I’m wondering how you folks handle customers requests for add-on work at the end of a job, especially kitchens. We try to think of everything from the start, but there always seems to be additional work which the client wants done right away to “complete” the job. When I charge even a very reasonable rate for these things, they seem annoyed, as if I should do it for free: not to mention how it wreaks havoc with the schedule. It can sometimes sour an otherwise good project.
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Replies
There are many ways as we all know , but one way is to have a clause on the original contract that clearly states any and all changes and a or additions will require a change order and signature from the client . The client must also sign and receive a copy of the original contract as well . Some shops say something like any changes or additions will be performed at time and materials cost or at the same rate per foot as the rest of the job .When the client sees their own signature it seems to freshen up the old memory on exactly what was agreed on .Keeping the lines of communication open all thru the job is a safe practice also . The signed contract or change order is a promissory note of sorts and will hold up in court , if it got that far. If they just need a few extra shelves or some dividers in a drawer or two , just bite the bullet and be done with it .
When somebody owes you a a lot of money it gives them control , if it is legal in your state get a substantial deposit and on long jobs set it up for periodic draws on the original contract . So if you have their money and their cabinets , you are in control .
good luck dusty
You need to use what is called a change order, basically a mini contract that gets pulled out and the facts and figures filled in as to the scope and cost of the additional work. Half the time the customer will suddenly decide the additional work isn't worth it if they actually have to pay for it. The use of change orders should be specified in the original contract for the overall job.
John W.
if you're handy with Excel- here's an easy sheet that I've been using for years in the custom millwork business.Customize it as needed.
half of the people I know think that change orders is where you have a license to gouge, the others don't want to do them, or are reluctant, and price them too low.
The fact is, last minuite changes do cost a disproportionate amount due to the time constraints and the disruption to other work. It doesn't matter if you have a multi-million dollar millwork company or a small one-man shop. You have to run out and find/buy/make something at the last minute and put everything else aside.
I've done a project where the client deliberately undersized the job, and added everything later, while the job was running. Every price was debated and re-quoted over and over until they were satisfied. The prices were higher than they would have been the first place, because there was no time and lots of risk. Because we couldn't schedule and volume buy our material, Everyone lost.
It's ultimately YOUR time and money. I wouldn't waste it. The customer will remember that you got beat down for $$, and the next job (if any) from them will go the same.The older I get, the better I was....
Thanks for the handy itemized cost chart, papanick. It includes some items like selecting and fetching materials that I am often too sheepish to charge for. Sometimes it helps the customer to see my actual costs to help them understand why these upcharges aren't freebies. As far as the impact on the schedule, that's a cross all professional woodworkers have to bear.
The hardest thing for me was (is) to charge what my time is worth. Sometimes those little "add ons" are not worth what I need to charge for it. But, when I short my self I always regret it. For example a good customer asked me to build a new drawer for one that failed in his bathroom. the old drawer was stapled particle board. I told him it would cost $120 for a drawer made from baltic ply. Of course that is insane, but the truth is it will take me half a day or more to make that one drawer. Assuming I have the materials in the shop. I also told him that If I made 10 drawers it would cost only $300. He declined but understood why I had to charge so much. I always give customers the option to check with someone else. Ill tell them that most painters, masons, sheet rock guys, what ever charge less than me but my time is worth more.
Having said all that, you have to read the customer to decide the best move. There have been times when I ate little add ons by charging too little, but the customer loved me for being there for them and I recieved many lucrative referals from them.
Good luck,
Mike
That's the ticket, mudman. Trying to keep a good customer happy even when they're request is unreasonable. I normally bill at a rate of 75 to $100/hr, but for these add-ons I get much less. I always end up eating the difference and lose time I could have spent with my family or getting a leg up on the next job. Educating the customer as to your predicament seems to be the answer.
Segil,
Another solution is to provide an alternative to the customer. There are lots of people looking for those small jobs but your customer doesn't know who they are or if they can be trusted. Your recomendation of someone would go a long way to a win-win all the way around.
Part of your job is helping your customer see the light. If they feel you're out to rip them off, there's ill will. But if you can use an analogy, they might understand your situation.
Notwithstanding that some people will always seek to "win" against a tradesperson, it helps to explain by telling these customers that if went to a doctor for a checkup their co-payment is a set fee, but if the checkup revealed a serious operation was needed, their payment would later increase substantially.
Likewise, if they hire a builder to put in new floors and hang cabinets, then decide to build an addition next to that room, there would also be a substantial increase in costs.
