Everyone nowadays is careful in

investing money especially when a

project is a large scale one. In order to
minimize risk, an investor should ascertain
economic viability of a project through a
thorough study. This is the main reason
why we conduct a project study and
sometimes called as a feasibility study

Project Summary (Executive Summary)

Market Study (Marketing Aspect)
Technical Feasibility (Technical Aspect)
Financial Feasibility (Financial Aspect)
Socio-economic Study (Socio-economic
aspect)
Organization and Management Study
(Management Aspect)

The executive summary gives an

overview of the facts, results, conclusions
and recommendations of a document
or a study.
This in detail shows the highlights,
descriptive
definition,
long-range
objectives, feasibility criteria, history and
basic conclusions of the project under
study

A Name of Enterprise
B Location
C Descriptive Definition of the Project
D Projects Long-Range Objectives
E Feasibility Criteria
F Highlights of the Project
G Major Assumptions

Briefly explains the reason for such

choice of name

Pinpoint the location of the industry/site

and gives the main reason for choosing
them. The factors which affect the
choice of the location are sources of raw
materials, labor and utilities; proximity to
the market; nature of available
transportation; cost of land and
buildings.

Is the project in line with governmentencouraged undertaking?

Is the project a result of encouraging
findings in certain regions or sectors of
the community?
What are the projects potential worth?

What does the project expect to

achieve in 10 years in terms of size,
capacity, volume, worth, role in industry
and economy?

What are the most important guidelines

used to judge the feasibility of the
project? Was it profitability? Did it
seriously consider the impact on the
socio-economic environment?

History How did the project come

about?
Project timetable and status How long
will it take before the project goes into
operation? What stage is the project
presently in?
Nature of the industry Briefly describe
the industry, its product lines, the
demand-supply
situation,
growth
patterns, problems and potentials and
role in the economy

Mode of Financing Briefly discuss the

sources of funds, the financing terms,
and the reasons for choosing such
sources and terms
Investment costs How much funds are
necessary
to
make
the
project
operational? How are these funds
allocated?

Major Assumptions Discusses in brief the

results of the market feasibility, technical
feasibility, financial feasibility, socioeconomic feasibility and management
feasibility

Lifeblood of virtually every project study.

While profitability is generally the focal
point of a project study, the question of
demand is the most basic issue.

The size, nature, and growth of total

demand for the product
The description and price of the product
to be sold
The supply situation and the nature of
competition
The different factors affecting the market
of the product
The appropriate marketing program for
the product

Nature of the product popular and

scientific (if any) and reasons for
choosing it
Properties of the product physical,
chemical,
mechanical,
and/or
agronomic
Uses of the product as a finished
commodity, as an input to other
production activities

Analysis of demand is part of the

important task of identifying the needs of
consumers and determining whether
they are willing and have the capability
to pay for the products
Demand analysis involves analyzing both
the macroeconomic variables (data
that adds up the activities of consumers,
and large sectors) and microeconomic
variables (level of the individual firm)

The size, nature and growth of total

demand for the product must be
determined in the following manner:
Who and where is the market? (conduct

market segmentation)
What is the total domestic demand?
Is there a foreign market?
What is the demand growth pattern?

The supply situation may be determined

as follows:
Who and where are the direct competitors?
What is the historical domestic supply?
What is the historical supply of the foreign

market?

Compare the demand and supply

trends
Determine the amount of demand
unsatisfied, especially in the projection
Determine the share of the market

Determine the selling prices of all similar

and substitute products
Look into the history of these prices and
establish the factors that mostly influence
their fluctuations over time
Determine the responsiveness of demand
to price changes
Establish the products selling price, taking
into consideration all of the above, the
market segment targeted, and the
operating costs and expenses

Determine the types of marketing

program prevalent in the industry and
gauge their respective effective
Draw up a marketing plan that identifies
and defines the target market, the selling
price, the packaging of the product, the
distribution network, the sales management mechanism and advertising and
promotions program

Design the marketing organization which

will implement the plan and determine
the costs involved.

Selecting
Determining
Providing estimates
Listing
down in detail estimated
production and over-head cost
Taking into consideration any major
technical development

The products describes the product to

be manufactured. This description
specifies
the
products
physical,
mechanical, and chemical properties
and identifies their various uses
The process the selected process must
be described simply and clearly with the
aid of charts/diagrams. The alternatives
and the chosen process must be
mentioned.

The machinery/equipment used the

machinery and equipment required
must be identified and individually listed
according to type and use. The
specifications, capacities and costs must
be described in detail.
A balancing of capacities must be
presented to show that the machinery
and equipment are capable of
producing the desired maximum output.

The raw materials and supplies the

required materials and supplies must be
listed and the basis for their selection
must be presented. The specifications
and descriptions of their physical,
mechanical and chemical properties
must also be given. Current and
prospective costs of raw materials, the
availability and continuity of supply, and
the current prospective source should
also be included.

The utilities the amount, cost, and

sources of electricity, fuel, water, and
other materials should be described.
Alternative sources of these utilities and
the feasibility of their use must also be
described

MAJOR ASSUMPTIONS
In the formulation of financial projection,

assumptions play a major role because they

serve as the foundation for estimating the
future expenditures, expenses and revenues
of the project as accurately as possible.
Such assumptions should be based on wellconsidered, realistic and workable facts.

In formulating assumptions, one must

consider the following:
Existing business practices in the industry

where the project belongs

Previously made feasibility studies directly
related to the project that may contribute to
additional factors to be considered
Governmental regulations and incentives
directly or indirectly affect the project

TOTAL PROJECTED COST

The second step in the preparation of the

financial aspect of a project study is an

estimation of the projects total cost or initial
asset requirement

SOURCES OF FINANCING
Alternative

sources of financing to be
considered should be listed
The sources selected or proposed for both
long-term and short-term financing are
determined as a function of maximum
profitability

 The status of financing from each source is

stated by relating it to actual releases

already
made,
applications
already
approved,
application
pending
and
applications still to be made

PREPARATION OF FINANCIAL STATEMENT

Presents and orderly and understandable

financial statement of the cash budget, the

operating performance, and the financial
condition of a project

A project, to be worthy of financing,

should be geared toward not only profit
generation
but
also
social
and
economic benefits

The socio-economic evaluation would

explain how it would affect:
Employment and income
Taxes
Supply
Demand

After setting the objectives and the ways

and means of attaining them, the overall
implementation plan is discussed in the
organization and management of the
study. Described here are:
Basic

considerations
in
organization
Form of ownership
Organizational chart
Officers and key personnel
Project schedule

forming

the

Basic Considerations the purpose of

the project must be restated. It would be
possible to ascertain the important
functions the project would require to
operate properly. These functions may
then be described in detail and serve as
the
foundation
of
the
projects
organizational chart. Finally, the general
qualifications for the various functions
must be clearly defined.

Forms of ownership here, the form of

ownership under which the project will
materialize is defined. The choice may
be limited to the following:
Single proprietorship
Partnership (general or limited)

Cooperative organization
Corporation