Application of Project Management Techniques for Timeline and Budgeting Estimates of Startups

Abstract

This study aims to develop a framework by incorporating well-proven project management techniques to help startup owners effectively set up ventures and secure early-stage financing. Startups not only open ways for innovative and updated technologies in the markets but also bring employment opportunities in a country that eventually increase productivity and the per capita income of a country. Despite all the benefits, the success rate of startups is meager, especially in developing countries, due to ineffective management and vague business plans. Therefore, this study aims to facilitate entrepreneurs using well-proven project management techniques from the literature and devise a new framework applied to a business case, as discussed in this paper. This study presents an approach to project management techniques for smartphone app-based startups. This study utilizes the fuzzy PERT (FPERT) for the best completion time and budget estimates. Experts’ opinions from eight private limited companies have been analyzed using FPERT. The critical path method (CPM) is also used to schedule activities. Finally, a techno-economic analysis is also performed to show the growth potential of such a startup, e-Karsaz. This study aims to help startups secure early-stage financing. Tech-based business ideas need to be commercialized in developing countries like Pakistan. There is a need to show long-term profitability to make an idea stand out among others and secure early-stage financing. The scope of project management techniques is confined to construction-based projects. The results show that it would take around 692 days for the e-Karsaz startup to become fully operational, with the capital budget estimated at around PKR 1.3 billion. The techno-economic analysis shows the project is economically viable with an internal rate of return (IRR) equal to 92 percent and a benefit-to-cost ratio (BCR) equal to 10. The sensitivity analysis, including five scenarios of weighted average cost of capital (WACC), shows that the project remains economically viable even if the required rate of return goes over 20 percent. This study is helpful for startups to make time and budget estimates and to show the growth potential to secure early-stage financing.