Describe project report and needs

Éxplain components of project report

´Describe the steps in formulation of project report

Éxplain guidelines of planning commission on project report

´Describe the use of network analysis in project management

Éxplain the errors in project report

Learning Objectives



Understand the process of project appraisal

Explain market feasibility study

Explain technical feasibility study

Describe financial feasibility study

Understand the meaning of social feasibility study.



The process of setting up a business is preceded by thedecision to choose entrepreneurship as a career andidentification of promising business ideas examining thedifferent opportunities.

Generation of ideas is not enough, the business ideas muststand the scrutiny from techno-economic, financial and legalperspectives.

After screening the ideas it is required to prepare a project

report that will serve as the road map for effective venturing.

Soon after the identification of a project and itsimplementation, the project report is formulated afterexamining various relevant aspects

Introduction



Any undertaking with a definite starting point anddefined objectives by which completion isdefined.

Projects by definition includes all types of undertaking- construction, manufacturing, newproduct or process development, new businessdevelopment and so on

What is a project ?



It has definite objectives

It consist of interrelated activities

It requires multiple skills

It has constraint of time, resources and budgets

It is unique

Project features



Time-time required to complete the project.

Cost- calculated from the time variable andresources

Quality- the amount of time put into individualtasks determines the overall quality

Scope- requirements specified for the end result.

Risk- potential points of failure

Control variables in a project



Life cycle has identifiable start and end pointwhich can be associated with a time scale.

The life cycle includes all phases from point of

inception to final termination of the project.

The project life cycle refers to a logical sequenceof activities to accomplish the project goals or

objectives.

Project life cycle



Initiation or birth phase- the output and criticalsuccess factors are defined

Planning phase- characterized by breaking down

the project into smaller parts/tasks

Execution phase- the project plans are executed

Closure or exit phase- that marks the completion

of project.

phases



Project management is the discipline of planning,organizing, and managing resources to bringabout successful completion of specific project

goals and objectives.Project management is composed of severaldifferent types of activities such as:

Project management



Ánalysis and design of objectives and events

´Planning the work according to the objectives.

Ássessing and controlling risk.

Éstimating resources

Állocation of resources

Órganizing the work

Ácquiring human and material resources

Ássigning tasks

´Directing activities.

Ćontrolling project execution.



´Tracking and reporting process

´

Analyzing the result based on the facts achieved´Defining the products of the project.

´Forecasting future trends in the project.

´Quality management.

Íssue management

Íssue solving

Ídentifying managing and controlling changes

´Project closure

Ćommunicating to stakeholders

Íncreasing/ decreasing a companys workforce.



Project report is a written document prepared byentrepreneur that describes all the relevantexternal and internal elements involved in

starting a new venture.It is an integration of all functional plans likemarketing, finance, manufacturing and humanresources which are required for successful

implementation of a project.

Project report



If an entrepreneur wants to manage and organize thebusiness effectively he or she needs a project plan in theform of a project report.

Project report is very important due to the following

reasons: It helps the entrepreneur to decide where he

wants to go It helps him to determine the viability of the

venture. It provides guidance to the entrepreneur in

planning realistic goals and targets in organizingand even in identifying possible roadblocks.

It is a pre-requisite to obtain finance.

Need of a project report



´The target audience- while working on project plan

keep in mind the intended audience and why you arewriting plan.

´Busin

ess strateg

y- the plan should explain the market

the industry, target customers and competitors. Secondlythe plan should explain how to execute your businessstrategy.

Ćompetition- focus your plan on being different thanyour competitors, think over the point- can you make

unique strategy? can you position your productsdifferently? And so on.

While making a project report keep following

points in mind



Be realisticInvolvement of people for creating project plan.

Keep your project plan in brief .



Project identification is the first and most importantstep in starting a new business.

The success of an entrepreneur depends on

identification of right project which can be successfullylaunched.

Project identification deals with collection, compilationand analysis of economic data for the purpose of

locating possible opportunities for investment, basedopportunities in the market.

Project identification



Consumers: potential customers are the sources for anybusiness and understanding their exact needs is the keyfor the success of business.

Existing products and services: existing products andservices in the market can also throw certaininformation to entrepreneurs and this information canbe more relevant for identifying a project in the form of

improving the products and services

Sources of information for project

identification



D

istribution channels: members of distribution aremore familiar about the markets and hence they canalso provide potential information about the needsof the customers.

Government sources: many department of bothcentral and state govts publish some usefulinformation which helps entrepreneurs inidentifying new projects.

Observation: observation of existing markets, scanof environment.

Trade and professional journals: provide potentialinformation on investment opportunities. demandand supply, availability of raw materials, availabilityof facilities.



After identifying potential projectsentrepreneur has to select the bestproject among them, so that it can beimplemented.

Selection of a project is based on several

factors. Some of the important issuesrelated to selection of a project arediscussed below:

Project selection



Investment size: the amount of money required forinvestment to start the new business venture is a major

factor which influences the selection of the project.Entrepreneur should have an idea about how much capitalhe needs to raise and from which resources.

Growth of sales: growth of sales from start up phase isanother critical factor in project selection.

Equipment: availability of equipment which is required forproject implementation is another important factor to beconsidered. The cost and timely availability of equipment,quality of equipment etc. are to be evaluated.

