The Ultimate Project Management 101 Guide

Transcription

1 The Ultimate Project Management 101 Guide For entrepreneurs, small business owners, game changers and people making it happen

2 Contents Project management Be clear on what you need to do 10 Time Management 14 Cost Management 20 Risk Management 24 This work is copyright. Apart from any use permitted under the Copyright Act 1968, no part may be reproduced by any process, nor may any other exclusive right be exercised, without the permission of EmineoHub in Perth Western Australia,

3 Welcome to Project Management We wrote this handy little guide for you, the Entrepreneur that s working hard and dreaming big, to realise your business goals. It s such an exciting time to be launching or growing a business, and with the marvels of technology, we can easily make an impact. Our business can be as big as we want it to be. We have seen some amazing people, with great vision and discipline, going for gold in reaching their goals. Unfortunately, we see them unnecessarily struggle, and to be honest it s upsetting. Whether you are a tech start up or waiting to move your fashion range out of the local market and in to a store, project management will benefit you. There is no silver bullet to launching or growing a business, but it can be so much easier with project management. Read on, and let this little handy guide give you some food for thought. Sarah Dean Founder 3

4 About Us Our Way Emineohub was born from the desire to support Entrepreneurs and small business owners get their best work out to the world. You decide your goals and vision for your business. Learn how big businesses all around the world use project management to realise their business goals. Implement their strategies no matter what your vision is or the size of your goal. Project management is scalable and unique to your business. At EmineoHub we take what we learnt from global corporations and bring it to you to be remarkable, and be noticed. Here are four reasons why project management builds excellence: Be clear on what you need to do Understand your business goals and let project management bring it home for you. Have a big to-do list? Then break it down in to manageable chunks of work with a deliverable, so you know you know you have achieved it, and on track at hitting your goals Measure your costs like a boss Cost management is king and can make or break your business. While managing costs can be overwhelming and sometimes daunting, it needn t be. Project Management will help you plan your budget, understand your cashflow to realise your goals and identify what pitfalls exist to avoid wasting precious money. Harness costs and unleash your business potential. Make every second count You own time and not the other way around! Project management helps you map out time-frames to realise your goals. Understand what you need to do and when, and when you need to bring in the crew to meet your goals. Time management is crucial in project management and when done properly, can propel you forward faster than you imagined. Understand what can go wrong Forewarned is forearmed in realising your business goals. Understand what can pull your business down so you can pull yourself back up before it becomes an issue, if it happens. Avoid business failure with risk management. Big business is now understanding the power of risk management and you can enhance your success by managing risks within a project environment, just like big business.

5 Project management 101 5

6 Project Management 101 Around the world there is a rich diversity of businesses and organisations that undertake project management. From the at-home entrepreneur launching their first app, all the way to the multinational corporation readying a global roll out of a new IT system, effective project management is essential to a successful launch. Regardless of the organisation that creates it, the characteristics of a project are usually always the same. What can vary drastically is the way a project is undertaken. How it is undertaken can be the difference between the end product being an achievement to an organisation realising its business goals, one that delivers but with stress and chaos, and one that is quite simply; an abysmal failure. No matter whether a project is successful or not, it will impact either positively or negatively on time, cost and quality of the end product. So, what is a project exactly? Here s a definition from The Project Management Institute (PMI)... A project is a temporary endeavour to create a unique product, service or result. The end of the project is reached when the project s objectives have been achieved, or when the project is terminated, because its objectives will not or cannot be met, or when the need for the project no longer exists. This definition is good because it is precise, and that is exactly what your project needs to be in its aims. Conversely, it is important to note that precision doesn t just mean quick or speedy. Accordingly, it s important to note temporary doesn t mean a short duration of time as a project can last for years! An example of a recent project taking many years is the new World Trade Centre in New York. However, as an entrepreneur or small business you may seek to deliver a project to a quicker time-line. A project supports you realising a business goal. The goals can be the result of a product, or incremental goals over a period time, as your business grows and matures. 6

7 Project Management 101 Some common examples of projects undertaken by entrepreneurs or small business to realise a goal are: Opening a café, bar, or restaurant Opening a store or boutique (whether online or brick and mortar) Developing and launching of an apps, software, product or service Founding a child care centre Opening a hairdressing or beauty salon Implementing new software or tools within a business to maximise productivity The launch of a festival, event or a retreat Taking a business idea and turning it into reality 7

