How to manage Scope Creep in your design projects

So many of us have experienced the dreaded scope creep and all of the complications that come with it! I’m here to tell you that you can embrace this as an actual potential revenue source. Listen to this episode to learn how you can make scope creep work for you!

Over the decade running my interior design business, I’ve had my fair share of clients trying to get more work out of me and my team than we originally signed on for, and I’ve really seen how that affects my profitability and efficiency! 

In this episode, I’m sharing steps you can take that will ensure you clearly define and communicate the scope of work to your clients and what to do when this issue inevitably arises. I talk about deterrents, contracts, processes, and billing tips to help you feel in control and your clients do not feel blindsided!

This episode is sponsored by Devix Kitchens.

Read the Full Transcript ⬇️

Hey, hey, hey, it’s Rebecca, and you’re listening to Resilient by Design. Today, I’m diving into all things scope creep. Like, you know that thing that causes your heart to go pitter patter when you’re worried that the client is going to ask you to do more and you don’t know how to charge them for it? I Or maybe you’re worried they’re asking you to do more and you don’t have time for it.

Or you’re worried that once you send them the invoice, they’re gonna be like what’s this? You guys know what I’m talking about. It’s the thing that happens once a project gets rolling and you’re all in the messy middle. When the client starts to Ask for more things should be a good thing, right? An opportunity to make more money.

It is, but for so many of us, especially in the early years, it’s something that has caused us anxiety. And if this is you and you know what I’m talking about, you’re going to love this episode. I’m just going to talk all the things today about scope creep and how to manage it. So here we go.

All right, so how do you track project changes? How do you deal with scope creep? Like what is the formula? Like give it to me, Rebecca! How do I do this thing? So here’s the reality. When I first started running projects and Inside my interior design business. I didn’t even really know what that term was.

I’m not gonna lie. I’d never heard it before I was like, ah, what is scope? I honestly didn’t even know what scope was I guess I would have known scope of work from being in design school But I really never thought about it in terms of what I did for the client It took several years for me to really think about Okay, what is my scope of work?

Because when I was first working for another designer, we didn’t really type it up. There was no list of here’s what, here’s what our services entail. We would just design, right? So we would just start working and selecting and sourcing and billing. And. That was that. And maybe sometimes the clients would contest the invoices, and we would just deal with it at that time.

But there really was no defined scope. So sure, that’s wonderful if that’s the type of client you have and that works for you. But what didn’t work for me was when I went out on my own and I didn’t have those clients. I didn’t have multi million dollar projects. I wasn’t shopping for 600 a yard fabric anymore.

In fact, I had to really kind of water down my selections, if I’m being honest, because the people who are hiring newbie designer, Rebecca, who just launched her business who had been working in television were on a budget. And so I needed to get super clear on what was the scope of work I delivered.

And as I moved into fixed fee pricing, flat fees, this is when it became the most important. And I think this is where possibly designers struggle the most is they’ve moved over to a fixed fee. And it’s so, at first, it’s so amazing. Like I know for me, when I first started charging a fixed fee, I was like, Oh, hallelujah.

I no longer need to track my hours. I don’t even need to worry. I can just serve my client and that’s that. But over time, once I started to reflect on the time we were putting into projects, I realized that our clients were taking advantage of us. Not intentionally and not with any malice, but they had paid a fee and they just wanted to suck us dry and get as much of our, as much as our knowledge and our expertise.

Peace. And so I would be running around, we’d go above and beyond, and we were not efficient. And it took me a while to learn that if you are going to charge a fixed fee, you need to be very efficient with your time. Because time is money, especially when you are paying other people to help you with projects, which basically I did from the very beginning.

From the very beginning, I knew I wanted help. I knew I couldn’t do it alone. I was a new mom, and that’s probably part of it. And so there was a limit to how much I could really do without help. And I really subscribed early on to this who, not how idea and this idea of outsourcing and getting help.

And that was going to be my way to scale, but then I had to pay those people. And so if I wasn’t paying attention, which I wasn’t, let’s be honest in the beginning, then all of a sudden I’m paying out more than I’d collected from the client for my fixed fee. And so I started to become aware of the fact that, okay, I need to get really clear on what is scope.

