fault. No, no, it's not the client's fault. It's your fault as a contractor because you did not give detailed scope. and make sure they understood what's happening. Okay? Most of you guys are way under your shortcut in your estimates. You just are. And I get it. Doing estimates is one of the most tedious and time-consuming things you can possibly do. Highly encourage you to use templates. You use software. I don't care which one you use. Next week, I got a guest on who has a software specifically to help you with this. I'm not necessarily endorsing them fully. I'm not saying there's the end-all, be-all. I'm just saying, use software and templates to shortcut this process for you. This is not an excuse. Like I don't have enough time is not an excuse when you're doing estimates, specifically when it comes to scope. So the way you prevent scope creep is you have to have a detailed scope of work. You have to. Okay. I even told my client, I was like, dude, you gotta, you gotta really get more detailed and what's up with this, et cetera. It literally said, et cetera. comma, et cetera. What does that even mean? What's et cetera? You're going to come put a pool in for me. You're going to bring in, you know,20 loads of dirt and playing out the low spot in my backyard. Like, what does that mean? What's et cetera mean? Right. Can't do that. The next thing is how to prevent scope creep is you have to look at the, the red flags when you're talking to clients. Again, last week I talked about the old versus new sales, you know, sales process. When you truly understand how to effectively communicate with clients, which is what we teach in the profit sales system, we call it sales, but really it's communication. I'll just be straight with you. It's communication that you, that it works across all avenues of your life and business. It just works really good in sales. Okay. So when you learn how to effectively communicate and specifically in the sales process, you learn how to start listening for cues. You learn to start hearing specific words and phrases and word tracks that certain types of personality traits and clients use. When you identify, oh, this is a C personality, right? This is a conscientious person who is going to want to know a lot of details, a lot of facts. They want to know the numbers. Think accountant, think engineering, people that want all of the information. When they start using certain phrases and you pick up on that, now you know, okay, this client is going to require a little extra handholding because they are a C personality and they want all of the details. I'm going to have to send them a text or email or a phone call probably at the end of each day and let them know where we're at because they want to know all the details. I need to add that into my time, right? Or I'm going to have to spend... a lot more time with my numbers and my invoices and my estimate because they're going to want to see more detail. I can't just say scope of work, remodel master bathroom, right? Some of you, that's what your scope of work is. Remodel master bathroom, uh, put, you know, install, uh, landscape pavers in the backyard, replace roof. That's your scope of work. That's not even acceptable. But specifically, when you have a C personality, they're going to want even more detail. So I got to factor into my time. One, my estimate's going to take a little bit longer because I got to add more detail. Two, the project's going to add a little bit more supervision and time because he's going to have more information and want more details, come home, want to talk to the guys while they're working. I'm going to factor that in to my overall cost because I know how to effectively communicate and I know what to listen for. Right. I start to see behavioral patterns. I start to see language patterns. When I talk to people and they say I'm really good at sales and they don't even know that there's four different types of personality profiles. I instantly know that you're not good at sales. Right. When you don't know that people speak in different language and I don't mean like Spanish, you know. English, French. I mean, they speak in different language based on their people class, their social class, their religion, their race, ethnicity. People speak differently. And if you don't understand and you just assume that everyone means and wants and thinks the same thing and you say something, you can offend somebody without even knowing it. So when it comes to scope and you're talking to a client, and they're using specific words and specific word tracks, those things should go off like a red flag. If they say something like, you know, you say, you know, what are you guys thinking about in regards to, you know, what type of countertops you want in the kitchen? You want solid surface? You want, you know, quartz, granite, famica? What do you want, laminate? Like, what are you thinking? And they say something like, well, we don't really know for sure yet. but we'll definitely have it figured out. You know, we'll figure it out later. Like if somebody says something like that, that is a clear sign that they're very indecisive. Red flags, hair on my neck standing up, spidey senses going off. Okay. Okay. That's, you know, mental notes. They don't know what they want. What about what kind of, you know, flooring are you wanting to put in there? Well, we don't really know that either. We're thinking tile, but you know, we're open to anything. Okay. Red flag number two. Okay. Well, what about the style of cabinets? Do you guys know you want something more modern? You want it to be more, you know, traditional contemporary? Like what's your thoughts of the overall style of the cabinets? Well, we like all of them. You know, we like all the different ones. We can't really decide which one we like the most, but we're, you know, and we know we have to make a decision eventually, right? Like these, this is trending down the road of dealing with an indecisive customer. If you don't think indecisive customers will cause scope creep, then you haven't worked, you haven't been in business long enough. Because indecisive customers will kill any productivity you have. They will frustrate the hell out of you, right? When you're dealing with indecisive