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Projects are the lifeblood of many service-based businesses, particularly in fields like construction, interior design, web design, event planning, and home improvement. However, while some projects are straightforward and speedy, others require significant resources and cash to execute.
"Big projects are risks that can send you into the next level of business or take you two steps backward, said Kornel Kurtz, the president and CEO of WebTek. Smaller projects may not come with a hefty paycheck, but they help provide steady work. Big plans, on the other hand, have the potential to boost your business profits, but they're also more expensive.
That's why it's essential to be mindful when debating work, Kurtz said. If you don't approach a big project with the right strategy or budget, your business might suffer. Fortunately, there are easy steps you can take to vet the opportunities that come your way correctly. Keeping the following project planning questions in mind is a great way to start.
Assessing a project comes down to asking the right project planning questions. Here are the six things you should ask before agreeing to a big project.
The first step to evaluating a project is understanding its scope. "When speaking with a potential client, it is important to interview them, said Cassandra Leite, the owner of New England Foundation Crack Repair. "Find out exactly what they are looking for and make sure you can deliver.
The right consulting questions for clients start by asking what the project entails, then asking the client about their goals. If you design and install custom closets, for example, you need to find out how many closets a potential client needs, why they don't like their current closets, and what exactly they want to be changed.
If it's a creative project, it's also helpful to ask a client about their vision. "We often ask for a link to [a client's] Pinterest board, said Sascha Lafleur, an interior designer and the founder of West of Main. "This is a great way to understand their level of design expectations versus their budget. If they're showing you a $200K kitchen but have a budget of $40K, this is a great conversation starter.
Asking these questions before starting a project helps you understand a project's scope. These questions are the key to ironing out the rest of the project details, like the timeline, payment, and upfront investment.
Before you accept a project, it's crucial to understand your client's demands. "Your client may have expectations beyond the scope of work and delivery, Kurtz said. "They may want you to communicate in a certain way or show up at certain times, all of which contributes to how much staff you need to execute the project as well as how much money you need to set aside.
Start with project planning questions that involve asking a potential client whether or not they've worked with a business like yours, Lafleur said. "That way, you can have a better understanding of what their experience has been in the past and if there may be trust issues or a potential red flag that they're difficult to work with.
Next, ask the client if they've attempted a similar project in the past. "I love clients that have had the experience of trying to take on a design project on their own and come to realize it's a lot of work, logistically and aesthetically, Lafleur said. She finds that these clients "truly value your expertise and service and will generally not micromanage.
Finally, when your questions to ask before starting a project include those that inquire about a client's work and communication styles, try to uncover the why behind their requests and preferences. "For example, if a web design client expects daily communication and updates during the project because their previous company ripped them off, Kurtz said, "you better know the depth of their expectations and can respond more appropriately to it.
Making sure the consulting questions you ask clients are those that probe for information beyond the project scope is critical to understanding a client's goals and concerns, as well as determining whether or not your business can help them.
Try to be realistic when evaluating a project timeline, Leite said. "Even if the ROI is great, really think to make sure you can deliver on time and on budget, she said. "One job that is poorly planned can lead to a negative [client] experience, which may, in turn, cost [your business] more money.
Questions to ask before starting a project include those that you should ask yourself. Consider the project scope, the client's demands, your resources, and your team's experience. "It takes a certain amount of time to execute a quality project, Lafleur said. If you have an experienced team, but you're short-staffed, projects may take longer to complete. On the other hand, you may have adequate staff but working with contractors for the first time, which could disrupt your workflow.
The timeline also affects your business's cash flow, so it's vital to consider your budget and upfront costs. "In my experience, Lafleur said, "it's never a good idea to reduce the amount of time a project should take just to meet a budget because at the end of the day the client is still expecting the same quality of service and it ends up reflecting badly on your company.
If a project takes longer than you anticipated, you won't just lose credibility with your client, you'll also lose money that you could have allocated to other projects or business expenses. So, instead of rushing to complete a project or squeezing it into your schedule, give yourself a reasonable amount of time, then pad your timeline to account for setbacks or delays.
"The top thing I choose to keep in mind when considering taking on a big web design project is how it will impact our resources, Kurtz said. "Will it tie up employees from working on our normal projects? Are we going to be able to maintain our current workload if we additionally take on this large one?
Accurately allocating your resources is key to completing a job without disrupting daily operations. Project planning questions should include those that come to mind when reviewing your list of current projects, as well as their respective timelines and budgets. You also need to see how many employees are assigned to each project. "Just because you have the resources to handle a big job doesn't mean you have the resources to handle a big job and your current workload, Kurtz said.
Be realistic about what your team can accomplish, and consider how comfortable you are stretching yourself financially and logistically.
Perhaps the most critical question to ask before starting a new project is the investment cost. "In most cases, the bigger the job, the more it costs to do the project, Leite said. "It's imperative to ensure there are enough funds to cover the costs of buying material upfront and paying employees.
Depending on the project, you may have to purchase new equipment, buy supplies, hire contractors, upgrade software, or pay for travel, all while continuing to cover payroll and other operating costs.
To accurately estimate the cost, you need to ask the right consulting questions to your client. "It's crucial to have some general numbers you can pull from at the onset of a potential project prior to actually creating a design, Lafleur said. "As an interior design firm, we have collected data from our previous projects to establish allowances for design services, furniture, fixtures, finishes, and construction.
If you can, Lafleur said it's helpful to create an itemized list of each cost and discuss it with the client. "In many cases, potential clients need to be educated, and simply do not know the reality of what their scope of work costs, she added.
After you determine your upfront investment, figure out your potential ROI. Leite said her company simply subtracts expenses from the project estimate to see what the profit would be.
Keep in mind, though: your time is also a valuable factor. "The bigger the job, the more of your time is invested, Leite said. Even if the potential ROI on a project is high, it may not be as lucrative as doing several smaller projects, she said.
It's critical to review your business's finances to determine whether or not you're in an excellent position to execute your client's vision. So, another question to ask before starting a project involved looking at your current cash flow, projected cash flow for the duration of the project, and accounts payable and receivable over the next few months. You need to find out whether you have enough incoming cash to cover regular operating expenses, upfront project costs, and unforeseen expenses.
If you can take on a big project without putting your business in a risky financial situation, then you may see a sizable profit. However, if you don't have enough cash to pay for project materials and help, you may need to consider alternate options, including seeking financing or bidding on a series of smaller projects instead.
Big projects can take your business to the next level, but only if you're realistic about your budget and timeline. When you're evaluating a project, take time to ask the right project planning questions, total your upfront costs, and consider the potential ROI.
If you think a business loan could help you secure your next project bid, check out Funding Circle's term loans.
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