So the first thing you need to do is you need to define the scope that you’re delivering for your client. You need to define, like, what is included? If you have hired us to renovate your basement, I am not tackling anything in the kitchen, or upstairs, or in the kids bedrooms. And I’m not answering your questions about which light fixture should you use up here, and what about that pink color for the den.

That is not in my scope. I used to just do those things because I’m a nice person, and I wanted to make them happy, and I’m a freaking people pleaser. I’m recovering, but it’s still there. And so I would do all the things because I always learn the customer’s always right. You need to serve your customer at all costs, make them happy.

But there is a fine line between doing everything for them to make them happy and standing your ground and still making them happy because you’re a professional and You deliver on what you say, not you over and over and over deliver to the point where they don’t see the value. So first you need to get clear on what is the scope.

It needs to be in your contract. It needs to be in a summary or a scope of work document that is attached to your contract so that everybody is clear what is included and what’s not. And I can tell you that as your projects grow in size, this is going to become even more important. We need you. I’ve only dealt more and more with scope creep, the bigger the projects have gotten because the clients have a little bit more money and they value your expertise a little bit more.

And so they’re quick and ready to ask for more help, which is amazing, but you need to be ready. So first of all, define your scope. Know what’s included in what they’re paying you. Even if they’re paying you hourly or fixed fee, doesn’t matter. Have a scope of work. Then you need to have a process. You need to have a process in place for when they want something that’s not in that scope of work.

And that process, you need to decide what that is. I mean, I have my own process, but essentially what it is in a nutshell is, this is what’s included in your contract or in the design fee. Should you require or, or desire any further assistance with your home or with the project that is, Asking us to work outside of the clearly defined.

This is not legal language, by the way. I’m just verbalizing it for you. This is not exact. This is really wordy. My contract is probably more succinct than this. I hope, but essentially, if you would like us to do anything that’s outside. The scope that doesn’t fall within the scope, then we’d be happy to do that for you.

And we will sign an additional contract and we will bill you at our hourly rate for any work that falls outside of the scope. Essentially, that is how we position it to our clients. So determine what your process is. Our process is that once they ask us in writing or verbally to do something outside the scope, we let them know that we’re going to be sending them the out of scope agreement.

Now, I can tell you that sometimes when we. And I would suggest that it actually acts as a deterrent and that’s not a bad thing. I had a project once where my, my poor designer would come to the meetings and she was the one in charge with the lead. So she was doing project lead doing, and I’ve had my business run this way for a very long time where my project leads, they’re the ones in communication with the client.

There’s the ones going to site most of the time. Hey, there’s pros and cons to that. I don’t have as much control, but that’s okay for me because I’m a podcaster and I’m an online course creator and I’m a coach. Like I got a lot of other things going on. And so I have to let some things go. If you’re going to scale and grow, you have to loosen the reins a little bit, but anyhow, that’s neither here nor there.

She would come back and she would say, Oh my gosh, Rebecca, every time that I go to their house for a site visit, they always want to show me pictures of something they found at Crate and Barrel. And they’re asking my opinion on would this artwork there, or, you know, could we do this table here? Like they want me to give them advice.

And she’s like, and I’ve, I’ve been like helping them, but it’s taking a lot of extra time. And I think I was staring like probably an extra 45 minutes the last time. And I’m thinking the first few times I’m like, okay, well, thank you. I appreciate you helping the client. That’s great. But this kept going and this particular project, the client had decided in the end, not to hire us to do any decorating that they would tackle the decorating themselves.

So what they were trying to do is get free advice from my designer who was so sweet and wasn’t the person who was going to say, ah, this isn’t what you’ve paid for. And so it got to a point where. We had to air quotes, threaten them with our out of scope agreement. This is the first time I had done something like this and it worked like a freaking charm.

So if you’ve been in this situation or maybe you’re currently in this situation, I highly recommend you try this tactic. And I did already have it in my contract that we have this out of scope agreement or that we would have an agreement drafted. But anyhow, essentially what we did, and I believe I sent the email as a business owner.

