Overview of Project Report Services
Any business, be it a large corporate house or an MSME, needs a roadmap for its goals to be successful. One of the key reasons why a business ends up failing is a lack of a clear vision of its operations, technical feasibility and financial model. These reasons also often result in unsuccessful funding rounds, rejection of bank loan applications and poor efficiency. However, with a proper guideboard, all of these issues can be easily dodged by a business. From helping a new business define its operational strategy to obtaining debt or equity, such a roadmap in the form of a Project Report has diverse functions. Thus, it is indispensable for any business to get its project report drafted in a careful and robust manner so that it is visually and technically accurate and successfully describes the company’s operational strategy and financial appraisal.
What is a Project Report?
A Project Report is a detailed analysis of a business that comprises its operational plan and financial forecasting. It also lays down the vision and mission of the business, along with its technical viability in terms of the manufacturing process, plant and machinery involved, location and scale of operations, etc.
For successfully setting up a new business venture or obtaining a bank loan, it is of utmost importance that a business has a detailed plan that lays down its structural and operational outline. A Project Report also helps upcoming entrepreneurs in developing a pathway for their new venture, attracting investors, and serving as a guarantee to banks about the feasibility of the business.
Kinds of Project Report
Project report serves multiple functions, from helping the business obtain investment to serving as an internal operational bible. Here are some of the different kinds of project reports that a business may need:
Project Report for a Bank Loan
A business, especially small-scale businesses, may require loans from a banking institution right from its idea stage to kick-start its operations. A comprehensive project report for a bank loan can help the business successfully convince the lending institution about its sustainability and profitability. Since a business project report provides a detailed assessment of the machinery and costing of the units involved, it becomes easier for banks to assess how the business plans to utilise the loan. It also enables the bank to identify whether the business will be profitable enough to repay the loan.
Project Report for Investors
Similar to a Project Report for bank loans, a business can also use a project report to attract potential investors at its bootstrapping stage. An investor seeks important details regards to the business, including operational aspects and technical elements such as the scale of operations, workforce and utilisation of capital infused. A well-drafted project report serves as a concise plan of such information to the investors, enabling them to decide whether they wish to invest in the idea or not.
Project Report for Licensing/Registration
Many State and Central Licensing Authorities have a mandatory pre-requirement of a business project report along with other documents while granting a business license. Each business comes with different operational ideas, financial forecasts and technical plans. A project report helps such authorities in identifying the feasibility of the business before granting it any license or registration.
Project Report for Internal Operations
A business can also use its project report as an internal step-by-step guide to its objectives, vision and operational strategy. Such a project report can help the company’s existing and new workforce understand the business goals.
Benefits of a Project Report
Apart from serving as a roadmap for the business, a project report offers numerous other benefits and functions. Some of the advantages of a project report are as follows:
Attract Better investments
A good project report can help any stakeholder of the business to easily understand the details of a business. Therefore, it makes it easier for lenders and investors to make the right investment decisions in a business by assessing its viability and revenue generation abilities.
Assess Technical Practicality of a Business
There are numerous technical aspects involved in a business, from the technology to machinery and equipment involved, from labour requirements to infrastructural requirements, from raw material involved to electricity and water supply needed, and from the environmental impact of the business to its commercial viability. A project report helps in defining all such aspects of the business in advance, even before the business has commenced.
Assess Financial Implications of the Business
A project report also helps in defining the commercial practicality of a business, including the projected cash flow, assets and liability, capital infusion plan, and working capital requirements of the business. With such information, the investors, promoters and other stakeholders of the business can identify the financial plan the business will follow and even use the project report as a financial guide for the business.
Key Contents of a Project Report
While the contents and structure of a business project report differ from industry to industry and business to business, there are some key details that every project report must have. These key contents of a project report are:
The first and foremost content of a project report is a detailed introduction of the business, laying down its executive summary, mission and vision. Such an overview helps the business owner in introducing the business to the appropriate reader of the project report.
A detailed project report must also include a market analysis to identify the opportunities, strengths, threats and weaknesses of the segment. It helps in identifying whether the industry to which the business belongs is booming or not.
A business project report must also lay down a comprehensive description of the project/business, including details such as:
- Manufacturing process
- Machinery and equipment required
- Raw material and channels of obtaining the same
- Kinds of products/services of the business
- Electricity and water connections requirements of the business
- Labour requirements
- The technology employed by the business
- Costing and working capital requirements of the business
A detailed project report also lays down the licenses, approvals and registrations required by the business to operate as per the applicable laws, regulations and guidelines. It includes approvals needed for the environmental impact the business will cause, industry-based licenses, tax registration, etc. Such information differs from business to business and, therefore, requires an evaluation from business project report experts.
One of the most important contents of a project report is the financial projection regarding the profit and loss, cash flow and balance sheet of the business. Banks and investors look for such information to evaluate the profitability of the business since it helps them identify the estimated costs involved, gross/net profit, cash flow, projected revenue and other key financial information of the business.