We explain what an investment project is, its relationship with planning, investment and its stages. Also, what types are there.
What is an investment project?
An investment project is a detailed plan of activities aimed at future economic action, that is, a possible investment of some kind. It is a common type of document in the business Administration and the management of projects, which arises from the need for a public or private economic actor (say, a business) to increase the performance of your capitals.
The investments that this type of Projects contemplated do not necessarily have organized objectives and trajectories, but rather they intend to increase the financial resources available, that is, they are committed to cost effectiveness.
In that sense, the planning is fundamental in its elaboration, since it allows organizations to maximize or preserve their resources, through different strategies investment opportunities, many of which involve long-term capital immobilization.
Since they involve the mobilization of resources, investment projects usually undergo evaluation processes that determine their suitability: their cost effectiveness, your margin of risk and other possible aspects, such as the environmental and legal and administrative aspects. The evaluation of projects, thus, can occur through very different tools and from very different points of view.
Types of investment projects
Investment projects can be classified in many ways, either by the economic sector to which they referprimary, secondary, tertiary, quaternary), by the area of influence that would have to be carried out (national, provincial, district, etc.), or by the type of financial elements that involve: goods (tangible) or services (intangibles).
Ultimately, the ranking of projects will depend on the concerns of the organization or the aspects that its evaluators consider most important. It is possible, for example, to classify them as profitable and unprofitable, according to what the organization is willing to invest and the return it wants to obtain from the project.
Stages of an investment project
Typically, an investment project goes through the following stages:
- Pre-feasibility. Project formulation and determination phase, which includes setting the goals general and specific, and gather the information enough to submit the project to a prior evaluation. It is the stage of research and documentation, if you will.
- Design. Once the general investment plan is in place, a detailed design is drawn up to carry it out. In other words, a second planning stage, but in much greater detail, in which the concrete plan for each of the activities that the investment project involves will be drawn up. At the end of this stage there will surely be new controls and evaluations to guarantee that the design corresponds to what has been established.
- Operation and commissioning. As its name implies, it is the stage in which the team in charge of the project carries it out. This stage can be long or short, depending on the case, and can involve different mechanisms of feedback or feedback of information that will be useful in the next stage.
- Evaluation or control. Whether or not the useful life of the project has ended, the normal thing is that this cycle closes with an evaluation stage, in which the information collected during the operation itself is used to compare the results obtained with the results initially proposed, and thus be able to take decisions relevant. In general, this stage will seek to answer two questions:
- Were the initially proposed objectives achieved?
- How can the project design be improved for future experiences?