10 Challenges Faced by Project-Based Businesses

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The challenges experienced by project-based businesses differ from those witnessed by product-focused businesses. From DCAA compliance for government projects to grant management to multiple hours billing rate, the challenges are high and unique.

If you are seeking project based employment then it would be better if you are aware of the prominent challenges faced by project-based businesses. This is exactly this post will tell you about!

Tracking Overhead, labor, fringes, and Indirect Expenditures

One of the biggest challenges for project-based businesses is to track their expenditures. It is quite difficult to look into service providing as well as non-service providing professionals. Additionally, tracking expenses related to people, customers, project, or other is difficult.

Delayed or Late Projects

Late projects can be a big hassle, delaying the duration at which a company can start reaping benefits. This can hamper the long-term return on investment of a business. It becomes difficult for a project based business to manage the timely delivery of their projects.

Misalignment between business objectives and projects

The aim of a project is to progress one or more business objectives. Most of the times gap inevitably appear and this can drift business objectives to a great extent. Without proper redirection, deliverables and projects end up failing to meet the expectations. Hence, it is essential for businesses to align projects as per the objectives of a business.

Dependency Issues

Most of the projects are interrelated and share equipment, people, deliverables, and resources. Such dependency can delay a single project and has a drastic effect on schedules, projects, resulting in resources conflicts. It is therefore essential for a business to maintain enough human and material resources so that each project can be handled efficiently and submitted on time.

Difficulty in Execution

Project-based businesses find it difficult to execute properly. This results in waste time, resources, opportunities, and eventually hinders project delivery. An easy solution is to assign an authority that is solely dedicated to managing and supervising of the project.


Overlapping Projects

A major challenge for project-based businesses is overlapping projects. This is a challenge with small-scale as well as large-scale project-based businesses. Projects compete against each other for people, resources as it becomes difficult to assign the same resources equally to all the projects. Businesses lacking scarce skills can cause bottlenecks.

Unidentified Business Value

A project is the ultimate success point for a business. Eventually, every project generated deliverables that the company utilizes to derive business value. When such deliverables occur late or incomplete then business loses opportunities then it becomes difficult to realize the business value.

Complex Decision Making

Most of the project based employment businesses are unable to obtain the correct information at the right time to effectively comprehend the current position of the business in order to communicate potential opportunities and unexpected surprises before the competition is severe.

Lack of Accountability

Failure to regularly communicate and monitor project milestones in real time, as well as budget performance, affects the project responsibility and accountability.


Project-based businesses tend to develop fragmented planning and resource procedures and tools resulting in the inability to systematically communicate and monitor multiple projects with ease. This results in the easy management of unexpected slippages and issues.

In addition to the above challenges, there are still project-based businesses that still utilize outdated tools or wrong tools. There are companies that still depend on desktop applications, which are not able to work in collaborative environments. Desktop applications can be quite expensive as well as are not able to be processed in the real-time. For this reason, it is essential for a project-based business to switch to web-based applications that can be edited, accessed, and shared by numerous members of the team with ease.


Conclusion: These are some common challenges of a project-based business. Dealing with such common project-based problems is something every manager must be prepared for. With proper investment and defining a smart strategy in a set of collaborative tools, it is possible to make sure that you can avoid such mistakes and get the most out of every project. If you want to get great success in project-based employment then make sure you address these challenges efficiently.

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About the Author Shamsher

Live Instructor-Led online digital marketing trainer, a consultant, and an affiliate marketer with over 8+ years of experience View Course Details if you want to grow your business online or want to learn digital marketing online from anywhere.

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