An investment project is a collection of coordinated and interdependent endeavors that aim to achieve a certain objective. Generally, a term and a budget are recognized for accomplishing this objective, making it very similar to a plan or program. In contrast, an investment is a capital deposit to obtain a future reward. This means that an instant profit is relegated to a far possibility while investing.
Therefore, an investment project is a suggestion for action that is feasible to obtain profits based on the usage of available resources. These undesirable advantages can be obtained in the short, medium, or long term. Therefore, every investment project requires the gathering and evaluating of factors that directly affect the supply and demand for a product. This is known as a market study, defining the market segment the project will target and the projected quantity of product to be promoted.
In summary, the investment project is a plan to allocate capital, material, human and technical resources. Its purpose is to create a financial return at a certain time. This will necessitate the mobilization of long-term resources. The phases of an investment project include the identification of a concept, the market study, the decision to invest, the administration, and the evaluation of the project’s results. Typically, many professionals evaluate the project itself.
Types Of Study For Investment Project
Market Study
It comprises numerous stages, the first of which is the precise specification of the product or service that will be developed and sold. Then, after determining the nature of the project, it is vital to determine whether there is sufficient demand to justify its implementation.
Alternatively, if it is a revolution, the issue is whether it will positively affect the segment of society it targets. The investigation of possible rivals and their offerings, including their success, pricing, sales history, and industry presence, will follow this section.
Technical Study
It is devoted to determining the way and the options with which the production will be carried out, going through the physical space that will be designated to that end, the best way to obtain the raw material, the machinery, the methods of work, and the ideal profile of the employees who will be assigned to this stage.
Financial Study
Given that, to decide on the aspects mentioned above, evaluating the inevitable economic impact is vital, we must pay attention to the budget. This study is responsible for examining the project’s viability and determining whether it can be sustained or whether a strategy revision is necessary to avoid significant losses.
Organization Study
As the name suggests, it entails determining the best way to launch the organization, i.e., finding the appropriate means to implement all the assessed and accepted concepts.
The Bottom Line:
In a team, there is a clear distinction between the creative and directing departments, and your communication must be clear and productive to meet everyone’s needs. The most frequent occurrence is that the final product differs significantly from its initial conception, based on the four studies’ results. As a result, it is necessary to keep the creatives’ spirit alive while requesting modifications that do their ideas profitable and secure projects.
