How to Start a Project Management Business
With the advent of modern technologies like laptops, cell phones, the internet, and software that lets you do everything from building a website to filing your taxes at the click of a button, it’s easier than ever before to work independently — anywhere, anytime, for anyone. And that means it’s also easier to work anywhere, anytime for yourself. Becoming an independent project manager, or a project management consultant, may be the perfect next step for you in your career. But while being your own boss has a lot of advantages, it also comes with its own challenges. You might be wondering where to start. Here’s some expert-approved advice and tips for how to start a project management business of your own.
Ask yourself hard questions
- The first step to starting your own project management company is sitting down and asking yourself a series of questions, such as:Would I be considered a seasoned project manager with years of direct, on-the-job experience and skills?
- Have I built up a network of clients, colleagues, and peers who can vouch for my abilities and experience — and potentially offer me new business?
- Am I capable of taking on more career risk, from both a mental and financial standpoint?
- Am I able to manage my time exceptionally well?
- Do I perform well under stress?
- Do I value workplace freedom over office politics?
If you’re able to answer “yes” to all of these questions, you’re ready to take the next step.
It’s time for more questions. Ask yourself:
- What are my strengths?
- Where does my expertise lie?
- What can I offer my clients that is unique or fills their needs?
- Where do I think I can carve out a space for myself in the market?
The answers to these questions will define your target market, as well as your corresponding advertising and marketing pitches. Figure out your niche first; the rest will come later.
Get a handle on your cash flow
Before making the leap to starting your own project management company, you’ll want to determine your financial capabilities. Consider what your initial costs might be — what supplies will you need? Do you need a dedicated cell phone or landline? Do you have a quiet space to work? Do you need to pay for medical insurance? What’s your target market and what can you expect to make as an independent consultant in that market? Note that within the project management industry, it’s typical to invoice monthly, with some clients allowing for weekly billing, and standard net payment terms are 30 days. You’ll therefore want to set aside at least 3 months of cash reserves — but ideally 8 to 12 months — to carry you through in case your first payments don’t come in on time, and to provide a buffer for slow months.
Have a plan for billing, expenses, and taxes
As a business owner, you’re now responsible for handling all your own billing, expenses, and tax reporting. Come up with a plan for how you will process each and stick to it. Remember that since an employer is no longer withholding state and federal income taxes, you’ll need to estimate your own quarterly income taxes and be prepared to pay them. Consider investing in tools and software to help you stay organized.
Get the word out
First, you’ll want to gently break the news to your employer. Let them know it’s a personal decision and the right step for you in your career, and reassure them that you’ve had a positive experience working with them. After all, you want to keep your relationship strong — they may be your next client!Next, let your network know that you’re setting up your own shop. Communicate clearly what you’re offering and be open to any and all opportunities at first. Your first contract will very likely come from your network.
Build your presence
Once you’ve decided to make the leap to starting your own project management company, you’ll need a strong online presence. Build yourself a reliable, easy-to-navigate website that you can point potential clients to. You can use readily available cloud software to make this happen, or if your budget allows, you can hire a web developer. Make sure you have a robust social media presence, as well: For example, LinkedIn connections and their recommendations can go a long way in building client trust.
Promote, promote, promote
To land those first few clients, you’ll also want to do a little self promotion — or, if your marketing and advertising budget allows, hire people to do it for you. “Promote your business locally through networking, local pay-per-click advertising, website advertising, email marketing, and direct mail,” one website writes. “Once you get your first few clients, you can work off referrals.” You may also want to consider placing ads in trade publications.
Choose the right tools
Just like with your billing, expenses and taxes, you’ll need a plan for how to manage the client-side part of your business. How will you track current clients, ongoing projects, and completed projects? And how will you scout for new clients? Further, you’ll need a plan for staying connected with your project team and all stakeholders when you’re off site. You may want to invest in cloud-based project management software or other tools; just make sure your clients have an easy time using the tool, too.
Find a mentor
When you’re running your own project management business, it’s inevitable that you’ll run into issues you’ve never encountered before or don’t know the answer to. You’ll want a trusted advisor or network of advisors you can go to for help. Entrepreneur.com suggests some places to start include websites like Find a Mentor, professional networking events, volunteering events, industry meetups, and social media. You may also want to explore options such as list servs and meetups associated with your educational institutions; they often have networks of alumni who are willing to help out.
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