Location: entrepreneurs should also consider good

location for the project. Infrastructure available, localgovernment support, nearness to market and rawmaterials etc. need to be considered.

Market: ability to market the product or service is veryimportant.



The components of a good project report are discussed

below:

Summary- a brief overview of plans

Business description- what the company doesMarket analysis- who is the customer, market size, trends

Competitive analysis- who else is out there, local,

domestic, foreign

Product/service advantages- why product of yours isbetter

Objectives- quantifiable targets

Components of project report



Market strategy- how to reach those targets

Operations- how will the company produce

Organization and management- who will run it

Timing- when will things happen

Financial information- historical, actual, projected

Exhibits/appendices- brouchers, photos, news clippingetc.



A brief description of the business

Estimated market potential and competitive assessment Your products advantages and market need it will meet

Your objectives for the business

Your market strategies.

How you will make the product or service on industry

Projected sales and profits

How much you have or will invest in the project

How much financing is needed?

Where it is coming from and what it will be used for

How and when the financing will be repaid

1. summary



The legal form of the business

Your specific product or service

The present or proposed location of the business

Your existing or potential customers and theirgeographic area, domestic, international

A brief history of the business , how did you get here?

How was the business financed till now Who are you or who will be the owners

2. Business description



This is the section where you need to prove that there

is really a need for your product or services- and thatthere is a sufficient demand to support the businessyou have proposed.

This section must first identify the need for yourproduct or service, second show how your product orservice meets that need, and third show how you cansell your products or service at a profit.

Market analysis



Describe the companies and products that are or will be

your competitors and dont forget to include imports if they are a factor in your market.

Look into following factors:

How many companies you will be competing against? Whereare they located, how long have they been in business?

How do they distribute the product or service? What is thererespective market share?

What are their strengths and weakness in marketing,operations and finance, what are there strategies?

How does your product compare in terms of price, quality,

service, design.Delivery or other features.?

Do you intend to take market share away from the competitionor will you be creating new, niche market?

competition



Investors or lenders want to know how your product or

service compares to the competition.

They want to know what is unique about yours and towhat extent you will have a competitive advantage

over similar or existing products and how long will thatadvantage last

Product description

Proprietary position

Other barriers to competition

Regulatory requirements

Product extension

5. Product or service advantage



This describes marketing objectives- where will your product

be and when example how many will you will sell, at whatprice, what will your market penetration rate be and when willeach target happen?

Target markets: identify the specific target market

Estimated sales and market share- estimate the sales youthink you can achieve over the next three years starting withquarterly estimates in years 1 and 2. calculate the market share

that these sales represent. Market share is that percentage of total market represented by your sales

6. objectives



7. Marketing strategythis is the section in which you assess the market , the

competition, your capabilities and how you will set yourproduct or service apart from others.

The following are important elements to consider when

developing your strategy: trends in the market,competitive strengths and weakness, voids in the market,advertising, public relations, promotions, quality andservice. And also following includes:

Product features, pricing, and distribution.



8. operations

How you will obtain or produce your products or provideyour services.

Location and space requirements- if your business exists,where is it, if proposed where are you planning to put itand why? What type of space you need, how much space,what will it cost, what may be unique or special about it.

Regulatory- what is the regulatory environment that youneed or need to avoid like parking, truck traffic, pollutioncontrol board etc

Equipment requirements- what type of equipment doyou need for manufacturing or service provision, howmuch does it cost, is special operator training is necessaryand so on



Personnel requirements: this is about human resourcesrequirement. how many people you need and what

skills do they need, what kind of experience is needed,are the people available, is training required, what arethe privilege wages, are unions a factor and so on.

Production or service operations- describe the processof manufacturing or providing services and include theadvantages of your process, capacity, quality control

systems, potential suppliers, secondary sources for rawmaterials or subcontract services and so on.



9. Organization and management

Organization

Key managers

Management weakness

Compensation

Ownership

Board membership



10. timing

Prepare a schedule that reflects major milestones in your

business plan for the next three to five years.

This can be very effectively presented by using a chartand brief explanations.

You should address planned product introductions,changes in workforce or management, noteworthy salesevents and significant changes to your customer base.



11. Financial informationUse the sales and cost information developed in the

preceding sections to prepare projected financialstatements.

Unless you have a financial background you may need helpwith this section.

Sources and use of proceeds- if you are seeking a lender orinvestors, you need to indicate in a summary table howmuch money you are seeking, where you anticipate it willcome from, how it will be paid back, and most importantlyand specifically how it will be used.

Flow projection- this statement identifies sources of cashin, categories for cash paid out and operating expensecategories. This essential statement will help you to planyour cash requirements in both short and long terms views.



Income statements and balance sheets- all plannersshould provide quarterly projections for the next two

years, and annual projections for years 3 through 5.

Break-even analysis- this analysis will help you tounderstand the specific relationships between your costsand sales. At what volume do your profits start? and so on

Spread sheets- computer spread sheets are sometimesvery useful for asking what if questions and looking at theresults under different conditions or scenarios.



12. Exhibits/appendices

Provide supportive details for your plan.

Include resumes all key managers, brouchers to furtherexplain products and services, maps showing location of business, tax returns, prior period statements,

accountants, compilation reports, and so on

Documents

Preparation of project