Mastering the Phases and Structure of Investment Projects
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Investment Projects
Definition
Production, within the meaning of efficient production.
Objective
To gather evidence to enable rational decisions.
Project Plan
A plan to materialize or specify an alternative business.
Capital Investment
The use of capital investment in productive business.
Investment Phases
Phase I: Pre-Investment
The purpose of this phase is to discard a project during the study stages before incurring higher than anticipated costs.
The process begins with the mental concept or identification of ideas before definitive studies.
Stages of Pre-Investment
- Profile Study: Used to estimate the viability of the investment. Elements include market analysis, project engineering, investments, costs, and revenues.
- Pre-Feasibility Study: Covers more details on the technical and economic-financial aspects.
- Feasibility Study: Used to make optimal decisions for the project.
Phase II: Investment
This stage aims to integrate, harmonize, and update the economic and financial technicalities within the definitive study.
Preparations
Definitive studies are conducted once investors decide to implement the project.
Task Planning and Execution
Involves physical and administrative tasks.
Commissioning
Initial testing of equipment, facilities, and related systems.
Phase III: Operation
The purpose is to apply an appropriate allocation of resources for the administration and business organization of the project.
Tasks involve physical and economic activities, ensuring the normal operation of the investment project. This is the productive stage of the product or service.
Structure of an Investment Project
Location
Where should the product be manufactured or the service located? Determining the most appropriate site.
Size
Determination of the plant capacity and the overall production capacity of the project.
Technology Systems
Design procedures and arrangements for the production of goods or services.
Market
The area in which the forces of supply and demand converge and relate.
Social Assessment
It is important to assess whether a business profitable for a private party is also profitable for the community, and vice versa.
Business Evaluation
Evaluation of monetary information to assess profitability.
Costs and Revenues
Operational costs after commissioning are derived from pre-engineering studies, size analysis, and market assessment.
Organization and Administration
Determining the optimal alternative, evaluation, and control system for business administration.