Two Reasons Why Business Projects Fail

As usual, it’s another very busy business day for you, isn’t it?  You may have awakened this morning and immediately started to think about business and the day ahead. Checking your email and voicemail before arriving at the office. So much going on that it could make your head swirl. But you remain focused on the agenda, goals and business projects of the day.

When finally arriving at your place of work, you check out current sales information for the company. The sales team is bringing in new customers and signed contracts. The sales prospecting strategy seems to be working and on target. When a prospect requests a quote be sent about the proposed work discussed, you get excited about how the business continues to grow and develop.

Then you review current work projects at various stages of completion. Everything comes to a sudden halt. The business day that started out so well unexpectedly turns stressful. A business project for a major, important customer is nearing completion and the job isn’t going as well as originally planned. In fact, the project isn’t going to make the profit it was projected to make. Worse yet, it may lose money for the company.

To remain viable business projects cannot fail. Nor can business projects lose money and not make a profit.


Because the primary reason you are in business is to make a profit. Otherwise, if you and the business keep losing money, there won’t be a business someday. That’s not something you want to experience.

When you look at the numbers, they don’t add up to the original projected costs. If you are a CEO, founder, business owner or a member of the management team you are right now asking yourself: How could this happen? Why didn’t I know sooner? … You probably have a sick feeling deep down in your gut for not paying more close attention to what was or wasn’t happening with the project.

What went wrong?

It was the right customer.

It was the right product or service.

It was (or it seemed like) the right quote for the job.

Yet, when all the time and costs are added up, the company lost money on the project.

How is that possible?

There are two points you need to consider with any project or contract your company takes on to have everything come together as expected for both you and for the customer.

  • Planning. This first point is important. Always ask yourself: How well did everyone involved plan for the work project? This does mean everyone! Including management, sales team and production. To plan you need to anticipate the project ahead from beginning to end with updates and adjustments along the way. Considerable thought needs to go into every customer project no matter how small or how large. Don’t assume you know how to get it done on time, on budget and to get it done right, the first time. It takes planning – regardless of whether you’ve done it 1000 times or it’s the very first time. Think it through. Have everyone on your team think it through. Synchronize all your plans and thoughts. Make certain everyone is going in the same direction and at the same pace.

Once a contract or an agreement is made between you, your company and the customer or client, the price of the work is locked in. If you quote an agreed upon price then the company needs to absolutely deliver on that price and its expectations. You are not going to get more money if something goes wrong or was ill planned in any way. That’s not the customer’s fault. It’s yours. That’s why it’s important to think long and hard about how to make everything happen on schedule.

Screen Shot 2017-07-24 at 10.22.46 AMAsk yourself:

Who are the right people to put on this work project?

How do I get everyone to mobilize and be motivated to get the job done right?

For example:

  • If you are in the construction industry, do you have the right tools, equipment and project manager?
  • If you are in the software industry, do you have the right software engineer or developer(s)?

Keeping asking:

What is it going to take?

Don’t take work that is beyond your scope of capability. You will be setting up yourself and the company for potential disaster with a great loss of money and reputation.

Most business people, including CEOs, founders, business owners and entrepreneurs, never really put enough effort into planning – or even the thought process necessary for a project to be truly successful from start to completion. Instead, most business people just dive in. That’s what brings on confusion and miscommunication. Co-workers don’t know exactly what is expected of them. Time frames are unknown. Boundaries are not put in place so people overstep each other’s responsibilities. Because there was not enough discussion and planning put into the front end of the project, at some point, the work becomes unorganized with it taking more hours than it should along with an increase in expenses. You may discover more supplies or equipment are needed than previously thought which further increases final costs. It can all add up to a less profitable work effort.

Whatever the reasons may be (and they will differ from work project to work project), the number one reason projects fail is lack of proper planning. Period.

Anytime you find yourself working on a project, a contract or a sale keep thinking about: How do I, how does the company, make this work to benefit everyone involved? What are the best options? If you continually ask those questions plus spend quality time planning, you’ll experience a much smoother, more enjoyable work experience. You’ll also meet projected profits.

Let’s now move onto the second reason why business projects fail.

  • People. If it were not for people, you’d have no business problems. But if you want to have a business, a successful business, you need people. You also need customers. People are essential to business. Yet often, people are assigned to the wrong jobs.


  • The employee may not have the right skills for the job.
  • May not have the right understanding of what needs to be done.
  • Perhaps there wasn’t a detailed enough plan for an employee, or group of employees, to follow.
  • Didn’t understand the parameter of the job scope.
  • The employee’s attitude.
  • The employee’s work ethic.
  • Not deadline motivated.

The above list could be longer. These are just examples. Each work project could include different reasons why people, team members or employees, don’t make a project as successful as it can potentially be. Whatever the reasons, it makes the job harder to complete and remain as profitable as initially anticipated. These factors can set up any business project to fail.

The right people on the right job with the right skills and the right understanding of the challenges and timeframe to get the project done will bring success for you, your company and the customer or client.

If you just sell it, plan it, then walk away and say: Go do it!, without a manager to oversee everything, there’s tremendous potential everything is going to fall apart at some point. It will be difficult to stay on target with projections of progress and budget. Someone must be in charge. To be a leader. To take responsibility. To ensure quality work.

You can’t just sell it and walk away from it hoping everything will fall into place and the customer will be satisfied with the outcome. That’s why keeping in mind the two reasons a business project fails are immensely important to your continued business success. It’s all about the right planning and the right people.

When 25% through the work project, ask: Are we on target?

When 50% (perhaps even 33%) through the work project, ask: Are we still on target?

You never want to get to being 75% done and hear the words: We’re behind. Or… This job is costing more than previously thought.

The immediate question to ask is: Why?

Also: Why didn’t we know sooner when something could have more effectively been done about it?

The only good news here is that you didn’t find out at the end of the job – which often happens at companies. Which is much too late in the process. Don’t let this happen at your company!

It is common and expected to make adjustments along the way in any business project.

It is vital to get a job done as agreed upon and on time.


For two reasons:

  • Your company wants to make a profit.
  • You want to be invited back to do another project… and another… and another project.

If you bring projects in on budget, on time, have a good working relationship with the people who hired your company as well as your co-workers, it’s much easier to sell the next project to form an ongoing business relationship.

If you are the leader of a business or the leader of a team at your company there are many things you are required to think about and have on your daily calendar.


  • Leaders lead. No excuses.

Also, remember:

  • Leaders plan.
  • Leaders surround themselves with the best people possible.

Go back and reread this article. Think about how you are managing your business projects and how there is opportunity to improve outcomes for you, the company and the customer or client.

To your success!