Which is also one of the nice perks of having people work for you is that then you kind of like the buck stops here. You’re the last line of defense. So then when you come in, it’s either really important or it’s serious, right? Or you could be the one who saves the day, who fixes all the problems.

Even though realistically you’re puppeteering everything else. There’s just something about feeling like a little bit of a bigger organization helps keeps clients in line. And so I believe that myself or even possibly my administrator sent them an email and said you know, we, we understand that you’ve been asking for some additional design advice and we will be happy to help you.

If this is the case, let us know. And I’d be happy to send along our out of scope agreement. So. that we can move forward. And what did the client do? She responded and said, Oh, no, no, that won’t be necessary. Thank you very much. And guess what happened after that? She stopped asking my design team when they were on site for advice and help.

Now, some of you listening might be like, Oh, that’s so bad. And they’re going to go and do and they’re going to muck it up. I’d rather them do it. Right? No. You have no control over what they are going to do. You are in business to run a business, to make money, to pay for your livelihood, to pay for your family, to pay for the people who work for you.

You cannot be doing a million favors that are sucking your time. Because what was happening is I’m now paying my freelance designer, because most of my team has throughout 10 plus years, we’ve been mostly contract workers, mostly freelancers and some full time employees, but I’m paying her for every single hour that she’s at the house.

But I can’t then recoup that from my client because I’ve given them a fixed fee. And so, and this is where maybe hourly you could win out, but then you also have to consider where that time is being pulled away from. Is it a future project? Is it something else? Anyhow, that was it. Client stopped asking.

And so it was a deterrent. It worked really well for that. So you have, what did I say at the beginning? What did I say? Right. You need a clearly defined scope. You need a process. For what happens when there’s a request that’s outside of the scope. And then you need a system to follow. Once the client has agreed so and I will also add that it’s not just a deterrent like it actually works, right?

so somebody might say, okay, yes, we want to sign the out of scope agreement and Great. We send it to them and what we do is on the out of scope agreement similar to our contract Is it’s just a one pager and it? There, then there’s a second page attached that just is like empty lines for the scope and we write in all the requests that have been made like source, I don’t know dining room chandelier replace carpet with new you know I don’t know, I’m just trying to figure something out like electrician to, I don’t know, whatever it might be.

And then you send it to the client for that, for their approval. So they need to then look at that, add anything that might be missing and let us know, is this what we’ve agreed upon as the out of scope items? And they might say, yep, that looks good. Then they sign it with the date and they’re agreeing that you are going to bill them now monthly for time.

Now you could collect a bit of a retainer. If you think there’s enough items that it’s worthwhile so that you make sure that they pay you that’s up to you. So either it’s a deterrent, or they sign on, and you’re off to the races. So the system that we have in place for this, because this could get out of control, right?

Which has happened to me, where it’s like, great, and if we’re not on top of it, and when you have a lot of projects on your docket, it’s hard to stay on top of some of this stuff. Like, it just is. And so, What happens is you sign the agreement and you’re like, this is great. I feel good. We’re getting paid for this work.

You do the five things, you know, you invoice them, but then they keep asking for more things. And instead of you saying, I’m going to add that to the out of scope agreement, you just keep doing them. Maybe you remember to bill them and maybe you don’t remember to bill them. And so it kind of falls off the rails.

You do need to make sure you’re using the systems that you set in place. I’m all about process. You guys know that. But this is something that I think is essential. And so what we then would do is If they, and this just recently happened to us on our project. We had quite a bit of requests that were out of scope.

Projects take a long time, a lot of things pop up. And so every single time my lead designer would say to the client, absolutely. I’ll just have our office add that to yours out of scope agreement and send it to you for review. So we would add the three more things, add the 10 more things, we send it to them for their review, they sign it, we’re off to the races, we can keep adding on.

And make sure that you are billing them monthly, because if you let that tally up over a couple of months, or you can bill them more frequently than that if you want every two weeks I just find that’s a lot of administration doing that much billing, so we do it every month. And If you think about it, over two months time, you could accumulate a lot of time, a lot of hours.

