Project Preparation and Submission Guidelines
Preparation and Submission of Draft
Market Research
Estimating demand, forecasting revenues, costs, and investment.
Analysis of Demand
Analyze future demand by considering the need for the good or service. Analyze consumer habits and motivations to create a consumer profile and business strategy. Once the product is ready, consider national and international market development. Consider variables such as population growth rate, age, sex, and average income per person.
Estimate Future Demand
Essential for project analysis. Analyze past demand to project future demand and understand variable behavior. Example: If a country experiences economic growth, consumer income increases. How is this increase distributed? Does it increase the income of potential consumers? If yes, then project demand increases.
Analysis of Supply
The amount of product available in a specific market. Consider production volumes, costs, installed and used capacities, technological changes, and legal provisions.
- Competitive markets depend on the number of suppliers. No single supplier affects the product price.
- In a competitive market, size is secondary. The project’s ability to conquer the market is key.
- When the market is competitive, production volume is irrelevant.
Project Market Participation
Projected demand and supply reveal market participation possibilities. This is crucial for analyzing project size. The decision might involve building or expanding production to meet market share goals.
Analysis of the Marketing System
Distribution channels, transportation, storage, cooling, product design, customer technical assistance, sales policies, funding plans, advertising, and promotion.
Technical Study
Propose and analyze different options for developing the good or service, including machinery, installations, and investment costs. Also, consider inputs and material costs.
Project Size
Project size depends on several factors:
- Theoretical Capacity: Production volume with good technique, operating at minimum cost.
- Maximum Capacity: Maximum production volume achieved with peak computer usage, regardless of cost.
- Normal Production: Production volume under estimated conditions for the longest period, achieving the lowest unit cost.
Size Selection
Choose the optimal project size using the Net Present Value (NPV) criterion. Select the size that maximizes NPV.
Production Process
Evaluate production processes to achieve optimal production using inputs, machinery, etc. Choose the best process among several options. Conduct a critical study of competitors’ production processes based on technological features, factor usage intensity, production costs, capacity expansion facilities, and advantages/disadvantages.
Description of the Production Process
Describe the process, equipment, facilities, labor force, etc. Specify main, intermediate, and by-products with their features. Identify raw material requirements, quantities, quality, and unit costs. Detail the employers involved in production and analyze skilled/unskilled labor requirements.
Criteria for Deciding on the Production Process
Choose the process that maximizes NPV. Conduct a qualitative analysis considering market research, size, location, availability, and cost of production factors.
Project Location
Study suitable locations. Investment decisions can be costly and difficult to change. Address location from macro to micro perspectives. Determinants: Water, electricity, roads. Desirable factors: Skilled labor, soil quality.
Physical Works and Equipment
Describe the type, shape, and size of physical works. Include sufficient detail for cost analysis and identification of major and complementary units. Detail the main materials used, their quantity, quality, origin, and unit price. Detail equipment, machinery, tools, and manpower. Provide a report showing implementation costs.
Economic Background of the Technical Study
Valuation of Investments in Physical Infrastructure
Includes construction or renovation of buildings, offices, roads, parking lots, electrical installations, etc. (Information managed in a “balance of physical works”).
Equipment Investments
Investments enabling normal project operation (“special equipment balance”). Usually accompanied by backup quotes. The first two columns should be supported by a technical annex justifying machine type and quantity. Unit costs should be supported by relevant contributions. Asset life is legally established by the IRS. This information enables a reinvestment schedule based on equipment sale income.
Other Cost Background of the Technical Study
Staff expertise levels, wage rates, labor requirements for direct operation, supervision, inspection, raw material costs, fuel, electricity, other inputs, waste, equipment residual value, rights, royalties, insurance, maintenance, and repairs.
Organization
Each project requires a unique administrative organization considering division of labor, centralization, authority, accountability, etc. Provide information on office sizing, equipment investment costs, executive position levels for salary calculations, and administrative procedures for indirect cost calculations.
Organizational Factors
Consider external unit participation (supplier and customer relationships), organizational structure size (hierarchical levels and functional divisions), technology management (procedures and human resources), administrative task complexity, and flexibility for adaptation.
Two Organizational Stages
Distinguish between project implementation and operation. Define the most suitable organizational structure for each project. Larger projects require larger structures.
Organization for Implementation
Can be done internally or outsourced. Prepare a calendar covering all activities. Use Gantt charts for progress control.
Organization for Operation
Determine staffing needs and decide on internal/outsourced activities. Analyze the influence of administrative procedures on investment and operating costs. Detail all departments and divisions. Provide a complete organizational overview.
Investment in the Organization
Invest in physical infrastructure, equipment, and working capital based on the study. Include enclosures, architectural programs, administrative unit details, corporate image considerations, executive vehicles, organizational and start-up expenses, communication systems, data processing, and working capital investment (inventories).
Cost of Administrative Operation
Most operating costs are derived from organizational analysis. Include executive, administrative, and service remuneration, indirect costs from social benefits and welfare services, third-party services, and information system records.
Legal Aspects
Consider both external and internal legal aspects. Each country has specific rules that influence project flows and expenditures. Consider tax laws (taxes, depreciation, profits/losses), labor law (salaries, allowances, pensions), and international treaties (tariffs, health regulations).