Project IdentificationProject identification is the first step for an entrepreneurial activity. It is concerned with collection, compilation and analysis of economic data for the eventual purpose of identifying possibilities of feasible and promising investment opportunity and developing it.

Project IdentificationProject Identificationbased on identified activities, goals and time framesEnvironmental Assessment(technical, social, economic feasibility)Project Development

Project ChoiceTheoretically infinite choices are availableImportant dimensions are;

Product/ ServiceMarketTechnologyEquipmentScale of productionLocationIncentives andTime phasingGovt. PoliciesInfrastructureSkills

Types of OpportunitiesAdditive; Least Risky

Utilize existing resourcesMin. change in business characterComplementary;Risky

Innovative ideasShift in business characterBreakthrough;Most Risky

Fundamental change in structure andCharacter of business

Idea Evaluation The IdeaHow Do You Get It? Dealing with problems yours or others Brainstorm with friends Mentors can help! Ask others if they heard of any good ideas From your travels The engineering and other universities, etc.Remember, a great idea does not guarantee success

How the founders of the Inc. 500 got their ideas While working in the same industry 43% Hobby or advocation 16% Saw somebody else do it 15% Saw an unfilled niche 11% Did a systematic search 7% Don't know 5%

Be the First... Our best business missions are based on those ideas that often emerge out of our deepest personal motivations and interests.Warren Avis in "Take a Chance to Be First"

Opportunity IdentificationIntelligence to Observe, Innovate & Deduct;During routine occupational workIdentifying dearth of an article or serviceFaced with un-identified situationAvailability of a particular skillAvailability of specific materialNeed of improvisation in existing processReports & records of professional bodiesJournals & Bulletins of Research InstitutionsStrategic Plan documents of the GovernmentSuccess stories of friends/ relatives/ others

Opportunity Identification

Repeat business, not one-time sell. Business instead of a practice. Not built on a persons talent, but orgn. Regional or national potential, rather than local. Less labor intensive, the better Already a market other companies doing it. Demographics or lifestyle changes creating the need, and thus, the market. Emotionally appealing to the customer. The more unregulated, the better. A proven team, not an untried idea. team is more important than idea. Recession-proof. Success is not built on one client, one product, or customer. Payment at time of service or before.

Criteria for Project SelectionInvestment Size - Small, Medium, LargeLocation -Ease of Liaison, transport, immunitiesAvailability of raw material, skilled personsTechnology Proven, IndigenousEquipment Capacity, Quality, Futuristic, IndigenousMarketing Retail/ industrial, import/export, ancillary/ parentCurrent Demand/ Supply positionIdentification of specific nichesHow much competitionFrequency of consumption

ImportanceCatalyst for economic developmentEmployment and income generationFramework for future activities & developmentInitiate infrastructure developmentDevelopment of society in long termAccelerate socio-cultural activities

Project FeasibilityFeasibility analysis helps to identify the strengths and weaknesses of the project after establishment of project objectives,

it includes;Market analysisTechnical analysisFinancial analysisSocial profitability analysis

Market analysisA market analysis is a method screening project ideas in terms of market, it includesMarket area, methods & cost of transportation and channels of distributionAnalysis of past & present demand, rate of consumption and consumers of the productSupply position, competitors & competitive products, prices, quality and marketing practices

Technical analysisServes as basis for estimation of cost and consideration about infrastructure demand, employment, payment systems & Ecology.Description of product including physical, mechanical and chemical properties & specs.Machinery & equipment, Manufacturing process, flow charts etc.Plant location, plant size, production schedule, volume of productionRaw material, labor requirements, Waste managementProduction cost

Financial analysisPreparation of financial statement to evaluate measures of commercial viability and magnitude of required financeStatements of total project cost, initial capital requirements, cash flows and projectionsCollection period of sales, inventory, payment periods of purchases and expensesROI, break even analysis, cost benefit analysis and price analysis

Project FormulationProject Formulation is the step to critically examine and make decision for choosing a project idea for implementation.A process whereby the entrepreneur makes an objective and independent assessment of various aspects of an investment proposition of a project idea for determining its impact.It aims at achieving the project objectives with min. expenditure and adequate resources in a limited time.

Sequential stages of Project FormulationFeasibility AnalysisTechno-Economic AnalysisProject Design & Network AnalysisInput AnalysisFinancial AnalysisSocial Cost-Benefit AnalysisPre-Investment Analysis

Project ReportPrepared by an expert / consultantServes as a guide to ManagementImportant for financial institutions & BanksA project report give details about;Merits & demerits in resource allocationInputs & outputs of the projectExtent of opportunities available

ObjectivesThe objectives may be in terms of social or economic or both;GeneralExpected achievementsOperationalExpected results

These objectives help in quantifying physical, financial, human and other resource requirements;

Project Report - ScopeEconomic Aspects:Market AnalysisTechnical Aspects:Financial Aspects:Production Aspects:Managerial Aspects:

Project Report - ContentsObjectives & scope of the projectProduct Characteristics, specification etcApplication/ Use of productStandards & Quality

Market position and trendsAnticipated demandProduction capacityPrice structureImport/ Export prospects

Raw Material requirementsAvailability, Sources, PriceProperties of raw material

Manufacturing ProcessProcess selectionProduction schedule

Project Report - ContentsPlant & MachineryEquipment/ Instrument requirementsPower, Water & other infrastructure

Land & BuildingArea, Building & Location etc.Construction schedule

Financial implicationsFixed & working capital investmentProject cost & Profitability

Marketing strategyPersonnel RequirementsStaff requirements & availabilityLabor & wages provisions