I have never met an agency owner who believes they don’t leave money on the table when it comes to a change order request. No agency is great at change orders and most — are abismal.
You have to get a mindset when you are working with changes. When the work has been approved by the client and he/she has signed off, you can move to the next step. Inevitably, somewhere along the way, there will be changes which impact the budget, the amount of time/effort put into the work, potentially out of pocket costs like printing, and the delivery timeframe.
The only way — let me repeat that — the only way to maintain the same level of profit that you budgeted for at the outset is to create a change order request. If the client wants to change the work, you need to prepare a change order that is the authorization to modify the budget (and potentially the timeline) for the change/work. Once the work is approved, going back and re-doing the work is a billable situation.
Imagine that you are remodeling your bathroom. The original plan that you signed calls for one sink. After you see the single-sink you decide you’d really like two sinks.
Does the contractor say, “Hey! No problem. We’ll get right at that and put in the second sink”? Well, partially correct. He will agree to make the change, but you’re going to have to pay additional dollars to take out the new-old single sink and install a new countertop with two sinks. And, you can bet your life on it, a good contractor will have you sign for the additional work and funds required before he resumes work.
It’s not debatable and we don’t question it. Of course, we’d expect to pay to undo what’s been done and to re-do what we have asked for.
So, why are agencies so different? We shouldn’t be.
Do you let your client or the time line intimidate you? The OTO rule, as it relates to a change order request, basically says….we’ll do the work once for the price agreed upon but if we have to re-do it or change directions — we’ll need to modify that price. The OTO rule isn’t rocket science, either. It’s just a good business practice.
