Many common questions have been answered in the beginner’s professional service business guide. However, here are some simplified answers.
What is a professional service business?
A professional service business is a business (or internal team inside a business) that provides a service or expertise rather than a physical product.
What are the biggest challenges for professional service businesses?
Some of the biggest challenges professional services face include too much admin, poor cross-team communication with resource managers, fractured project planning processes, and monitoring team productivity.
How do you manage and retain clients?
The three easiest ways to help manage and retain clients include: keeping your promises, learning from your mistakes, and automating repetitive tasks.
What is a project definition?
A project definition is an introduction to what the client wants to hire your professional service business for. It is the step before onboarding a client and creating a project scope.
What needs to be included in project scopes?
Project scopes should include the following:
- Client Name
- Billing Type
- Due Date(s)
- Quick Links
- Project Description
Why are resource planning and management important?
Resource planning and management are important because no business has truly unlimited resources. Planning and managing them properly ensures your projects don’t run out before they finish.
What is the difference between resource management and capacity management?
Resource management typically looks at immediate project needs, whereas capacity management looks at future projects and overall business goals.
What is project visibility?
Project visibility refers to how well people involved in a project are able to access the information they need, and how well information is tracked or transferred.
What are the main billing methods for professional service businesses?
Some of the main billing methods for professional service businesses include:
- Hourly or Daily rates
- Fixed-rate or project-based
- Milestone based
- Materials and labor-based
What are billable and non-billable hours?
Billable hours are hours in which you or employees have worked on client projects, that help advance the project forward. Non-billable hours are hours worked that you can’t reasonably charge a client for, e.g. entertainment or employee training.
What is project profitability?
Project profitability (or profitability index) is the measurement that describes whether a project is helping increase revenue growth or losing value.
How do you measure project profitability?
You can measure project profitability with a simple formula:
Profitability (Index) = present value of future cash flows / initial project investment
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