A Project Report is a comprehensive document which provides details of the proposed business. It consists of information on economic condition, technical details, financial aspects, managerial and production aspects. It allows an entrepreneur to assess the inputs and helps him to obtain loans from banks or Financial Institutions.
The project report contains detailed information about Land and buildings required, Production Capacity, Process of production, Plant & Machinery Details with their prices and specifications, Detail of raw materials, Electricity & fuel, Manpower, Marketing Cost, financial analyses and economic viability of the project.
Contents of a Project Report
Following are the contents of a project report.
1. Basic Information
A project report gives information about the details of the industry to which the project relates to. It must give information about the previous experience, current status, problems, and future prospects of the industry. It provides information about the product or services. It shall also consider demand and supply in the market.
2. Executive Summary
A project report states the objectives of the proposed business and the plan by which the business can attain success. The comprehensive picture of the business considering the Working capital, Business operations, methods to discharge and execute business. It shall also mention the presumption and the risks involved in the business operation.
3. Organization Summary
The project report must indicate the structure of the organization and the pattern proposed for the organization. It must state whether the ownership is based on proprietorship, partnership, or company. It must provide information about the promoters such as name, address, age, qualification, and experience.
4. Project Description
A comprehensive description of the project shall be mentioned and it should give details of:
- Address of the site,
- Necessary Raw material requirements to produce the product,
- Production capacity,
- Space required for the factory and godown
- Electricity consumption requirements,
- Fuel consumption requirements,
- Water consumption requirements,
- Minimum Requirement of skilled and unskilled labour,
- The technology required for the project,
- Production process,
- Pollution control equipment required.
If the business is related to the provision of services, then it shall state the nature of services rendered to customers. It should state the method of providing service to customers in detail.
5. Marketing Plan
The project report must clearly state the total expected demand for the product in the market. It must state the selling price at which the product can be sold in the market. It must also mention the techniques to be used to capture the market. It must provide the details of the mode of distribution of the product from the production unit to the market. Project report shall state the following:
- Type of customers,
- Target markets,
- Nature of the market,
- distribution channels.
- Future prospects of the market,
- Sales objectives,
- Marketing Cost of the project,
- Market share of the proposed venture,
- Demand for the product,
- Potential customers of products and distribution channels.
6. Capital Structure and operating cost
The project report shall mention the total capital requirements. It must state the source of finance, it must also disclose the number of owner’s funds and borrowed funds. Estimate cost of the project which must include the cost of land, building, plant and machinery, fixed assets, incorporation expenses, and working capital. the financial structure of a venture shall be disclosed such as equity or debt financing.
7. Management Plan
The project report should state the following.
- Experience of the promoters of the business,
- Details of the management team,
- Duties and responsibilities of team members,
- Current personnel need of the organization,
- Methods of managing the business,
- Plans for hiring and training personnel,
- Programs and policies of the management.
8. Financial Aspects
To ascertain the profitability of the business, a projected profit and loss account and balance sheet must be incorporated in the project report. It must show the expected sales, cost of production, gross profit, and net profit likely to be earned. In addition, a Profit and loss account (income statement), projected balance sheet (position statement), cash flow statement and funds flow statement must be prepared every year.
The Profit and loss account (income statement) and cash flow projections should include a three-year summary, detail by month for the first year, and detail by quarter for the second and third years. Break-even point (No profit and no loss) and Return on investment must be stated in the project report. The accounting process system and the inventory management system will be generally addressed in this section of the project report.
9. Technical Aspects
The project report shall provide information related to technology to use in the project and technical aspects of a project. It includes information on Technology selected for the project, Production process, capacity of machinery, pollution control equipment, etc.
10. Project Implementation
Every proposed business should draft a time table for the project. It must specify the time within the activities involved in establishing the enterprise that can be completed. Implemented schemes shall show the timetable covered for project preparation and completion.
11. Social responsibility
The proposed business takes inputs from society. Therefore, it shall also state benefits for society in the form of employment, income, exports, and infrastructure.