Have you ever found yourself working on jobs where the estimated budget comes in way under the final contracted amount? It could be because of a number of factors, one being change orders that weren't done to the design agreement. To address this dilemma, consultant Michael Stone suggests going back to the basics and looking at how to approach a design agreement.
The first step in the process should be the set a budget with the client prior to putting together any design agreement. Without a budget, Stone says, you will get a lot of push back on prices and waste a lot of time.
Your quote for a design agreement should always be within no more than ten percent of what you know the job will sell for, and preferably within five percent. Your design agreement should be very specific on what the job is and the procedure you'll follow to design and estimate the project so you can present the proposal to them.
Getting the budget set helps to keep the customer focused and on track. It's your job to tell them upfront, and remind them frequently, that changes to the design will change the price.
The minute clients try and make any changes, Stone says it is important to respond with a new price range on their project. Stone also advises against giving price ranges unless you can get within five to ten percent of what the job will run for.
As soon as you present the final price, they'll start asking if this, that, or the other is included. Either it is or isn't. If it is, say "Yes." If it isn't, say "No." Don't be bashful or shy. Given them the information they need to make the decision to proceed, or revise their project to get the price where they want it.
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