PROJECT IDENTIFICATION AND SELECTION (PIS)

Entrepreneur, entrepreneurship and enterprise go hand in hand. Setting up an enterprise starts

with the process of project selection. The selection of right project is very important as it is
rightly said that “Well begun is half done.”

PROJECT

The very foundation of an enterprise is the project. Hence, the success or failure of an enterprise
largely depends upon the project. In simple words, a project is an idea or a plan that is
intended to be carried out.

A project has the following three basic features:

I. A Course Of Action

II. Specific Objectives, and

III. Definite Time Perspective

Every project has a starting point, an end point with specific objectives.

How do the entrepreneurs select a project?

There is a definite procedure of selecting a project. Basically, project selection consists of two
main steps

1. project identification
2. project selection

Project Identification and selection is a process to evaluate each project idea and select the
project with the highest priority.

1. Project Identification: The process of identifying an idea for developing into a project
is called Project Identification. This is a systematic process. Project Identification
process starts with the generation of a product idea. In order to select the most
promising project the entrepreneur needs to generate a few ideas about the possible
projects.

2. Project Selection: Project selection starts from where project identification ends.
Project selection is a careful study of each project idea in detail and choosing one of
them for further consideration and development.
 11.2 PROJECT SELECTION
Project selection starts from where project identification ends.after having some
project ideas these are analysed in the light of existing economic conditions the government
policy and so on. A tool generally used for this purpose what is called in the managerial jargon
swot analysis. The intending entrepreneur analyses his/her strengths and weakness as well as
opportunities/competitive advantages and threats/challenges offered by each of the project ideas.
On the basis of this analysis the most suitable idea is finally selected to convert it into an
enterprise. The process involved in selecting a project out of some projects is also described as
the “zeroing in process”

What follows from above analysis is that tere is a timeinterval involved in between project
identification and project selection. But in some cases,there may be almost no time gap between
the two an imaginary casecan illustrate it

Two friends nikhil and chinmoy were traveling from guwahati to delhi by northeast express.
Their train stopped at allahabad. Some teenagers with guava baskets croweded the compartment.
Almost every passenger purchased guava.so did nikhil and chinmoy also. They started eating
guava. Chinmoy told to nikhil; “the guavas are really delicious” nikhil nodded. They reached
delhi by evening and parted company. While chinomoy went to his home,nikkhil took bramputra
mail to allahabad. He contacted shopkeepers in allahabad who were selling guavas. He finalized
a business deal for them to send a packet of 1000 kgs of guavas daily to delhi, thus nikhil’s
business started from the third day when he was selling guavas in delhi.

Here ,one pertinent question for us is how did this idea make its headway into a business
opportunity for nikhil?. In its answer,what can we mention is that nikhil must have turned
questions in his mind like;

(i) who will buy his guavas?

(ii) What will be the size of the the packet and what will be its price?
(iii) How much will be the cost of per kg of guava?
Project identification and selection is half done in the process of establishing an enterprise.
The entrepreneur needs to analyse other related aspects also like raw material potential
market labour, capital location forms of ownership etc. it is necessary to mention that each of
these aspects has to be evaluated independently and in relation to each other.

This forms a continuous and “back and forth” process as shown in figure 11.1
 These interdependent aspects are separately discussed in the subsequent chapters later in the
book

In the process of establishing an enterprise next to project/product selection comes the

‘project formulation’ this is discussed ,in detail in the following chapter 12

11.4 LET US SUM UP

Project is a well evolved work plan designed to achieve specific objectives within a specified
period of time. The process of establishing an enterprise starts with project/product identification
is done by generating some project ideas. Each of these project ideas are then, evaluated with the
help of a tool called “SWOT” analysis. Thus the idea found most suitable on the basis of
“SWOT” analysis is finally selected to convert it into an enterprise.