In my opinion, anyone you work for that does not see the corresponding logic to your work, is not worth working for. You will always have an uphill battle, and more than half the time you'll lose. An informed customer is a paying customer.
Reading the customer, is sort of like having a sixth sense if you will , it has saved me many problems over the years . If you are dealing with an overly demanding or otherwise unreasonable person , it is unlikely you can change that . Trust your gut and pass on jobs for people who you get a rotten feeling from , this can save you much time , aggravation and grief in the long run . If the client feels we are hungry we become vulnerable and can easily become a target .I very politely tell them sorry , I am covered up with work right now and cannot accept their job . There are plenty of genuine and wonderful people to work for . Also if you have made a commitment to have the job done on a certain date , make it clear from the start you have a job directly behind theirs and speak up now if there is more to this job .
regards dusty
I am still struggling with this issue daily, after many years as a professional millwork estimator and project manager.
The problem is often three-fold.
1: As a group, we are considered by many to be "labour" and not worth as much per hour as a "professional".
I have seen corporations that have no problem paying a consulting junior accountant (fresh from school) $250/hour, then turn around and debate whether a 40yr professional on-site refinisher is worth $50/hour to refinish a 30' table overnight.
The costs of our equipment, apprenticeships, and years of experience are undervalued by the people who watch too many DIY shows on TLC.
2: As a "service" industry, our time is not valued as much as a "product" would be:
Call Toyota, and order a new car. Then, the day before delivery, ask them if they can add air-conditioning, or automatic transmission. Will they hold their price? Will they hold their delivery date? With the cost difference be the same as if you ordered it in the first place? No-one in their right mind would try to say yes. But as an industry, we have to do it all the time.
3: Construction as a group has been painted with a dirty brush as a bunch of crooks, gougers, and overpaid workers. The numerous examples of paving contractors who drive brand new BMW X5s, etc. has made every one of us look bad, regardless of our specific discipline.
In Summation:
GOOD/FAST/CHEAP ----- pick two.
The older I get, the better I was....
Edited 9/1/2005 12:09 pm ET by papanick
I dont think that it is fair to compair our trades to those of $250 and hour consultants. First of all those fees are not common, and those who are recieving those rates have very specific SKILLS (not education) that are in demand. We live in a capitalist sociaty and are paid market value for our work (excepting when the goverment interferes). Most of our skills are luxery items, so if we charge too much they will pass. On the flip side I know that I am on the low side for what I charge and that my customers will not find anyone else to beat my work for the money. So if they think my rates are too high (refinishing and repairs are great examples) then I very nicely tell them I cannot do the work for less and perhaps they should look for other bids. It is still a personal blow when I loose a bid, I feel like the kid who wasn't picked to be on the team. And often when I know that the customer can't afford my higher wages I feel real bad, it is not uncommon for me to charge less to those people. But in general that is bad for business. In this line of work there are those that make it and those who don't. It seems to me that there are many, many combinations that produce varying results. I know guys who have successful businesses that have absolutly no repore with their customers, and they are constantly complaining about their difficult, cheap customers. But some how they are doing well. Then there are the "nice guys" whos customers inevetibly become friends and end up giving in more than they should, there by cutting profits. I think that I am the latter.... yet my business does well, and I don't have the dark cloud hanging over me that so many trades people seem to have. I am not overly stressed, and I look forward to the next job, instead of dreading "another picky tightwad customer who expects something for nothing". However I will never make enough to buy a BMW! If that is what I wanted I would have stayed in school and worked towards becoming a $250 an hour consultant. By the way that job ain't all it is cracked up to be either!
Well I've got to make some bids for my picky tightwad customers,
(heh heh, just kidding)
Mike
Well said , I would tend to agree with you on the major points . One thing I do is NEVER quote by the hour , I only work by bid , if it goes well I make a bit more in less time if it takes as long or longer then I thought , so be it . I also have a hard time telling them how much per hour I figure , better for me to bid the job , they can take it or leave it , I never look back anymore . I also tend to become friends with my clients and probably give them way more then I or the next guy would or should , but honestly it generally comes back 10 fold in referrals and repeat business , and peace of mind .
dusty
Many fine suggestions here. I personally do not like to use change orders if it is avoidable; ten years of commercial business in Chicago has me quite fed up with them. We're in New Hampshire now, and I'd like to take a kinder, gentler hand with my customers. They are mostly very nice people and thats the problem. The jerk-offs I have no trouble dealing with. Its this softer side of the woodworking business that is the essence of this discussion for me. When a customer crosses over from being a client to becoming a friend. We spend a lot of time with these people, and we essentially make their dreams come true. For many, it my be the only time in their lives that something of permanence that they helped design comes into reality. When they recommend you to their friends, it is this relationship that is often the primary reason. Once the job is over, the friendship tends to dissipate over time, and this is a good thing. It will get in the way of a good business relationship far more than help it.
