Avoiding Changes That Cost Money and Clients

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Changes and change-orders have always carried a negative aura about them, both with kitchen and bath remodeling professionals and their customers.

Customers often view them as a means for remodeling contractors to “make up” for errors in the original contract. Contractors, on the other hand, see them as disruptive to their schedules and a cause of dissatisfaction for their clients.

In this month’s column, we’ll examine the different aspects of managing changes in our projects – specifically, avoiding changes in the first place, pricing them fairly and profitably and keeping customers happy through these changes.

PRACTICING AVOIDANCE

The first step in avoiding changes and change-orders on a project is to insist on thorough planning before the contract is signed. This process starts with the initial client meeting, when your designer is gathering information about the goals of the project. It’s at that time that the broad outlines of where the project is going should be defined, including potential expansion of the work beyond the original project definition.

Once the overall project has been decided, it’s important that adequate time is spent on the plans and specifications to make sure that as many decisions as possible can be made and fully understood. At this point a thorough investigation of the structural aspects of the proposed project should be done. A contractor should consider his/her their responsibility to know and understand anything about the project that can be determined without any actual deconstruction.

One approach to the planning process is to view it as a “funneling” exercise. In other words, rough out the project and then attach some estimates to the work involved. The next step would be to adjust the scope of work or products as required to bring the cost into line with the client’s budget. Next, the specifications can be completed to associate actual costs with the revised design. The ultimate objective is to incorporate as close to all of the products and features the client desires as possible and still fall within the budget.

Ideally, you do not want to rush this process, but rather allow the client to consider what the priorities are and get comfortable with the things that are being eliminated. At the same time, the client should be considering other areas of the home for those “as-long-as-you-are-here” items that seem to come up once the project starts. Identify those add-ons and incorporate them into the original contract. This will allow you to deal with these more economically for your client, and with less disruption to your schedule.

Finally, make sure there is as much certainty as possible in your plans and specifications. Include catalog cuts of the products being specified, and make sure colors and finishes are included in those specifications. Drawings should clearly show details such as crown moldings, panels, etc. If there are special stains or finishes, have the client approve on samples of these.

WHEN CHANGES OCCUR

Once the project starts, changes may occur regardless of how thorough your planning has been. Changes can result from hidden defects that surface during the construction process, but, more often, they result from things the client wants to add to the overall project. Either way, changes can cause tension between you and the client.

The first step in controlling such situations is to make sure that your client understands what work will be involved in executing the additional work. Often, a client does not understand all of the elements that may be required to accomplish something that he/she wants to add.

For example, let’s say your client asks you to add an electrical outlet and assumes that, since he/she has seen one of these at the hardware store for $8.00, this change should be minimal. The problem that arises with this, of course, is that the project is almost done and this change involves a special trip for the electrician, the drywaller and the painter – and you need to bill the client $275 to add this outlet.

Obviously, in a situation like the one I just described, it’s important that you accurately determine what it will take to complete the work the client wants so that you can accurately estimate what that work will cost. Next, you need to make sure that your client understands how you arrived at your estimated cost of the change. Finally, make sure that you and your client have agreed upon the price that will be paid for the change, preferably with a signed change-order.

As mentioned earlier, change-orders can be a source of tension between your firm and your clients because clients enter into a contract with the hope that the project will be completed to their expectations without the cost increasing from the original contract amount.

One of the things that will upset customers is the feeling of being “nickel-and-dimed” with changes. To prevent clients from feeling this way, you should assume that there are going to be a number of small changes and additions and plan to take care of them without opening your change-order book by setting a contingency budget to cover them.

STAYING CLEAR

As I noted earlier, when there’s a need for a change-order, make sure that both you and your client are absolutely clear on exactly what is to be done.

There’s always a temptation to “keep the job moving” by starting the change-order work before there’s an agreement in place, but this is a dangerous practice.

Remember, no one likes surprises, particularly if it involves having to pay more than the client expected to pay for a job.

Once you complete the work, you’ve really lost the leverage of not doing the “extra” if the client thinks that it’s too expensive.

On the other hand, you can limit the possibility of changes by spending the time before the project starts to fully explore and define the project.

Then handle changes that do occur in a transparent manner so that you maintain your client’s trust and confidence through the end of the project, and gain a long-time referral source.

Read past columns on Business Management by Bruce Kelleran, and send us your comments about this story and others by logging onto Kitchen & Bath Design News’ Website at www.kitchenbathdesign.com.

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