• Analyse the Performace of Existing
Industries
• Examine the Inputs and Outputs of
Various Industries
• Review Imports and Exports
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Generation of Ideas
Monitoring the environment
Corporate appraisal
Scouting for Project Ideas
Preliminary Screening
Project rating index
Sources of positive not present value
On being an entrepreneur
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Availability of Inputs
Adequacy of Market
Reasonableness of cost
Acceptability of risk level
Compatibility with the Promoter
Consistency with Government Priorities
Availability of Inputs
Adquacy of the Market
Corporate Appraisal
A realistic appraisal of corporate
strengths and weakness is essential
for
identifying
investment
opportunities which can be profitably
exploited. The broad areas of
corporate
appraisal
and
the
important aspects to be considered
under them are as follows:
Marketing & Distribution
a. Market image
b. Product Line
c. Market Share
d. Distribution Network
e. Customer Loyalty
f. Marketing & Distribution costs
Production & Operations
• Condition & capacity of plant &
machinery
• Availability of raw materials, subassemblies, & power
• Degree of vertical
• Locational advantage
• Cost structure
Production & Operations
(contd.)
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Availability of Inputs
Adequacy of Market
Reasonableness of Cost
Acceptability of Risk Level
Compatibility with the Promoter
• The idea must be compatible with the
interest, personality, and resources of the
enterpreneur. According to Murphy, a real
opportunity has three characteristics:
• (i) It fits the personaility of the
entrepreneur—it squares with his abilities,
training, and proclivities.
• (ii) It is accessible to him.
• (iii) It offers him the prospect of rapid
growth and high return on invested capital.
Consistency with Governmental
Priorities
• Is the project consistent with national
goals and priorities?
• Are there any environmental effects
countrary to governmental regulations?
• Can the foreign exchange requirements of
the project be easily accommodated?
• Will there be any difficulty in obtaining the
license for the project?
Availability of Inputs
• Are the capital requirements of the project within
manageable limits?
• Can the technical know-how required for the
project be obtained?
• Are the raw materials required for the project
available domestically at a reasonable cost? If
the raw materials have to be imported, will there
be problems?
• Is the power supply for the project reasonably
obtainable from external sources and captive
power sources?
Adequacy of the Market
• The size of the present market must offer
the prospect of adequate sales volume.
Further, there should be a potential for
growth and a reasonable return on
investment. To judge the adequace of the
market the following factors have to be
examined.