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Small Start-up Business Project Management

First published Aug 12

Eric Tse

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Abstract

This article introduces how business starters can use project management to start up their small businesses. First we identify the minimal set of tools that is good enough for small business starters to use. Then we map project management tools to our business start-up process to identify opportunities we can exploit project management. Finally we can create or borrow tools that adhere to the process mapping. There are lots of work can be done in the future for this program, including educating the public basic project management concepts, introducing or creating project management tools to the user and ensure they develop a habit of using them.

Introduction

Entrepreneurs and small businesses are important to economy. This article is to determine what project management skills and tools suitable are optimal for small business starters to ramp up business, manage operations, deliver tailored or bespoke products to customers, and manage innovation and growth. We assume readers have basic knowledge of project management although we will ultimately hope broader audience can benefit from using lite project management skills. This may also be a starting point for a program introducing project management to small and micro businesses, or even to the wider public.

The ultimate goals for the program may be:

  • Introduce project management to the wider public, start with small business owners
  • Start-up business users can simplify and manage their life and tasks using tools or knowledge provided
  • Enable small business owners to be more organized and systematic so as to reduce stress and anxiety 
  •  

This article refers to two literature sources, one is a paper from Turner (Turner, 2011) in PMI Journal, and another is the small start-up business program from a College in Ontario, Canada. 

The problem statement and scope of this article would be:

  • To what extent do small micro business use project management both in their mainline business and to manage innovation and growth?
  • What elements of the project management are important for small micro business?
  • A Business Start-up Process
  • How project management fit, map, or morph into Business Start-up Process

The following would not be in scope:

  • Details of innovation project management.
  • Lower Level Description of tools and content generated from the morph of project management and business start-up process.
  • Project Management ABCs
  • Operation Management and Project Management Morphing

\

 

Strategy

Small Business Project Mgmt

To develop the skillsets, knowledge, and tools, first we will define Project Management Light (PML), derived from PMBOK referencing Turner`s literature. Then we will define a Small Business Start-up Process, for this paper we use the process used by Ontario Self Employment Benefit Program. Afterwards, we will start morphing some of them (demonstrated by the orange area). There are many different ways of morphing the activities and process. We will use table mapping methods commonly used in business and system analysis to start to complete the scope of this article. 

Project Management Lite (PML) (Turner, 2011)

Characteristics

  • We would expect simplified project planning and control systems, with simplified reporting mechanisms.
  • We would not expect to see them adopting some of the standard methodologies.
  • We also expect to see people fulfilling several roles on projects, especially in smaller companies.
  • Microsized companies do not employ specialist project managers, and so projects are managed by people with other primary roles, and small and micro-sized companies do not tend to use the recognized tools and techniques of project management.
  • uses laissez-faire management and egoless team structures
  • Use of project management
    • Operations management (This is very important but details about project and operation management morphing will be out of scope)
    • Innovation and growth: (Innovation Process is too complicated to be in scope in this article. Also not every start-up business innovates. We will talk about Innovation Process Project Management in another article. However for the growth, we will talk about Business Start-up Process.)
    • Lite project management

PMLite Content (Turner, 2011)

PMBOK practices

Remarks

Client requirements

The need to define client requirements as an essential first step. Communication Management

Road map or milestones

High level schematic plan. to provide an overall vision of how the project would be completed

Work breakdown or activity lists

Define the activities required to do the work

Agile or scrum

 

Uses laissez-faire management and egoless team structures; also requires all the team members to be able to do all the work, so it requires homogeneous work and homogeneous teams.

Responsibility assignment matrix

×

they don't need that formality

Scope and resource schedule

Simple form of scope or resource schedule. Some have a simple resource schedule, with dates against their activity list. Others also have a resource schedule with dates against the involvement of named resources.

Team building

×

No Formal Team building is needed.

Risk and issue management

Need risk management. The most important project management functionality they applied.

Commercial project management

Simple appraise the value of projects, Buy or hire, Buy-or-do it yourself, contract management.

Domain knowledge

Basic domain knowledge in their work.

Microsoft project

×

Too complicated. Perhaps Excel is good enough

Project Office

×

No Need

Cost management

Very Simple Financial Cost, Sales and Tax Tracking. No Earned Value Analysis

Quality management

×

Use Manage Client Requirement

Integration management

×

No Need

Life-cycle and stage gates

×

No need

Program and portfolio management

×

No need except for innovation. Will talk about Innovation in other paper

The above table shows what elements of the project management are important for small micro business.

