7 Ways Small Businesses Make Major Project Management Mistakes

Poor project management can hurt a business in many ways. Whether you’re a giant or a start-up, inefficient project management leads to an inflated budget, late deliveries, dissatisfied clients and demotivated employees. If you’re a small firm, you have to be even more careful.

Unlike Fortune 500 companies, you probably don’t have the capacity to go over your budget or waste precious resources. These reasons lend to the fact that 66% of all small business owners juggle three different roles at once in their companies. It’s not always possible to hire professionals with experience, but can you really take on customer services when your major is IT?

Chances are you’ll be swamped with work and if one of the roles you’ve taken on is that of a project manager, then read on and make sure to take a different path. Here, you’ll find seven of the most common project management mistakes made by small businesses, and how you can avoid them.

1. Lack of Technology

In the face of limited funds and manpower, small businesses rely on free technology instead of committing to a one-time investment. They will resort to using MS Excel for project management and social media for day to day coordination.

The only issue is that Excel is not made for project management and does not feature the fundamental tools available in most project management software such as document setting, time tracking or budgeting.

The money saved by not investing is actually multiplied in terms of productivity lost, which can end up costing you a lot more than project management software would in the long run. A good project management tool gives you the benefit of having all your project details in one place. You can track the progress of your team members and identify which stage of the life cycle your projects are in, among other time-saving features.

2. Living in the Now

You know how they say dress for the job you want and not the one you have? That’s what running a business is like, you have to construct short-term goals to achieve your long-term objective. Similarly, every decision you make for your business should align with your future vision, including the decisions you make regarding your project management department.

With the trial and error approach taken by small businesses, it is no wonder that only around 50% make it to their fifth year. More often than not this is due to a lack of set standardized procedures. As your company grows, proper processes should be set so that new hires integrate into the culture instead of ‘winging-it’.

As you grow, complex projects will line up in the pipeline and the software you choose should help streamline your future needs as well as immediate; be it a year or 5 years from now. Instead of getting the most expensive software available, assess your business’s needs and identify which software best serves your current needs and can handle a growing company.

This will also help you battle scope creep. This is when a project slowly expands after it is in the initiation phase. One add-on becomes two, then three and before you know it – the project has surpassed the completion date. A good software can point out changes in delivery time as additional changes are made to it.

3. Ignoring Potential Risks

If you fail to plan, you plan to fail. While economics teaches us market conditions in the state of ceteris paribus I.e. all other factors constant – the real-world market is ever changing. And you must continually grow and adapt to it.

While initially small businesses possess a high tolerance for risk, with time they become more stringent. Rather than dealing with risk, small businesses should try to determine the source of the risk itself.

All projects must be undertaken with the element of risk, not only in the mind but also applied to the fundamentals of the project itself. Since risk is a rudimentary aspect of project management, planning and scheduling for it should not be overlooked.

Risk planning should also include strategies for combating risk as it materializes. However, by planning for the future you can analyze factors such as market conditions, current trends and changing customer wants to assess which areas are most vulnerable to risk.

4. Not Believing In the System

Everything in the universe follows a set path. Imagine one day you step out of your house and find Mercury staring down at you instead of the sun? Utter disaster would ensue because that would disrupt the entire system.

Similarly, project management is undertaken to create a set path for your projects to follow. Each step is carefully set out and is essential to the quality of the end result. Small companies face a range of difficulties and may find it difficult to process in the middle of all that problem-solving. In such cases, it is undoubtedly tempting to skip the process and cross the finish line – but don’t.

Project management demands a strong discipline and doctrine to be followed. Untrained project managers usually learn on the job and in their eagerness to complete projects may not follow proper procedures and guidelines. They may be overwhelmed by all the new information or show an aversion towards the methodology.

Terms such as work breakdown, resource planning, task analysis, and Floats may seem daunting in the beginning, but assure your project manager that once in the flow of work, they will begin to make sense. This is because the principles of project management are primarily based on common sense.

5. Failing To Communicate

Everybody agrees that clear communication makes life a lot simpler. It helps coordinate and solves problems, however, once projects are underway, it is easy to have to delay meetings due to the sheer workload.

Employees work better with managers who tell them exactly what they need from them. Efficient communication occurs when the message you intended to give has been sent and received as is. Many project managers will assign roles to members without ever telling them in simple words what they expect them to do.

Remember to keep an open-door policy and ask questions instead of waiting for your members to come and update you. Take the initiative and soon your team will follow as well.

6. Allocating The Wrong Resources

Small companies have it rough; a lack of manpower but overflowing to the brim with work that needs to be done. This conundrum makes it a common occurrence for employees to have more than one job designation.

Employees can severely damage project results if assigned to handle a task without the proper qualification and experience. A good project manager sets realistic expectations about the strengths and weaknesses of their team and is not afraid to communicate the trade-off between inadequate resources and project results to the owner.

7. Continuous Planning Reviews

Once your project has begun, the end result will probably not look like what you first had in mind. This is often because of scope creep. As mentioned above, scope creep is when the needs of your project keep growing bit by bit, and it inflates without your knowledge. This leads to unrealistic expectations and delays in delivery deadlines and budgets increments.

To make sure your project’s end goal is set and portrayed realistically, review your project planning after a set interval, for example, every three days. This will help you adjust your project’s plan in line with its scope. Continual reviews of your plan help reduce risk and wastage of precious resources.


Now that you know seven of the most common project management mistakes, you should be able to notice when they crop up in your business. It’s just a matter of keeping an eye on these things and working towards fewer mistakes in future. If you can eliminate even a few of these over time, you’ll notice improvements across the board. You’ll find that operations seem more structured, workflows more smoothly, and productivity is on the rise.

Hopefully, you found this useful and will be able to avoid these mistakes in future. If you notice things starting to fall apart though, just refer back to this guide and you can get things back on track.

Erik Hupje

Erik Hupje

Eric was born in Brunei and attended The Delft University of Technology in The Netherlands. He has 20 years of experience working as an asset management engineer for the oil and gas industry and is the founder of Road to Reliability.
Erik Hupje

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