Pros and Cons of Small and Big Projects

I’ve read a lot of advice over the years on the importance of being disciplined in the types of projects you go after.

One has to do with small vs. big projects–going after either a high volume of small, easily repeatable projects or focusing on going after a few large, highly complex but amply budgeted projects.

Try to do a mix of these and it’s unlikely you’ll have a good business. Do either one very well and you’ve got yourself a successful business.

As someone who has struggled with a mix of both small and big projects in our agency businesses, I thought it’d be helpful to map out the pros and cons of small and big projects and why it’s important to figure out what types of projects are right for your firm.

Small Projects

Small projects are typically lower in budget and shorter in duration. As a result, a firm needs to take on a higher volume of smaller projects to make meaningful revenue. Higher volume of projects means making more sales, which means you need a higher volume of leads. This means your sales and marketing efforts need to be dialed in to reach and convert more customers.

In my world of building websites for businesses, small projects could be simple marketing websites for small businesses or audit reports that furnish clients with recommendations on how to improve their websites.

Pros of Small Projects

Shorter duration, unlikely to drag on
Relatively shorter sales cycle, easier for clients to buy
Allows for diversified client roster, less concentration risk
Larger base of clients = more case studies and referrals
Could be more easily designed to be repeatable and streamlined in process
More reps = more opportunities to draw lessons and get better

Cons of Small Projects

Requires higher volume of sales activity to generate significant revenue
May not be as technically or creatively challenging
May not be an impactful project for the client (low stakes), which could lead to lack of attention & commitment of resources from client side
May be hard to go deeper into understanding the client’s business
May have to limit or deny any customized approaches
Lifetime value of client may be limited or require more transactions to materially increase

Big Projects

Big projects are typically much higher in budget and longer in duration. They may require a high degree of technical expertise, larger number of team members, and complexities related to navigating a client’s org chart, existing systems, and existing 3rd-party vendors and agencies. Large budgets may mean that a firm only needs a handful of such projects to have a successful year.

Big projects are also relative – a $100k project that may be “big” for one firm may be tiny for a firm that averages $1 million per project. Even so, I have a feeling people have mental models they adopt to categorize their own collection of small to big projects and would agree with the pros and cons of each.

Pros of Big Projects

Large budgets that allow for more personnel and longer timelines and, if done right, more profit dollars
Need relatively less number of deals won to still have a healthy and profitable year
Typically high stakes and impactful for the client, meaning they’ll pay attention and invest resources to keep things moving
Demands creativity, technical rigor, and varied problem-solving skills from your team, which could be highly satisfying to your employees
Large initial engagement can transform into lucrative long-term contracts

Cons of Big Projects

Typically much longer sales cycles and more detailed RFP and procurement processes that require time and attention
The flipside of being high stakes: multiple stakeholders and higher level executives who weigh in unexpectedly and alter approaches and scope mid-project
Very specific and technically difficult assignments may not be as usable or repeatable on future projects
Project scope and timelines may be more challenging to manage, making it hard to avoid delays
Takes longer to build up case studies and a portfolio, especially if the firm is only doing a few big projects at a time and some may take more than a year to complete
May require harder-to-staff roles (more technical, more senior, and/or more specialty personnel)
Can quickly lead to client concentration risk, especially if a large client that’s winding down isn’t replaced quickly enough

The Importance of Being Deliberate

When I think back on some of the more painful project experiences in Barrel’s history, a common theme is that we treated small projects like they were big ones and big projects like they were small ones.

For example, we would do a $50k website project using the exact same process and staffing as a $300k project, leading to an overcomplicated approach, personnel bloat, and all kinds of budget overages and delays.

On the flipside, there were times when we would take on a big project and try to be scrappy, thinking we could pass it off as a small project and capture higher margins. In these cases, we would get burned from understaffing, not going deep enough into the technical details, and not allocating enough time and effort to properly test and debug on the project.

At a higher level, these were problems stemming from a lack of discipline when it came to our positioning. We didn’t do enough to define our target client profile, value proposition, and services offering. In such a vacuum, we ended up trying to figure out stuff as we went, often relying on what we did on the last project as a guide, even if project size, client goals, and other variables were not the same.

The best way to do small and big projects profitably and successfully is to do the upfront work of designing your services including modeling out the staffing and timing approaches, figuring out what the deliverables will be, and how you’ll market the offering to prospective buyers. In doing such work, one might find that “small” and “big” are inadequate labels for types of projects, opening the door for well-defined services that address clients’ needs in different business situations, industry verticals, platform needs, etc.

Mapping out the business to such a level requires a level of deliberation and intentionality that I found very challenging to embrace while running an agency. It’s something we’re continuing to do at Barrel, and every time we invest more into such activities, the outcomes are very favorable.