When dealing in services business, unless you do "menu” pricing, dealing with clients who want job priced and done quickly can be challenging. Founders can be cavalier when the prospect of new work comes around, so they quote a price for a service and get to work. Doing this can mean they spend more time on the job than anticipated, or incur more cost, and passing this onto the customer can be tricky.
Scope Creep and Scope Seep
Per Wikipedia, Scope Creep refers to uncontrolled changes or continuous growth in a project's scope. This can occur when the scope of a project is not properly defined, documented, or controlled.
Per contrarianconsulting.com Scope Seep refers to situations when you allow extra features, tasks, or deliverables to be added to the scope of the project without the customer asking for them
Both Scope Creep and Scope Seep can land freelance businesses in financial trouble, especially when they starting out, as founders try to gain business by offering lower prices, quicker delivery and more features than their established competitors.
The big challenge here is getting customers to pay for these changes in scope, while maintaining a good relationship and getting repeat business in the future. Some ways of dealing with these changes in scope are:
Send a bill, and duck
A very traditional approach favoured by law and accounting firms. Often a bill will catch a client unaware, as this is the first they know of any project scope changes, and then the backdraft happens. Some proponents will argue “it’s easier to ask for forgiveness than ask permission”, but we’re not big fans of this approach as it annoys the customer. Potentially a customer would have decided on a different feature set but by going ahead and doing the work, any of the decisions from the client.
Bill the agreed amount, write-off the rest
While this is the path of least resistance, it has the most brutal impact on a business that is starting out. Founders can be very creative in justifying their decision to write off a bill:
- "the client doesn’t have enough money"
- "we are building our portfolio"
- "this is a good client to have for future work"
- "it was a good experience for us"
- "we won’t do it again"
None of these excuses will pay your upcoming supplier and tax bills
Have a conversation and improve your process
While it’s not helpful to say “have a conversation” once the project is out of control, explaining to the client any project cost changes should be done sooner rather than later. Having a better process lets you identify some key points in the future when you can discuss potential price changes with clients.
Your process might include:
- Discovery - a period (that the client pays for) with all the client information for you to determine what needs to be done, and at what cost
- Onboarding - an initial period induct the client into your way of working and processes.
- Deliverables - scheduled parts of the project to be delivered, set against costs
Should you have any questions about implementing the above, please drop us a line or request a catch up.