An investment project is an action plan thought out in detail, during the implementation of which money is invested in a certain type of activity. The main goal is to generate income. Let's look into the details of the concept, the rules for choosing an investment project for investing our own resources in it. We will also consider the types and types of this investment option and the timing of reaching a net profit, that is, payback.
What is an investment project?
An investment project is some kind of measures aimed at achieving the desired financial result. To do this, it is necessary to organize constant injections from investors.
The benefits of such projects are not only for their owners and investors. After all, investing in the development of a certain event and, in fact, the creation of a certain product or service affects changes in different areas.
The essence of the investment project is to develop the following areas:
education of personnel – in some cases.
production. The investor's funds are attracted for the improvement and construction of new or expansion of existing areas for production purposes. The key task is to take profit from the sale of manufactured products. This type is used in various sectors of the economy;
scientific and technical. Investments affect the development, production and further testing of devices, technologies, processes. Such projects can be quite long-term, so they are most often long-term;
commercial. In this case, the acquisition is carried out for the purpose of subsequent resale of movable and immovable property. The sale is carried out at a higher price, which becomes possible as a result of certain improvements in technical characteristics;
financial. These are economic projects in which securities are purchased and an investment portfolio is created from them. In the future, the same thing happens as in the previous paragraph – resale at a more favorable price for the holder of securities;
ecological. The objects of investments are nature protection zones. This view is also long-term;
social. Perhaps the most disinterested type of investment. The main goal is not to extract financial benefits, like the others, but to improve educational, sports, health, cultural and other non-profitable areas.
more than 3 years – long-term;
1-3 years - average;
up to 1 year - short-term.
a large investment project implies investments of more than $ 1 million. Direction – large enterprises that are able to saturate the market (local and external) with the necessary quantity of a specific product;
the average investment project involves raising funds in the amount of 100 thousand to 1 million dollars. Mainly such investments are attracted to modernize the production of a limited number of products;
small investments – up to 100 thousand dollars. They are necessary for the growth of output volumes. It is planned to use them for a short period.
All this works to create, improve, refine and eventually resell a certain product. The final goal is to get a financial reward. That is, the investment project is not limited to the acquisition of shares or contributions to certain financial organizations. It also requires careful market analysis, negotiations, risk hedging and many other actions.
Specifics of investment projects
Any investment fund is a risky investment. Even though a large complex of activities is being formed, the main purpose of which is to make a profit. Achieving results is not guaranteed, but a high profit is possible. That is why there are big risks in investment projects, and the first ones are divided into the following types of activities:
In risk-free projects, the chances of burning out are practically reduced to zero. At the same time, the likely earnings are often considered "abstract", because there is still a certain chance of losing investments, although it is very small.
A risky project, it is also called a "venture", is high risks, as well as sufficient chances of obtaining a large income. To protect capital, it is distributed between different spheres. This will help to save at least some of the funds. An important advantage that bribes investors, and they consciously take high risks, is big earnings. In the event that the portfolio is formed correctly, the amount that is lost will be covered by income from other projects.
Overview of types of investment projects
The specifics of the investment project mentioned above do not fully give an understanding of what types of deposits exist today, let's fill this gap. Investment projects can be:
In addition to types, there are also several types of investment projects. Let's consider them further.
What types of investment projects are there
Here it is necessary to consider the existing types of objects in which you can invest. These include economic investment projects and other vectors for attracting finance. The division takes place according to the purposes of attracting infusions, there are 5 of them:
The growth of production of a certain product.
Expansion of the product line.
Improving the quality of a certain product.
Optimization of expenses for the production of products, which will help reduce their cost.
Classification by duration of project existence:
There is a classification into types depending on the volume of injected funds, there are such:
According to the orientation, investment projects are also divided into several types. They are mostly commercial, that is, they pursue the goal of generating income. Social investment projects help to improve people's lives, environmental projects help to improve the relevant sphere. The rest belong to the "other" category.
Another classification depends on the position of the investor. There are state production organizations, coalition manufacturers and foreign investors.
The procedure for implementing the investment project: key steps
The project implementation is presented in the following stages:
Writing a business plan. During the implementation of this stage, market research, cost assessment and emerging risks are carried out. This is followed by marketing research and the collection of documents required to launch the project. If investments are already attracted at this stage, then they are attributed to the initial contribution.
Investing. Most of the depositors come at this stage. A contribution of a certain amount is made to the account of shares, bonds, acquisition of movable or immovable property. At this stage, the owner of the capital can no longer change his decision to launch the project, because this will entail significant financial losses.
Exploitation. Completion – receipt of dividends due to the depositor. The duration of this stage may be different, but the longer it is, the more income the investor will receive and will be able to significantly replenish his portfolio.
It is impossible to choose a project and not complete these steps if you want to make a profit from this event. Remember, the lack of proper analysis and definition of finances, not based on it, leads to their loss.
How much does an investment project pay off for
Investments in projects can be quite large, and their return sometimes takes several years. This parameter is very important when investors choose one or another direction. It is impossible to give an unambiguous answer to which types of investment projects will give a return faster, which ones will be slower. However, each depositor has the opportunity to make a preliminary calculation of this on their own.
In its simplest form, the payback period of any investment project is equal to the number of days that will pass from the moment deposits are made to their full return. When this point is passed, investments begin to work in a plus and bring a net profit.
Investment projects in HYIP: what is it
Investment projects in HYIP are platforms that are hidden under the image of an organization that solves certain problems. Investors are offered large percentages as a result of certain "activities". In fact, there is no manufacturing of products, expansion of production capacities and solutions to social problems – this is just a legend.
The essence of the HYIP project is the redistribution of funds that are invested later, between those who made investments earlier. To be more precise, the payment of the promised interest to them. However, even taking into account the risks that arise (sooner or later new people who want to bring money to such a project will end), earning on HYIP projects is a very real task.
The secret of success is to choose a HYPE that is as reliable as possible, but it is not easy to do this. The reason is that they all promise a large percentage and at the same time do not require any intervention from the depositor. The choice should always be made with a "cold" head and an understanding of the processes. However, it is also recommended to act in relation to other similar projects.
The selection of the project in which you want to invest, regardless of its type and type, should be approached carefully. Do not rush and never invest in one event, because if it goes through, you will lose everything. Diversify your finances, especially if you work with high-risk investments. Having studied useful materials, you will be able to invest your money very profitably and profitably.