The PROJECT PERFECT White Paper Collection Abstract Small Start-up Business Project Management Eric Tse 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 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 01/08/12 www.projectperfect.com.au Page 1 of 11
- 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 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. 01/08/12 www.projectperfect.com.au Page 2 of 11
- 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 Startup Process.) Lite project management PMLite Content (Turner, 2011) PMBOK practices PMLite 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 01/08/12 www.projectperfect.com.au Page 3 of 11
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 01/08/12 www.projectperfect.com.au Page 4 of 11
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 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Phase 1 - Strategic Plan 23 days 01/01 02/02 Self-Assessment 3 days 01/01 05/01 Define business vision 1 day 01/01 01/01 Manager Identify available skills, information and support 1 day 02/01 02/01 3 Advisor, Manager Decide whether to proceed 1 day 05/01 05/01 4 Manager Define the Opportunity 10 days 06/01 19/01 Research the market and competition 1 day 06/01 06/01 5 Advisor Interview owners of similar businesses 5 days 07/01 13/01 7 Owners Identify needed resources 2 days 14/01 15/01 8 Advisor, Peers Identify operating cost elements 2 days 16/01 19/01 9 Accountant Evaluate Business Approach 4 days 20/01 23/01 Define new entity requirements 1 day 20/01 20/01 10 Manager Identify on-going business purchase opportunities 1 day 21/01 21/01 12 Manager Research franchise possibilities 1 day 22/01 22/01 13 Manager Summarize business approach 1 day 23/01 23/01 14 Manager Evaluate Potential Risks and Rewards 7 days 21/01 29/01 Assess market size and stability 2 days 21/01 22/01 12 Advisor Estimate the competition 1 day 23/01 23/01 17 Advisor Assess needed resource availability 2 days 26/01 27/01 18 Advisor Evaluate realistic initial market share 1 day 28/01 28/01 19 Advisor Determine financial requirements 2 days 26/01 27/01 15 Advisor Review personal suitability 1 day 28/01 28/01 21 Manager Evaluate initial profitability 1 day 29/01 29/01 22 Manager Review and modify the strategic plan 2 days 30/01 02/02 23 Confirm decision to proceed 0 days 02/02 02/02 24 Phase 2 - Define the Business Opportunity 27 days 03/02 10/03 Define the Market 13 days 03/02 19/02 Access available information 1 day 03/02 03/02 25 Advisor Create market analysis plan 2 days 04/02 05/02 28 Advisor Implement market analysis plan 5 days 06/02 12/02 29 Advisor Identify competition 2 days 13/02 16/02 30 Advisor Summarize the market 2 days 17/02 18/02 31 Advisor Identify target market niche 1 day 19/02 19/02 32 Advisor 01/08/12 www.projectperfect.com.au Page 5 of 11
34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 Identify Needed Materials and Supplies 7 days 20/02 01/03 Select a business approach (from"evaluate 2 days 20/02 23/02 28SS, Manager Business Approach" above) 33 Identify management staff resources 1 day 24/02 24/02 35 Manager Identify staffing requirements 1 day 25/02 25/02 36 Manager Identify needed raw materials 1 day 26/02 26/02 37 Manager Identify needed utilities 1 day 27/02 27/02 38 Manager Summarize operating expenses and financial 1 day 01/03 01/03 39 Manager projections Evaluate Potential Risks and Rewards 6 days 02/03 09/03 Assess market size and stability 2 days 02/03 03/03 40 Manager Assess needed resources availability 2 days 04/03 05/03 42 Manager Forecast financial returns 2 days 08/03 09/03 43 Accountant Review and modify the business opportunity 1 day 10/03 10/03 44 Confirm decision to proceed 0 days 10/03 10/03 45 Advisor, Peers, Lawyer, Accountant Phase 3 - Plan for Action 21 days 11/03 08/04 Develop Detailed 5-Year Business Plan 21 days 11/03 08/04 Describe the vision and opportunity 1 day 11/03 11/03 46 Advisor List assumptions 1 day 12/03 12/03 49 Advisor Describe the market 1 day 15/03 15/03 50 Advisor Describe the new business 1 day 16/03 16/03 51 Advisor Describe strengths, weaknesses, assets and threats 1 day 17/03 17/03 52 Advisor Estimate sales volume during startup period 1 day 18/03 18/03 53 Advisor, Accountant Forecast operating costs 1 day 19/03 19/03 54 Advisor, Accountant Establish pricing strategy 1 day 22/03 22/03 55 Advisor Forecast revenue 1 day 23/03 23/03 56 Advisor Summarize pro-forma financial statement 2 days 24/03 25/03 57 