What is an investment project?

There are different definitions of what it is an investment project, the most complete and accurate defines it as a plan to which capital and material inputs are assigned, human and technical in order to generate a benefit or economic performance to a certain term.

This implies answering certain questions such as:

What is going to be done? Why? With what? In what way? At what time? And for whom?

It arises as an alternative to the conception of an idea that seeks the solution of a problem or the way to take advantage of a business opportunity.

Organization of an investment project

It can be presented as a written document, made up of a series of studies that support a proposal for economic action where available resources will be mobilized, with certain profit-making purposes. This allows the entrepreneur to know if the idea is viable, it can be carried out and it will pay off.

It responds to a decision on the use of resources with the aim of improving or maintaining the production of goods or the provision of services.

It ranges from the intention to execute something, to the implementation of the action plans. An investment project It involves stages, ranging from the identification of a good idea, the evaluation of the project, the decision to invest, the administration of said investment and the management of the results.

Project evaluation:

It is a set of tools, which helps in the analysis of the possible performance and viability of an investment project. It will yield results that will facilitate decision making.

• Market study: This study gives the investor an idea of ​​the real risk of being accepted or not in the market. It allows to demonstrate the need for a product or service, considering the necessary elements of judgment. It makes known the possibility of providing a better product or service than others that are already offered in the market, it is also very useful already that indicates the quantity of goods or services that the community would be willing to acquire at what prices and through what means.

It helps to determine whether or not market conditions are an obstacle to carry out the project and this information should serve as support in decision making.

• Technical analysis: It is aimed at determining the form and resources to carry out production, considering any detail, from the physical space, options to get the raw material, the machinery, the working method and the profile of the human resource.
• Financial Analysis: The budget, established to reach a decision regarding each of the previous points, it is also necessary to evaluate the inevitable economic impact, the depreciation, the inflation, etc.

Through this study, the feasibility of the project is analyzed and it is decided whether to continue or whether to redesign the strategy to avoid losses.

Then there is nothing left but to make the pertinent decisions, make the investment, either looking for financing or mobilizing own or company capital and, as it is already underway, monitor the fulfillment of the goals economic.