Company Profile

After the elements of PM Lite are identified, we develop a company profile. This company profile includes the elements they will be using in the business start-up process that is specific to the company.

Company: TSE and TSE business and Technology Consulting

■ requirements analysis
■ milestone planning
■ work breakdown and activity lists
■ responsibility assignment matrix
■ work schedules (and checklist and Gantt charts)
■ PM software for work scheduling and control (micro-soft project)
■ PM software for resource scheduling (but not resource schedules per se)
■ Kick off meetings
■ Risk management (but not issue management)
■ Scope management
■ Cost management
■ Commercial management

Project Management and Business Start-up Process

SO how we can tie Business Start-up Process and Project Management Together? How we are going to use project management techniques to manage our business start-up process?
There are at least two dimensions I can think of in terms of mixing them two together. One is Business Start-Up as a project; another is Business Start-Up Process Items and PMLite mapping. For the first one, it is to put the whole business startup process into a master project management schedule. The second one is the for each item inside the process, identify PM concepts or items that would be useful to help executing the tasks. Some of the items can me a project itself. 

Business Start-Up as a Project

For this example, we choose the Microsoft project start up template as an example to illustrate how we can put business start-up process into a Gannt Chart, Schedule or work breakdown structure. This process has a lot of action item executable to start up the business. Each item has duration, start date, end date, resource, dependencies etc. 

1

Phase 1 - Strategic Plan

23 days

01/01

02/02

2

Self-Assessment

3 days

01/01

05/01

3

Define business vision

1 day

01/01

01/01

Manager

4

Identify available skills, information and support

1 day

02/01

02/01

3

Advisor, Manager

5

Decide whether to proceed

1 day

05/01

05/01

4

Manager

6

Define the Opportunity

10 days

06/01

19/01

7

Research the market and competition

1 day

06/01

06/01

5

Advisor

8

Interview owners of similar businesses

5 days

07/01

13/01

7

Owners

9

Identify needed resources

2 days

14/01

15/01

8

Advisor, Peers

10

Identify operating cost elements

2 days

16/01

19/01

9

Accountant

11

Evaluate Business Approach

4 days

20/01

23/01

12

Define new entity requirements

1 day

20/01

20/01

10

Manager

13

Identify on-going business purchase opportunities

1 day

21/01

21/01

12

Manager

14

Research franchise possibilities

1 day

22/01

22/01

13

Manager

15

Summarize business approach

1 day

23/01

23/01

14

Manager

16

Evaluate Potential Risks and Rewards

7 days

21/01

29/01

17

Assess market size and stability

2 days

21/01

22/01

12

Advisor

18

Estimate the competition

1 day

23/01

23/01

17

Advisor

19

Assess needed resource availability

2 days

26/01

27/01

18

Advisor

20

Evaluate realistic initial market share

1 day

28/01

28/01

19

Advisor

21

Determine financial requirements

2 days

26/01

27/01

15

Advisor

22

Review personal suitability

1 day

28/01

28/01

21

Manager

23

Evaluate initial profitability

1 day

29/01

29/01

22

Manager

24

Review and modify the strategic plan

2 days

30/01

02/02

23

25

Confirm decision to proceed

0 days

02/02

02/02

24

26

Phase 2 - Define the Business Opportunity

27 days

03/02

10/03

27

Define the Market

13 days

03/02

19/02

28

Access available information

1 day

03/02

03/02

25

Advisor

29

Create market analysis plan

2 days

04/02

05/02

28

Advisor

30

Implement market analysis plan

5 days

06/02

12/02

29

Advisor

31

Identify competition

2 days

13/02

16/02

30

Advisor

32

Summarize the market

2 days

17/02

18/02

31

Advisor

33

Identify target market niche

1 day

19/02

19/02

32

Advisor

34

Identify Needed Materials and Supplies

7 days

20/02

01/03

35

Select a business approach (from "Evaluate Business Approach" above)

