Dave Brown, Partner at Foundation Finance, excels at helping clients get beyond the limitations of current financial conventional wisdom and take control of their own economic future. Today, Dave has written a guest blog for us about the financing options for SMBs:

Any small business owner who took the time to research the outlook for obtaining financing in 2013 would most likely get opinions as varied as the sources consulted.  Such a forecast depends on many variables – the state of the overall economy; the state of the local economy; the potential sources of financing; and, the overall credit-worthiness of the applicant, to highlight just a few.  While these are clear starting points, things can start to get somewhat murky once we begin to drill down on the subject of potential sources of financing.

As we continue to deal with the impact of the 2008 financial meltdown, it's impossible for anyone to not still feel ramifications of it.  So even though you might not have had a need for financing in 2010 or 2012, just know changes that were set in motion during the backlash of the last few years might very well have an impact on your efforts to obtain financing in 2013.  This goes beyond the obvious truth that applicants should expect to spend more time and manpower jumping through the lender’s hoops in order to prove they are worthy of the financing help.  We must also be aware of any potential impact on the actual pool of lendable capital in the marketplace. 

As part of the Journyx webinar series, in How To Shield Your Business from the Next Financial Downturn , we discuss just how critical the availability of financing is to the entire global economy, along with how the traditional sources of financing have been impacted and the resulting rise of “alternative” financing.  We also discuss the impact of government regulation, how one government action can contradict another, and how the influence is felt at the local level.  Finally, we explore the possibility of being less dependent on external sources of capital in order to maintain greater flexibility and control in any economic environment.    

This webinar will next be presented on Thursday, Feb 21, at 2 p.m. CST. I hope you'll join us. Please write down any questions now that you have on this topic and I'll do my best to answer it during the webinar's Q&A section.

One of my main responsibilities here at Journyx is working with presenters on their contributions to our webinar series. The June sequence is comprised of top-of-the-line presenters who offer tips and techniques SMBs can use to address common business issues.

I would like to spotlight our newest presenter, Dave Brown, Partner at Foundation Finance. He’ll talk about how businesses can shield themselves from the next financial downturn. If you want to hear specific, actionable advice about minimizing risks from external forces, this is one you definitely need to see. Dave will also share how to leverage existing finances for maximum benefit to everyday business. We are excited that he is willing to impart his value-producing knowledge in his webinar this month! Be sure to sign up and see for see for yourself.

If you haven’t yet scanned our upcoming events for June, make sure you do. They are a great way to learn and connect with industry professionals. Attendees have reached out to let me know they have derived real business value from our series and have used the knowledge to improve their own companies. It's a partnership effort between our presenters and us here at Journyx to help businesses truly understand their resources and capabilities.

Ahhh…the age old question. Or at least one that seems to come up from time to time. It’s certainly a question that has frustrated me for a while. When should the project manager become engaged in the project? After the sale? During the sale process? From inception, working right alongside Sales to map out an estimate and close the deal with the client? You could say ‘it depends’, but I’m not sure that’s a good answer either.

About a decade ago I worked for very large aviation and engineering firm where I specialized in managing web projects primarily for internal customers. What that means is I led internet and intranet projects for individual business units within the organization. The whole sales process was mine. There was no marketing involvement, just the internal sponsor initiating a project request which was my cue to find out their needs, map out requirements, and then turn around a price estimate that we could move forward with. I would sometimes take a developer with me to speed up the process of documenting requirements and a proposed solution if I wasn’t completely sure, and that would get me to a good price point quickly for the internal client. None of these were multi-million dollar engagements – the largest was probably close to $100,000. But you can see how informed I was as I assembled my team and began to work with the client on the project. There were no gaps or cracks through which information could fall. I had been with the project from inception and knew everything.

Fast-forward ten years to larger projects I was leading for a professional services organization. The Sales team completes the deal with a price and a proposed solution and starts throwing these projects over the wall to me and the other project managers. We have only the knowledge we can extract from the account manager during a phone call and we have the statement of work…and not much else. No wonder when I showed up at the client site for project kickoff I was usually bombarded with questions and expectations that were different from what I was telling them was going to happen on the project.

It’s extremely important – no, it’s critical – that the project manager be a part of that sales process. There are too many risks involved – including budget and other financial risks – when the individuals who will actually be carrying out the project aren’t part of the team that also prices the project and drafts a solution. The project manager should be allowed to act much more as an engagement manager – running the concept or project request from inception to deployment. When you just hand it over the wall, you create a do-over point where knowledge must again be transferred and you have too much risk for important details just falling through the cracks.

Summary

So I’ll ask the question again, should the project manager be involved in pricing the engagement? My answer is an absolute ‘yes’. And much more than that – the project manager should be involved in the whole account management process of getting the project request to the ‘sold project’ point with a statement of work, price, draft schedule and a date for an official kickoff meeting. By involving the project manager, you have the best chance at not only presenting the right price, but then also ensuring that your project team and the customer will be on the same page when they sit down to finalize how the project will be run during the formal kickoff session.

About the Author: Brad Egeland is an IT/Project Management consultant, business strategist, and author with over 25 years of software development, management, and project management experience leading initiatives in Manufacturing, Government Contracting, Gaming and Hospitality, Retail Operations, Aviation and Airline, Pharmaceutical, Start-ups, Healthcare, Higher Education, Non-profit, High-Tech, Engineering and general IT. He has been highly recognized for his ability to work with C-level business leaders in both startups and established organizations to create best practice processes for business management and project management and has overseen the creation and execution of multiple project management offices. He is a married, father of 7 living in Las Vegas, NV. He can be reached at brad at bradegeland.com or you can visit his website at www.bradegeland.com.