I know the change orders sound kinda rude when ya want to do everything on a handshake. But it is necessary to avoid any conflicts you made have with the customer.
I personally wouldnt comeout with a price sheet for change orders but have a clause written in the contract and make sure the customer is aware of the clause and explain it to them exactly what a change is in case they dont understand.
Communication is the key and getting it in writting even if you have a space where they initial they understand about change orders.
your time is money. Its just as important as the clients time. So you should be compensated for it.
The client understanding that will help the entire process and your rep stay clean and free of snags. Buckism: Will show you the the way
Sounds like you have a good business sense.
But if you get a rep as the guy who'll throw in a freebee, customers will tell friends, who then will expect that freebee, every time.
Make sure the original contract spells out explicitly what work will be done and at what rate and what time frame. And then have a clause in decent size BOLD type that indicates that any changes will require a change order that is signed by both parties and that it will be completed at the same rate but on an "as time permits" basis. and have areas in the contract that they have to sign or initial that shows they are aware of the shop rate and the requirements for a change order and the "as time permits" clause.
That way if you have another job scheduled to start right after this one you can get to it and come back as you can to this one.
I'm sure the gang on the 'Home Building' forum have run into this problem many, many times. Try posting there and see how they handle this same situation. SawdustSteve
Sawdust Steve,
You ain't only kidding. The carpenters I know tell me this is their single biggest problem. People think once you're on the job site, its time to think about all the little things they want you to do without regard to the effect on your other customers. And these people are always complaining about contractors never returning their calls or showing up when expected. Go figure! I guess I have it easy compared to these guys. I sometimes have to remind people that the piece I just installed is not a mock-up, it is the final version. Any further work must be scheduled and billed seperately.
In Project Management lingo this is called a "Scope Change." (my real job is training and consulting on project management http://www.oakinc.com).
One way to handle this is with a "Statement of work" (SOW) that tells the customer exactly what you will do. It will also spell out how changes will be handled. Sometimes the SOW also spells out what will NOT be done.
The best example I've come across of a contractor handling project scope changes was that he started with a good SOW then when a customer requested something other than what is in the SOW, he would write it up (on one page) with a cost estimate. Then he would ask the customer to accept or decline. (literally sign the document)
Other things I've learned that might help:
NEVER give an estimate without thinking about the scope of work (drawing pictures, going through the steps, writing it down etc...) In the corporate world, I call these "Hallway estimates." (the boss stops you in the hallway and asks you to estimate some ill-defined piece of work). Hallway estimates are almost always wrong and They are usually too low!
Use your first SOW as a template for the next SOW. Keep improving your SOW. After you've done enough of these, the most you'll have to do is edit an old one.
At the end of each project ask, "What worked?", "What didn't work?", "What could I have done better?" It is often better to write your answers down. (Something about writing makes it stick in our brains better).
Track your actual hours against your estimated hours - the fastest way to improve your esimating.
Customers are impressed with a well written SOW. I know that in my own experience with contractors I've gotten great scope documents and lousy ones. (A plasterer I would recommend in a heartbeat, a carpenter/electrician that will never be spoken of again, a web site builder who went over scope without authorization and tried to bill us for the work when we didn't pay he shut down our web site - fortunately we had a backup and recovered in a day).
Referrals are the least expensive and most effective sales.
Good work and good relationships are your best insurance.
Put yourself in your customers shoes but also help them see what it's like in your shoes too.
Customers know what they want, they often don't know how to tell you what they want.
HTH,
Mark
MarkRD,
Thanks for the tip. I've never heard of an SOW but it sounds like a great idea to me. I typically write down at the end of a proposal a short list of what is included and not included, but the informality of this "mentioning" of these very important factors doesn"t seem to register with customers. A separate form dealing with these issues, reviewed at the start of a job would leave me in a strong position throughout the project. The client is often confused as to what is included or not, and I think this will spell it out. I will start using an SOW immediately.
I'll try and track down a template for you to work from ....Mark
Visit my woodworking blog Dust Maker
Good advice. Estimating has always been the toughest aspect of being an independent business, for me. "After action" reports are also very useful, provided one sits down to learn from them and not plow into the next job.
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