Investment phase of the project. Economic efficiency of the investment project

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Investment phase of the project - its implementation and completion. Accompanied by a large amount of consulting and engineering work, which are an integral part of management. Such a phase of the project is a set of certain stages. Allocate definition, legislative, financial and organizational components.

General information

The investment phase of the project deals with creation. Within its framework, the facility is commissioned and prepared for further operation. But for this it is necessary to solve such questions:

1. Establish the legal, financial and organizational basis for the existence of the project.
2. Purchase land.
3. Purchase and obtain or create the desired technologies.
4. Perform all necessary research, research and expert development.
5. Take care of technological documentation.
6. Design, manufacture and test product samples.
7. Conclude contracts, including those for participation in tenders.
8. To carry out constructionwork.
9. Purchase, manufacture and install technological and other equipment.
10. Develop and create production tooling and special tools.
11. Perform prelaunch promotion.
12. To form the administrative apparatus of the organization.
13. Recruit and train staff.
14. Commission and launch the plant.

As you can see, this phase of the project is hard and long work.

What details should you always keep in mind?

Considering the concept of "investment project", it should be noted that absolutely all the important points in the above list would not fit. In addition to them, it should be mentioned about the presence of:

• The organizational base necessary for the implementation of the project.
• Get technology. Particular attention is paid to the overall engineering design.
• Construction, installation and commissioning.
• Must have detailed engineering design and contracting, including bidding, negotiation and cost estimates.
• Pre-production supply should include moments of supply.
• Preparatory work is required to select the location of the company.
• You should take care of a wide range of information about all possible costs.

But the investment phase of the project is not limited to this either.

Determining the cost

WhenAs soon as the price of the project is being considered and determined, it is very important to pay attention to various proposals for the right groups of goods and services. This applies to materials, equipment, components and similar items. It is advisable to choose from a sufficiently large group of external and internal suppliers who can be judged as reliable partners with good discipline.

Negotiating and contracting, when the desired result is achieved, allows you to reinforce the agreements reached with legal obligations that arise from the object of attention. This may be the acquisition of technology, the construction or reconstruction of buildings, financing, the purchase and installation of machinery and equipment. In practice, this is expressed in the form of contracts between the entrepreneur / investor with suppliers of raw materials, consultants, financial institutions, architects and other persons performing the necessary work.

About construction and personnel

Alternatively, this can also mean the reconstruction or creation of a new object. It does not change the essence of the matter. Initially, it is necessary to prepare the location of the future object. Then the installation and installation of the required equipment is carried out. To avoid unpleasant surprises, they are accompanied by diagrams, instructions and work programs.

The costs of the investment project are not limited to this alone. The start of recruitment and training of personnel should coincide in time with construction. It should be noted that this can sometimes be decisive for effectivestart-up and productivity growth. The implementation of the previously calculated production, promotion and supply of created products falls on the shoulders of the recruited personnel.

Starting and control

The investment phase of the project ends at the start of its work. Launch is usually a short step, but this does not diminish its technical importance in implementation. After all, it is he who is the most important link that connects construction and operations.

When success is achieved at this point, we can talk about the effectiveness of planning and project implementation. Without it, it's hard to enjoy high performance.

But just getting started is half the battle. To track performance and maintain overall profitability, you need to compare forecasts with real data. Where necessary, corrective changes should be made to the extent possible to achieve the intended project objectives. Although it should be noted that control does not directly relate to the investment phase - it follows it.

Specific activity

As the old proverb says, "Winning loves preparation." Therefore, it is necessary to pay much attention to the development of an investment project to be carried out efficiently and reliably. And there is a problem here. Very often, an investor does not want to spend a lot of time and money on a detailed feasibility study. It's sometimesturns into failures of the implementation process and ultimately rises in price. The time spent studying strategic markets, technical, managerial, territorial, financial and organizational alternatives, as a rule, pays off many times over. Due to limited resources, their efficient use is relevant. Therefore, from the point of view of rationality, it is necessary to perform the following tasks:

1. If the volume of investments that will be directed to the implementation of the project has already been set, then it is necessary to try to achieve the maximum effect from their use.
2. Subject to agreement on the result that needs to be obtained, one should look for ways to minimize the costs of available investment resources.

And a little about efficiency

So the concept of "investment project" is considered. Now let's move on to the second part of the article and talk about what economic efficiency is. In short, this is a category that is used to reflect the compliance of the implemented project with the interests and goals of its participants. Successful implementation makes it possible to increase the country's gross domestic product, which is divided among a group of specified persons. These can be owners, shareholders, employees of enterprises, banks, budgets of various levels, and so on. The economic efficiency of an investment project is determined by revenues and costs. It should be noted that in this case a rather significant variety stands out.

Types of efficiency

How to evaluate an investment project? The examples below will answer this question:

1. Efficiency in general. This approach involves working from a commercial and public perspective. Moreover, in both cases, it is always necessary to focus on the point of view of the participant who is engaged in the implementation with the involvement of his own funds. At the same time, the goals of finding sources of funding and determining the attractiveness of the topic under development for potential partners are pursued. Perhaps someone will be attracted by the public (socio-economic) and commercial result.
2. Efficiency of participation in the project. Enterprises, its shareholders, leasing companies, banks can join. Each representative of the listed groups independently decides whether he should take part in the project based on the benefits received and the payback period.

A little more about efficiency

It often happens that a project to some extent affects the interests of structures of a higher order, such as a region, an industry, and the like. Their peculiarity is that they can have a very significant impact on the efficiency of project implementation. The social significance of something should not be overlooked, so you can work out an option with support from the local, regional or federal budgets. All this allows to increase its effectiveness from the investor's point of view.

It should be noted that the presenceseveral participants, the mismatch of their interests, different attitudes towards priority often affect the result. Let's consider a small example. The investment project is implemented by the enterprise with the attraction of borrowed funds. It is ready to take even risks in order to obtain greater profits. Whereas the lender is interested in having his funds returned to him with an agreed percentage.