Fundamentals of

Project Management&
Entrepreneurship
Chapter Three
Stages of creating and formation business
projects
Under the supervision of Dr. Elsayed Maher Khalaf
Instructor in the Department of Business Administration
Faculty of Commerce
University of Sadat City
(2023)
Prepared by Khloud Khalifa
 Introduction

The first stage: The emergence of the idea of the project.

The second stage: The preliminary feasibility study.
The third stage: A detailed feasibility study.
Fourth stage: Choosing the legal form of the project.
The fifth stage: Establishing the project.
Sixth stage: The administrative organization of the project.
Seventh stage: Starting the activity.
The first stage: the emergence of the project idea:
The focus of the idea of ​any project is the realization that
there is a specific need for a particular good or service, so
that there is an opportunity to improve satisfaction through
the activity of the new project.
That is, the idea is the subject of the activity that the project
that the founder are interested in is expected to engage in and
see that this idea is commensurate with the available material
and technical capabilities and that it will contribute to filling
a basic need of the market.
Multiple sources from which ideas can be obtained
regarding new activities for existing projects.
These sources include the following:
1- Project marketing management.
2- Research and development department.
3- Project workers.
4- Universities and scientific research centers.

The areas that could be an area for new ideas may be the
following:
1- The idea of a new project, whether production or service.
2- The idea of marketing a particular service.
3- The idea of a joint venture.
4- Idea for a new activity for an existing project.
However, it must be noted that the mere existence of the
idea in itself is not sufficient to establish the project, but
rather it must be linked to plans and material and human
capabilities so that it becomes a tangible reality and only
then the project is born.
The second stage: the preliminary feasibility study:
This stage aims to ensure the economic soundness of the project
idea, meaning that the expected economic and social returns from
the project are commensurate with the costs, investments, and
sacrifices that the individual or society will bear in order to
establish the project.
In general, the initial feasibility study stage should verify the
following tools:
1. Availability of marketing opportunities for the project's
products.
2. Availability of the productive, financial and human elements
necessary for the project.
3. Availability of the ability to achieve an appropriate return on
Investment.
The third stage: Detailed feasibility study:
If the preliminary feasibility study that was conducted in the
previous stage showed the validity of the idea, it will move to the
next stage, which includes the following elements of the study:
(1) Environmental Study:
This study aims to identify:
1. The extent to which the project to be established is consistent
with the prevailing regulations and laws.
2. Knowledge of distribution markets, capital markets, and
investment sources available to it.
3. Knowing the technological aspects present in the surrounding
environment and research centers.
4. Availability of physical, financial and human resources in the
surrounding environment
(2) Marketing Study:
The first aspect: Knowing the expected demand for the project's products.
The second aspect: Knowing the desires and opinions of consumers regarding
the proposed products.

(3) Technical Study:

The basic elements of the technical feasibility study are as follows:
1. Choose the project site.
2. Determining the expected production volume.
3. Determine product types.
4. Determining the technology used (automatic - semi-automatic -manual)
5. Determine the sources from which we obtain machinery and equipment
(4) Financial Study:
This study aims to determine and forecast the expected profit during
the project years.
The income items of the project are as follows:
1. Revenue from the sale of project products.
2. Revenue from the sale of some production waste.
3. In return for consulting or technical services.

The most important items of expenses are as follows:

1. Construction and incorporation expenses.
2. Expenses of the first cycle of production and marketing.
3. Interests due on loans during the project construction period.
The fourth stage: Choosing the legal form of the
project:

(1)Individual project.
(2)General partnership companies.
(3)Limited Partnership Company.
(4)Companies limited by shares.
(5)Joint Stock Companies.
(6)Limited Liability Companies.
(7)Joint venture company.
The Fifth Stage: Establishing the Project:

1- Offering shares for public subscription to raise capital and the

necessary additional.
2- Establishing the basic and initial administrative organization
for the project.
3- Selecting individuals or administrative leaders to fill the
administrative Positions.
4- Concluding the necessary contracts for obtaining lands,
buildings, and Machinery.
Sixth stage: Administrative organization of the project:
Organizing is a basic function of management, and
administrative organization is a means of coordinating
human efforts through an organized collective effort to
achieve the goals.