Advisor Develop break-even analysis 1 day 26/03 26/03 58 Advisor Develop cash-flow projection 1 day 29/03 29/03 59 Advisor Identify licensing and permitting requirements 1 day 30/03 30/03 60 Advisor Develop startup plan 2 days 31/03 01/04 61 Advisor Develop sales and marketing strategy 1 day 02/04 02/04 62 Advisor Develop distribution structure 1 day 05/04 05/04 63 Advisor Describe risks and opportunities 2 days 06/04 07/04 64 Advisor Publish the business plan 1 day 08/04 08/04 65 Advisor Confirm decision to proceed 0 days 08/04 08/04 66 Advisor Phase 4 - Proceed With Startup Plan 53 days 09/04 22/06 Choose a location 1 day 09/04 09/04 67 Establish Business Structure 24 days 12/04 13/05 Choose a Name 2 days 12/04 13/04 Identify implications 1 day 12/04 12/04 69 Lawyer Research name availability 1 day 13/04 13/04 72 Lawyer Choose a Bank 5 days 14/04 20/04 Establish accounts 4 days 14/04 19/04 73 Banker Establish line of credit 1 day 20/04 20/04 75 Banker 01/08/12 www.projectperfect.com.au Page 6 of 11
77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 Choose legal representation 1 day 21/04 21/04 75SS, Lawyer 76 Select business tax-basis category 2 days 22/04 23/04 77 Lawyer, Accountant Choose capital funding source 2 days 26/04 27/04 78 Manager Commit capital funding 0 days 27/04 27/04 79 Manager Establish the Operating Control Base 12 days 28/04 13/05 Choose and set up the accounting system 2 days 28/04 29/04 79, 80 Accountant Obtain required licenses and permits 4 days 30/04 05/05 82 Lawyer, Government agency Obtain needed insurance 4 days 06/05 11/05 83 Accountant Establish security plan 2 days 12/05 13/05 84 Advisor, Lawyer Develop Marketing Program 4 days 13/04 16/04 Establish an advertising program 2 days 13/04 14/04 73SS Advisor Develop a logo 1 day 15/04 15/04 87 Advisor, Lawyer Order promotional materials 1 day 16/04 16/04 88 Advisor Provide Physical Facilities 15 days 14/05 03/06 Secure operation space 5 days 14/05 20/05 85, 89 Lawyer Select computer network hardware 1 day 21/05 21/05 91 Information services Select computer software 1 day 24/05 24/05 92 Information services Establish utilities 3 days 25/05 27/05 93 Manager Provide furniture and equipment 4 days 28/05 02/06 94 Manager Move in 1 day 03/06 03/06 95 Manager Provide Staffing 40 days 28/04 22/06 Interview and test candidates 14 days 28/04 17/05 79 Manager Hire staff 10 days 18/05 31/05 98 Manager Train staff 16 days 01/06 22/06 99 Manager 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. 01/08/12 www.projectperfect.com.au Page 7 of 11
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 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 7. Sales and Marketing Plan 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 01/08/12 www.projectperfect.com.au Page 8 of 11
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 milestone planning, work breakdown and activity lists, responsibility assignment matrix, work schedules (and checklist and Gantt charts), PM software, Kick off 8. Operations Plan 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 Inherit from 8 Procedures Risk management, work breakdown and activity lists, responsibility assignment matrix, work schedules (and checklist and Gantt charts), PM software, Kick off 9. Risk Plan meetings, commercial PM 9.1 Risk Assessment and Plan Chart Inherit from 9 milestone planning, work breakdown and activity lists, responsibility assignment matrix, work schedules (and checklist and Gantt charts), PM software, Kick off 10. Implementation Plan 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 01/08/12 www.projectperfect.com.au Page 9 of 11
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. 01/08/12 www.projectperfect.com.au Page 10 of 11
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. About Project Perfect Project Perfect is a project management software consulting and training organisation based in Sydney Australia. Their focus is to provide organisations with the project infrastructure they need to successfully manage projects. Project Perfect sell Project Administrator software, which is a tool to assist organisations better manage project risks, issues, budgets, scope, documentation planning and scheduling. They also created a technique for gathering requirements called Method H, and sell software to support the technique. For more information on Project tools or Project Management visit www.projectperfect.com.au 01/08/12 www.projectperfect.com.au Page 11 of 11