How Did Madden Elevator Financially Manage a 1.3M Project as a Small Company?

Taking on projects demands more than just technical know-how. It also requires careful financial planning. Whether you’re upgrading elevator systems in a busy high-rise or creating the next generation of smart elevators, managing the budget is key. This guide will help you understand how smart financial planning can make these big projects successful. 

When large projects are won like in the case of Madden Elevator landing 1.3 million dollar job as a small company, it’s imperative to proactively project plan.  This is not only parts, material, and labor but also project cash flow. Madden made some special project cash flow tools that assisted in managing money and rolled up into the 13-week cash flow model.

Why Financial Planning Matters for Elevator Projects 

When it comes to elevator projects, financial planning is more than just adding up costs. It’s about making sure every part of the project is affordable. Elevators are complex systems, and managing costs well can be the difference between a project that succeeds and one that fails.

Budgeting 

Think of your project budget as a roadmap. It outlines all expected costs—from materials and labor to any surprises. A good budget guides decisions and keeps the project on track with the company’s financial goals. It helps you use resources wisely, manage risks, and ensure that every dollar moves you closer to your goals. This is especially true for projects where there’s little room for error. Budgeting is about more than just money; it’s about time and resources too. By balancing your budget, you can make sure resources are in the right place at the right time, keeping your project on schedule. 

When creating a budget for an elevator project, several key elements need careful planning:

1. Get the Numbers Right 

Estimating costs accurately is vital. You need to know the costs for materials, labor, and other project needs. Using methods like comparing similar projects or industry formulas can help you get the numbers right. Making monthly WIP adjustments is critical to fully understanding project costs, we recommend weekly WIP reviews!

2. Understand Direct and Indirect Costs 

Direct costs are easy to identify—they’re the expenses directly tied to the project, like materials and labor. But don’t forget about indirect costs, like administrative overhead, which can sneak up on you.  Make sure you included these burden costs in your pricing calculator model!

3. Plan for the Unexpected 

No project goes perfectly according to plan. That’s why building a contingency into your budget is important. It gives you flexibility to handle unexpected challenges without derailing the project. This is one are that often gets overlooked!

Crafting a Financial Plan That Works 

For any project, having a robust financial plan is essential from the start. Your financial plan should map out every stage of the project, from the initial design to the final installation. This roadmap helps forecast what funds you’ll need and when, so you’re never caught off guard. 

• Align Financial Goals with Project Objectives: Make sure your financial goals match up with what you want to achieve with the project. This alignment ensures that every financial decision you make supports the project’s overall success. 

• Stay Flexible: Things change—especially in complex projects. Your financial plan needs to be flexible enough to adapt to changes in scope, unexpected delays, or new opportunities that might arise. 

Managing Risks in Financial Planning 

No matter how well you plan, risks are always part of the equation in projects. 

1. Spot Risks Early: The first step in managing financial risks is identifying them early. By anticipating where things might go wrong, you can develop strategies to deal with these issues before they become problems. 

2. Have a Plan B: Always have a contingency plan. Set aside a portion of your budget to deal with unexpected costs so that you can keep the project moving forward even when surprises arise.  We also suggest having a plan C & D, and hope you never need them! 

3. Be Financially Resilient: Your budget should be robust enough to handle whatever comes your way. This means being strategic about your financial decisions and always planning for the unexpected. 

Best Practices for Financial Planning in Elevator Projects 

There are some proven practices that make financial planning for elevator projects more effective. 

• Keep an Eye on Things: Regularly check your project’s financial health. Compare actual costs to your budget and adjust as needed to stay on track. 

• Set Milestones: Financial milestones act as checkpoints throughout the project. They help ensure things are progressing as planned and give you a chance to make course corrections if needed. 

• Use Technology: Don’t hesitate to use modern project management tools to track your budget. These tools can automate much of the work, making it easier to stay on top of your finances. 

Supporting Projects with Thoughtful Financial Planning 

Projects in the elevator industry present both exciting opportunities and complex challenges. These projects, whether it’s modernizing a high-rise’s elevator systems, developing groundbreaking smart elevator technology, or retrofitting for enhanced safety, require more than just technical expertise—they demand precise and strategic financial planning. Remember, the success of these projects doesn’t just lie in the cutting-edge technology or the sleek designs; it’s also in the careful planning and management of financial resources. With careful financial planning, you can navigate the complexities of these projects and help the elevator industry continue to innovate and grow. 

I’ll leave you with 3 critical things to ensure project success: 

• The 5 P’s: Proper Planning Prevents Poor Performance! 
• CASH is King, do Project Cash Flow Planning rolled into a 13-week cash forecast! 
• Weekly WIP reviews will keep you on top of the project enabling you to can make early adjustments for project management success.