Starting a small business is often compared to managing a project. And for good reason. Both require careful planning, resource allocation, risk management, and execution. Whether you're starting a local retail store or launching a high-tech new startup, the project management skillset can significantly assist you in achieving your small business goals.

In this article, we’ll explore 7 key reasons why running a small business mirrors the project management process, and how understanding project management principles can set your small business up for success.

‍

But First: What is a Project?

A project is a one-time job with a clear goal, like building a house, launching a new app, or planning a wedding. It has a start, an end, and a plan to get things done. Unlike daily work, a project is temporary—it finishes when the goal is met.

Project management is the art of making sure the project runs smoothly. It’s about planning, organising, and leading a team to get things done on time, within budget, and without chaos. A project manager keeps everything on track, solves problems, and makes sure everyone knows what they need to do.

A project is a lot like a road trip. You have a destination (project goal), a map (project plan), and a budget. You decide who’s coming (project team), what to pack (resources), and how long it’ll take. Project management is making sure you don’t run out of petrol, get lost, or blow all your money on snacks before you reach the finish line.

Read more about what a project is here.

‍

7 Reasons Why Project Management is Key to Small Business Success

‍

Reason 1. Project Management Teaches Effective Planning

Both a small business and a project start with a solid plan. Without this foundation, the chances of success are slim.

In project management, one of the earliest steps is to define the project scope – what you aim to achieve and how you will go about it. Similarly, when starting a business, you must establish your business goals, target audience, and financial objectives. You create a roadmap – a business plan – outlining the necessary steps and resources required for success.

Studies show that businesses with a solid business plan are 30% more likely to succeed. Similarly, entrepreneurs with a business plan are 260% more likely to launch their business than those without.

‍

Reason 2. Project Management Helps Setting Clear Small Business Objectives and Deadlines

A key project management principle is setting specific, measurable, achievable, relevant, and time-bound (SMART) goals. This is just as important in a small business.

Without clear objectives and deadlines, it’s easy to lose direction. Setting clear goals helps business owners focus on what matters most, from financial targets to customer acquisition rates.

‍

Reason 3. Project Management Assists Small Businesses to Manage Limited Resources

In project management and small business operations, resource management is critical. You need to identify and manage the resources you have (for example, people, time, or money).

This is where the project management frameworks can assist. For example, the Project Management Institute’s Talent Triangle teaches project managers how to focus on the following skill sets to navigate project growth:

• Ways of Working: Learning about different ways of working (for example, predictive, agile, or design thinking techniques) and applying the relevant techniques when needed.
  ‍
• Power Skills: Interpersonal skills such as communication, collaborative leadership, and problem-solving.
  ‍
• Business Acumen: Understanding the influences of a project manager’s industry and organisation to make good decisions.
  ‍

These Talent Triangle applies to small business owners as they manage tasks, teams, and budgets. For example:

• Ways of Working: Knowing when to follow established processes and when to take risks with new approaches.
  ‍
• Power Skills: Effectively managing relationships with suppliers, staff, and team members.
  ‍
• Business Acumen: Understanding the market your small business operates, targeting key customers and managing business risks.

‍

Reason 4. Project Management Provides an Approach to Risk Management

No project or business is without risks. Some risks, like market changes or financial uncertainty, are unavoidable. The key is how you manage those risks.

Project managers use risk assessment techniques to identify problems early on and create contingency plans. Similarly, small business owners must continually assess risks such as shifts in customer behaviour, competition, or financial instability. Flexibility and quick thinking are essential in both fields.

‍

Reason 5. Project Management Teaches Effective Communication

Communication is central to both project management and small business. In a project, team members must clearly understand their roles, deadlines, and expectations. A 2023 Project Management Institute survey of 3,500 project professionals found that communication was the most critical soft skill that a project manager should develop.

Similarly, in a small business, communicating effectively with employees, customers, and suppliers ensures that everything runs smoothly.

Strong communication builds a positive culture and improves efficiency. Be it internal communication between team members or external communication with clients, clarity is critical to success.

‍

Reason 6. Project Management Demonstrates How to Track Progress and Measure Results

One of the main principles of project management is tracking progress against goals. Whether through Gantt charts, KPIs, or other performance metrics, knowing where you stand is essential. The same applies to small businesses. The Bank of Queensland has found that financial mismanagement – not understanding how cash flow is managed and realising when cash flow has reduced – is a key cause of small business failure in Australia.

Regularly measuring progress helps you see what’s working and what needs adjusting. Whether you're looking at sales figures, customer feedback, or operational efficiency, tracking results will keep your business on course.

‍

Reason 7. Project Management Provides Closure

Just as every project has an endpoint, so does your business. This doesn’t necessarily mean closing your business but achieving key milestones like launching a product or expanding your customer base.

In project management, closure is about evaluating success and learning from mistakes. For small businesses, closure is also a moment to review performance, assess what was learned, and plan for the next phase (for example, a second office, a new product, or moving into a new customer market).

‍

Take the Next Step with Project Management for Small Business

Starting and managing a small business is much like overseeing a project. You need a clear plan, the right resources, and effective risk management. The principles of project management can help you navigate challenges and set your business up for long-term success.

Want to sharpen your project management skills and boost your business's performance? Consider undertaking an online project management certification. Online project management qualifications can provide you with valuable tools and techniques that will help you manage your business or projects more effectively, boosting your chances of success. The best part of a certification is that it is self-paced, meaning you can learn around the demanding schedule of starting and growing your business.

Want to learn more about small business project management? Join our free Project Management Community here.