When you first start your business, you’ll be desperate for as many projects as you can get. Your operating capital will be limited, so you’ll need to generate revenue quickly and sustainably, and more projects are the answer. But there’s a limit to how far this mentality can take you as your business grows and expands; eventually, you’ll hit a point where you have more projects coming in than you can feasibly handle. You’re still young, so you don’t want to turn business away, but if you keep accepting work, you won’t be able to perform optimally.
What should you do in this situation?
Introducing Project Portfolio Management
If you haven’t heard of project portfolio management (PPM) before, you might mistake it for project management. However, PPM is distinct, taking a higher-level look at your projects and how they benefit your company. PPM managers work to create a system of prioritization, so you can assign resources (including project managers) to your most important projects, and shelve your least important projects for a later time. PPM also helps you organize and understand the nature and value of each project, so you can avoid overworking your staff and still ensure the maximum amount of work is completed.
PPM, as an idea can be executed by anyone in charge of onboarding new customers or managing projects, but it’s best executed by a dedicated PPM professional with PPM software, which will help you quantify the value of projects, improve transparency, and aid in assignment and communication.
Steps to Take
If you have more potential projects than you can realistically handle, these are the steps you’ll need to take to resolve the situation (assuming you have a PPM system in place):
- Turn down low-priority projects. After weeks or months of trying to get as many customers as possible, it will be painful to say “no” to your first unwanted project. Still, with a PPM system in place, you’ll be able to easily see which projects simply aren’t worth the time and money investment—especially when compared to your higher-priority and more profitable work. Try not to burn bridges here, but be honest about your circumstances; saying your organization is too busy to take on new projects may actually be a boost for your reputation.
- Set realistic expectations for new customers. If you’re onboarding new customers and you know they’re going to take a backseat to your higher-priority work, Set Realistic Expectations for them. Let them know you have a high priority project that’s going to occupy your team for the next eight weeks, and that they shouldn’t expect work to begin until that project is finished. It may not be what they want to hear, but it will proactively avoid an even worse conversation that will likely arise if your new customer is blindsided.
- Hire new people for your most profitable work. If you’re shifting your resources to your most profitable work, you should be able to hire some new team members to execute that work more quickly. Completing more highly profitable projects at a faster rate is almost always worth the additional salary you’ll pay—even if your margins per project end up being slightly lower.
- Invest in partnerships and contractors. You don’t have to hire more people to get more work done. Instead, you can invest in partnerships with contractors and other firms. With contractors, you can bring new resources onto each project only as needed, helping you hit your target goals without adding a consistent cost to your monthly expenses. With partnerships, you may be able to refer low-priority or unprofitable projects to other companies, and cash in on a stream of referral fees. It’s a way to profit off your rejected projects.
- Increase pricing. If you have more work coming in than you can realistically accept, it might be a good time to increase your prices. Clearly, your prospective customers see the value of your services; if you get a few less interested customers or if you lose a core client, you’ll still stay busy with remaining projects, and you’ll make more money per project doing it.
Having too many projects is one of the best “problems” you can have as an entrepreneur, but it’s still a problem. Fortunately, there are objective rubrics and systems you can leverage to ensure you and your team can handle those projects appropriately.
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