As a contractor or homebuilder, you will constantly deal with scope changes. They can be big or small, but the result will always be the same: you’ve got more work than originally agreed upon.
Some clients might understand that changes come with extra costs, but others will not be so understanding. In a worst case scenario, they might even assume that you will absorb the additional time and effort without changing the price.
Scope changes are part of the job, but if they’re not managed properly, they can lead to unbilled work, broken client relationships, or serious financial losses. All of those small requests that seem harmless, like adding a couple of feet to a fence, changing material of a countertop, or adding more landscaping to a job will pile up over time. This can quickly turn a profitable job into one that barely breaks even.
The Risks of Scope Creep and Its Impact
You Give Too Many “Favors”
Nobody wants to be footing the bill for change orders. If a few minor tweaks go unbilled, you’ve lost time and money. These changes can feel like a one-off favor to keep a client happy, but will quickly build up and cut your profit margins out of the picture.
Client Expectations vs. Reality
The reality is, many clients don’t fully understand the impact of mid-project changes. They may think a small addition won’t cost much or can be absorbed into the original quote. This disconnect commonly leads to tension when the contractor adjusts the quote, and bills the costs later on.
How to Handle Scope Changes Effectively
It’s important to understand that there are two types of scope changes that can occur throughout a construction project. Changes that occur during the quoting phase, and changes that occur after the initial contract has been signed. If a new material or item is requested during the quoting phase of a project, it is not considered a change order—it is just a step in the project planning.
Many contractors unfortunately overlook this step, and the massive opportunity for revenue growth that comes with it. Homeowners might have just seen one or two materials they liked and pulled the trigger right away, because it’s easy for them.
However, if you go the extra mile and help guide them through all options and upgrades, you can usually eliminate 80% of change orders before they even happen. This won’t only reduce headaches down the line, it gives you an opportunity to skyrocket the revenue you can gain on the project.
Managing Changes After the Contract is Signed
For changes that happen after the main contract is signed, handling them effectively becomes key. These are the true change orders, and they can be difficult to manage. Here’s some practical tips on how to navigate these change orders successfully:
Clear Communication is Key
Set expectations from day one. This will help you avoid most common misunderstandings. Talking with your client, and being upfront that any changes or requests will affect the overall cost is key. Ideally, this will be outlined in your contracts, but you should make sure to remind your clients of this as the project goes on, or whenever a change is requested.
Document Every Change
When a change order is requested, document it right away, no matter how small. Before going forward with the change, sit down with, or send a revised contract for the client to sign off on. Make sure to remind them of the associated costs. This ensures that the extra costs are understood, and it protects you from doing any work on your own dime.
Build Flexibility into Your Contracts
Include a clause into your contracts that highlights how change orders will be handled. Having this clearly stated in your contract will prevent any headaches, financial losses, or potential legal repercussions down the line.
It’s a Lot of Work - But There’s an Easier Way
When you’re managing multiple projects, and trying to track down clients with their own busy schedules, communicating changes, revising contracts, and getting signatures can seem impossible. Even with the tips we outlined above, it’s easy to stumble into difficult and uncomfortable situations.
So, how do you handle scope changes without hurting your bottom line and keep your client relationships healthy? Lot’s of contractors are turning to Bolster for this, and you should too.
How Bolster Simplifies Scope Changes
Earlier, we talked about getting all options and upgrades out of the way from the start, and Bolster is the best way to do this. Thanks to Bolster’s interactive proposals, you can say goodbye to the traditional quoting and change order process. These proposals allow you to bring the showroom right to the homeowners living room to get all choices in front of them immediately.
Even if they want a change throughout the project, you won’t have to worry about confirming new prices, documenting changes, or even tracking down your clients to communicate these changes. Let’s explore how it works.
Interactive Estimates Do The Work For You
Bolster’s interactive proposals transform the traditional quoting and change order process. If a client wants to upgrade materials or adjust the project scope, they can do so directly within the original quote, on their own. Here’s how it works:
Real-Time Pricing Adjustments
Homeowners can watch the pricing of their choices change instantly. If they want to change the countertop material, they can do so without having to go to a showroom, or website to view the pricing. The homeowner has everything they need in the quote to make an educated decision, and can request the change in just a few clicks from the comfort of their home. This means no more guesswork or surprises when the job is completed.
Streamlined Communication
Communication breakdowns are a huge pain during home building or remodeling projects. Bolster was designed to ensure these miscommunications are a thing of the past. Instead of juggling emails, texts, and calls in different applications, Bolster houses all client communications in its integrated CRM. Clients and contractors both receive automated notifications whenever a scope change is requested, keeping everybody on the same page.
Clear Records and Change Order Tracking
The system tracks and documents every change made, and keeps these records all in one place. This transparent history of all change orders ensures that nothing will slip through the cracks and protects you from paying out of pocket for any small tweaks. Both the contractor, and the homeowner can review all adjustments with a full view of the project's progression. This prevents misunderstandings or disputes, and ultimately protects your business and bottom line.
Stop Losing Profits Today
It’s time to ditch those endless hours of manual updates, communication errors and frustrating client follow-ups. Bolster has already transformed the way hundreds of contractors manage change orders, communicate pricing changes, and keep up with documentation—all while protecting their profits.
Are you ready to join them? Book a demo with our team today and experience firsthand how Bolster can give you hours back in your day, and keep your profits protected along the way.
