Basics of Setting Up a Small Project Management Business

ManagementWhen a business sells a service that a client will only buy once or thrice in a lifetime, then it is engaged in a project management business. It could appear to be a one-man or one-woman team such as a wild animal or insect exterminator or a team of several teams consisting of five thousand workers drilling a highway tunnel across the sea.

The common notion of project management is that it involves a Gantt chart and a well-documented plan of tasks, schedules and personnel assignment. Another typical view is that project management is for big business which involves a highly paid project manager with project management certification.

Well, this is not the case.

How Small Project Management Businesses Usually Start and Grow

When an aspiring entrepreneur is good at something and sells such expertise as a service or has inherited a service business from his or her parents, then that would technically be the start of a project management business.

The typical small business owner selling services has a gut feel of the service process being sold. He or she would rarely document each step in the process and would usually be proud and call such attitude as ‘protecting a trade secret.’

However, when the decision to expand and sell franchises is reached, the small business owner is now challenged to establish a standard way of doing things to keep the business name’s integrity and ensure consistent profitability.

The business owner will have to hire a franchising expert to create an operations manual; establish standards in procedures to maintain and sustain quality in all franchises; or even apply for intellectual property rights on the name, look and feel, and unique procedures of the business.

For instance, the operations manual will contain information such as the process steps in safely catching a rattle snake, how much to charge for the service, what equipment to use, where to release the reptile, what will the business owner do when someone has been bitten and so forth.

Typical Advantage of Setting Up a Project Management Business

The typical advantage of setting up a small project management business is that it usually requires small or no capital at all. What is usually invested is the time and effort of the business owner who is good at what he or she does.

But the question is, can he or she be even better to make consistent profits and build a reputation for quality service? If the answer is yes, then how will the business owner proceed from where he or she is good at?

The Right Footing: Start the Expertise Multiplier

Before even making a decision to write a business plan, the aspiring small project management business owner should attempt to document the steps that he or she does best. For this, it would be advantageous to look at this free manual.

Documenting the process steps can result in the following expertise multiplier benefits:

  • Fine tune the process further for greater efficiencies
  • Better organization
  • Better insight on how to breakdown tasks so the simple ones can be assigned to other people
  • When the owner gets sick, the substitute can look at the process steps for consistent quality
  • Training reference for new workers in cases of expanded business
  • Better division of labor and delegation

Using Capital: Manage Resources First in the Mind

After documenting most of the necessary service processes, the business owner should then list all of the resources required to execute each service, how much they cost, how many sales would it take to recover such costs, what are the seasonal behaviors of the business and how many customers can the business serve with such resources.

Documenting the above information or more enables the business owner to commit mistakes in his or her head without actually spending cash yet for such mistakes.

Dry Run: Estimate Capacities and Demand

As long as the aspiring business owner can do the service business part-time in addition to a full-time job, then estimating demand for the service is not necessary. However, if demand picks up, the small project management business owner should know his or her capacities.

The first technique is to go through the service process steps and asking someone to time the actions with a stopwatch every step of the process. This is an operations management technique called the time-and-motion. Thus, if a service can be completed in x time which includes travel time to-and-fro, then 8 hours divided by x is the capacity y number of clients in a given day.

The next technique is to simulate the maximum number of estimated services that the business owner can do for himself or herself in a day or week. This is crucial as fatigue can affect service quality. Moreover, a good marketing strategy can be formulated that is in-line with realistic capacities.

Getting Down to Business: Write the Business Plan

After the dry run, the aspiring business owner should now write the business plan. Writing the business plan provides the business aspect to the technical aspect of the small project management business. In addition to that, the business plan is very useful in raising capital either through equity loans from the bank, through venture capitalists and friends, or through government grants.

Go, Go, Go: Register the Business

When the business plan is complete, the aspiring small project management business owner should now register the business.