The Business Side: Six Tips for Successful Project Management
August 31, 2011
Requirements such as using a contract, negotiating the right fee, carefully monitoring each project, using deadlines to control costs, collecting on accounts in a timely manner and following up with clients are more important than ever. Let’s take a look at each of these items to see how they apply to your business.
1. Use a contract. Very few business managers understand the No. 1 benefit of having a contract. Some company owners might guess it will help get them paid; others might think it gives them power over the client. But the real benefit of having a contract is having the scope of service in writing. In this very complex world, having a written contract agreement is not a luxury but a necessity.
A good way to handle the contract is to write a preliminary document outlining a scope of work based on meetings or discussions with the client. Email or fax the contract to the client for review and approval. Don’t be surprised if the client wants to make some changes to the scope or cost. Many good sample contracts are available on the Internet. Don’t forget to include special provisions that deal with how to end the contract, including one that allows you to leave the job if you’re not paid according to the agreed-upon terms.
2. Negotiate the right fee. There are a few rules that are very important to getting the right fee for your work. First, you have to believe in the quality of your service, and you must make sure the client believes your company is the right one for the job. Also, make sure you are negotiating with the person who can sign your contract. And don’t just sell your service, but sell it at the highest price. Sometimes we get in such a hurry to complete a sale we leave money on the table that could have been ours.
Start any negotiation with the scope of service. Make sure you and the client both agree on the desired product. This is especially true on ALTA/ACSM surveys, where the client may not need many items on schedule “A.” Don’t just lower the price if the client asks you; explain that lowering the price will require a change in the scope of service. Also, don’t lower the price before the client asks--a mistake often made by inexperienced business owners. If you come to an impasse during the fee discussion, sometimes it is best to stop talking. Anything you say at that point might prevent you from getting the job.
3. Monitor every project. Becoming an effective manager is an art that most company owners learn over time through bad experiences. One problem most of us have is to take on too many tasks.
At the beginning of each week, sit down and make a list of the most important things you need to accomplish that coming week. Some items might end up not getting finished, but you have to realize that is OK. Try to delegate some minor items to other people. They may be accomplished differently than you would have done them, but it’s important to free up some of your time to focus on other tasks. Also, don’t be afraid to say “no.” You do not have to agree to everything your employees or clients want. Your staff only wants or needs direction or instruction in small blocks of time. Make yourself available when needed, but then step back and let your staff do their work. Employees want to please the boss. If they’re not getting the job done, analyze the instructions and directions that you are providing to make sure everything is clear.
4. Implement deadlines to control costs. Never share cost information with your employees. Projects need to be managed by time, not money. For each project, schedule a certain amount of time to complete the work, including field work. Don’t ever forget the old axiom, “Over time, over budget.” Also, watch out for “scope creep,” a problem that occurs when clients call and add items to the project after the contract is signed. One of my former bosses handled this situation by directly confronting the client about the additional work. In many cases, the requests would be dropped. In some cases, the discussion would result in an expanded and renegotiated contract.
5. Collect on your accounts. One of the most disheartening situations for a business owner is to be unable to collect the money owed for services rendered. Sometimes the shortage of funds can be so severe that the owner can no longer run the company. Don’t let this happen to you. Set up a system to bill clients in a timely manner and follow up on client invoices. Remember: Clients pay from invoices, not statements. This is one reason I have always been in favor of lump-sum billing as opposed to hourly rates. When billing by the project, the invoice can be mailed with the final map or product. An hourly invoice needs to wait until the end of billing cycles, and this delay can result in a missed billing cycle by the client.
When a contract is signed, make sure you speak with the client about how to get paid, including the billing cycle and required paperwork. It is always a good idea to call a few days after mailing invoices to make sure the client received the bill. These might be tasks you can delegate to an employee.
6. Follow up with your clients. A few days after the client has received the work, make a quick follow-up call to ask whether the service was satisfactory. A successful surveying business depends on repeat business from former clients, so make sure the final survey was the product the client wanted to buy. Also, don’t be afraid to ask the client for recommendations of other people or businesses who could use the type of services you provide.
Managing projects to maximize efficiency and profitability is more important now than ever. Fortunately, the basic tenets of successful project management haven’t changed. Take control of your surveying business by managing your projects wisely.