customers, you have to have basically like a drop dead point of like, hey, we have to have all of our decisions, all of our selections made. by this date, or we cannot move forward with your project. And you're going to have to force their hand a little bit. And then also understand that halfway through the project, they're going to change their mind because they felt like you forced them to make a decision they weren't ready to make yet. And they're going to want to change it later on. And this is where you really have to have a tough conversation and setting expectations from the get-go of, listen, we charge for change orders. If you said you want a quartz countertop, and I provide you an estimate for a quartz countertop, and two weeks before we need to put it in, you change your mind and you want granted. That's a change order. It may slow down the project depending on the countertop supplier, what their schedule is and their availability and their resources because now they've got to go pick it out. They've got to make a different selection, right? And so you charge a change order and you charge a fee. for the change order, not just the cost of the change order. You charge a fee like $100 or $200 or $50 fee that simply says, hey, if you change your mind mid project, you're going to be assessed $100 fee just for doing the change order plus the cost of the change order. The goal of that is to persuade them to make up their mind quicker than later. It truly is to penalize them, right? You want people to make up their mind. as soon as they can in the process. Sometimes things change. It's just how it is. But you can mitigate the amount of changes that have to be made. So you have to look out for red flags with specific types of clients. I already covered the charging a fee. If you charge a fee for change orders, it really kind of forces them to make sure that they decide what they want. And the last thing, When you, when someone is looking for additional work to be done, right. And instead of being the people pleaser contractor, Tim comes to you in the middle of project. Hey, Brad, I know we talked about it whenever, you know, whenever we did the estimate and we, we talked about replacing the front door, you know, along with the, the kitchen remodel. And, you know, originally we told you we didn't want to do it, but we would have changed our mind and you know, we want to do it now. Okay. perfect. We can do it just so you know, here's the fee. It's going to increase the timeline. We may not even be able to do it right now because of schedule things that are scheduled. You know, we can't add stuff, you know, whatever. Right. And that may have been a bad example for, for what I'm actually trying to say, but regardless of like, you have to like, if somebody says they want to add a week's worth of work in the middle of a project, And you have another job lined up. You can't always just push everybody off and add in a week's worth of work. You may have to come back and do that. And it's going to cost more because you have to mobilize, right? Those things have to be discussed. But what I was trying to get to with the, this is being direct, is if you're working and then, you know, sweet Alice comes and says, hey, while you're here, can you replace my toilet for me? You know, I bought it at Lowe's. It just needs to be installed. You go, yeah, absolutely. Let me get you a price on that. Like instantly. Absolutely. Let me work up a price for you. Yeah, I'd love to do that for you. Let me, you know, it's going to be $300 or whatever. If you know what the price is. Hey, can you replace this toilet for me? Yeah, absolutely. We can do that tomorrow. It would just add an extra $200 onto the project. What do you mean? You can't do it. Oh, no, no, no, that we, you know, that wasn't in our original scope. So, you know, we'll have to actually do that. So it's going to be $200 extra. Would you like us to get, you know, would you like me to issue a change order? Would you like us to add this to the job? Would you like us to do this for you? Well, let me think about it, right? You got to be direct. A lot of you guys don't like conflict. This is the people pleaser. And you think that a customer asking you to do something and you really don't want to do it. Right. You in your mind, this is a psychological problem in your mind. You think by saying no or by saying it's going to cost money that what you are actually doing is disappointing them and you're going to cause an enormous amount of conflict and they're going to be really upset with you. And so instead of doing the right thing, what you should do, what you need to do for your own sanity and for your own financial well-being is you just under your breath say. Oh man, I don't really have time to do this. And you know, this pisses me off, but I'm going to do it anyways. Yeah. Mrs. Alice, we can do it for you. No problem. Right. I know you guys listen to this, have done this. I know you have, cause I've done the same thing. You're shaking your head right now because you've done this. You can't do this. Now, let me, let me add a disclaimer here in my business. We always looked for little opportunities. to provide value without the customer even knowing it. One of the most common things that we would do on a lot of homes, and you guys know this if you work inside homes, a lot of times doors don't open, close properly, right? Either the hinges are off, the doors warped, or the strikes aren't aligned, whatever. The doors don't open or close properly, right? The deadbolt won't turn and lock because it's hitting the strike plate. What we always did is anytime we're working on a home, especially if it's in like, like if we're working in a bathroom and we got to go in and out the front door every single day and the door doesn't close, like you, sometimes you're carrying stuff and you kind of pull the door shut and it doesn't close unless you grab it and like pull the handle really hard to lock it. Well, that creates kind of an inconvenience for us. So we'll just fix it. We'll just, you know, spend 10,15 minutes and fix the door so it operates normal. And we don't even tell the client that we did it. A lot of times three to four or five days later, they go, you know, did you guys fix the