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There was a time when change orders represented a large part of a company's profit on a project. This was particularly prevalent in commercial construction, where every proposal was bid by at least four companies. Most lowered their markups to win the bid, counting on change orders to make up the...
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Sound business practices and solid customer relations are key to keeping yourself out of court while still collecting every dime that's owed to you. So, too, is choosing your clients carefully, so that you're working for people who aren't looking to pull one over on you.
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Change orders rarely come neatly wrapped. At my company, we complete a form in the office based on information we receive over the phone, estimate the cost of the change, and then present it to the client. We try to respond within one day, but our other work often takes precedence.
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Paying up front makes customers absolutely certain they want the change. If they change their mind, and any fees apply, they still pay. This also guarantees they can afford the upgrade, and we don't have to chase after the money once the change has been made.
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There are five baseline measurements that all company owners need to know.
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Documenting the change from the very beginning helps track the time required to finalize the process.
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Keith Steier, president of Knockout Renovation in Brooklyn, N.Y., has found a solution to this problem. At the end of each billing period, the client pays Knockout for work completed, less the 30%.
Instead of struggling against the current, consider using it to your advantage by shutting down for the last week of the year. In fact, it's a perfect opportunity to close out your accounting and spend some time evaluating the year gone by and planning for the year that's fast approaching.