2 days

20/02

23/02

28SS, 33

Manager

36

Identify management staff resources

1 day

24/02

24/02

35

Manager

37

Identify staffing requirements

1 day

25/02

25/02

36

Manager

38

Identify needed raw materials

1 day

26/02

26/02

37

Manager

39

Identify needed utilities

1 day

27/02

27/02

38

Manager

40

Summarize operating expenses and financial projections

1 day

01/03

01/03

39

Manager

41

Evaluate Potential Risks and Rewards

6 days

02/03

09/03

42

Assess market size and stability

2 days

02/03

03/03

40

Manager

43

Assess needed resources availability

2 days

04/03

05/03

42

Manager

44

Forecast financial returns

2 days

08/03

09/03

43

Accountant

45

Review and modify the business opportunity

1 day

10/03

10/03

44

46

Confirm decision to proceed

0 days

10/03

10/03

45

Advisor, Peers, Lawyer, Accountant

47

Phase 3 - Plan for Action

21 days

11/03

08/04

48

Develop Detailed 5-Year Business Plan

21 days

11/03

08/04

49

Describe the vision and opportunity

1 day

11/03

11/03

46

Advisor

50

List assumptions

1 day

12/03

12/03

49

Advisor

51

Describe the market

1 day

15/03

15/03

50

Advisor

52

Describe the new business

1 day

16/03

16/03

51

Advisor

53

Describe strengths, weaknesses, assets and threats

1 day

17/03

17/03

52

Advisor

54

Estimate sales volume during startup period

1 day

18/03

18/03

53

Advisor, Accountant

55

Forecast operating costs

1 day

19/03

19/03

54

Advisor, Accountant

56

Establish pricing strategy

1 day

22/03

22/03

55

Advisor

57

Forecast revenue

1 day

23/03

23/03

56

Advisor

58

Summarize pro-forma financial statement

2 days

24/03

25/03

57

Advisor

59

Develop break-even analysis

1 day

26/03

26/03

58

Advisor

60

Develop cash-flow projection

1 day

29/03

29/03

59

Advisor

61

Identify licensing and permitting requirements

1 day

30/03

30/03

60

Advisor

62

Develop startup plan

2 days

31/03

01/04

61

Advisor

63

Develop sales and marketing strategy

1 day

02/04

02/04

62

Advisor

64

Develop distribution structure

1 day

05/04

05/04

63

Advisor

65

Describe risks and opportunities

2 days

06/04

07/04

64

Advisor

66

Publish the business plan

1 day

08/04

08/04

65

Advisor

67

Confirm decision to proceed

0 days

08/04

08/04

66

Advisor

68

Phase 4 - Proceed With Startup Plan

53 days

09/04

22/06

69

Choose a location

1 day

09/04

09/04

67

70

Establish Business Structure

24 days

12/04

13/05

71

Choose a Name

2 days

12/04

13/04

72

Identify implications

1 day

12/04

12/04

69

Lawyer

73

Research name availability

1 day

13/04

13/04

72

Lawyer

74

Choose a Bank

5 days

14/04

20/04

75

Establish accounts

4 days

14/04

19/04

73

Banker

76

Establish line of credit

1 day

20/04

20/04

75

Banker

77

Choose legal representation

1 day

21/04

21/04

75SS, 76

Lawyer

78

Select business tax-basis category

2 days

22/04

23/04

77

Lawyer, Accountant

79

Choose capital funding source

2 days

26/04

27/04

78

Manager

80

Commit capital funding

0 days

27/04

27/04

79

Manager

81

Establish the Operating Control Base

12 days

28/04

13/05

82

Choose and set up the accounting system

2 days

28/04

29/04

79, 80

Accountant

83

Obtain required licenses and permits

4 days

30/04

05/05

82

Lawyer, Government agency

84

Obtain needed insurance

4 days

06/05

11/05

83

Accountant

85

Establish security plan

2 days

12/05

13/05

84

Advisor, Lawyer

86

Develop Marketing Program

4 days

13/04

16/04

87

Establish an advertising program

2 days

13/04

14/04

73SS

Advisor

88

Develop a logo

1 day

15/04

15/04

87

Advisor, Lawyer

89

Order promotional materials

1 day

16/04

16/04

88

Advisor

90

Provide Physical Facilities

15 days

14/05

03/06

91

Secure operation space

5 days

14/05

20/05

85, 89

Lawyer

92

Select computer network hardware

1 day

21/05

21/05

91

Information services

93

Select computer software

1 day

24/05

24/05

92

Information services

94

Establish utilities

3 days

25/05

27/05

93

Manager

95

Provide furniture and equipment

4 days

28/05

02/06

94

Manager

96

Move in

1 day

03/06

03/06

95

Manager

97

Provide Staffing

40 days

28/04

22/06

98

Interview and test candidates

14 days

28/04

17/05

79

Manager

99

Hire staff

10 days

18/05

31/05

98

Manager

100

Train staff

16 days

01/06

22/06

99

Manager

101

Start up the business

0 days

22/06

22/06

96, 100

Manager

Business Start-Up Process Items and PMLite mapping

In this section, we choose the Ontario Self Employment Program Business Start-Up Process. This process focuses on the business planning. However in this plan, there are operation plan and implementation plan that implies activities in execution phase and operation management phase.
After the business plan is approved, starters will start-up their businesses based on implementation plan the ultimate goal is to implement an operation that align with the operation plan.  You may assume there is a process for business execution and a processes for operation management. Our scope will only do the mapping for the business Planning Process.
For each item inside the process, we identify PM concepts or items that would be useful to help executing the tasks. Some of the items can me a project itself. 


