6 project-based business models

Introduction: why classify project-based business models?

A project-based business looks simple: find a job, assemble a team, deliver the result and get paid. In practice, the same construction or renovation project can operate under different rules. One company takes responsibility for warranties and deadlines, another sells management services, and another performs a single type of work as a subcontractor.

A project-based business model can be described through three questions. Who is accountable to the customer for the result? Who holds the funds, and who handles materials, advances and funds entrusted to staff? What exactly does the customer pay for: a fixed scope of work, the team's time, management, stages of work or procurement?

This classification becomes useful when you have more than one project and decisions based on intuition no longer stand up to the workload. Your turnover grows, more people and counterparties become involved, and profit starts slipping away in the details. The 101 blog describes this transition in its article on managing a project-based business, with a focus on goals, planning, tools and budget control. Managing a project-based business (in Russian)

Model 1. Fixed-price turnkey general contracting

The model in brief: you sign a contract to deliver a result and take responsibility for coordinating all the work. The customer pays for the completed project or for stages of work. Within that scope, people, materials, subcontractors, quality control and deadlines are your responsibility.

The finances in this model require discipline. A cash flow gap can easily arise even with a full workload: advances have gone into materials, subcontractors are due to be paid, and the customer has held up a stage. It helps to track each site separately and see what has been paid, what has been spent and what is still in transit. The 101 blog examines the causes of cash flow gaps specifically in construction projects. Cash flow gaps in construction projects

Hypothetical general contracting example: the project is on schedule, the site manager is completing work, and the customer is satisfied. Then changes need to be agreed: materials are replaced, small extras are added, the estimate grows, and the team continues purchasing. If changes are not recorded promptly, profit disappears.

What to agree in advance in general contracting: how extra work is documented, how often the budget is reconciled by cost category, who can spend money, and where the single source of truth for payments is kept. These rules make it easier to protect your margin and discuss prices calmly. There is also a separate article on pricing principles in renovation and finishing work. Pricing in renovation and finishing work (in Russian)

Model 2. Specialist subcontracting

The model in brief: you perform one type of work within someone else's project. This often means building services, plastering, electrical work, façades, roofing or individual stages of finishing work. The contract is usually simpler, the cycle shorter, and the result easier to check.

The advantage of subcontracting is focus. The disadvantage is dependence on someone else's schedule and payment discipline. If the general contractor's deadlines or budget slip, your payments can also be delayed. This makes rules for advances, documenting completed work and accepting stages important in subcontracting.

Hypothetical subcontracting example: a crew arrives on site, but the site is not as ready as promised, and no work area is available. The crew loses two days to downtime. This may seem minor, yet these are direct losses that are rarely recoverable as a separate charge. Tracking actual project costs helps you recognize these situations and understand when work starts making a loss.

Another area of risk is funds entrusted to staff and small purchases. When several tradespeople each buy consumables, money goes quickly. The team needs a habit of recording spending immediately and assigning it to the site; otherwise, profit on each job will be a matter of guesswork.

Model 3. Project management for a fee

The model in brief: you sell management services. The company organizes the schedule, oversees contractors, manages documents, monitors quality and helps the customer make decisions. In the commercial arrangement described here, payments for work and materials pass directly between the customer and the contractors or suppliers; your income is a fixed fee or a percentage for management.

It is important to formalize the limits of responsibility in this model. What counts as management, which measures are used (schedule, budget and quality), and how are decisions on changes made? Without these boundaries, the customer may expect the management company to guarantee the result of work performed by others as well.

Hypothetical project management example: the customer chooses a cheaper contractor, who misses a stage deadline and disappears. The management company stays on site and rescues the project, even though it did not sign the contract for the work. A procedure agreed in advance helps: how contractors are selected, which documents are required, and how deviations and claims are recorded.

The model's strength is scaling through processes: a smaller team can manage more projects if management accounting and reporting work as a system. The basics of project management, roles and metrics are covered in the article “Project management fundamentals for entrepreneurs.” Project management fundamentals for entrepreneurs (in Russian)

Model 4. Design + build as a single product

The model in brief: you sell an integrated package of design, procurement, construction and design supervision. This is convenient for the customer: fewer contractors, better coordination of decisions, and clearer responsibility.

