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Module 5-Project Report

Entrepreneurship Development (Kannur University)

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Module V
Project Report
The project report is a document that contains all information regarding the proposed project.
It is served as a blueprint of all operations to be undertaken for attaining the desired results.
The project report is basically the business plan of action and clearly describes its goals and
objectives. It is one that helps in converting the business idea into a productive venture
without any chaos or confusion as it defines strategies for project execution.
Information from various aspects like technical, financial, economic, production and
managerial are together constituted in project report for better understanding. It describes all
inputs required for the accomplishment of a project so that they can be arranged accordingly
at the right time.
The project report is an essential tool available with management for proper monitoring of
operations and helps them in recognizing any problems. Managers through project reports are
able to estimate all costs of operations and possible profitability of the proposed project.

Meaning & Definition

A Project Report is a document which provides details on the overall picture of the proposed
business. The project report gives an account of the project proposal to ascertain the
prospects of the proposed plan/activity.
Project Report is a written document relating to any investment. It contains data on the basis
of which the project has been appraised and found feasible. It consists of information on
economic, technical, financial, managerial and production aspects. It enables the entrepreneur
to know the inputs and helps him to obtain loans from banks or financial Institutions.
The project report contains detailed information about Land and buildings required,
Manufacturing Capacity per annum, Manufacturing Process, Machinery & equipment along
with their prices and specifications, Requirements of raw materials, Requirements of Power
& Water, Manpower needs, Marketing Cost of the project, production, financial analyses and
economic viability of the project.

Characteristics of Project Report

1. Scope: The project report gives a clear picture of what is to be done or to be achieved. It
describes the goals of the proposed project and activities to be undertaken for achieving
these goals.
2. Resource: It shows the means or resources required to meet the desired scope. Project
report serves as the roadmap which tells the direction in which business should go for
attaining its goals.
3. Time: The project report denotes the standard time required for the completion of each
and every task of the proposed project.
4. Quality: The project report explains the desired standards to be achieved by the
completion of all tasks. Limit of deviations that can be accepted from these defined
standards are also contained in this report.

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5. Risk: Risk is an unavoidable factor associated with every business and needs to
monitored properly. The project report considers all risk factors that may arrive at the
completion of the proposed project and also tells the ways for recovering from these
factors.

Need/Objectives/Purpose of Project Report

1. Selecting Best Investment Proposal: Project report is an efficient tool for analyzing the
status of any investment proposal. It shows the expected profitability and risk associated
with the project and this way helps in choosing the best option.
2. Approval of Project: It is essential for registration or approval purposes of the proposed
project. Different authorities like District industries center, Directorate of industries,
government departments, etc. require project reports for giving approval.
3. Tracking: The Project report assists in tracking the current activities of the project. It
helps team members and other stakeholders to check the project progress from time to
time and helps in finding out any deviations against the original plan.
4. Visibility: Another important advantage of having the project report is that it gives full
insight into the project. It gives a clear description of activities to be undertaken and
avoids any confusion or disorder.
5. Risk Identification: Identification of risk is a significant step for the completion of
every project. The project report enables in spotting the risk early and taking all
corrective actions timely.
6. Cost Management: Project report helps in managing the expenses through regular
reporting of all activities. It sets the standard cost of every operation in advance and
helps in finding out any deviation in these costs through tracking of the project.
7. Financial Assistance: It is an important tool for availing financial assistance from
financial institutions or fund providers. The project report enables financial institutions in
judging the profitability of the proposed project and then takes the decision accordingly
for approving the funds.
8. Test Business Soundness: Project report helps in testing the profitability and soundness
of the proposed project. It tells the total estimated costs, possible income and risk
associated with any proposal.

Requirements / Contents of a Project Report

Following are the contents of a project report:

1. General Information
A project report must provide information about the details of the industry to which the
project belongs to. It must give information about the past experience, present status,
problems and future prospects of the industry. It must give information about the product
to be manufactured and the reasons for selecting the product if the proposed business is a
manufacturing unit. It must spell out the demand for the product in the local, national and
the global market. It should clearly identify the alternatives of business and should
clarify the reasons for starting the business.

