Every healthy, profitable business has one thing in common: excellent project management. From start to finish, the way your projects are being managed can make all the difference in adhering to budgets, amplifying profits, and delivering results on time.
While each project may vary in scope and need for oversight, this guide will walk you through several key steps you need to take to set project budgets, keep them on track, and maximize your profits.
Step 1: Establish a realistic budget
One of the most important steps in budget-savvy project management is establishing a realistic budget. If you’re starting out with an established budget with no wiggle room, feel free to skip to step 2. Otherwise, you’ll need to consider factors such as time, resources, and unforeseen expenses. If your team has tackled a similar project before—perhaps for the same customer, a customer of a similar size, or an internal project of a similar scope—looking back on the data from that project can help you set realistic expectations. The right software will store all of this crucial information in a centralized location so you can get a clear and accurate picture of which projects were profitable, on time, and are most closely related to the project you’re currently planning.
It’s also a good rule of thumb to factor a little extra time and money into project budgets where possible, especially when you don’t have access to data on your previous projects or are venturing into new territory.
Step 2: Prioritize costs
When you don’t have any wiggle room in your project budgets for potential delays, increases in labor or supply costs, broadened project scope, or any number of variables, you can still plan ahead in a budget-savvy way. How? By prioritizing costs in advance. To maximize your return on investment, consider project goals and customer needs. Rank these by level of importance or by expense.
Once you know where priorities lie if any setbacks arise, it’s time to consider what you can do to avoid reducing the scope of a project once it’s started. You can potentially reduce costs without compromising quality by eliminating the less important deliverables and focusing on the core of the project. Depending on what is causing your setback, you could also try negotiating with vendors and suppliers, lengthening project timelines to accommodate delayed parts deliveries, and reallocating remaining resources.
Step 3: Track and manage costs
To avoid going over budget on a project, it’s crucial to monitor project expenses regularly. While you can use spreadsheets and hold check-ins with team members to keep track of expenses, there’s a simpler way. You’ll save a lot of time on manual re-entry and needless meetings if you utilize the right software instead. That way, you’ll be storing relevant project data within a centralized system that each contributing team member can view and update as progress is made.
Step 4: Establish ownership and clear lines of communication
One thing that can derail or delay project progress leading to budget breakdowns is a lack of ownership and communication. You need to ensure that each necessary step within a project is owned by someone on your team. This looks like each team member knowing up front that they are accountable for this element being delivered and are expected to check in regularly with project stakeholders on any progress or pitfalls.
Regular check-ins between team members are standard but have you established clear check-ins and lines of communication with your customers? If this project is built for a specific customer or will affect your entire customer base, updating them on progress, delays, and providing relevant information along the way can lead to greater satisfaction. Happy customers stick around; if you’re looking to maximize your profits on future projects as well as this one, maintaining clear lines of communication with your customers can go a long way!
Step 5: Adjust as needed
If you’ve made it all the way to step 5, you’ve put a lot of time, thought, and effort into planning a budget-savvy project. However, it’s important to keep your plans malleable and flexible, adjusting as needed. While you don’t set out hoping for scope creep or reductions in staff leading to project delays, these and a variety of other things can pop up during the course of any project. If you want your projects to remain as profitable as possible, strategy adjustments, budget adjustments, and timeline adjustments might be required along the way.
Delivering projects on time, under budget, and maximizing your profits every time is the goal, right? These 5 steps will help you achieve this goal more often and streamline your project management process to focus on the essentials.
If you want to take further steps to streamline your business management, Tigerpaw’s all-in-one automated software can help. Find out more about it here. We’d love the chance to help you build a better business and sleep better at night!