1. PROJECT IDENTIFICATION AND FORMULATION

2. HOW TO START A NEW VENTURE
Idea generation
Primary screening or pre-feasibility study
Project feasibility or detailed feasibility study
Support study
Detailed project report (DPR)
Design or planning
Implementation or execution
Termination of project

3. Idea generation or project identification
Support
Study
Preliminary screening or pre feasibility study
Project feasibility or feasibility study
Market & demand
Analysis
Technical
Analysis
Financial
Analysis
Social cost benefit
Analysis
Environmental
& risk analysis
Detailed project reporter formal approval from sponsors
Planning, organizing & scheduling of project activities
Direction & controlling of activities
Termination of project (commissioning)

4. IDEA GENERATION OR IDENTIFICATION OF INVESTMENT OPPORTUNITIES
Idea generation is the process of grouping logical thoughts based on some factors.

5. IMPORTANCE OF IDEA GENERATION
Basis for other steps in completing steps.
Important for continuous growth of organization.
Survival in the competitive market.
Contribution towards development of society.

6. SOURCES OF IDEA GENERATION
Performance of existing industry
Examining the inputs and outputs of various industries
Review of imports and exports
Availability of cheap materials & labor locally
Price trend, to find demand – supply gap
Government guidelines
Analysis of economic and social trends
Study of new technological developments
others

7. PRELIMINARY SCREENING OR PRE-FEASIBILITY STUDY
Preliminary screening is done with a view to avoid unnecessary cost and efforts in detailed study, if idea is not looking worthwhile in first instance
DEFINITION : Preliminary screening can be defined as a series of steps to know whether or not a complete detailed feasibility study should be made.

8. OBJECTIVES OF PRELIMINARY SCREENING
To determine whether project (idea) is promising business opportunity or not.
Whether it justified a detailed analysis or not
To find out any critical aspect on which success or failure depends
To formulate a plan for detailed feasibility study

9. ASPECTS OR AREAS OF PRELIMINARY SCREENING
Acceptable risk level
Consistency with government priorities
Availability of inputs
Adequacy of market
Reasonableness of the costs
Compatibility with promoters

10. SUPPORT STUDY
Support study can be defined as – An in-depth investigation into any one or a couple of critical aspects (areas) of a project, to help the feasibility study.
Critical aspect here means those areas whose success or failure decides the success of failure of business or project.

11. OBJECTIVES OF PROJECT FEASIBILITY STUDY
It guarantees the success of Project
It works as basic terms of reference for Project
It describes the nature and complexity of Project
It gives an idea about investment in Project
It also provides us the possible future difficulties
It gives an idea about economic and social benefits

12. Pre-Feasibility Study
Difference between Pre-Feasibility Study or Project or Detailed Feasibility Study
Pre-Feasibility Study
Feasibility Study
Objective
To determine whether or not the Project idea needs further investigation
To determine the true profitability of the Project and selecting the Project.
Scope
Over-view study
Detailed study
Type of Data
Secondary Data
Primary Data
Time involved
Low
High
Accuracy
Cost involved

13. Components of Project of Detailed Feasibility study
Market and Demand analysis
Technical analysis
Financial analysis
Social Cost-Benefit analysis
Environmental and risk analysis

14. Detailed Project Report (DPR)
Meaning: “Doing project feasibility is not the end of Project formulation stage. It also includes documentation of it, which is known as Detailed Project Report.”

15. Definition:
“A formal written document containing the process of Project formulation and briefing the Project scope”

16. Objectives:
It work as formal communication to Project Promoters for their approval.
It also fulfills the need of Project Report to be provided to the financial institutions/banks
It can also be submitted as Project Reports to Govt. Departments for necessary approval.

17. Format of DPR General information about the Project
Background and experience of the Project Promoters
Details and working of already owned businesses.
Details of the proposed Projects
Schedule of implementation
Project costs
Means of financing the Project
Marketing and selling arrangements
Profitability and cash-flow estimates
Mode of payment of term-loans
Government Approvals.

18. PROJECT MARKET
&
DEMAND

19. Market Demand Analysis
Objective Specification
Collection of Data
Market Survey
Market Description
Demand Forecasting
MARKET PLANNING

20. Market Survey
“Market Survey is a technique that is aimed at gathering all possible information (primary data) by conducting interviews.”

21. Steps under Market Survey
Defining the Target Market
Selecting the Sample
Developing the Questionnaire
Training the Surveyors
Recording the Information
Interpreting the Information

22. Market Descriptions Competition in Market Study of Market Segments
Price
Methods of Distribution
Sales Promotion
Consumers Interest

23. Demand Forecasting
“Demand Forecasting is the art of predicting demand for a product or a service at some future date on the basis of certain present and past behaviour patterns of some related events.”

24. Characteristics of a Good Demand Forecasting
Accuracy
Simplicity
Economy
Timeliness
Availability

25. Methods of Demand Forecasting
Survey of buyer’s intentions
Collective opinion method
Expert opinion method
Controlled experiments
Study of general economic environment

26. Statistical Methods Trend Projection Method Graphical Method
Regression Analysis

27. Market Planning
This steps under Market and Demand Analysis is not related to actual analysis, but related to Market plans of new firm (if idea under consideration is selected). Under this step, four P’s of Marketing viz Product, Price, Place and Promotion should be well designed to achieve the expected level of Market Penetration.