8 The following seven aspects of a project are particularly relevant to Entrepreneurs and Small Business Owners where time, money and people are in limited supply: 1. Identifying the need for a project based on realising your business goals 2. Scope of work (SOW) is what you need to do within your project to realise your business goals 3. Quality of your product or service 4. The duration of your project 8

9 5. How much your project will cost 6. Who will be involved in your project 7. Managing risks to your project so you can ideally avoid them As you progress through your project it s vital to keep in mind a project s aims can be quite dynamic and subject to change. This shall occur as you go through each stage of the project, and elaborate on its aims individually. The foundational elements of a project shall also become fluid. The typical pillars of a project all concern time, cost efficiency, quality and risk. One of these will be the primary drivers of your project, or the primary concern in realising a business goals. Yet, as you progress the primary driver may change too. While at the start cost efficiency was perhaps the primary driver, it could emerge the chief aim becomes getting your app, product, or service (APOS) to market in a timely manner. 9

10 Be clear on what you need to do

11 Be Clear On What You Need To Do Prior to starting a project to realise your business goal, you need to be really clear on what you need to do. This is called your Scope of Work. You need to ask yourself what work is required, and only the work required, to successfully complete your project and realise your business goal. Any work that you identify outside of realising your goal can be put aside for future projects as you continually improve your business and product. For instance, you may consider additional functionality to your app or an extra offering to your product or service that isn t crucial to your immediate goal. You can put that additional functionality to the side and use it in the future as a future version or expansion of your product or service. Brainstorm with your business partner, mentor or staff about what needs to be done. Make sure the people you consult have the education, knowledge, skill, experience and training to assist you when brainstorming. Consult the results of your market research to make sure you the work you are defining is what your future customers need. You can then ensure you have captured what you need to do, and re-iterate where necessary, by undertaking the following: Interviews Focus groups Workshops Questionnaires and surveys Observations 11

12 Be Clear On What You Need To Do It s really important to then capture and document this for future reference to ensure you are doing only the work you said you would do. This document will come in handy to share with people that will support you in getting your product or service out in time to realise your business goal. Once you have defined what it is you need to do then create a Work Breakdown Structure (WBS). A WBS is basically chunking your scope of work down in to manageable portions of work, and breaking it down again and so on. A WBS is great for reducing the overwhelm of what needs to be done. It helps you package up what you need to do so you can take a logical approach to achieving the right work at the right time, and not inadvertently getting distracted by numerous tasks and ultimately not achieving anything. A WBS is depicted by a graph, such as the one across the page: 12

13 Figure Work Breakdown Structure 13

14 Time Management

15 Time Management Time is precious and it's a valuable commodity to an entrepreneur or business owner. Who hasn t wished for more hours in the day during the last week! It s a painful reality too: once time is gone we never get it back. If time management is a primary project driver of your project it could be because of a deadline, constraint or performance. Some of the reasons for these are: Deadlines You committed to delivering your APOS to market by a certain date You need sales volume to repay a loan that funded the development of your APOS and it needs to be released to market by a particular date Being innovative, competitive, and relevant with your APOS to market before others competitors beat you to market with a rival Getting your APOS to market to take advantage of a particular season or holiday Someone is going to challenge your work ethic or be dissatisfied if you don t deliver on time, and it usually has a contract involved Constraints If you re a solo entrepreneur or small business owner with few staff, then the constraints on your time and your staff s time, can dictate the amount of time reasonably available to execute your project The people you need to hire to get your APOS to market are only available at a particular time and you need to cater to their availability Performance Your team may not be too sure about what they need to do on your project and you will need to allow time for them to learn If a project is new in your business or unfamiliar to people in your team, a project schedule outlining the tasks of the project, and what they are responsible for assists with individual and team performance Realistic expectations of what needs to be done and when reduces individual and team stress. Set achievable targets 15

16 Time Management So why is time management on your project important? It can help you and your team with the following: Achieving overall and incremental results on what needs to be done to get your APOS by its deadline. What are your project deliverables and when do you need to get to market? Clarify to you what tasks need to be taken in order, i.e. step by step task management Understand when to hire the people you need to get your project done on time. At what point do you need to start hiring or engaging the right people to meet your project deadline? Understanding your time frames and communicating these time frames to people either internally or externally to your project Identify any issues that may get you off track in meeting your deadlines Estimate the performance of yourself, your team and others to meet your deadline so you can identify where things are slowing your project down and why Forecast your project cash flow and when you need to pay to suppliers or contractors If you have obtained funding or have an investor, it can give them an understanding on ROI, based on what you plan to deliver and when. Together you can take corrective action to get to market on time if necessary So, if you need to understand exactly how to get started, what you need to do and when, how to juggle competing demands with clients/ suppliers/team members, getting the work/life balance right and making sure you re getting to market on time, consider using a Gantt Chart. 16

