Alcion Benedict Popp 200215417 Supervisor: Ron Johnston

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Application of PM to small business ventures
Alcion Benedict Popp (200215417) Supervisor Ron
Johnston
The case study We choose to develop a case study
based on the hospitality industry, with a
particular focus on Dance Clubs, which pose a
high degree of risk, uniqueness and capital
investment. It is believed that by implementing
PM to dance-clubs, generalisation of the
applicability of PM can be cast across many
various small businesses and especially those in
the hospitality industry.
The secondary scope of this paper is hence, to
encourage the use of PM best practices by small
business venture operators, as a more strategic
approach, by showing that this approach is not so
complex as perceived and by providing this
document as a staring point and an example of
this.
The principal scope of the project is to
investigate the suitability and applicability of
Project Management principles in the planning and
development of a small business with a high
degree of risk, by developing one particular case
study fully using the Project Management
framework as given by the Project Management
Institute (PMI).
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Background information on PM Literature Review
Conclusions
It can be confirmed that PM can be applied to
small start-up ventures with a high degree of
risk at least from a planning perspective,
because it has been possible to
What is a project ?
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-gt Temporary Endeavour -gt Researching, Planning
Developing -gt Time, Cost Scope elements as well
as, -gt Quality, Risk Procurement elements
1 - Organize information relating to the main
case study within the PLC as given by the PMI. 2
- Develop a high degree of detail in the WBS,
especially in the soft phases of planning
concepts and development. 3 - Hypothesise and
forecast methods of actually accomplishing the
project in the implementation and termination
phases and develop control mechanisms for these
future phases.
Use of PM
-gt Developed by PMI -gt Complex and Dynamic
projects
Examples (Large High Risk Projects)

• IT MindManager

1 Project Manager 15 developers. Developed
software for power companies throughout the
United States.
It is also believed that the document developed
serves as a good guiding model for the
implementation of PM and satisfies some critical
requirements (R. Max Wideman, 1991), including

• SPACE Spirit mission to Mars

1 - Clarifying the scope of the project and
spelling out the sequence of events. 2 -
Breaking up the phases and tasks into separate
mini-projects that are easier to handle. 3 -
Rendering the process sufficiently simple and
clear, so as to be accessible by non-PM experts.
4 - Showing that the model can be all-inclusive.
1 Project Manager, 4 Function Managers (e.g.
project scientist) several hundred people.

• MEDICINE Human Genome Project

13 year project 19902003. Involved Germany,
France Japan. Set new standards for medicine.
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Closing Processes
Our Focus (Small High Risk Projects)
Deliverable a plan
Applying the approach to a small business with 1
project manager 2 functional managers Venue
Marketing managers

• Compilation of all data gathered and
  presentation, including
• Feasibility study
• Theory
• Estimates
• Trials / Operational tests
• Plan to be used as a guide or starting point for
  an investor

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Initiation (case study)
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Executive Processes
Market Analysis (areas of interest)
Planning Processes (case study)
Solicitation Execution
For example, we identify needs using the model of
buying behavior, which can be used for this case
study or other ventures alike Fig 1. Fig 2.
Scope Activity definitions
Deliverable a project
Implementation of a venture such as this requires
a business plan, a proficient team and the
addressing of executive elements. Solicitation is
required on items such as
Development of a dance club with a high degree of
risk, for future operation in the CBD of Sydney.

• Compilation of
• Technical documents (architectural engineer
  drawings of what has been built)
• Contacts of all parties
• Licenses
• Legal documents
• Problematic issues resolutions

Constraints
-gt The Project Management Team -gt Equipment -gt
Facilities development -gt Employment -gt Food
Liquor -gt Music, Events and Performers -gt
Marketing

• Intended Investment 300,000
• Contingency of 20
• Size 200-300 patrons
• Staffing part-time / casual

Fig 1. Model of Buying Behaviour and Processes.
WBS (new venture) Fig 3.
Cost Control
Quality Assurance
Resource Planning
Cost control measures can cause various types of
plan modifications

• Flowcharting as a Control Mechanism

• Equipment / facilities
• Audio / Visual
• Employment
• Sources of supply distribution of products
• Marketing technology driven, human physical
  resources

See Fig 5.

• Modify by a factor, e.g. 20 (when reality and
  plan are separated by a constant percentage
  margin)
• Redevelop the plan, e.g. (when plan is
  erratically incorrect)
• Ignore (for atypical variances)

• Resolution Mechanisms

-gt Prevention Resolution (very stringent,
purchase 2 copies of everything for insurance) -gt
Inspection Resolution (extensive checking of
processes, less costly) -gt Attribute sampling vs
variability sampling resolution (allows quality
control to use an acceptable range for quality
checks)
Cost Estimating

• Operating Activities 4,787
• Investing Activities 0
• Financing Activities -950

Risk Control
These include
Risk Management Plan

• Service risks (addressing a service class
  convenience, preference, shopping or specialty)
• Critical risks contingency (risk of injury and
  death insurance schemes used)
• Quantitative risk response (using matrices)
• Project cost variation as a risk (mitigation by
  re-assessment)
• Fig 6a. Fig 6b.

Scope Control

• Developed risk analysis, including risk
  identification and quantification, to illustrate
  how this would occur for a venue such as the one
  proposed.Developed risk response and mitigation
  strategies using a risk weighting schedule. For
  example, the table below.

Scope control needs to be considered in the venue
because of various volatile issues, such as
Fig 2. Maslow Pyramid of needs

• Competition surveyed data based on Tank,
  Home, IceBox, NV, Rogues, Arq

• Environmental changes
• Failures of the initial scope
• Technological changes

Stakeholder Analysis

• Shareholders
• Part-time employees
• Banks/financial institutions
• Customers
• Community

Communication Plan
Issues examined include the direction of
information flow, the required format for the
information and the frequency with which
information is communicated.

• Communication flow diagram (Fig 4.)

Other foreseeable challenges

• Leadership vs Management (Kotter, 1990)
• Communication issues / consensus
• Socioeconomic factors