Strategic Project Selection: Optimizing Your Business Portfolio

You may not have considered it this way before as a small business person, but if you are doing projects, you have a project portfolio. This portfolio advances your business goals. Selecting projects is a strategic choice based on more than influencer advice and a promising trend. How do you evaluate what are the best projects to take on?

Small businesses providing online services or digital products need to carefully select which projects to take on each year in addition to their regular operational business efforts. Strategic choice of projects ensures the best use of resources and success. But how to select the best new project invest time, money, and energy in developing a new product to introduce or set of templates, create a new course, or develop a unique marketing campaign with new branding and promotional materials and graphics?

Here are some important considerations:

1. Alignment with Business Goals

Before evaluating any project, carefully analyze its alignment with your business goals. Ask yourself how this project directly contributes to your objectives. If a project doesn't significantly contribute to your goals it may not be best use of your resources.

2. Financial Evaluation

Thoroughly assess the viability of each project. Calculate if it will give you a profitable return on investment (ROI) and payback period. Your investment is not just the materials you use and any professionals you may pay to assist, but also your own time. Also note that there is an opportunity cost if your time is spent on this project instead of another.

3. Market Research

Do some market research into the demand for the outcome of each project you’re considering adding to your portfolio. If you're developing products, consider factors such as user base, competition, and prevailing market trends.

4. Risk Assessment

Every project carries risks. These risks might manifest as concerns (can we successfully build it?), market uncertainties (will it attract customers?), or financial contingencies (will it yield returns?)

5. Resource Availability

Assess the resources currently at your disposal, including your teams skills, availability, financial resources and technological tools. If a project demands resources you lack, it may not be feasible.

6. Timing

Evaluate the time required for each project. Consider the markets readiness for your product. If the market is immature or highly volatile, with changes it could influence the project’s success.

7. Portfolio Balance

Strive for a portfolio balance by considering factors like short term vs. long term projects, low risk vs. high risk projects or small vs. large projects. This balance fosters stability.

8. Use a Scoring Model

Consider implementing a project scoring model to rate each project based on criteria (such, as those mentioned above). This can be as simple as making a list of the proposed projects on a spreadsheet with columns for the criteria you wish to rank them on. This objective approach facilitates a comparison of different projects.

Selecting suitable projects involves a combination of quantitative analysis and qualitative judgment. Your experience and instincts as small business person are key to making the right decision choices for your business.

Image Credit: Art by Christina A. Steele, all rights reserved.