17 Time Management A Gantt Chart is a list of activities under main high level elements of work, with start and finish dates of the activities, that are depicted visually with horizontal lines similar to a bar chart. Gantt charts are commonly used in project management and can be used by anyone in any industry. Whether we are starting our business or already operating it is crucial that we are monitoring not only our performance, but the performance of our suppliers and team members, in getting to market in a desired time-frame. It can be difficult to measure performance when you haven t decided how to quantify it. A Gantt Chart is a useful tool to support you in doing this and communicating your performance progress and expectations. The benefits of using a Gantt chart are numerous. It can help you understand what activities you need to do achieve the bigger picture. It enables you to understand what needs to be done when, the duration of the activities and in what order you do the activities. This supports you making the best use of your time and those around you. As Entrepreneurs we need to make time to look after ourselves and make sure we don t become a slave to our business. Using a Gantt chart is an excellent way to make sure you factor time in for yourself, family and friends and re-assign what activities can be done another time to achieve your desired work/life balance. You can even include your nonnegotiables such as gym time or time with your family and work the activities in the Gantt chart around this. A Gantt chart is a great way to make sure your team are working on the right tasks and performing. If you are delivering work to a client, you can use the Gantt chart to manage their expectations by agreeing to when you need to deliver and they clearly understand what they need to give you by when if necessary. It can help you communicate to others your expectations of when you need them to deliver to you. Your suppliers will know when to deliver and communicate to you in advance if they are going to miss the deadline, and the same applies to your team members. 17

18 How to create a Gantt Chart Creating a Gantt Chart isn t hard and is quite straightforward but you will need to give yourself time to create it. There are several software packages such as MS Project, Smartsheet, Basecamp and even MS Excel if you wish to keep it simple. Figure Gantt Chart The steps below teach you the fundamentals on how to create a Gantt Chart, and turn that big picture in to a reality: 1. Be clear on exactly it is you wish to achieve. What is in the big picture now and what can be added in later? 2. Apply your WBS. This the skeleton of your Gantt Chart. 3. Break your WBS down in to activities. This is where you start applying the padding to the skeleton. 18

19 How to create a Gantt Chart 4. Identify the duration of those activities. When doing this consider who will work on what, their work hours and other external factors that may impact on the duration of the activity. Don t forget to block off days such as weekends as the software you use may assume you are working weekends. 5. Apply sequencing of the activities. What is the order of the activities? What activities need to be done first before another activity can start and another can finish? 6. Decide a start date of the first activity. When you have completed the steps above, the starting date will trigger the dates for the remaining activities which drive each other as they are sequenced (think of dominoes having a knock on effect to each other). 7. Review the Gantt Chart to see if you are happy with how it looks. Do you need to change the sequencing of activities so the order of them is more achievable? Are the dates in the schedule realistic for you, your team and suppliers to deliver? Have you overloaded yourself and others with too much work or not enough work? Once you have created your Gantt Chart you can send on to suppliers, team members and clients for their feedback and agreement. Doing this is crucial for them agreeing to their deadlines to avoid resentment or avoidance of their responsibilities. When they have agreed to the deadlines in the Gantt Chart you can use it as a productivity tool to measure their performance with them. If performance is deviating or about to deviate, you can work with them to get back on track in meeting your deadlines, and ultimately getting to market smarter and faster. Consider using a Gantt Chart within your business. It can help you be clear of what you need to do and when, reclaim your work/life balance by supporting you to measure your performance and others and communicate expectations. Ultimately, a Gantt Chart will help you get your APOS to market smarter and faster. 19

20 Cost Management

21 Cost Management As an entrepreneur or small business owner in the first few years, it's money that makes your business world go around. Its cash flow, budgeting, funding and being seen by others as a successful business person that is financially sound. As your business grows so does your reputation and a wise, highly successful businessman once said to me that you have one shot at a good reputation. So what exactly is cost management? The Project Management Institute (PMI) defines cost management as planning how you ll spend the money, estimating, getting the financing, finding funding, managing and controlling the costs and of course budgeting too. There are four processes to project cost management. Before we get into the four processes of project cost management, let s first have a look at some frustrating issues that can occur if cost management isn t utilised, and the benefits of project cost management when it is. If you are experiencing any of these frustrating issues then project cost management is really going to help you: Contractors or services providers, such as app developer for example, are costing way more money than you initially thought Your burning up too much money with getting your APOS to market and you don t understand where the money is going You may have to scale back what you were originally want to do as you can t afford it You can t say right now how much money you have spent on your APOS and how much money you still need to get it to market Your investor or loan provider is riding your back wanting to know when there is a return on investment (ROI) or loan repayment You think you were too optimistic when setting your budget for your APOS and now you re not sure you can even get to market You re under pressure and you don t know what to do 21

