Project
Project is the foundation for any company. It is a technical
document which approves the activities of a company. It indicates the unit
product intermediate or end products to be sold in the market. It has to be
planned carefully based on the market fore cast. It helps an entrepreneur to
apply for loan.
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Project is defined as a non-routine, non-repetitive, one-off undertaking
normally with discrete time, financial and technical performance goals–Harrison.
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A project is a scientifically evolved work plan devised to achieve
a specific objective within a specified period of time. The project may differ
in size, nature, objectives and complexity.
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A project is an approval for a capital investment to develop
facilities to provide goods and services defines World Bank.
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Projects are classified as quantifiable and non-quantifiable
projects, sectoral projects, techno-economic projects and financial projects.
The project life cycle consists of three main stages as shown
below :
The Pre-Investment Phase
The first phase of the project is pre-investment. It is concerned
with objective formulation, demand forecasting, selection of optimal strategy,
evaluation of input characteristics, projections of the financial profile, cost
benefit analysis and pre investment appraisal. The project idea is developed
into an investment proposition during this phase.
The Construction Phase
The construction phase begins after the investment decision is
done. The assets like land, buildings, machinery, communication services,
control systems etc. are purchased by investing the resources. The development
of the infrastructure for the project is the main concern in this phase.
Normalisation Phase
Normalisation Phase starts after the trial is made during the
construction phase. The primary objective of this phase is to produce the goods
and services for which the project was established. The assets created during
the construction phase are utilised during the normalisation phase.
The criteria used for project selection are;
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Investment size
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Location
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Technology
·
Equipment
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Marketing
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Power and water
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Working capital requirements
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Labour component
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Economic viability
Project formulation is the systematic development of a project
idea. It involves the joint efforts of a team of experts. It would be helpful
if government clearance is obtained. It is an analytical management aid. It can
be shown to the bankers or other institutions to acquire financial assistance.
It is prepared by an expert after detailed study and analysis of the various
aspects of a project.
The major steps involved in project report preparation are;
Step 1: Choose an idea for the enterprise. The idea selected should
be viable, profitable and socially good. These ideas can be acquired from
various sources such as magazines, journals, competitors, employees, distributors,
customers and through research.
Step 2: Observations have to be made with regard to the availability of
raw material, labour, machinery, technology and demand in the market.
Step 3: Scanning of business environment is the next step. The
amount of money required for investment is scanned thoroughly, location of
enterprise, labour availability and the extent of marketing are also scanned.
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