door? Like, oh yeah, yeah, we did that last week. Wow. Thank you so much. You know, it's just a little value add. So we, we, you know, I would build into my estimate. I mean, we're only talking like 10,15 minutes. I'm not building in five hours of work, right? We build into the estimate of like opportunities to provide value like that. It can be as simple as pulling their trash cans from the road back up to the house after the trash guy comes by. You know, there's lots of ways you can look for opportunities. That's a whole different podcast. But the other thing is like, back to what I was saying about the scope. I knew, you know, after several projects, I pretty much know with about a, you know,80 to 90% certainty. that when we demo an old bathroom, the floor under the toilet is going to have some damage. It just is. There's always going to be OSB or if it's for whatever even is plywood, there's always going to be some wood rot or damage around the toilet and the toilet flange. And almost inevitably, it turns into a change order. Well, we didn't know that was there. Customer, it's going to be $300 to fix this, right? So what I started doing... is with the things that we know have a high probability of happening, I just built it into my estimate. I just add an extra hour or two in labor for the plumber or for when we're doing framing or whatever. I just build it in so that whenever we remove the flooring, sure enough, there's a rotten toilet, and we had extra scrap pieces of OSB, different thicknesses on the trailer, it's already covered. The cost, one sheet of plywood or OSB, and an hour of labor, and you're covered. And we're only talking like, you know, $100, $150, $200, whatever, but we're covered. And I don't have to go back to the customer and say, well, customer, I got a change order. Because what you don't want to do is you don't want to change order your customers to death. You know, this is actually a strategy used by terrible and cheap and crooked contractors is to low bid a job and then beat them to death on change orders. If you're unethical and you're a used car salesman and that's what you want to do, that's fine. But, you know, we're talking about ethical professional businesses here, right? Just build that into your costs. And guess what? If you have, you know, $1,000 built into your costs for unforeseens and for whatever reason, you have the unicorn project and everything goes absolutely perfect on this job. I mean, perfect. You could not ask for a better job. And you walk away with like a 70% gross profit as opposed to like a 50% because you just had so much amazing stuff. If you feel compelled that you got too much money out of them, you can always give your clients money back. Like there's no law or rule that says you can't come to your client and say, hey, guess what? I know we estimated this at $40,000. But everything went absolutely perfect, so we're only going to charge you $38,000. You think they're going to be pissed off at you? No, Brad, you said $40,000. We want to pay you the extra, too. If you feel so inclined to do that. Now, what I would recommend doing, if that's me, and I feel like I walked away with an extra $3,000 or $4,000 that I didn't deserve, and it was weighing on me, I would donate that money to charity. That's just me. I'm not saying you have to do that. They're saying like, I would much rather give money to charity if I felt so inclined. You heard me say before, don't run your business like a charity, run it so you can be charitable. This is an example when you can do that, right? So you have to, if you build that into your scope, you don't have to go to your client every other day. Oh, Mary, guess what? Another change order. Yeah, this one's only going to be 300 in the next day. Hey, guess what? We got another change order. This one's actually going to be a thousand though. Next day, oh, Mary, guess what? We got another change order. And you're like, holy crap, dude. Like, did you not estimate this correctly? Like, what's going on here? Are you just taking advantage of me? Right? Try to prevent that by, you know, padding your estimate a tiny bit to cover unforeseens or the ones that you know are going to happen majority of the time. Just automatically put that into your estimate. Right. Make sure you have a detailed scope of work to prevent any unknowns and any misconceptions about what they're getting. Set the expectation from the get go. Right. Charge appropriately. By the way, if you charge what you're supposed to charge, what I tell you to charge, a lot of times you can cover some of those unknowns, those little two, three, four hundred dollar unknowns. And you're still walking away with a lot of money and you're doing just fine, even if you don't include that in your estimate. Right. There's plenty of times where I was making really good money on a job and I just felt, you know what? We'll take care of that 30 minute job. No problem. Don't even worry about it. Right. You can do that when you're charging appropriately. When you're not charging appropriately, you're counting every penny that's coming out of your pocket. Right. So do these things. And I promise you, your scope creep problem will disappear. If you do what I just told you. 90% of your scope creep problems will disappear. And the last thing I'll say is you have to make sure your team is on the same page. You can't be saying, we're going to charge you for a change order. And then your client, your, I mean, your, your lead guy who has a people pleasing problem is undermining what you're saying. And he's staying longer and doing stuff for them and not telling you because he feels like that's what you should do. You know, that's a personnel problem you got to deal with. Right. So just make sure. If you do what I said, you won't have any more scope creep problems. Guys, thanks for hanging out with me. This is a really good topic and I haven't covered before, but it's something that definitely happens to a lot of us and it can cause us tens of thousands of dollars a year in lost revenue. So do this, implement it, and you will have some great success. Thanks for hanging out with me. You know where to find me. Just search for the Hammer and Grind Podcast. Remember, until next time, profit is not a dirty word.