The potential benefits of a project management office (PMO) are numerous and well-documented. However, many of the benefits never materialize. Take a look at PMOs over the years and you will see that many have restructured, dissolved, or constantly had to justify their existence during both economic downturns as well as high-growth periods. This is evidence enough that PMOs are not yielding demonstrable positive financial results. This churn often causes years of frustration for both the PMOs and the projects and departments they serve. Changing the way in which the PMO is chartered, works, and is perceived within an organization can ensure that it offers plentiful advantages for the entire organization.

Two Problem Scenarios… And Strategies to Solve Them

One: The PMO is spawned by an executive with a big problem

Let’s consider this example: a client forms a PMO to salvage a huge contract with a customer. A very large project lags, causing late deliveries and missed expectations all around. Department staff is not completely honest with the customer, hoping that they will somehow be able to ‘catch up.’ They fall further behind and an executive is forced to intervene. Experienced senior project managers are brought in to assist with the problem, turn around customer expectations, and evolve communication and estimation processes within three months. In another four months, the project managers turn the projects back over to a grateful department.

The senior project managers who saved the day wonder, “Now what? We had unrestricted executive access, some of the best people across the organization loaned or transferred to our projects, and spent tens of thousands of dollars on training, equipment, and process improvement. Results were great. Now we can’t get a phone call returned from a director outside the PMO or any attention to the best practices we just proved are necessary to keep projects out of the red zone.” Three of the four project managers are let go or quit within the next six months along with half of the PMO staff of 20.

This example is not just for illustration – it is happening in organizations all across the country every day. If the PMO is helpful in solving the big problem, then PMO staff members must assume other roles to continue to justify their existence. When PMOs define their own course, the high-percentage outcome is stagnated by over-regulation and process. It does not take long for your PMO to lose power and possibly be disbanded.

Strategies to remain financially viable:

1. Always take on the big problems. Put the PMO on each issue as a fix-it or turnaround weapon.
2. Key deliverable leave-behinds should include significant process improvements that equip your internal customers with tools they didn’t previously have that make them more successful going forward.
3. Processes used should include mentoring and training key people in the problem domain so that the fixes the PMO put in place ‘stick.’
4. Help the involved departments win their battles, shore up their defenses and then move on to the next big problem.

Two: The PMO is spawned by one or more executives who want more visibility or compliance via governance efforts but don’t really want lasting change

Read the rest of this article at PM Hut.

Have you ever had that project or account that you just had to have? One that, for some reason, you saw as a make-it-or-break-it client initiative. Do you have a ‘succeed or die’ mentality? It’s probably a good thing if you don’t.

I realize there are times when we say, “I need to get that business or I may be in trouble.” That’s the nature of business. As an independent consultant, I’ve reached that crossroad a few times….I’m sure most consultants do. But do you go at it with that win-at-all-cost mentality? Or do you get creative? I vote for creative. A CEO of one company I worked used the win-at-all-cost approach….and it was not successful.

The Scenario

The organization I was working for was a small professional services company located in the Midwest; I was responsible for leading and growing the staff in Las Vegas. I was responsible for leading projects for one of their gaming/hospitality clients and as well as leading a project to perform a complete re-write of the software system that basically ran a local Las Vegas hospitality firm’s entire organization.

For the software re-write, we determined that the software would need to be completely abandoned as it had become a bad patchwork of software and add-ons. For some reason, our CEO wanted the contract badly and bid accordingly – low enough to win the business. However, we were much smaller than our well-known competition causing the client organization some anxiety. The client CIO felt that we would likely introduce change order after change order to recoup the revenue we were giving up in our winning bid. So our CEO pulled out the showstopper…he guaranteed one price (which was in the $1 million-plus range) and no change orders…period. None. No matter what. Well, that sealed the deal.

The problem, of course, is that it became a budgetary nightmare for me as the project manager because it was priced too low and there was no way to add revenue through change orders. The client was understanding enough, but everything within reason that they asked for, we did. The work was eventually completed, but by the end of the project, it was more than 60% over budget and my hands were tied from finding ways to add any revenue to the project. I know that the CEO’s hope was that eventually more work would come from the customer, but both organizations eventually failed – the client’s from the economy and the vendor (my organization) from poor management and fraudulent tactics by the CEO.

Summary

As a project manager and as an independent consultant, I’ve never been in favor of a win-at-all-cost strategy. The go-for-broke mentality is not likely to win you long-term business and it can certainly cause your financial infrastructure to become shaky by betting everything on one project going perfectly and not breaking the bank.

As we all know, every project hits bumps…every project experiences some sort of issue or critical point. And nearly every project struggles to some degree to stay on budget. Plus, more than 50% of all projects fail to some degree. Putting too much hope in everything going perfectly on a project is a recipe for disaster. It is far better to strategize, and pick projects and clients that match well with your long term organizational plans and financial goals. It’s the best decision to price work to profit, not just to win no matter what. A win-at-all-cost mentality at the top of your organization can bring a company down fast - leaving everyone else to pick up the pieces with the clients you were faithfully trying to serve.

About the Author: Brad Egeland is an IT/Project Management consultant, business strategist, and author with over 25 years of software development, management, and project management experience leading initiatives in Manufacturing, Government Contracting, Gaming and Hospitality, Retail Operations, Aviation and Airline, Pharmaceutical, Start-ups, Healthcare, Higher Education, Non-profit, High-Tech, Engineering and general IT. He has been highly recognized for his ability to work with C-level business leaders in both startups and established organizations to create best practice processes for business management and project management and has overseen the creation and execution of multiple project management offices. He is a married, father of 7 living in Las Vegas, NV. He can be reached at brad at bradegeland.com or you can visit his website at www.bradegeland.com.