PREPARATION OF A

PRELIMINARY PROJECT
REPORT
INTRODUCTION

❖ The basic necessity of an entrepreneur is to decide upon a project. The right

project selected will lead to a great success, while the wrong or infeasible
project will lead to the complete downfall of an enterprise. Hence a project
is the foundation stone of a venture.

❖ A project generally, has been identified as any program of action. Thus there
are research projects, agricultural projects, sub-projects and projects related
to market equipment, technology, production, location, etc.
PRELIMINARY PROJECT REPORT.

 A preliminary project report is prepared by an expert after detailed study and

analysis of the various aspects of a project. It acts as a guide to management,
especially at the initial stage to know whether the technical, commercial,
financial and economical states are feasible or not.
 This project report is a written document pertaining to any investment
proposal.
 This project report can be shown to the bankers or other financial institutions
to acquire financial assistance.
 It is also used by the entrepreneur to check if he is deviating from what was
decided earlier.
 ECONOMIC TECHNICAL

PROJECT REPORT

PRODUCTION FINANCIAL

MANAGERIAL
 PREPARATION OF PROJECT REPORT

SCANNING OF PREPARATION
CHOOSING AN OBSERVATION BUSINESS OF PROJECT
IDEA ENVIRONMENT REPORT
 Choosing an idea
Idea being the basic fuel for running an enterprise decides its success and failure
to a large proportion. An idea chosen should not only benefit the enterprise but
also should be valued by the society and market.

 Observation
After considering the idea to be implemented the next thing to consider is
regarding the factors that affect the business such as availability of raw
materials, mode of transportation, availability of cheap labour etc.

 Scanning of business environment

Various assets and investments put in as the capital for running of the company
should be scanned. This should include the land area invested for the enterprise.

 Preparation of project report

Finally after following all the three steps make a project report according to its
layout behaving as a guide for the management.
FORMAT OF A PRELIMINARY PROJECT
REPORT
 Title Page
 Abstract
 Introduction
 Methodology
 Reference
 FORMAT OF A PRELIMINARY PROJECT
REPORT
 Title Page

A short clear title which clearly indicates

what the report is about. The title page
will normally include the date and who
the report is for.
 Abstract

It is a very brief summary of contents. This

gives the reader a quick overview of the
experiments or piece of research being
reported on ,including what was done, how it
was done, what the result were and their
implications. writing an abstract is much
more difficult than it looks.
Things to note while writing an abstract
❖ Keep in the past tense, third person.
❖ It needs to make sense in its own right.
❖ It should mention the results and
outcomes.
 Introduction

The introduction sets the scene for the main body of the
report.
The aim and objective of the report should be explained in
detailed.
Any problems or limitations in the scope of the report should
be identified.
 Methodology

Information under this heading may include: a list of

equipment used; explanation of procedures followed;
relevant information on material used, including sources of
materials and details of any necessary preparation;
reference to any problems encountered and subsequent
changes in procedures.
 Reference

The reference should list, in alphabetical order by author, all

published sources referred in your report.
The reference can contain documents from online and any
authorised materials.
GUIDELINES BY THE PLANNING COMMISSION
FOR FORMULATING PROJECT REPORT.

 An entrepreneur, to get the project sanctioned has to

consult the planning commission. There are certain
guidelines given by the planning commission for preparing
a project report.The guidelines given by the planning
commission or the steps in the making of the project
report are in the next slide.
GUIDELINES BY THE PLANNING COMMISSION
FOR FORMULATING PROJECT REPORT.

 General information
 Preliminary analysis of alternatives
 Project description
 Marketing play
 Capital requirement and costs
 Operating requirements and costs
 Financial analysis
 Economic analysis
Lets get a little deeper!
 General information

It should contain general information

regarding the company or enterprise. The
report should also contain the analysis of the
industry to which the project belongs. It
should contain the past performance of the
industry, the priority of the industry, role of
the industry, change in production over a
period of time, allocation or investment f
funds, choice of technique, etc.
 Preliminary analysis of alternatives

It should contain the following:

 The gap between demand and supply of the outputs which are to be
produced, data on the capacity that would be available from the projects
which are in production at the time of report making.
 A complete list of all existing plans in the industry, giving their capacities
and level of production attained.
 A list of all letters for which letters of intents/licenses have been issued
and a list of proposed projects.
 All options that are technically feasible.
 The locations of the project and its implications.
 An account of the foreign exchange requirements
 The rate of return on investment should be calculated and presented
 The alternative cost calculations against the returns should be presented.
 Project description

It should contain the following:

 A brief description of the technology/processes chosen for

the project.
 Information relevant to determining the optimality of the
location chosen
 Information on specific details should be given for
considering environmental impacts like population, water,
flora, fauna, air, land, effects arising out of projects,
pollution, etc
 Operational requirements of the plant, water and power,
personnel, organisational structure envisaged, transport
costs activity-wise phasing of construction ad factors
affecting it.
 Marketing plan.

Marketing plan should contain the following:

It should have data regarding the marketing plan, i.e., demand and
prospective supply in each of the areas to be served.
The methods and data used for making estimates of domestic supply and
selection of the market areas should be presented.
Degree of price sensitivity and analysis of past trends in prices.
 Capital requirement and costs

Information on all items of costs should be carefully

collected and presented.
The estimates of costs should be reasonably completed and
properly classified.

 Operating requirements and costs

Operating costs are those costs which are incurred after

the commencement of commercial production. Information
about all items of operating cost should be collected.
Operating costs include cost of raw materials and
intermediates, fuel, utilities, labour, repair and
maintenance, setting expenses and other expenses.
 Financial analysis

It is used to measure the financial viability.

A performance balance sheet for the project
data should be presented.
Depreciation should be allowed for, on the basis
specified by the Bureau of Public Entereprises.
Foreign exchange requirements should be
cleared by the Department of Economic Affairs.
The report must also analyse the sensitivity of
the rate of return to changes in the level and
pattern of product prices.
 Economic analysis

The enterprise should try to assess the

impacts of its operation on foreign
trade.
Indirect costs and benefits should also
be included in the report.
If they cannot be quantified, They
should be analysed and their
emphasised.