Do you find your projects nearly always go over time, over budget or cost you more than you thought they would? Scope creep can be one of the biggest killers of project profitability.
What is scope creep?
According to the dictionary, Scope creep is “uncontrolled growth in the scope or requirements of a project”. But for your business, it can mean making a loss rather than a profit on your job. When your projects outgrow the scope of the quote the client approved, you are essentially giving away your time, materials and expertise for free.
So how do you get your projects to stay within the lines? While there is no 100% guarantee that you’ll make scope creep a thing of the past, these 4 tips can help you. By implementing these tips, you can prevent scope creep in some cases, and negate the damage when it does occur.
Plan out your quotes
What information do you use when you pull together a quote? If you rely on guesstimating or having a rough idea then the chances you’ll underquote are much higher. It may be because you’ve forgotten to quote something, or because you’ve underestimated the time or costs involved.
Careful planning can help you with this. Plan out the steps involved, and check the costs and time involved. For projects you work on all the time, templating out the quote can really help you save time while getting your scope right from the start.
If the staff that pull together the quotes are not the same team doing the final work, then making sure there is a clear feedback loop between these groups is important. Your sales team make think two hours is all that’s needed, but your boilies know they need at least three hours.
Learn from the Past
Your costs change over time as you switch suppliers, and as material prices rise. Even if your quotes and templates started perfect, reviewing them periodically will always be important to keep up with changing prices.
When you’re just starting out with templates, or with assessing your quote accuracy, make sure to take some time at the end of any new project to assess what went well, and what went wrong. Did a particular task take longer than expected? What was your actual profit margin at the end vs your expected margin? What changes need to be made to templates or future quotes. Of course, the more accurate the record-keeping the more information you can use to refine your project scope.
Updating your templates and sharing your findings with your team will help your whole business quote more accurately to reduce scope creep in your projects.
Be clear with the client
Even if you have the perfect quote, the client might have other ideas. Umming and erring, change of plans and rescheduling can play havoc with your rostering and cause you extra costs. Small changes to the project might not seem like a big deal to the client but might harm your margins considerably.
To counteract this, be sure to be upfront about any extra costs the client might incur from changing their mind. Having this information on your quote or in signed T&Cs can save you a big headache down the line. If the scope of the project changes significantly then the quote will need to be revisited. The client should understand this from the start.
Extra team training might be needed to help your team understand this, and help them have difficult conversations with the client if it arises. Again, if your project goes out of scope from the quote then you’re giving away work for free. Is that something you’re comfortable with?
Track as you work, not when the job is done
If you want to limit the impact of scope creep on your projects, then tracking your costs as you work is crucial. Mistakes happen when you’re quoting and when you start to work, it’s sometimes unavoidable. But, if you keep an eye on your margins as you work you can reduce the impact and strategize to limit the damage.
If you can see that you are running out of time to complete a project, you can chat with the client to see about adding more time to their quote. It’s a much easier conversation to have before the work is finished than after.