Business Plan

Business Start Up Process

PML Tools and Concepts

1.       Executive Summary

requirements analysis, scope

2.       Company Description

requirements analysis, scope

2.1   Business Concept

requirements analysis, scope

2.2   Products and Services Description (Overview)

requirements analysis, scope

2.3   Key Management Description and Advisors

 

3.       Vision and Mission

milestone planning, scope

3.1   Vision

milestone planning

3.2   Mission

milestone planning

4.       Goals and Objectives

milestone planning

4.1   Year One

 

4.2   Year Two

 

5.       Industry Research and Analysis

requirements analysis

5.1   Industry (Size, Growth, Trends and Outlook)

 

5.2   Influences (Social, Cultural, Political, Economic)

 

5.3   Regulatory Issues (Federal, Provincial, Municipal and Industry)

 

5.4   Opportunity

requirements analysis

6.       Target Market Research and Analysis

requirements analysis, scope

6.1   Target Market Profile and Analysis

requirements analysis

         6.1.1   Market Segment(s) (Size, Growth, Trends, Outlook and Potential)

Inherit from 6.1

         6.1.2   Geographic

Inherit from 6.1

         6.1.3   Customer Profile

Inherit from 6.1

                     6.1.3.1   Demographic

Inherit from 6.1

                     6.1.3.2   Psychographic

Inherit from 6.1

         6.1.4   Consumer Profile (if applicable)

Inherit from 6.1

                     6.1.4.1   Demographic

Inherit from 6.1

        6.1.4.2   Psychographic

Inherit from 6.1

6.2    Competitive Profile and Analysis

requirements analysis

          6.2.1   Competitors

Inherit from 6.2

                     6.2.1.1   Direct

Inherit from 6.2

                     6.2.1.2   Indirect

Inherit from 6.2

          6.2.2   Competitive S.W.O.T. Analysis Chart

Inherit from 6.2

          6.2.3   Competitive Advantage

Inherit from 6.2

7.       Sales and Marketing Plan

requirements analysis, milestone planning, work breakdown and activity lists, responsibility assignment matrix, work schedules (and checklist and Gantt charts), PM software, Kick off meetings, commercial PM

7.1   Positioning Plan

Inherit from 7

7.2   Products and Services Plan

Inherit from 7

7.3   Placement/Distribution Plan

Inherit from 7

7.4   Packaging (Products) and/or Bundling (Services) Plan

Inherit from 7

7.5   Pricing Plan

Cost management

7.6   Promotion Plan

Inherit from 7

         7.6.1   Advertising

Inherit from 7

         7.6.2   Promotion

Inherit from 7

                     7.6.2.1   Customer Promotion

Inherit from 7

                     7.6.2.2   Consumer Promotion

Inherit from 7

         7.6.3   Publicity Plan

Communication management

                     7.6.3.1   Media Relations

Communication management

                     7.6.3.2   Trade Relations

Communication management

                     7.6.3.3   Public Relations

Communication management

7.7   Networking Plan

Communication management

7.8   Sales Plan and Forecast

Cost management

         7.8.1   Sales Plan

Cost management

         7.8.2   Year One Sales Forecast

Cost management

      7.8.2.1   Notes and Assumptions (Incl. Seasonality)

Cost management

         7.8.3   Year Two Sales Forecast

Cost management

                     7.8.3.1   Notes and Assumptions (Incl. Seasonality)

Cost management

         7.8.4   Year One Sales Forecast and Promotion Plan Chart

Cost management

         7.8.5   Year Two Sales Forecast and Promotion Plan Chart

Cost management

 

 

8.       Operations Plan

milestone planning, work breakdown and activity lists, responsibility assignment matrix, work schedules (and checklist and Gantt charts), PM software, Kick off meetings, commercial PM

