1.
PROJECT IDENTIFICATION &
SELECTION
PAWAN MISHRA
B.Tech Food Technology(7TH SEMESTER)
B1917R10172024
ENTREPRENUERSHIP DEVELOPMENT ASSIGNMENT

2.
Project Identification & Selection
• Introduction-
An entrepreneur has an infinitely wide choice with respect to his
project in diffrent dimensions such as project/service, market,
technology, equipment, scale of production, time phasing and location.
Hence the identification of investment oppurtunities (projects) calls for
understanding the environment in which one operates, sensitivity to
emerging investment possibilities, imaginative. Analysis of a variety of
factors and also chances of luck. This chapter is concerned with the
scouting and screening of project ideas, steps in the project
identification process by an existing company.

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Project Ideas-
it is the first and the foremost task of an entrepreneur to find out
suitable business which is feasible and promising and which merit
further examination and appraisal. Therefore he has to first search for
a sound workable buisness idea and give a practical shape to his idea.
While doing so the entrepreneur has to tackle the various problems
from time to time to achieve the ultimate success. Since the good
project ideas are elusive, a variety of sources should be tapped to
ultimate the generation of project ideas.

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Sources of project ideas-
 Project ideas could originate from the various sources viz.,
 Success story of friend/relatives.
 Experience of others in manufacture/sale of product.
 Examining the inputs and outputs of industries.
 Plan outlays and government guidelines.
 Suggestions of financial institutions and developmental agencies.
 Investigations of local materials and resources.
 Economic and social trend of the of the economy.
 New technological developments.
 Project profiles and industrial potential surveys.
 Visits to trade fairs.
 Unfulfilled psychological needs.
 Possibility of reviving sick units.

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Purpose and need for project identification-
The entire economic management planning is based on two fundamental
assumptions i.e. a) limited means and b) unlimited ends. A planner has to select
few important needs to cut it into size of his/her means. This may be treated as
fixing the priority is called identification of project. It hleps in elimination
process. Identification and selection of a project is a scientific process. This
process is based on certain essential conditions. It may be differ project to
project. The essential condition which should be taken into consideration for
identification and selection of production projects are as follows:
i) Project should be in conformity with the economic needs of the area.
ii) It should take into account the depriving factors which might have adverse
impact.
iii) The input-output ratio should be optimum.

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iv) The purpose of the project is to increase the production and employment of
the area.
thus, the above said conditions will differ due to resources availability, use
pattern and other relevant conditions of the area. Besides that, project should
also consider certain national priorities.
Steps in project identification-
project ideas are like other ideas which don’t take concrete shape
immidiatly. There are several stages of making propositions their considerations
and scrutiny for their soundness.
This project identification may be broadly divided into four stages, viz.,
A. Conceptual stage- where project ideas were generated
B. Screening stage- at which unviable ideas were eliminated

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C. Identification stage- at which viable projects are selected
D. Pre-feasibility stage- at which pre-feasibility studies are taking up.
Screening of project ideas-
After gathering the project ideas from the various sources as aforesaid, it is
essential to eliminate ideas which prima facie are not promising. It can be done
with the help of testing the following conditions of the propositions :
a. Compatibility with the promoter
b. Consistency with governmental priorities
c. Availability of inputs
d. Adequacy of market
e. Reasonableness of cost
f. Acceptability of risk level etc.

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Methodology of project identification-
to make a viable project it should be liked with the actual circumstances
prevailing in the area. Without knowing the basic information relating to socio-
economic conditions of the area, it is difficult to draw a suitable project for the
area. Development needs and potentials vary from area to area. For specific area,
before drawing a project, local conditions and other relevant factors must be take
into consideration. Most of the project fail because they were not based o local
problems. Assumptions based on macro level information may fail to watch at
macro level. Survey is the technique to unearth the hidden information which are
vital to identify the basic requisites of project i.e. need, resources and priorities. It
also helps in making right choice between different alternatives. Secondly it
presents a lot of information to be used as a benchmark information which will
help at the later stage for evaluation of the project.

9.
Project identification for an company-
Existing companies essentially large scale company form of organisations
are continuously developing various projects for their developmental purposes.
While doing so, the existing company has to make a more intensive analysis of its
resources and environmental and conceive of seeks to identify new project
opportunities should undertake a “SWOT” analysis. It is a acronym law of
strengths and weakness and opportunities and threats .this analysis evaluates all
these four characteristics of the existing company.
A brief summary of the points required for SWOT analysis is given below:
 Availability of iternal financial reasos for new projects after taking into account
the need for replacement expenditure, increase in working capital, repayment
of borrowings and dividend payments.
 Capability of raising external financial resources.

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 Availability of production facilities.
 technological capabilities of the company.
 Availability of infrastructural facilities.
 Cost structure and profit margins of the company.
 Distribution network of the company.
 Market share of the company.
 Capability of top management of the company.
 Likely changes in the governmental policies.
 Existence and severity of competition.
 Changes in the customers preferences, tastes etc.
By considering the above said information keenly the SWOT analysis helps
to provide the basis for the corporate strategy to be followed and indicate the
major areas of thrust. These may include expansion of the capacity of existing
product range, vertical integration, diversification in related areas and mergers.

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Summary-
Thus this lesson has explained you the significance and mode of
conceiving a good project idea. It also explains to you the various sources from
which the project ideas can be generated and how one should select the project
idea.
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