Project Management for Small Business

Joseph Phillips

• Publisher: AMACOM
• Year: 2011
• ISBN:
  9780814417683
• Topic: Business
• Subtopic: Bookkeeping & Budgets
• Index: Business

Project management can help companies become more efficient and profitable. But as a seasoned project management consultant, educator, and writer, author Joseph Phillips teaches that the how of successful project management looks different for every business. Grounded in years of his real-world experience, Project Management for Small Business introduces readers to the core principles and techniques of project management adapted and simplified to be most effective for smaller enterprises. With repeatable practices for planning, executing, and controlling projects in an environment where one team member may be wearing multiple hats, this practical how-to helps you avoid the potentially devastating effects of wasted time and materials. Among many other useful skills, you'll learn how to define project requirements and scope; create a project schedule based on resource availability; estimate and budget for project costs, identify and minimize project risks; manage workflow; communicate effectively; and control project change. Classic project management models often prove too cumbersome for smaller businesses with limited staff resources, tight budgets, and next to no time to devote to learning a complex new system. Project Management for Small Business skips the complicated theory and goes straight to the heart of what it really takes to make a project--and your business--a success.

CHAPTER 1
The Business of Project Management

BUSINESSES EXIST FOR ONE PRIMARY PURPOSE: to make money. They may have lofty goals and vision statements, and they may want to do good while earning a profit, but the fundamental reason for their existence is to make money. Successful businesses provide goods and services that people and other companies will willingly pay for. The culture of business is an exciting blend of competition, accuracy, risk, and a concerted effort to achieve more than just profit.

Projects have a purpose as well: to get things done. They are temporary creative endeavors that have a definite beginning, action, and an ending. Projects are a conduit that enables businesses to reach their goals, achieve their visions, and increase their market share. It’s not difficult to see the connection between successful projects and profit. When projects are managed properly, profits increase, businesses can grow, and stress diminishes. There’s a distinct difference between simply managing a project and managing a profitable project.

Massive, bulky companies follow stodgy, cumbersome methodologies for project management. In this book, I am sharing my lean, mean, and proven approach to project management for small businesses. When I talk about project management for small businesses, what I’m really talking about is people and the four specific roles they play in a project. Each role owns a portion of the project, and it’s possible for a single person to play more than one role.

The most important role that is played in a project is that of the project customer. Customers are the reason why businesses and projects exist. Customers ask businesses for products and services in exchange for money—it’s a simple concept. In project management, it’s all about keeping the customer happy by doing what was promised. If you want profitable projects, and I know you do, then focus on what the customer wants to buy.

The second role in project management for small businesses is played by the people on the project team. The team members are the employees who do the work on the project. They are the people who have the most sway over the quality of the project, the project schedule, and the project costs. As a project team member doing the actual work, you have considerable responsibility on your shoulders, because people are depending on you to do the work properly. You are a direct link between what the project customer receives and the profitability of the company.

The third role is played by the project manager. The project manager is the person who oversees the coordination of all the project activities. She is the hub of planning, decisions, communication, and project discipline. She is the intermediary among the project customer, the project team, and the business owner. As the project manager, you’ll work with the project team, help the project customer, and report the performance of the project to the business owner.

The final role in the project is played by the business owner. The business owner carries the stress and responsibility of dealing with payroll, taxes, insurance, and overhead costs, and is always looking for new sales to keep the business afloat and growing. As the business owner, you’ve identified a need for your product or service, you’ve marketed your ability to satisfy that need, and you’re doing the work—all while balancing the opportunity against the cost of that opportunity. In other words, you don’t want to work for free and keep pouring revenue into a business that’s not creating a profit.

And, of course, you’ve invested more than just cash into your venture; you’ve invested your energy, your passion, and yourself. You’re taking energy that could be spent with your family and friends, from hobbies and leisure, and often from everything else you have, and you’re investing it all in your business. Remember when you first started? All you could think of was the opportunity to be your own boss, enjoy the freedom, and control your destiny. Now, however, running a business is more than a personal passion and a dream come true; people are counting on you and depending on you, and they’re demanding that you deliver on your promises. Owning and operating a business isn’t easy; if it were, everyone would do it.

The project customer may pay for the project, but the project team members, the project manager, and the business owner all contribute to its success or failure. The project team members, project manager, and business owner must work together if the project is to be a success. The integrated efforts of these three roles allow a project to be profitable, allow people to earn wages, and allow a business to grow and be sustainable. Get this lesson right away: In project management, there must never be an us-against-them mentality. Harmony and respect among these project roles will contribute to far greater project success than the best of plans laced with blame, contempt, and spite.

In this book, I’m addressing you the business owner, you the project manager, and you the project team member. You must understand and acknowledge how projects operate, how your roles are interdependent, and how the project customer is depending on you. Each person involved in the project has responsibilities that affect how well other people can do their jobs. There must be a commitment to do the correct work correctly, and a determination to be dependable, and to depend on others. While it’s easy to see these three roles in project management as a chain of command, it’s better to see them as pieces in a jigsaw puzzle. The business owner, the project manager, and the project team are all reliant on one another.