Seventh stage: Starting the activity:

After completing all of the above, the permanent
management body will be selected, which will complete
the functional structure and work systems and start
the project operation process.
 True or False Questions

1- Stages of creating and formation business projects, the first stage

is the emergence of the idea of the project.
Answer: True

2- Stages of creating and formation business projects, the second

stage is Choosing the legal form of the project.
Answer: False
3- Stages of creating and formation business projects, the third stage:
A detailed feasibility study.
Answer: True

4- Stages of creating and formation business projects, the fourth

stage: Choosing the legal form of the project.
Answer: True
5- Stages of creating and formation business projects, the third stage:
Establishing the project.
Answer: False

6- Stages of creating and formation business projects, the Sixth

stage: The administrative organization of the project.
Answer: True
7- Stages of creating and formation business projects, the Seventh
stage: Starting the activity.
Answer: True

8- Stages of creating and formation business projects, the sixth stage

Choosing the legal form of the project.
Answer: False
9- The first stage is the emergence of the project idea: The focus of
the idea of ​any project is the realization that there is a specific need
for a particular good or service.
Answer: True

10- The idea is commensurate with the available material and

technical capabilities and that it will contribute to filling a basic need
of the market.
Answer: True
11- Multiple sources from which ideas can be obtained regarding
new activities for existing projects includes Project marketing
management, and Research and development department, Project
workers, and Universities and scientific research centers.
Answer: True

12- However, it must be noted that the mere existence of the idea in
itself is sufficient to establish the project, but rather it must be linked
to plans and material and human capabilities so that it becomes a
tangible reality and only then the project is born.
Answer: False
13- The second stage: the preliminary feasibility study: This stage
aims to ensure the economic soundness of the project idea.
Answer: True

14- In general, the initial feasibility study stage should verify just the
following tools: Availability of marketing opportunities for the
project's products, and Availability of the productive, financial and
human elements necessary for the project.
Answer: False
15- The third stage: Detailed feasibility study includes
Environmental Study, Marketing Study, Technical Study, and
Financial Study.
Answer: True

16- The third stage: Detailed feasibility study includes

Environmental Study; This study aims to identify: The extent to
which the project to be established is consistent with the prevailing
regulations and laws, and Knowledge of distribution markets, capital
markets, and investment sources available to it.
Answer: True
17- The third stage: Detailed feasibility study includes Marketing Study;
The first aspect: Knowing the expected demand for the project's
products, and The second aspect: Knowing the desires and opinions of
consumers regarding the proposed products.
Answer: True

18- The third stage: Detailed feasibility study includes; Technical Study:
The basic elements of the technical feasibility study are as follows:
Choose the project site, Determining the expected production volume,
Determine product types, Determining the technology used (automatic -
semi-automatic -manual), and Determine the sources from which we
obtain machinery and equipment.
Answer: True
 Multiple Choice Questions:-

1- Stages of creating and formation business projects, the first stage

is;
a) The emergence of the idea of the project.
b) The preliminary feasibility study.
c) A detailed feasibility study.
d) Choosing the legal form of the project.

Answer: A
2- Stages of creating and formation business projects, the third stage
is;
a) The emergence of the idea of the project.
b) The preliminary feasibility study.
c) A detailed feasibility study.
d) Choosing the legal form of the project.
Answer: C
3- Stages of creating and formation business projects, the fifth stage
is;
a) The emergence of the idea of the project.
b) The preliminary feasibility study.
c) Establishing the project.
D) The administrative organization of the project.
Answer: C
4- …………………., This stage aims to ensure the economic
soundness of the project idea.
A) The second stage: the preliminary feasibility study.
B) The third stage: A detailed feasibility study.
C) Fourth stage: Choosing the legal form of the project.
D) The fifth stage: Establishing the project.

Answer: A
5- The third stage: Detailed feasibility study: Technical Study
includes; The basic elements of the technical feasibility study are as
follows:
a) Choose the project site, and Determining the expected production
volume only.
b) Determine product types only .
c) Choose the project site, and Determining the expected production
volume, Determine product types, and Determining the technology
used (automatic - semi-automatic -manual)
d) Determine the sources from which we obtain machinery and
equipment only.
Answer: C
Thank You For listening