10 Things to Know Before Selection of a Project in Business

The project selection stage or step of the project preparation is called ‘Investment Decision’ also, because of this stage, the decision is taken regarding making decisions or not, based on feasibilities. In this stage, the objectives and limits of available resources are kept in view.

things to know before selection of a project in business
things to know before the selection of a project in business

Thereafter, a detailed project report is prepared, along with the selection of the project and investment decisions.

In this report, various information and analysis are incorporated in the report form, indicating a summary of various decisions.

Criteria for Selecting a Project in Entrepreneurship

While selecting a project, the entrepreneur should determine the following things:

1. Production of Product

First of all, the entrepreneur also has to take the decision, as to what commodities are to be produced, what will the resources for that, what will be their various uses and what will be the production process of that commodity?

Related: 6 Different Stages or Phases for Preparation of New Projects.

2. Manufacturing Process

After deciding the production process, the entrepreneur should have its detailed study and should select the best alternative among various prevailing alternatives and flow charts will be drawn.

3. Size of the Unit

The entrepreneur should make the decisions, whether the size of the unit will be small or medium.

This decision is necessary because possibly the business might be expanded by doing it on a small scale.

Related: 9 Importance of Planning in Business Management.

4. Form of Ownership

The form of ownership of the Enterprise may be sole traders, partnerships, company or joint ventures.

The entrepreneur has decided on the selection of the form of ownership, according to the circumstances.

Usually, the entrepreneurs implement the project based on single ownership.

However, when contribution (in the form of Technical and managerial skills) of several entrepreneurs is required, then the enterprise is established in the form of partnership.

5. Machines and Tools

The entrepreneur should select machines and tools, according to the size of the plant.

Along with the selection, various other issues, like – specialties of machinery, number of tools, sources of Machines, and tools, their prices, and date of making supplies, conditions for payment, their costs, and alternative sources, etc. should also be considered.

6. Project Site

While selecting the project site, its distance from the market should also be kept in view, by the entrepreneur, so that undue expenses may not have to be incurred on carrying off the resources and products, etc.

Related: Top 10 Characteristics of Good and Ideal Project Planning.

7. Plant Layout

The entrepreneur should also decide on the design of plant layout and what will be the cost of its construction?

8. Availability of Raw Materials and Services

To complete the project, several facilities are not only required, but rather various arrangements are also be made.

The entrepreneur should take decisions about the quantity of raw material, sources of supply thereof, their quality, conditions for their supply, and also for arrangements of roads, electricity, water, transport, and communications in the project area.

9. Need for Labour

The entrepreneur also has to decide on the type, quantity, and quality of labor required and also about the supervisory arrangement to supervise the workers. Project Formulation and Implementation

10. Types of Capital and Structure

The entrepreneur has to make decisions about the type of capital fixed and working, for the project, and also about the sources of capital, which may internal or external, or both.

Their comparative study can be the basis for taking appropriate decisions so that these may be properly utilized and suitable balance may also be maintained among these sources.

Thus, Now you all know the things to know before the Selection of a Project.

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