In your company, you might call your projects jobs, assignments, contracts, or some other name. Let’s be clear: A project is a temporary endeavor to create products, provide a service, or create a desired condition for other people. Projects have a definite beginning and a definite ending. They are unique in that they are not part of the day-to-day grind of operations, like bookkeeping and assembly lines. Projects are about creating. At the end of the project, you can step back, admire your work, and see the project’s vision realized and utilized. You’ve ushered the endeavor from concept, through execution, and finally to closing. Projects allow you to take an idea and move it from the ether into reality.

Projects can go to the heart of your company: The project work allows you and others to earn a living. When you’re completing the project work, there’s passion linked to the energy that the project requires. Most people love the actual creation of the project, but often despise the minutiae of project management.

As a project management consultant, I’ve often heard people say, “Who has time for project management? Let’s just get in there and get the work done.” But then, when planning isn’t handled properly, or when risks creep into the project, or when team members don’t understand their assignments, the project begins to fall apart. Yes, you can complete projects without project management, but project management increases the odds of successful, repeatable, and profitable projects. Project management takes time and energy, but it rewards you with control, documented plans, and an organized, focused attack. Do you want to increase profits, achieve more, and reduce frustration? Embrace project management.

Are you scared of project management? I’ve consulted with plenty of businesses where the underlying problem isn’t project management itself, but the fear of it. I have some good news for you: I understand that you don’t have the time or the desire for an elaborate, complicated approach to project management. My approach is a logical system that creates quick results, builds momentum, and increases profits. Small businesses can use this streamlined approach to get more done, win more projects, have more energy while they’re doing the work, and spend less time managing the work, frustration, and stress of project management.

When you and the members of your project team know what activities will occur and in what order, projects can get done faster and more efficiently. When you have more control, better communication, and more effective project organization, projects become more profitable. You’ll find you’re capable of doing more, delegating more, and earning more. Yes, it takes some time to adapt the project management processes, but you’ll begin to see benefits right away.

Defining Projects

What types of projects do you deliver? Are you providing a service, like hosting conferences and trade shows? Or are you providing products, like manufacturing special equipment? Or are your projects more of a hybrid, where you’re both providing a service and building a product, such as wiring a building for network connectivity, installing the computer hardware, and selling the IT equipment? All projects, regardless of your industry, can use this streamlined approach to project management.

The Triple Constraints of Project Management

At the foundation of all projects is the project scope. The project scope is a document that defines all the things the project must create in order for it to be considered done and acceptable to your customer. In some projects, the scope may be in the form of a statement of work, while in others, it may be an actual document called the project scope statement. In either case, it’s a document that defines what the customer expects your company to do for it. Complete what’s in the scope and your customer will be happy and you’ll be paid.

PROJECT COACH: I’m providing an overview right now; I’ll go into detail on the project scope statement in Chapter 3. Just know that the project scope defines all the project work that you’ll complete for the customer.

Once you and the customer have finalized the project scope, you’ll need to factor in two other facets of project management: time and cost. You and your customer will negotiate both of these project constraints, but basically there must be enough time and enough money to fulfill the obligations of the project scope. It’s unreasonable for a customer to demand a project scope to build a mansion with a toolshed budget and an afternoon-long schedule.

The balance of time, cost, and scope is called the triple constraints of project management, although some people call it the iron triangle of project management. In Figure 1–1, notice how the three constraints are in balance with one another. If any constraint isn’t in balance with the others, you won’t have a successful, profitable project. If any constraint grows, you’ll need to add more to the others; for example, if there are additions to the project scope, you’ll need to add more time and probably more money to maintain the balance.

Figure 1–1. The Triple Constraints of Project Management. Projects must balance time, cost, and scope if they are to be successful.

Moving Through a Project Life Cycle

Projects are like snowflakes: No two are alike. Sure, projects can be similar, and you may do the same type of projects over and over for various clients, but there are different characteristics that make each project unique. The project requirements, the customer, the location, and even the team completing the work are all distinctive elements that distinguish one project from another. It’s the uniqueness of each project that demands your attention.

Consider the sorts of projects handled by an IT integrator, a furniture manufacturer, and a construction company. All of the projects carried out by these businesses have countless combinations of requirements, people, and objectives. All of them move through a unique project life cycle. A project life cycle describes the phases that a project moves through that are unique to that project: the project launch, project work, and project conclusion. For example, consider the phases in a construction project to build a new home, as shown in Figure 1–2:

Preconstruction: planning, design, and approval of the construction project

Site work: preparing the construction site for the actual build

Foundation: creating the construction foundation as planned

Framing: building the skeleton of the home

Rough-ins: installing the heating and cooling systems, electrical work, and plumbing systems

Figure 1–2. Project Phases. Projects are made up of phases that move the project toward completion.

Interior finishes: finishing the walls, doors, trim, cabinets, flooring, fixtures, and appliances

Exterior finishes: siding such as cedar or stucco, roofing, gutters, and landscaping

These are the project phases, or different segments of project work, in the project life cycle, and in this instance they are unique to the construction of a hom...