How to Keep Your Client's Project On Schedule and On Budget
The implications of this ‘scope creep’ can be significant, but the good news is, there are ways to avoid it. Follow these tips to help you guide your client and plan for the unexpected in order to finish on time and on budget.
What are the implications?An obvious effect of scope creep is budget overrun, something that 42 percent of renovating homeowners experienced in 2017, according to the 2018 Houzz and Home Study. Of this percentage, 27 percent reported that the overspend was caused by a scope or design change.Lost profitability is a big consequence for home renovators, particularly for those who charge a flat fee. “To avoid scope creep, I often charge an hourly rate and have a margin on the goods the client purchases,” says Jodie Blampied of Style Merchants. “You need to have everyone in agreement on the ideas and budget, otherwise it will compromise the outcome of the project.” Scope creep can also delay work, which can have a knock-on effect – if you can’t get one project finished on time, you’ll have to start the next project late.So how can you avoid these challenges? Read on to find out how to prevent scope creep....
Set a budgetFind out how much your client is comfortable spending and set a strict budget that you can refer back to during the project. Although 74 percent of homeowners set a budget, only 53 percent actually stick to it, according to our Houzz and Home Survey. A detailed budget breakdown can work as a guide to help them stay on track.To give clients an idea of how much they can expect to pay for various projects, use your Houzz profile to highlight the details and costs of your different projects.Read the full report of the 2019 Australian Houzz & Home Survey
Understand the desired outcomeIt’s important to talk to your client about their needs and identify exactly what they want to get out of the project. If you understand their motivation and goals, you’ll be able to focus on the right solution and prevent changes that don’t solve the underlying problem. Manage expectations by uploading quality photos of past projects to your Houzz profile, and include detailed information. This will ensure homeowners know what to expect before they contact you. How to Keyword Your Photos Effectively
Define your client’s goalsA good way to set goals with your client is to use SMART criteria. The idea behind business consultant Peter Drucker’s strategy is that you define the scope as Specific, Measurable, Acceptable, Realistic and Time-bound.Be specific about what is and is not included, with as much detail as possible – for example, the rooms you’ll be working on, the materials you’ll use, and which existing elements will stay. Quantify the details of the project to ensure your goals are measurable. Include things such as the dimensions of flooring, and the number of windows you’ll replace or trees you’ll plant.Agree on these goals with your client to ensure they’re acceptable, then use your experience and knowledge to set realistic timelines and budgets – factoring in extra time for unexpected delays. Finally, draw up a realistic schedule of when each phase will be completed – include deliveries, client decisions and payment dates.
Draw up an all-encompassing contractMake sure you have everything clearly laid out in a contract before you begin, and include elements that aren’t part of the project scope to clear up any ambiguity. Ask your client if there’s any extra work they’d like you to do, so you can plan this in from the beginning.Open Book: 3 Architects on How They Navigated Business Challenges
Discuss change ordersIt’s a good idea to talk to your client about how any change will need to be recorded as an amendment to the original contract, and that it’s more efficient to think of everything beforehand. Make it clear there’s a fee involved in change orders, and use any anecdotes of past projects to illustrate your point.To work out the fee, a good rule of thumb is to calculate how much time it would take you to investigate the cost of the change, new materials, and any lost time working on the project.Some design professionals recommend adding a listing to the contract that states that any changes will incur an administration fee. This will encourage clients to add potential changes to the scope of work before construction begins. It also establishes the fact that your time as a professional is valuable, and emphasises that even small changes can disrupt a project.
Limit free changesBuild some flexibility into your service, however, by perhaps offering a certain number of changes within the initial budget, and explain that any alterations after that will incur a fee. This will help show you’ve considered your client’s needs while encouraging them to stick to early decisions. Houzz Insights for Pros: Most Popular Saved Photos This Year
Offer to do another phaseIf your client asks you to do some extra work that’s not in the original scope, feel free to draw up a new contract. Let the customer know you’re willing to fulfil the request, but that you’ll need to add to the original agreement. A strategy like this makes it clear that the client can’t just add work to the existing project, while still ensuring you can carry out the additional tasks.How to Use Ideabooks to Work Smarter With Clients
Connect with a design professionalIf you don’t offer design services, it’s a good idea to suggest to your clients that they consider hiring a designer. By working with a professional, they’ll be able to plan a renovation that fits their needs, while reducing the chance of scope creep.Although the initial outlay might sound like a bigger investment, the cost of hiring a designer could be less than the potential overspend from design mistakes. “Always surround yourself with good trades and specialists for certain tasks,” says Blampied. “You can’t be an expert at everything.”
Reduce the impactOf course, it’s best to avoid scope creep entirely, but this isn’t always possible. Plan ahead by building in a contingency budget to counteract those changes that are unavoidable.Many professionals recommend putting aside 10 percent to 20 percent of your budget for unplanned costs. If the contingency fund is needed, your client is already prepared to spend it; if it isn’t, they’ll be happy they still have some of their budget left untouched. Everything You Want to Know About the 2019 Best of Houzz Awards
Keep homeowners in the loopTake time to update your client on the progress of their project to enable them to see the milestones you’ve met. This can encourage them to feel excited about the design choices they’ve already made, and stick to their decisions in order to get the project finished.Blampied suggests having regular work-in-progress meetings with your clients as there are always changes. “Make sure all changes and modifications are agreed in writing,” she says. Send financial updates, as well, to help them keep on top of project costs and avoid going over budget. Your turnWhat other tips can you add to this list? Share your thoughts in the Comments below, like this story, save the images, and join the conversation.MoreNeed more advice about running a business? Read stories with tips for professionals here...
What is scope creep?Changes happen during many projects, and are often due to uncontrolled circumstances. When the scope of a project isn’t properly defined, documented or managed, these changes can escalate and cause problems. In fact, scope creep can lead to a project costing up to four times as much as planned, according to a recent university research article. Check out Ivy, our new business management platform for designers
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