8.1   Legal Name and Trade Name (if different from legal name) of Business

Inherit from 8

8.2   Legal Structure of Business

Inherit from 8

8.3   Business Coordinates

Inherit from 8

         8.3.1   Business Address

Inherit from 8

         8.3.2   Telephone Number(s)

Inherit from 8

         8.3.3   Fax Number(s)

Inherit from 8

         8.3.4   E-Mail Address

Inherit from 8

         8.3.5   Website Address

Inherit from 8

8.4   Business Processes

Inherit from 8

8.5   Equipment

Inherit from 8

8.6   Suppliers

Inherit from 8

8.7   Management Plan, Policies and Procedures

Inherit from 8

         8.7.1   Administrative Plan, Policies and Procedures

Inherit from 8

         8.7.2   Personnel Plan, Policies and Procedures

Inherit from 8

         8.7.3   Quality Control Plan, Policies and Procedures

Inherit from 8

         8.7.4   Customer Service Plan, Policies and Procedures

Inherit from 8

         8.7.5   Payment Plan, Policies and Procedures

Inherit from 8

      8.7.5.1   Suppliers

Inherit from 8

      8.7.5.2   Customers

Inherit from 8

         8.7.6   Other Management (e.g. Sales, Financial) Plans, Policies and Procedures

Inherit from 8

 

 

9.       Risk Plan

Risk management,  work breakdown and activity lists, responsibility assignment matrix, work schedules (and checklist and Gantt charts), PM software, Kick off meetings, commercial PM

9.1   Risk Assessment and Plan Chart

Inherit from 9

 

 

10.   Implementation Plan

milestone planning, work breakdown and activity lists, responsibility assignment matrix, work schedules (and checklist and Gantt charts), PM software, Kick off meetings, commercial PM

10.1   Implementation Plan (first three months) Chart

Inherit from 10

 

 

11.   Financial Plan

cost management

11.1   Start-Up Costs

cost management

11.2   Sources of Funding

cost management

11.3   Year One Projected Profit/Loss Statement

cost management

           11.3.1   Notes and Assumptions

cost management

11.4   Year Two Projected Profit/Loss Statement

cost management

           11.4.1   Notes and Assumptions

cost management

11.5   Year One Projected Cash Flow Statement

cost management

           11.5.1   Notes and Assumptions

cost management

11.6   Year Two Projected Cash Flow Statement

cost management

           11.6.1   Notes and Assumptions

cost management

11.7   Breakeven Analysis

cost management

From the above table, we have mapped project management Lite items into business start-up process. There are lots we can use about project management into our business start-up. For example communication management and client requirement are needed when we talk about networking, sales, or even marketing.
For operation management and implementation, we need to use work schedule, work breakdown structure, Gantt chart, tracking, monitoring, activity lists, PM software to help delivering our jobs.
For sales, pricing, financial plan, we can use cost management tools to forecast, plan, track, report, monitor our financial and sales activities. 
For risk management plan, we will leverage PM risk management techniques and tools such as risk register, impact and probability tool, risk identification, risk response planning, risk monitoring etc.
For the business description, identifying the business idea, we can focus on using milestones, visions defining techniques.

\

PM Tools Generation Examples

Of course the mapping is not enough. We need to use it. SO how can we use project management? We can develop tools and practices for ourselves and can stick using them.
There are many tools you can develop and you can use, and many tools have been developed. Tools can be spread sheets, checklist, application, document etc. You can be as creative as you need. The whole point here is to use them. For this article, I will use one of my self-created tools to track my activities.

Small Business Project Management

Above is a snapshot of one of the tools. This is to identify, schedule, track, prioritize and report my business start-up activities during my project execution phase. This is rather simple, simpler than project office work breakdown structure and Gantt chart. It does not have duration and dependencies.  From the left there are activity lists or work breakdown. Then it has priority for execution. On the next following column, it identifies the tasks should be executed in which during the month. After the tasks have finished you fill the box green. Yellow for in progress and red for not finished. On the far right column you put comments and status update of the item. This can be served as an issue log. Also you can extract this column and the first work item column for monthly reporting. I found this tool handy and it is very easy to make and use. The most important thing is to create a habit of using it and stick to your plan.

Conclusion and Future Work

This article introduces how business starters can use project management to start up their small businesses. First we identify the minimal set of tools that is good enough for small business starters to use. Then we map the project management tools to our business start-up process to identify opportunities we can exploit project management. Finally we can create or borrow tools that adhere to the process mapping. There are lots of work can be done in the future for this program, including educating the public basic project management concepts, introducing or creating project management tools to the user and ensure they develop habit of using them.

The Author

Eric Tse is an international recognized expert/consultant in Enterprise Access and Identity Management Architecture Design and Implementation. He has been working with international renowned experts in information technology in many prestigious companies.  He also pursues research interests in project management, financial models, application/enterprise/solution architectures, compilation technology and philosophy of science.

 

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