How to Prepare a Business Project Report

This article is dedicated to answering the following question: how should a business project report be prepared?

Meaning of Project Report

A project report is a document that provides details about the overall picture of the proposed business. It reports on the project proposal to determine the prospects of the proposed plan/activity.

A project report is a written document related to any investment. It contains data based on which the project has been assessed and deemed feasible. It consists of information on the economic, technical, financial, managerial, and production aspects. It allows the entrepreneur to know the inputs and helps them secure loans from banks or financial institutions.

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The project report contains detailed information on land and buildings required, manufacturing capacity per year, manufacturing process, machinery and equipment along with their prices and specifications, raw material requirements, power and water requirements, manpower requirements, the cost of marketing of the project, production, financial analysis, and the economic viability of the project.

Contents of a Project Report

Here are the contents of a project report:

General Information

A project report should provide information on the details of the industry to which the project belongs. It should give information about the past experience, present status, problems, and future prospects of the industry. It should give information about the product to be manufactured and the reasons for selecting the product if the proposed business is a manufacturing unit.

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It should specify the demand for the product in the local, national, and international markets. It should clearly identify the business alternatives and should clarify the reasons for starting the business.

Executive Summary

A project report should state the objectives of the business and the methods by which the business can achieve success. The overall picture of the business regarding capital, operations, methods of operation and execution of the business should be stated in the project report. It should mention the assumptions and risks generally involved in the business.

Organizational Summary

The project report should state the proposed organizational structure and pattern of the unit. It should state whether the ownership is based on sole proprietorship, partnership, or a joint-stock company. It should provide information about the bio-data of promoters including financial soundness. The name, address, age, qualification, and experience of the owners or promoters of the projected business should be mentioned in the project report.

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Project Description

A brief description of the project should be given and should give details on the following:

• Site location,
• Raw material requirements,
• Production target,
• Area required for the work shed,
• Power requirements,
• Fuel requirements,
• Water requirements,
• Employment requirements of skilled and unskilled labor,
• Technology adopted for the project,
• Manufacturing process,
• Projected volumes of production, unit prices,
• Pollution treatment plants needed.

If the business is a service-oriented business, it should state the type of services rendered to the customers. It should state in detail the method of service delivery to customers.

Marketing Plan

The project report should clearly state the total anticipated demand for the product. It should state the price at which the product can be sold in the market. It should also mention the strategies to be employed for capturing the market. If any after-sales service is provided, that should also be stated in the project. It should describe the method of distributing the product from the production unit to the market.

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The project report should state the following:

• Type of customers,
• Target markets,
• Nature of markets,
• Market segmentation,
• Future prospects of the market,
• Sales objectives,
• Marketing cost of the project,
• Market share of the proposed business,
• The demand for the product in the local, national, and international markets.
• It should state the potential users of the products and the channels of distribution to be used for distributing the product.

Capital Structure and Operating Expenses

The project report should describe the total capital requirement of the project. It should state the source of financing, it should also state the extent of owner funds and borrowed funds.

The working capital requirements should be stated and the source of procurement should also be stated in the project. The estimate of the total project cost should be broken down into land, building and civil works, plant and machinery, miscellaneous fixed assets, preliminary and preoperative expenses, and working capital.

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The proposed financial structure of the business should indicate the sources and anticipated terms of financing by equity and debt. This section should also specify the cost of operation.

Management Plan

The project report should state the following:

• Business experience of the promoters of the business,
• Details about the management team,
• Duties and responsibilities of team members,
• The current staff needs of the organization,
• Modes of management of the business,
• Plans for recruitment and training of personnel,
• Programs and policies of management.

Financial Aspects

To judge the profitability of the business, a projected profit and loss account and balance sheet should be presented in the project report. It should indicate the estimated sales revenue, cost of production, gross profit, and net profit likely to be generated by the proposed unit.

In addition to the above, a projected balance sheet, cash flow statement, and fund flow statement should be prepared every year and at least for a period of 3 to 5 years.

The income statement and cash flow projections should include a three-year summary, detailed by month for the first year and detailed by quarter for the second and third years. The break-even point and the rate of return on investment should be stated in the project report.

The accounting system and the system of inventory control to be used are generally discussed in this section of the project report. The project report should state whether the business is financially and economically viable.

Technical Aspects

The project report provides information about the technology and technical aspects of a project. It covers information about the technology selected for the project, the production process, the capacity of the machines, pollution control plants, etc.

Project Implementation

Every proposed business unit should prepare a time schedule for the project. It should indicate the time within which the activities involved in setting up the business can be completed. The implementation schedules indicate the projected time frame for the preparation and completion of the project.

Social Responsibility

The proposed units draw inputs from society. Hence its contribution to society in the form of employment, income, export, and infrastructure. The output of the business should be stated in the project report.

Conclusion

Preparing a business project report requires careful planning and effective organization.