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2. Executive Summary
A project report must state the objectives of the business and the methods through which
the business can attain success. The overall picture of the business with regard to capital,
operations, methods of functioning and execution of the business must be stated in the
project report. It must mention the assumptions and the risks generally involved in the
business.
3. Organization Summary
The project report should indicate the organization structure and pattern proposed for the
unit. It must state whether the ownership is based on sole proprietorship, partnership or
Joint Stock Company. It must provide information about the bio data of the promoters
including financial soundness. The name, address, age qualification and experience of
the proprietors or promoters of the proposed business must be stated in the project report.
4. Project Description
A brief description of the project must be stated and must give details about the following:
 Location of the site,
 Raw material requirements,
 Target of production,
 Area required for the work shed,
 Power requirements,
 Fuel requirements,
 Water requirements,
 Employment requirements of skilled and unskilled labour,
 Technology selected for the project,
 Production process,
 Projected production volumes, unit prices,
 Pollution treatment plants required.
If the business is service oriented, then it must state the type 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. It must
state the price at which the product can be sold in the market. It must also mention the
strategies to be employed to capture the market. If any, after sale service is provided that
must also be stated in the project. It must describe the mode of distribution of the product
from the production unit to the market. Project report must state the following:
 Type of customers,
 Target markets,
 Nature of market,
 Market segmentation,
 Future prospects of the market,

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 Sales objectives,
 Marketing Cost of the project,
 Market share of proposed venture,
 Demand for the product in the local, national and the global market,
 It must indicate potential users of products and distribution channels to be used for
distributing the product.
6. Capital Structure and operating cost
The project report must describe the total capital requirements of the project. It must state
the source of finance, it must also indicate the extent of owner’s funds and borrowed
funds. Working capital requirements must be stated and the source of supply should also
be indicated in the project. Estimate of total project cost, must be broken down into land,
construction of buildings and civil works, plant and machinery, miscellaneous fixed
assets, preliminary and preoperative expenses and working capital. Proposed financial
structure of venture must indicate the expected sources and terms of equity and debt
financing. This section must also spell out the operating cost.
7. Management Plan
The project report should state the following.
a. Business experience of the promoters of the business,
b. Details about the management team,
c. Duties and responsibilities of team members,
d. Current personnel needs of the organization,
e. Methods of managing the business,
f. Plans for hiring and training personnel,
g. Programmes and policies of the management.
8. Financial Aspects
In order to judge the profitability of the business a projected profit and loss account and
balance sheet must be presented in the project report. It must show the estimated sales
revenue, cost of production, gross profit and net profit likely to be earned by the
proposed unit. In addition to the above, a projected balance sheet, cash flow statement
and funds flow statement must 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, detail by month for the first year, and detail by quarter for the second and third
years. Break- even point and rate of return on investment must be stated in the project
report. The accounting system and the inventory control system will be used is generally
addressed in this section of the project report. The project report must state whether the
business is financially and economically viable.
9. Technical Aspects
Project report provides information about the technology and technical aspects of a
project. It covers information on Technology selected for the project, Production process,
capacity of machinery, pollution control plants etc.
10. Project Implementation

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Every proposed business unit must draw a time table for the project. It must indicate the
time within the activities involved in establishing the enterprise can be completed.
Implementation schemes show the timetable envisaged for project preparation and
completion.
11. Social responsibility
The proposed units draws inputs from the society. Hence its contribution to the society in
the form of employment, income, exports and infrastructure. The output of the business
must be indicated in the project report.

General Principles of a Good Reporting System

A good reporting system helps the management in proper planning and controlling. If the
reports are available to every level of management at the proper time, current activities may
be regulated and controlled and necessary corrective actions may also be taken in time.
Hence, some principles have been followed for making the reporting system more effective.
Such principles are briefly explained below.
1. Proper Flow of Information: The information should be free flow from the proper place
to the right end user of the report. Hence, the information should be presented in the right
format and at a proper time so that it helps in planning and co-ordination. The flow of
report should not be delayed at any cost. Flow of information is a continuous activity.
Information may flow upward, downward or side ways within an organization. Orders,
instructions, plans etc., may flow from top to bottom. Reports of grievances, suggestions
etc. may flow from bottom to top. Notifications, letters, settlements and complaints may
flow from outside. Annual Report, Financial Statement Analysis Report, Directors
Report, Auditors report etc. may flow from inside to outside. Information flows as
sideways from one manager to another at the same level through meetings, discussion
etc.
2. Proper Timing: The very purpose of preparation of report is controlling the
unfavourable activities. Hence, the report should be submitted at the required time
at any cost. If not so, there is no use of preparing such report. Moreover, the efforts used
for preparing the report and time are also waste. In the case of routine report, the time
schedule should be strictly adhered to. The absence of information at required time leads
to taking wrong decision.
3. Accurate Information: The report contains only accurate information. If wrong
information are included in the report, it may lead to take wrong decision. Hence, the
supply of accurate information helps the managerial executives to understand the
situation very clearly. At the same time, the presentation of accurate information in the
report should not involve excessive cost of preparation and should not result in the delay
in the presentation of report.
4. Relevant Information: Proper attention should be devoted to include only relevant
information in the report. The inclusion of irrelevant information is waste one and
increase the time in the report preparation. Moreover, the irrelevant information
confuse the end user of the report.
5. Basis of Comparison: The information bestowed by reports will be helpful when it
carries provision to compare with past figures, standards set or objectives. The trend of
the variation can be find out only through the comparison. Corrective action can be
taken with the help of comparative information.

