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CHAPTER 2: INITIATING A PROJECT > Evaluating and Selecting Projects - Pg. 43

+ INITIATING A PROJECT 43 Most often, businesses have a desired markup in mind for projects. This markup helps you predict the price of the project. You multiply your desired markup by the project costs, and then add this value to the project costs to predict the project quote. If the desired markup is 25 percent and the project costs are $16,500, the cost of the project, $16,500, plus the markup of $4,125 gives a quote of $20,625. These are all considerations that go into the selection, sale, and initiation of a project. Business owners and project managers must consider the complete cost of the project in order to predict the gross profit and quotes.These elements are the fundamentals of profitable projects.You may also have to consider the marketplace, the volume of work required by the project, your business income, your activity level, your relationship with the customer, and other factors that may cause you to raise or lower your gross profit, your markup, and the quotes you offer to your customers. But what about businesses that are not-for-profit by design? Projects in not-for-profit organizations have the same model; how- ever, their goals are linked not to profitability, but to satisfying the organization's mission and purpose.These companies should follow the same model as their for-profit counterparts because effective, well-managed projects lead to higher fund-raising and better stew- ardship of the funds they've received to support their charitable goals and missions. Just because a company is a not-for-profit en- tity doesn't mean that it can ignore proven business principles. Evaluating and Selecting Projects Let's say that your organization has two projects to choose from, but it can choose only one of them. Project A is worth $55,000 American Management Association · www.amanet.org