Project Risks

5 Projects Risks You Should Avoid At All Cost (and How to Mitigate Them)

Running a digital or creative agency can offer huge potential revenue for anyone looking to get into the creative industry, or transition from a freelancing career into an agency environment. However, running any kind of business comes with an array of risk factors that you need to take into consideration if you want to succeed. Dealing with clients, deadlines, quality of work and setting expectations are all factors that must be planned for and understood by agencies. Let’s take a look at some of these project management risks and how to mitigate them.

 

Project Risks

1. Client Revisions

Creative projects are unfortunately very rarely cut and dry successes – they often take many stages of planning, proposals, and revisions until the final work is approved by the client. It is very important to understand this and budget accordingly when quoting for a job, otherwise, you may find the revenue from the project is overshadowed by many revisions and changes you hadn’t accounted for, costing you man hours that could mean you actually make a loss on the project.

How To Remedy This Risk

  • Have a clear proposal and contract with the client that sets out the deliverables and doesn’t allow for extra deliverables to be added during the project (unless they pay for them).
  • Calculate the number of hours it will take to carry out a project, then double it to take into account revisions and changes. This will give you a price point.
  • Do not be afraid to say no to a client if they keep changing the project.
  • Price yourself high – this will weed out any low quality/nightmare clients that want the world for next to nothing!
  • Charge upfront (at least 50%) – very important to prevent any disputes or the client refusing to pay for the work carried out so far.
  • Use a software such as Filestage to speed up creative revision loops

2. Meeting Deadlines

Deadlines are very important for clients in order to meet their goals, but they should also be important for you as an agency as well. Keeping to deadlines should be a priority in your agency in order to ensure your budget and quote is correct so you don’t waste man hours and therefore lose profit. If you miss deadlines, it can not only upset the client (and harm potential future business opportunity with them) but also tarnish your reputation in the industry. Not only this, missing deadlines can mean projects overflow into other client projects you had arranged, meaning other clients will see a knock on effect of you missing the first deadline and this can then set you up in bad stead for other client projects at your agency. Keep timelines under control!

(Image Source: Giphy)

How to Remedy This Risk

  • Set a timeline for each deliverable of the project, and try to stay within the budgeted timeline.
  • Dedicate resources in your agency to the project – don’t spread your team too thin with other projects as you’ll likely miss deadlines or suffer on the quality for all of them.
  • Listen to the client’s needs and hold an initial business meeting to map out exactly what they require. This will put you in the best position for moving ahead and ensuring your initial work is very close or nailing what the client wants, meaning less revisions!
  • Always over-budget your hours. Allocating a few extra hours as contingency is a great way to ensure you have a buffer of time in case you need it, and often means you overdeliver for the client making them happier!

 

3. Quality Of Your Work

With any kind of creative project, the quality of the output is very important and should be the cornerstone of what your agency is built on. In order to maintain a high level of quality, you should work hard to only employ very talented designers/creatives who understand your vision, invest time in training them to meet your standards, and also price your work in line with the quality your clients will expect. If you are just starting out in the creative world, an agency might not be the best fit and you should really shadow someone in the industry on a freelance basis before jumping into having your own agency so you can fully understand the quality of work people have come to expect.

How To Mitigate Quality Issues

  • Only hire top talent (that you can afford).
  • Train your people and show them examples of the quality your agency produces or will be producing.
  • Price your projects in line with this quality level (this will again help you avoid nightmare clients, remember pricing is positioning).
  • For new or junior staff, have an editor or more experienced designer/creative monitor their output before the client sees it to ensure it ties in with your agency’s quality requirement.
  • Do not lower yourself to take on lower paid jobs, even if the client isn’t too worried about quality (believe me, they are and they’ll ensure they get it once the project is underway!).

 

4. Clients Running Out Of Money

I’ve seen this happen first hand, and it’s not good news for either party. Sometimes, especially in higher-priced projects, the client has raised external finance or budgeted for their creative work or marketing services and gets carried away with spending all their capital on the best quality work they can, even if they can’t afford it after all of their other bills are paid! Some young startups fall in this trap, where they plough most of their budget into hiring the best agency to do their work, but don’t realise all of the other costs they need to pay in running other parts of their business, and so they end up not being able to pay the full quoted price to the agency, meaning they lose out on a finished project and the agency loses out on revenue.

How To Mitigate This Risk

  • Ask for at least 50% payment upfront.
  • Ask for references if it’s a large project.
  • Ask for accounts or evidence they have the money to pay.
  • Do not start work until the first payment has cleared and it is in your bank account.

5. Not Having A Kickoff Meeting

The key with any business, project or undertaking is to always have a clear direction, correct? That’s why you must ensure you have a clear set of milestones for the project that will give you and your employees in your agency the direction to be moving in. Without a clear direction, your team will struggle to understand the end goals of the project and what their work is supposed to be achieving for the client, and therefore fail to put out their best work. By holding a structured kickoff meeting before the project commences, your team and client will be on the same page and this will minimize conflict and ensure everything runs smoothly throughout. Not only this, if the project is long, or your team are handling multiple concurrent projects, having a clear vision for the deliverables will allow your team to quickly refresh themselves on what they need to be achieving, and help them in times where of creative block as they can refer back to the project goals from the kickoff meeting in order to re-focus.

How To Mitigate This Risk

  • Host a kickoff meeting (at least 1 hour long) with your whole team that’s working on the project, and all of the client stakeholders.
  • Map out clear timelines, deliverables, and reasons for these deliverables with the client.
  • Understand the business’ problems and end goals so you can work that into a strategy to solve them.
  • Ask many questions of your client

(Image Source: Giphy)

Conclusion

So, running an agency (that’s successful) isn’t as easy as it seems! But, as long as you take a number of precautions like those listed above you will be in a good position to mitigate a lot of the risks associated with creative projects and client management. Clients in the creative industry can often demand very high quality output, many revisions or other changes to the project throughout its course, so having clear deliverables and understanding your client’s needs are crucial in asserting your position in the relationship from a position of strength, but also help your client fulfil their goals and generate repeat business. There is nothing better than owning a thriving agency, just make sure you build the right foundations in order for it to grow and avoid any of the common risks we discussed!

Max is a SaaS enthusiast and loves actionable content that provides direct value.

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