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6. Reports should be Clear and Simple: The very purpose of preparing a report is
helping the management in planning, coordinating and controlling. Hence, the report
should be presented in very simple terms and can be clearly understood by anybody. If
not so, there is no meaning of preparing a report. The method of presenting a report is in
such a way that attracts the eye of the readers and enables them to arrive at a conclusion.
The arrangement of information in a report is in brief, complete, clear and simple.
7. Cost: The management incur some expenses with regard to report preparation. Such
expenses should be commensurate with the benefits derived from the report preparation.
If possible, more benefits may be available than the expenses incurred. In this way,
reporting system can be installed. In other words, there should be an endeavor to make
the system as economical as possible.
8. Evaluation of Responsibility: The reporting system has been installed in such a way to
evaluate the managerial responsibility. The standards or targets are fixed for each
functional department. The record of actual performance is monitored along with the
standards so as to enable management to assess the performance of different
individuals.

Performa of a Project Report

A project report for new business conducts a profound road map for effectual business
venture. It discusses whether the business requires finance or not, the challenging risks,
several problems en route, etc. Hence it becomes vital for every new business to prepare a
project report, to acquaint them on forewarning issues.

Project report for New Business - Format

Below is the sequence of standard format which should be followed while preparing new
business project report:
1. Background of the business.
2. Customer's profile
3. Long and short term Corporate Objectives
• To perform a viability assessment of the proposed new business ideas in terms of
marketability, technical feasibility, financing and authorities
• To be able to prepare a relevant business plan
• To recognize fundamental startup issues
4. Market Analysis
• Brief discussion on the type of market, chief influencers, players, etc.,
• Market description.
• Reasons for starting business in a particular market
• Target clients
• Advantages of the services offered by the new business
• Market consumption patterns
• Past and existing supply location

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• Production prospects and limitations

• Exports and Imports
• Price structure
• Flexibility of demand
• Client behavior, purposes, intentions, impetus, approaches, inclinations and needs
• Supply network and marketing rules formulated by the government
• Government and technical limitations imposed on the promotion of the product
5. Financial Assessment
• Investment expenditure and value of the entire project
• Methods of investment
• Anticipated productivity
• Money flows of the project report
• Investment value evaluated in context of different points of merit
• Estimated financial ranking
• Marketing Assessment
• Product
• Price
• Place
• Promotion
6. Operational Plan
• Business models
• Production of goods and services
7. Financial Plan
8. Management Structure
9. Business structure (Ownership, staff, etc.,)
10. SWOT Analysis: Significant Success aspects depending on Strengths, Weaknesses,
Opportunities and Threats to be faced by the firm in future
11. Appendices
• Break-Even Assessment
• Profit and Loss Synopsis
• Fund Flow Summary

Tips for designing an effectual Project report for New Business

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While designing a project report for new business it is vital to keep the following points in
consideration:
1) Target Market:
While making a new business project report it is significant to keep in mind the target
market. For instance, if you are preparing a report on debt financing, the focus should be
on the assurance that the debt can be reimbursed by the company and not on the huge
revenues that the firm has accrued.
2) Market approach:
The first approach towards preparing business report should be developing and assisting
powerful business strategy. The report should describe the economic trends, clients and
players. It should also explain on how to perform the chosen approach, the marketing of
its products and functional competence.
3) Market Rivalry:
An industrialist should recognize at what point of time the firm will perform similar
activities and when it will do things another way, in order to identify its strength and
drawbacks. Concentrate on strategies which present you differently from your
competitors, market products differently using various channels, etc.
4) Be practical:
Catalog realistic plans, for there are many unanticipated expenses, price overruns, issues
that have been neglected, etc. Hence, predict future trends realistically to make a
powerful project report.

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