Project report of a business
- 1. PROJECT REPORT OF A BUSINESS Dr. N. Yuvaraj Assistant Professor Achariya Arts and Science College Villianur, Puducherry-605110 Yuvaraj.aasc@achariya.org
- 2. Project report – provide necessary information required for the purpose of processing the proposal for financial assistance. Report- able to provide complete frame work for the presentation of all the information that would be required by financial institutions for appraising the project. Project report- saves time, energy, reduce objections and queries for the banker. Good project report- bankers welcome for ease process.
- 3. Who helps in project preparation? SIDCO- Small Industries Development Corporation. DGTD- Directorate General of Technical Development- publish statistical information every year on important items. Several Commercial Banks- ICICI, IndusInd, FinCorp, HDFC etc.,
- 4. Information's to be included in the project report 1. General Information 2. Project description 3. Market potential 4. Capital costs and sources of finance 5. Assessment of working capital 6. Other financial aspects 7. Economic and social variables
- 5. 1. General Information Name and address of the Entrepreneur Qualifications, experience and other capabilities Past performance and present status of the industry, the way it is organized and the problem it faces etc., Constitution and organization structure of the enterprise. In case partnership firm- submit registration certificate from Directorate of Industries. Range of products to be manufactured.
- 6. 2. Project description Site – (town, street, number etc.,), owned or leasehold land, site is approved industrial area? Suitable to the type of enterprise being planned? Raw material – imported raw material required? If so license has been obtained? Sources of raw material? Skilled labour – Whether available in that area? If not, what arrangement have been made to train labours in various skills? Power- Inadequate supply of electricity? Power requirements, load sanctioned, stability of power supply and price at different consumption levels.
- 7. Fuel – coal, oil or gas required? State their availability position. Water – Important factor for projects like brewery, soft drinks. Source and quality of water- report to be attached. Waste disposal – Waste materials or emissions have significant problem. Emissions- may be gas (smoke or fumes), physical- noise, heat, vibrations, Chemical – solid or liquid discharge through pumps etc., State clearly scope of dumps, sewage system and sewage treatment plant.
- 8. Communication system- telephone, telex, etc., Transport facilities - Other common facilities – machine shops, welding shops, electrical repair shops etc., List of machinery and equipments – complete list of machinery and other equipments, their type, size and cost to be stated. Source of supply of capital equipment and construction services should also be given. Capacity of the plant – licensed capacity should be stated. Also state the unit will run on single, double or tiple shift basis.
- 9. Technology selected – is it up to date and appropriate? Which other units using same technology and with what result? Manufacturing process – stage of production to be stated Period of conversion from raw materials to finished goods to be stated. Balancing of plant – state whether capacity of various plants at different stages of production in uniform Quality control – obtain quality marks like ISI, Q, Agmark etc., This creates confidence among customers. Research and development - for improvement of quality of the product.
- 10. 3. Market potential Total demand and supply of the product Estimate of cost and price- margin profit Marketing strategy Whether after sales service required? Whether seasonal market- state arrangement made for warehousing or stocking of goods in off-season. Transportation of goods – done on public carrier or by own transport
- 11. 4. Capital costs and sources of finance An estimate of various components of capital items required by the unit should be given. It includes Land & building Plant & machinery Other miscellaneous assets. Preliminary expenses Contingency cushion against price rise Margin for working capital
- 12. 5. Assessment of working capital requirements Working capital assessments have been designed for limits between 25 k and 2 Lakhs. 6. Other financial aspects Project Profit & Loss A/C Sales revenue, return on investment etc., Cost of production Allied costs and profit Balance sheet and cash flow statement Break-even analysis
- 13. 7. Economic and social variables State cost for controlling the environmental changes (pollution) -called as abatement cost -i.e treating the effluents and emissions. Sate social benefits Promoting employments Import substitution Promoting ancillaries – sub contracts needed ? Development of the area – establishment of the unit will bring overall development in the area.
- 14. Thank you