What is the business case for the project?

Before starting any project, it is necessary to calculate its business case. It shows that the chosen methods of production, the necessary equipment, production areas and other factors have an economic justification. It is important to determine whether their use will be cost-effective.

Usually, the business case for a project includes some technical calculations. It has a certain structure. It includes, first of all, general provisions or criteria. This is the name of the project, its goals and organizers. This includes the description of the products that are expected to be produced, the market, the technology that will be used, the necessary equipment, production facilities and locations. Also, the terms of execution and the approximate economic indicators that are expected to be obtained are described. All these data are given in the form of a brief overview and familiarization with the project.

Further, the economic rationale includes a more comprehensive market survey for the sale of products. Here there is an assessment of the market, its condition, the availability of identical products that will compete with the products. Also, the product itself and its advantages are described, that is, its competitiveness in this market is assessed. More details focus on the special qualities of the product, its technological characteristics. When assessing the market, take into account the demand for this product, fluctuations in the cost of similar products and pricing.

The next item, which has an economic justification, is a description of the technological equipment that is intended to be used in the project. Here the necessary technical resources and their quantity are described in more detail. Attention is focused on the specifics of production, on which the choice of equipment depends. Also possible suppliers are considered with which it is supposed to work. Much attention is paid to production technology.

Then follows the description of the necessary production areas. Here they pay more attention to the territories and their features. Also consider and describe the necessary infrastructure and engineering communications. Important also are the climatic conditions and, if necessary, the availability of geological developments.

The rationale for the economic efficiency of the project necessarily includes, as the main point, the production program itself and its scale. To calculate the possible indicators that can be obtained as a result of the project, it is necessary to know its capacity.

Naturally, the project includes the need to purchase and supply raw materials and materials. Be sure to enter their list, the approximate price level and methods of transportation. Volumes of supplies must be calculated for several years ahead. A scheme for the delivery of raw materials to the place of production is also provided.

Important is the personnel necessary for the implementation of the project and the production process, as well as their training. Then follows the project development schedule. Do not forget about compliance with environmental standards and environmental protection. Communication with the public and authorities is also important.

In conclusion, the calculations of costs and investment are indicated. This includes all the funds that you need to spend on the purchase of materials, equipment, rental of production space, labor, advertising, taxes, insurance and other possible costs.

The economic justification of the project must necessarily contain sources of financing for the project, its terms and schedule. Once such a detailed plan has been drawn up, it is possible to proceed to its immediate implementation if it has a positive economic evaluation.