There's no scientific formula to answer your question that works for all companies. But there might be one that works for you — and you’ll know it because you created it. When you set benchmarks, you give yourself a way to measure progress as you go, rather than winging it. Typically, the simplest first measures of a project’s success are time, cost and scope — and not, I should stress, revenue or profits. (Not yet, at least, because not every initiative spins out cash immediately.) Break it down this way:
Every project needs a timeline with realistic — not wishful — weekly and monthly milestones. Factor everything in. Depending on the project’s scope, for example, you may need to hire the manpower to pull it off, so factor in the weeks it’ll take to pull that off. And once the clock starts ticking, consider yourself at its mercy. If you fall behind, it’s not the clock’s fault — it’s just the first sign that your project is failing.
Tracking costs seems obvious, but small-business owners don’t often bother separating the specific costs of a project from regular expenses. I’ve even seen them forget to track all or parts of the salaries and benefits for the employees involved in a project — meaning they have no idea of its true cost. Easy tip: Have employees log each hour they spend on a project, and monitor those hours weekly.
The phrase “mission creep” is common in the military, when the original task (knock out the bad guy) is subsumed by a larger, more complex agenda (replace bad guy with democracy). You can’t afford this; say no to the inevitable suggestions to expand your project. And if you repeatedly deviate from the original scope of the work, kill the project and start a new one with its own timeline and budget.
Did all that? If so, revenues, gross profits and net profits and cash flows should start climbing. If they’re not, or they’re not climbing fast enough to eventually cover the prorated cost of your initiative (check your timeline!), you need to kill it. Never throw good money after bad to “save” a project.
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