When you first started a business, chances are it began as a project. Perhaps it was an extension of a hobby, such as baking or sewing, or a routine activity like mowing the lawn or walking your dog.
Despite what got you on the road to entrepreneurship, you’ll find that some management is bound to creep into the mix. That is if you intend for your small business to make money and eventually become not so small.
Even if you’re content with the status quo, running a business of any size is a lot of work, and much can go wrong. With so much on your plate, it wouldn’t be surprising if you began to feel overwhelmed. That’s where establishing processes can help you save on both time and effort.
For example, if you sell cookies, you should have a process for purchasing and keeping stock of the ingredients. Otherwise, you might run out of raw materials midway through production.
That’s where project management comes in. It helps you handle all aspects of the business with a sense of direction and discipline, saving you needless stress and worry. Project management can also save you some big bucks.
A 2018 survey by the Project Management Institute claims 10% of business dollars spent goes to waste because of poor business management. The implication is that with good project management, you can claw back that $10 out of every $100 you spend on your business and put it to better use.
- Small businesses can benefit from project management software to monitor expenses, keep them on track, improve processes, and promote accountability
- Poor execution of a business strategy leads to a 10% wastage in costs
- Project management principles guide businesses to become more efficient and productive
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Why Does Applying Project Management Principles to Your Small Business Help?
Managing a business often entails a million details that you probably never thought you’d have to deal with when you got started. They are usually little things, but they can chip away your time and resources like nobody’s business, especially if something goes wrong, and it will.
However, if you follow the project management principles and create a project life cycle for your business, you’ll see a vast improvement in your productivity and capacity to smile. Project management software includes tools and techniques that make it easier to carry out tasks designed to reach a specific goal. It helps you divide and conquer, breaking up business goals into smaller chunks, so they’re easier to achieve.
However, these product management tools won’t magically do the work for you, just like a hammer on its own won’t fix the garage you’ve been planning on redoing for months, which means that you must do the work yourself.
If you’ve been winging your business for some time and it’s doing well without project management, applying project management principles now might seem like a lot of unnecessary work.
The thing is, you might not know that something is broken until it stops working, and that could lead to a big problem, especially if you’re on the point of scaling up. Effective project management can help your business now and in the future.
How? Let’s count the ways.
Running out of money is the top reason small businesses fail. While this could be because they’re not creating enough revenue, in many cases, it’s because they didn’t keep track of expenses.
Some businesses simply bleed money because owners aren’t aware of what’s going out. Project management can help you establish a budget and stick to it by tracking expenses. Seeing costs mounting in real-time can set the alarm bells ringing way before it becomes a problem.
Keeps the Business on Track
Time is money, and that’s particularly true for businesses. However, it’s easy for a task to drag on for longer than it should because you don’t know that it is. Project management requires setting milestones and deadlines for each job, which keeps everyone working on a schedule.
For example, let’s say you contracted someone to build a website for your business. Setting timelines makes it easy to monitor whether the project is on track. Without project management, it could be easy to lose sight of the end goal.
Improves Your Processes
Project management essentially documents everything that goes on with a particular undertaking. So, when you need to undertake a similar project, you already have a standard operating procedure (SOP) or template for it, making the job a lot easier.
More importantly, documenting each project makes it easier to identify where you made a mistake or the cause for delays. This’ll help you look out for or avoid such issues in the next project.
Transparency is a significant benefit of project management. You’ll see how long each project took, how much it cost, and why it didn’t turn out the way you expected. You can then identify who was accountable for slowing down the project or ensuring it remained on course.
Project management gives you an excellent vantage point to evaluate the situation. If you’re the source of delay because it took you a long time to arrive at a decision, you can take steps to ensure that doesn’t happen again.
Meanwhile, if people went further to ensure the project met its goals, you can give credit where credit is due. Having that transparency keeps everyone motivated to do their best and encourages collaboration.
What Are the Five Stages of Project Management?
Now that you understand how project management helps your business, the next step is to know the stages involved, which are initiation, planning, execution, monitoring and control, and closure.
Stage 1: Initiation
This is the start of your foray into project management, and it’s a doozy. The initiation stage is where you need to do thorough research into the feasibility of a project or your business if you’re just starting out. It’s a lot like a business plan, so you can consider it a two-fer.
Establish if your business idea is a “go” or “no” in the initiation stage. Among the questions that need to be asked and answered are the following:
- Why this business?
- How feasible is it?
- Are there partners you can bring in?
- What is the goal?
- What are the things you cannot do in the business?
Once you’ve researched every aspect, including your funding sources, and you decide that the business can work, create a document with all that information. Outline the justification for the business (it’s cool because), the benefits (everybody will love it because), and the profit potential (I’m going to be rich).
Project management people call it a business case or a feasibility study, and it comes in handy when it’s time to get investors. You can also create a project charter that formally establishes the parameters of the project or business.
It includes the names of the people involved, roles and responsibilities, project objectives, scope, deliverables, timeline, and budget. While it doesn’t have to be a fancy document, this template might help you get started.
Stage 2: Planning
The second stage of project management involves planning, which means creating a roadmap to achieve a goal. For example, if you want to put up a cookie business (or want to add cookies to your bakery business), your goal would be to make cookies available to your customers. How do you get there?
First, you need to set goals. You can use the SMART (specific, measurable, attainable, realistic, and timely) or the CLEAR (collaborative, limited, emotional, appreciable, and refinable) method for setting goals, or you could set your criteria.
The important thing is to set clear goals, and once you have goals, you can add everything you need to the plan to get you there. By this stage, you should have all the information you need for specific aspects of the business, such as the cost of materials, skills required, available resources, and a timetable.
Create an actual work schedule to help your team accomplish those goals and identify milestones that’ll indicate whether you’re on track or not. A good project management software would be very useful at this stage of project management.
Stage 3: Execution
While most of the work happens in the first two stages, this is the stage that most people associate with project management because execution is where all the action is. It’s also the most exciting for business owners because this is where you finally put your plans to work and see if you did an excellent job in Stages 1 and 2.
The processes that happen in the executing stage include:
- Letting everyone in on the plan and discussing possible issues
- Assigning roles and tasks to team members
- Buying materials and equipment as outlined in the plan
- Implementing the workflow and seeing if it works
- Doing a test run
- Addressing any issues that come up
- Updating the plan and adjusting schedules, deadlines, and budgets as needed
You’ll probably hold quite a few meetings at this stage because many things may come up that you might not have anticipated. For example, you may have planned on launching your cookies in three weeks, but you get to know there’s a big festival just a week away that could bring in a lot of revenue. You’ll need to discuss developments like these with all stakeholders, particularly those most affected by any shifts in the plan.
Stage 4: Monitoring and Control
This part of project planning isn’t as exciting, but definitely critical. Monitoring progress and controlling variables that might affect the smooth running of the business will head off any headaches later on. Compare yourself to a teacher watching over their students. Let your team do the work but guide them when necessary to ensure they do it right and finish on time.
Stage 5: Closure
All projects have an end date, so this stage is when you deliver the product or service to the client and move on to other projects. This is also the point where the project manager evaluates the team’s performance and provides a report, also known as a postmortem, on what happened during the entire project, including what went wrong and what went right.
What To Do Next?
Project management principles provide structure and discipline while running a small business. Applying them can make your processes more efficient and employees more productive after each cycle. Your business may not be a project, but it runs better when you manage it like one.
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