PM 595 CP 1

PART 1:

Assume you are the project manager for a new business venture. This venture will require financing, but once completed, will generate revenue and, eventually, a profit over cost. For CP-1, you are to write a Project Proposal with enough detail to convince investors to finance your idea. This Project Proposal will require detailed cost and revenue estimates and a credible schedule to win investor support.

Select a venture of personal interest. Read the Proposal Requirements below to help you select a suitable idea. For example, select a venture where you can identify realistic cost and scheduling concerns. Opening a small retail storefront or a franchise is one example. Do NOT propose building a house, because investors typically already have financing before beginning such a project. When selecting your project, keep in mind the goal of CP-1 is to apply the techniques introduced during the course.

Focus on detailed cost estimating, scheduling, and project justification. Estimating includes specific assumptions made during the estimating process, as well as quantities, unit prices, hourly rates for tasks, and accumulated totals. Justification will include an NPV analysis of costs vs. projected detailed revenue streams over a five year period with cash inflows and outflows over the project life. Start-up and other costs, and revenue streams, should be derived from detailed project cost estimates and sales forecasts.

When you establish your financial data you must be reasonable. A product that is developed for a cost of $100,000 will rarely have a net income of $1,000,000 per year, but I have seen students dream that up in the past. The numbers should allow for the possibility of failure if things go wrong.

The CP-1 Project Proposal will be structured with the following sections:

• Cover Page including assignment, project title, course, and student contact information.
• Executive Summary/Proposal which “summarizes” the content from the entire document with quantifiable highlights such as overall cost, duration, revenue, etc., and makes the pitch to investors along with a request for the needed funds.
• Project Description which describes the project and the need for it.
• WBS with proper grouping, indenting, and coding for approximately 25 to 40 tasks.
• Cost Estimate for each task. Capital cost estimates should include building, franchise fees, equipment, etc., if required for your project.
• Advanced Cost Estimating Technique which describes the use of an advanced technique such as three-point or contingency estimating and an example of its use in your project.
• Cost Assumptions including a list of assumptions made when deriving your estimates.
• Financial Analysis including NPV calculations.
• Schedule including MSP Gantt chart schedule (required), including tasks, task relationships, task duration, and task resources.

NOTE: Each section should include the detail as described above, along with a proper discussion about the included data as well as the project manager’s analysis/interpretation of the information.

Submission Requirements

• CP-1 must be submitted as a single document in MS Word. Information or details created with other tools like Excel or MS Project such as tables, charts, or graphs must be incorporated into the MS Word submittal as an inserted object, such as a JPEG. (For help with MS Project, see the Video Tutorial link in the Overview section above.) Failure to follow this requirement will result in the return of the proposal for re-formatting to the requested MS Word format.
• You may insert objects into the body of your paper to support your discussion if they are half a page or less. Larger items should be included in an appendix with appropriate references to this information.
• CP-1 must include a cover page.
• As a guide, the body of CP-1 should be between five and ten pages in length (i.e., not including cover page, appendix, etc.).