22 Cost Management So, bearing in the mind the above, the benefits of using cost management as part of project management are numerous. Some of these benefits include: Investors and suppliers seeing you as a mature business owner that has a healthy attitude to managing costs. This will support them in having confidence with investing in your business or extending lines of credit to get your project going Providing a service that clients will feel confident your cost management is sustaining your business and won t lose you as a supplier. This is particularly relevant if you are trades person or run a business where you do high value renovations/construction/landscaping etc. Having a realistic view of what your project costs are and when you are consuming costs. Then this will support you with understanding your business cash flow Having a good degree of certainty with what your costs are to execute your project and get your APOS to market Knowing how much you re spending and on what Being able to afford to get your APOS to market as you originally planned, if not better Displaying full control of how much you have spent to date and able to answer questions off the top of your head Your investor or lender being comfortable with how you are managing your costs and you can produce the facts and figures when asked As mentioned before, there are four processes for project cost management that when done properly and in sequence will support you realising the benefits above. 22

23 Cost Management These are: 1. Plan Cost Management This is the process of how you will manage your costs and have a cost management plan. Here you will figure out what documentation and tools you need to manage the costs of your project, incoming and outgoing. The documentation you create and the tools you identify will support you with planning, managing, spend and controlling money. 2. Estimate Costs This is where you will figure out how much your project will cost. When you do this you will need to identify how much your staff will cost (including your own salary to draw from the business), expenses, costs of suppliers, costs of contractors, costs of any premises that you will need, cost of council permits if needed etc. You will also need to figure out the costs of activities (from your Gantt Chart).This is step one in creating your cost baseline. 3. Determine Budget So once you have your estimate and costs of activities this will help you to understand the total cost of your project, which you will hopefully have enough money for. If you do then this is your budget, if you don t you will need to eliminate some activities or scale the costs back to what you can afford. When you layer these costs into your project schedule you will then have a budget profile where you will know when you are spending on what. This is step two in creating your cost baseline. 4. Control Costs Here you will use your cost management plan and use the documents and tools you created earlier. Together with your cost baseline you will be able to track your actual costs against your baseline costs, see the variance in what your spending to what you planned, and take any corrective action to rein in costs. This information will help you give the facts and figures to investors or loan providers when needed. By following the above it gives you the understanding to manage your project costs, give you control on costs flowing in and out, plus show to investors and suppliers that you have a mature and healthy approach to managing costs. 23

24 Risk Management 24

25 Risk Management Risk management can be a complicated beast and due to its complexity, sometimes people avoid looking at the risks. However, forewarned is forearmed and by identifying what can go wrong in your getting you product or service to market, you can substantially reduce the likelihood and consequences of a negative event happening. So what does this mean? Risk management means that you look at what can go wrong in you realising your business goals within a project environment to realise your business goals on time, on budget and at the desired level of quality. Ultimately this means that you are in a position to navigate yourself and your business around any issues that arise, and not become unstuck. For the purpose of making risk management relevant for Entrepreneurs and small business owners we have stripped the risk management process right back to an actionable and manageable process. The risk management cycle that we have defined has two processes, Pre-treatment and Post- treatment. The definitions are below: 1. Pre-treatment. Identifying risks that can occur, and the likelihood and consequences of how they can impact on your business goals, WITHOUT having a plan to mitigate them. 2. Post-treatment. Analysing the risks identified in pre-treatment stage, and the likelihood and consequences of how they can impact on your business goals, WITH having a plan to mitigate them 25

26 Risk Management Pre-treatment To identify and understand risks you need to do identify any events that could occur that could impact on you realizing your business goals. To do this, follow the four steps below: 1. Brainstorm potential risky events yourself, with peers or with a mentor and write these down 2. Analyse past history what events have happened in the past that were an uncomfortable consequence that you would like to avoid now? What event s have happened to others that could happen to you? 3. Use the matrix below to estimate what the impact of the risk is based on the matrix guidelines 4. Use the matrix below to estimate what the likelihood of the risk is based on the matrix guidelines Figure Risk Matrix 26

