Project report or business plan is a written statement of what an entrepreneur proposes to take up. It is one kind of course of action about what the entrepreneur hopes to achieve in his business and how is he going to achieve it.
There are eight different sequential stages or steps in preparing a project report or business plan. These are described below:
General information: The general information in the project report should include the following:
- Bio-data of the Promoter;
- Industry profile;
- Constitution and Organization;
- Product details; etc.
Project description: A brief description of the project covering the following aspects is given in the project report:
- Location, Physical structure;
- Pollution control;
- Transportation and communication system;
- Production process;
- Research and development etc.
Market potential: While preparing a project report, the following aspects about the market potential of the product should be stated in the project report:
- Demand and supply position;
- Expected price;
- Marketing strategy;
- After sale service;
- Transportation etc.
Capital costs and sources of finance: An estimate of the capital costs, such as costs of land, building, plant, machinery, installation costs, preliminary expenses etc. should be given in the project report. The present probable sources of capital should also be stated in the project report.
Assessment of working capital requirements: The requirement for working capital and its sources of supply should be carefully and clearly mentioned in the project report.
Other financial aspects: In order to adjudge the profitability of the project, a projected Profit and loss account, Balance sheet, Cash flow statement, Break-even analysis etc. should be presented in the project report.
Economic and social variables: The following economic and social variables should be stated in the project report in the viewpoint of social responsibility:
- Controlling the environmental damage;
- Employment generation;
- Local resource utilization;
- Development of the area etc.
Project implementation: Every entrepreneur should draw an implementation scheme or timetable for his project to ensure the timely completion of all the activities of the project. If there is a delay, a project cost overrun.
So, these are the various steps in preparing or formulating a project report or business plan.