The main risk is selling design and construction as one promise while calculating their finances separately. The design team may work at break-even to secure the construction work, construction may make a loss because the design needs revisions, and procurement margins may be consumed by logistics and returns. A single financial model for the project is needed, with clear income and expense categories.

Hypothetical design + build example: the customer approves the visualizations, then the team discovers on site that some solutions conflict with the actual dimensions. Rework begins, deadlines move, and purchases have already been made. If all changes are handled in chat messages, spending will start to diverge from the contract. Recording changes as project events makes management easier.

The contract structure is a separate issue: what the base scope includes, how procurement is priced, how material changes are accounted for, and who is responsible for suppliers. With these rules in place, the team spends less time arguing about who should do what and more time doing the work.

Model 5. Engineering and equipment procurement (EPC approach)

The model in brief: you take responsibility for engineering, equipment supply and installation, often including commissioning. EPC stands for Engineering, Procurement and Construction under the responsibility of one contractor. The related approach discussed here covers engineering, supply and installation; the contract defines the specific scope and responsibility. Projects are larger, documentation is more extensive, and supply cycles are longer. An error in a specification or delivery date can disrupt stages of work and lead to contractual penalties.

In an EPC approach, cash movements are spread over time. Procurement can take months, suppliers receive advances well before delivery, work is paid for later, and the customer accepts stages based on documents. The key management skill is therefore seeing where advances are tied up, which work is already covered by acceptance documents, and which obligations lie ahead.

Hypothetical engineering example: a supplier confirms a date and then postpones shipment. The installation crew is idle, the customer demands explanations, and the schedule falls apart. In these projects, it is important to track contracts and prepayments separately and regularly update the cash flow forecast.

When several projects run at once, separating project expenses from company expenses helps. In 101, this is often linked to the Company Fund and business-level analytics, so you can understand whether the problem lies in a particular site or in ongoing company costs.

Model 6. Packaged projects and standardized services

The model in brief: you package a project as a repeatable product. Examples include bathroom renovation, turnkey electrical work, the rough finishing specified in a design, or kitchen procurement. The price and scope are standardized in advance, solutions are repeated, and the team works from templates.

The advantage is predictability. The disadvantage is the risk of losses on exceptions. One unusual site with uneven walls and awkward utility layouts can consume the margin if the package was sold without an assessment stage and rules for extra work.

Hypothetical packaged-project example: a manager sells a fixed-price package, the surveyor identifies extra work on site, and the site manager starts doing it to avoid an argument. A payment dispute follows. The packaged model rests on three things: clear boundaries, a clear process for agreeing changes, and tracking actual project costs.

To scale these packages, you need control over their costs. When you know what each stage actually costs, you can improve the product: change the methods, revise the procurement package and estimate labor more accurately. If cost knowledge stays in people's heads, scaling will remain dependent on individuals.

Final section: how do you choose a model and why use 101 App with its web version?

Choosing a project-based business model starts with an honest answer: where do you want to be in the chain, and what are you prepared to take financial responsibility for? General contracting offers control and a larger contract value while placing risks on you. Subcontracting offers focus and speed while adding dependence on other people's schedules. Project management for a fee requires expertise, established processes and clear boundaries of responsibility. Packages offer repeatability and require strict control of exceptions.

To avoid choosing based on your mood, work through these questions:

• Who signs the contract with the customer, and who is ultimately accountable for deadlines and quality?
• Whose account is used for materials, advances, payments to team members and subcontractors?
• How is the price calculated: a fixed amount for the result, by stage, for the team's time, or as a management percentage?
• What are the rules for scope changes: extra work, material substitutions and revised approvals?

The next question is which tools to use. When you have more than one project, management depends on an accounting system: each site is treated as a separate project, settlements with contractors and suppliers are transparent, and the balance of money for work and materials is clear. This is the focus of 101 App: it shows the project's financial picture based on the data entered, helps you keep track of counterparties, advances and reports, generate acceptance certificates, and analyze income, expenses and profit.

101 App also has a web version. On mobile, it is convenient to record events on site. The web version makes it easier to review cash movements, payments, advances and analytics when you need to take time over a management decision. Feature availability depends on the subscription plan, access rights and the version you use.

If you would like to see how this fits your project-based business model, the easiest starting point is a presentation and a discussion of your company's needs. 101 App and its web version connect the site and the office, addressing a common problem for project teams: money passes through many hands, so the project needs one source of truth.