WHAT YOU’LL LEARN IN TODAY’S EPISODE:

WHY YOUR SCOPE OF WORK IS THE FIRST STEP TO PROFITABILITY IN YOUR BUSINESS

UNDERSTANDING THE COMPLEXITY OF YOUR CLIENT WHEN PRICING YOUR PROJECT

UNDERSTANDING THE COMPLEXITY OF YOUR TEAM AND VENDORS WHEN PRICING YOUR PROJECT

---

I hear everything from designers, from “I estimated 50 hours, and I’m now at 90. I’m totally upside down on my numbers.” to “I have no idea where to start” to “I totally messed this one up, Renee, and I don’t know how I’m going to get out of it.” 

If that is you, or you’ve had these pangs of anxiety, you are amongst the many, and this is why I want to talk about his topic today. 

I know I’ve discussed pricing in other episodes, but today, I want to discuss the common thread I’m seeing when designers tell me how they priced their projects. If you skip this step or gloss over it, you absolutely can’t build your pricing correctly.

What is this step? 

It is all about the scope of work.

There’s the magic formula. There are no calculators that can get you the pricing you are looking for to build your fees for construction management of a project that I have come across that can do it properly.

Maybe some of you are using a calculator and feel you have the right numbers dialed in. Ok, if that’s the case, then honestly, I’d like to see those calculators. I’m not saying some of these calculators aren’t great. I’m saying they can’t take into consideration the complexity of every single project. And they often are an extension to a calculator used to price out furnishings and accessories. And those calculators I think, get you right on the money.

The complexities that come with a construction project are on a whole other level from decorating a room. So I caution all of you, that a shortcut like a calculator based on square footage is the way to go when you’re pricing out construction projects. 

What to use instead

You dial in your scope of work to the smallest detail. 

Maybe some of you are already thinking, “Duh, of course, I have a scope of work. How do I start a project without a scope of work?” 

I would push back on that and say, “Does your scope of work cover everything you need to do?” What I see and hear from designers is, for instance, “Renee, we’re going to be gutting a bathroom for my client. We’re not going to be moving the fixtures. We’re just doing a refresh. So I’m thinking it’s going to take me 40 hours of work.” 

And I’m sitting there thinking, what? That’s all you used to build your hours? Where the hell did you come up with 40 hours? Just because you did a bathroom like this before and it took you 40 hours doesn’t mean it will be the same. 

Figuring, guessing, and estimating is the formula to get you upside down in your fees. 

Remember, we are doing this to make an income. This is not a hobby. And unless you are profitable in your business, then you will go out of business. 

Your starting point is the scope of work dialed into the nth degree, coupled with the complexity of the client, as well as the team and vendors you will be using. 

I go into more detail in today’s episode about this particular designer who reached out to me about the bathroom project and all the details she knew about it – after it was done. She knew what she had done, and that’s when the light bulb went off for her. She had never taken the time to literally write down the entire scope of work. Down to the knobs vs. pulls on the cabinets vs. drawers in the vanity. 

All of that takes your time.  

Not just in selections but in planning, drawing, oversight, communication – all of it. 

All of the parts and pieces were in her head. Some of them were on her drawings. She just didn’t focus on the complexity that each one would bring to her workload. 

After realizing all of this, she began to get upset. And I get it. I have been there too. But it is a waste of energy. You cannot go back. Yesterday is yesterday. Tomorrow is tomorrow and let’s focus on that. And once we got over that, she started to feel empowered. And that’s what I want for each of you.

Through this, she also learned that this project was so much more than her last bathroom project, which was the same size. This is why I keep harping on the shortcut calculators for construction. 

Breezing through a scope of work, thinking, “I got it.” only leaves you open to mistakes. And unfortunately, in this business, mistakes costs money. 

Complexity of the client.

We then moved on to the complexity of the client. Every client is going to be different.

I understand you may not know the client well when you are pricing. But you do get better on this with time. So you’re going to have to listen to your gut. And we’re really good at understanding the complexity of clients from our decorating work. 

You know what I’m talking about, right? These are just the little hints they give away in their conversations. 

There are many things to consider when talking to a client that could affect the number of hours it will take to manage a project. Managing the project is not just about the demo and installation of the items. It is about the people you are working with. And the number one person you’re working for – you guessed it – is the client. 

I often see designers underestimate the amount of time they will need to work with the client, especially on larger projects. Our renovations are typically the second largest investment our clients have ever made after the purchase of their home. What we do is expensive. I’m not even talking about a new build. I’m talking about a renovation. The clients are involved. They have every right to ask lots and lots of questions. You just need to make sure you calculate that in when you’re developing your fees. 

Complexity of your team and vendors

The designer I talked to shared how she didn’t know this team. And I asked if she factored in more time for that. And she said, “Well, no. It’s the same amount of work.” Well, that may or may not be true. This new contractor does not know how she likes to work. He’s going to come with his own set of ideas, and you’re going to come with yours. Who knows the situation? However, the facts remain that when I am not working with my A Team, it takes me longer. And that all has to be factored in when you’re developing your fees. 

I am fortunate, after all these years of working in the same community, I have a Rolodex filled with vendors that I can tap into. 

Are there times I don’t have a source? Of course. Will it take me longer to find it? Absolutely. I’m going to want a couple of options. I’m going to want to do some research. I’m going to want to vet their services. All of that takes time. 

So again, that goes back to the scope of work – knowing exactly what you are doing. 

The more time you take on the front end to present the fees that you are more confident will cover you, the more profitable your businesses will be. 

Will you get it right each and every time? I wish I could tell you you would. The problem is there are just so many X factors when we go into these projects and why I always recommend putting a few more hours on a project just in case. Do they always cover? Not always. To mitigate any loss is a win. 

Your scope of work is the first step to your profitability and the foundation for accurate pricing. 

The second step is understanding the client and the team dynamics. 

Thinking critically about your next project and keeping these variables in mind will allow you to set comprehensive fee pricing that you feel confident will not only cover your ass but make you money!

As always if this episode leaves you with more questions than answers please feel free to reach out to me at renee@devignierdesign.com or shoot me a dm on social media!