Welcome

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Project Profile Preparation

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 5-point Agenda

1. What is a Project?
2. What is a Profile?
3. The Skills required in
Profile Preparation
4. Preparing a Project
Profile
5. Evaluation of a
Business Opportunity

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 What is a Project?

• Defined Objective/s
• Defined Measurable
Deliverables
• Planned activity [from
beginning to end]
• Definite Resources

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 What is a Project Profile?

• A brief version of the

Project Report
• Finer details of the Capital
Cost are not worked out
• Broad assumptions are
taken
• Limited survey or study
efforts
• Limited attention to
challenges in the Project
Execution
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 Skills required … 1/3

• Market Analysis:
– Secondary Research
– Primary Research
– Data Analysis
– Discussions
– Strategy Formulation

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 Skills required … 2/3

• Technical Analysis:
– Alternative Technologies
– Product / Service
Delivery Method
– Strategic Cost Reduction
/ Least cost to produce
– Value for money concept
– Managing Entry barriers

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 Skills required … 3/3

• Financial Analysis:
– Snap financials – Cost of
core activity (single unit
level)
– Economies/Efficiency of
the scale – minimum
economic size
– Potential to repeat with
precision and speed
– Scalability
– Variable Costs,
Contribution & Fixed costs

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 Preparing the Project Profile ..1/2

1. Decide the Idea

2. Work out snap financials:
(a) Variable costs
(b) Sale Price
(c) Contribution
(d) Fixed costs
(e) Cost of the Project
3. Understand nitty-gritty of
production process /
service delivery [end to
end]

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 Preparing the Project Profile..2/2

4. Check the market:

a. Target market segment
b. Its current/projected
size
c. Existing/future players
5. SWOT Analysis
6. Key challenges
7. Success factors

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 Evaluating a Business Opportunity…1/4

• What is your product?

– What is its UOM
• Do you have more than one
variant of the product?
– List all variants
• What is the price per UOM for
each variant?
– Your selling price and not MRP.
Don’t include taxes.
• What is variable cost per UOM
– Include RM, PM, Consumables,
Electricity, Labour, Commission,
Freight etc.

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 Evaluating a Business Opportunity…2/4

• What is the contribution per

UOM?
– C = SP-VC
• What quantity shall you
produce or deal in?
– Data for each product variant
• Imagine approximate Cost of
Project
– Land, Building, Machinery,
Furniture, Vehicles, Other assets
• Imagine your overheads
– Salary, Rent, Electricity, Travel,
Phone, Interest

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 Evaluating a Business Opportunity…3/4

• Calculate your net profit

• If you are happy with the net
profit:
– Recheck each number. Is it fair,
realistic & achievable?
– If yes, go chase the dream. Else
revise the doubtful numbers and
recheck.

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 Evaluating a Business Opportunity…4/4

• If you are not happy with the

net profit:
– Recheck each number and see if
you can you do better anywhere.
– If yes, revise that number and
relook.
– If can’t do better anywhere, drop
the project.
• Do you want to live with small
profit all your life?
– If the project is not scalable, drop
it right away.

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 Project Profile
The Financial Analysis & revisions

1. Profit:
a. Contribution %,
b. Net Profit %,
c. How to improve profitability

2. Cost of Project:
a. Land + Building as % of Total COP,
b. Working Capital Margin as % of total COP

3. Breakeven point:
a. Its significance
b. Methods to improve BEP

4. Payback period:
a. Its significance

5. Scalability:
a. Significance of scalability /growth potential,
b. Minimum Economic Capacity

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 The Agenda

1. What is a Project?
2. What is a Profile?
3. The Skills required in Profile Preparation
4. The Ground work
5. Workshop on Project Financials
6. Financial Analysis & Revisions

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Shall we take a break?

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