27 Risk Management Once you have brainstormed the potential risky events you then need to decide the impact of the event in regards to your business goals. These are: 1. Insignificant - little to no effect on event 2. Minor - effects are felt, but not critical to outcome 3. Moderate - an impact to the business that would have some impact to the course of action and outcome 4. Major - serious impact to the course of action and outcome 5. Severe - could result in disaster Once you have understood the impact of the event in regards to your business goals, you then need to understand the likelihood of it occurring. The likelihood would be possible - There is a 1-30% chance of the event occurring. Therefore the risk rating would be HIGH. 1. Very unlikely - less than a 5% chance of the event occurring 2. Unlikely - There is a 6-10% chance of the event occurring 3. Possible - There is a 11-30% chance of the event occurring 4. Likely - There is a 31-50% chance of the event occurring 5. Very likely - There is a 50% or greater chance of the event occurring Once this is done you then need to rate the event by referencing the likelihood and consequence and seeing where it meets on the risk matrix. This is then the risk rating. An example of an event occurring that could have a negative consequence to realizing your business goal could be: If supplier A is late in delivering their service to me, I will then miss out on the optimal time to get to market to take advantage of optimal sales, and my anticipated return on investment (ROI) is diminished. I will then have less cashflow to develop my business. So the consequence of this would be: Major will have a serious impact to course of action and outcome 27

28 Risk Management Post Treatment You may decide this rating is unacceptable and would be much more comfortable with a risk rating of: Low. This is a combination of the likelihood being unlikely and the consequence acceptable minor. Once you have brainstormed your risks you will then need to decide what action you need to take to get a more acceptable scoring of risk. It is important to do this so you can realise what business goals may go awry, and how you can manage yourself and your business to make sure these events don t occur. When deciding how to manage risks you need to consider: What your level of appetite to risk is. How much risk are you willing to take to meet your business objectives? This is personal to everyone and not everyone will be on the same page with their risk appetite. If you working with a business partner or investor you will both need to understand each others risk appetite and what your happy place is What level of risk you wish to actively manage or just avoid. For instance you may have a basic understanding of what needs to be done to develop a particular product, and you believe you can figure it out to save money. However, in figuring it out you may waste a lot of time and end up getting your product to market late and miss the perfect sales window. You decide to avoid that risk by hiring someone to do the work instead that will get you to market on time, and that the ROI on hiring someone will be realized once the sales come in. Impact to resources (yourself, freelancers etc.) around time constraints with delivering their work on time Budget. Would a risk eventuating mean you need to spend a significant amount of money that would hurt your business goals? Impact to key milestones in developing your product or service to get to market within your desired timeframe 28

29 Risk Management You will then need to decide and agree what action you need to take after discussions with the right people. To treat the risk with the supplier to achieve a risk rating of low is : To make sure my supplier doesn t delay me in realizing my ROI by getting my product out to market in time to take advantage of market conditions, I am going to award the work to a supplier a month earlier than planned so they deliver the work to me a month earlier than needed. I am going to meet with the supplier once a week to discuss their progress and address any issues that arise and work with them to resolve any issues so I m not delayed. You will then need to repeat this exercise for each risk event that could impact you on realizing your business goals. It is important to capture these risks by creating a risk register that addresses each risk with the following: Risk name Pre-treatment assessment Post-treatment assessment A description of how you will make sure the risk doesn t occur How often you will review the risk to make sure it isn t eventuating Who owns the risk and is responsible for managing it and making sure it doesn t occur Share the risk register with the relevant people so they can understand what their risks are and how often they need to check in with the risk. 29

30 EmineoHub EmineoHub enables entrepreneurs and small business owners to realise their business goals by using project management. Our purpose is to support you in getting your best work out to the world to be remarkable and be noticed. Sarah is the founder of EmineoHub. She realised after a mid career crisis at 36 that she would much rather be of service to others, and while contemplating what to do next, discovered a real lack of project management methodologies for small businesses. After a lot of research Sarah developed the Project Renegade and is quite excited to bring you her knowledge and research to help you be successful with your business. Sarah has 15 years experience working within the project controls and project management space. She has worked in Australia and the UK with global companies such as Chevron, Thales, Saab, Alstom, BHP Billiton, Optus and worked with family businesses that have scaled up their capabilities and services. Sarah also has project management qualifications from Curtin University, Perth Western Australia. Artwork RedNed (Nadine Bryant). 30

31 Contact Us : : hello@emineohub.com :

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