And so, the last thing you want is to then send them an invoice and they’re like, Oh my god, I didn’t know it was going to be 3, 000 for your time. Like, if I had known that, I would never have signed up for it. How many of you can relate to that? Or how many of you have been afraid of that? So, invoice regularly.

And also, if at all possible, give them a time estimate. I, I think that’s kind of important to let them know that it won’t be less than so many hours. And it likely won’t be more than. Do like an upset point. The way that you would do in a commercial design project. The way that Adriana talked in designers room a little while ago about commercial design.

The differences between residential and commercial. And one of the things that she does is she creates like this upset point where she tells clients it’s not going to be more than. 50 hours or what have you. It’s helpful to give them a benchmark because the last thing you want is for your client to feel blindsided and then you feel blindsided by them because they don’t want to pay.

Like, I hate dealing with all that freaking stuff. So that is a system. That’s my system. You can, you could find out. What other people do, but you do need some kind of system to track the project changes and by documenting, so that’s not really project changes that is like out of scope changes but tracking those changes because you want to have a paper trail and really as a project changes and things get added on, you should be built for your time.

As. You start doing that work. It’s just plain and simple. This is a business. This is ain’t a hobby guy. And I do hope that you find a way that works for you because it’s not, I’m not everybody works the same way, but I want it to be something that you can embrace. Because there’s a lot of additional revenue that could be brought in and it’s like bonus money because maybe you’ve projected, okay, this project we’re collecting this lump sum for our design fee, and that’ll take us for the next four months.

And then I need another project and you’re kind of forecasting, right? If you’re doing all the things I teach you inside designers room, you’re forecasting for your year. You’re figuring out what projects you need, right, to sustain you financially. But then it’s like, Oh, well, they want us to go and pick some lamps.

Sure. No freaking problem. Right? Boom. There’s a bonus couple hundred bucks. There’s a bonus thousand dollars that you didn’t expect. And it’s easy for you at this point, because it’s why I love scope creep, because it’s so much easier for you to pick for a client who a, you’re already working for. And so you’re already in the motions of working with them.

And then B, you completely understand the aesthetic and the design of the project, and they probably trust you and your decisions. At that point, it’s going to be a lot quicker and easier for them to get a yes. For you to get a yes from them, I mean. So I think it’s something that you can definitely embrace as a money opportunity, have a really clear process, and I would highlight it almost as like an invitation, right?

It’s something that you can highlight, as I always say, early and often, right? Talk about it early. Maybe it’s in your consultation when you walk them through your contract or at the proposal presentation. Maybe it’s even at the presentation in your studio or if you present at their house and you just remind them, listen, this is what the scope covers.

We’re excited to get started. Don’t forget. We are here, like, we’re working with you for the next 18 months. If something pops up and you want our help with it, that’s why we have this out of scope agreement. We would be happy to tackle any new design challenges. It’ll simply fall under the out of scope agreement.

You don’t always have to talk about the money because it’s there, it’s in the paperwork. Okay. That was like a very tactical episode. I hope that you guys enjoy that. I’d love to hear if anyone’s had any horror stories. I know this is a weird ask, but it’s always helpful to hear these stories. And hopefully now you’ve learned from those, but it’s helpful to hear those stories that we could share in community.

If you’re in designers room, we should probably start this conversation. About like. What are people’s processes for scope creep and out of scope agreements? How are people handling this? What are some situations that went awry? How can we learn from each other? And that is why I created designers room.

I love bringing designers together in community so that we can share, you know, it’s so wonderful to hear someone say, Oh my God, this happened to me. And then someone else pop in and be like, Oh my God, that happened three months ago. Here’s what I did. And here’s how I handled it. So if you guys are interested in joining us in that beautiful community, it’s called Designer’s Room.

You can go find it on my website, rebeccahay. com forward slash join, and you can learn more about it. It’s open enrollment, you can join any time, and we have monthly workshops things like that where I would share my, I share my scope creep. We share all kinds of learnings inside Designer’s Room.

Anyhow, check it out if it interests you, but make sure that you do have a scope agreement, an out of scope agreement, a system for tracking those changes so that you don’t get effed in the end. That’s my words of wisdom for you today, guys. All right. I hope to see you guys soon. Thanks for listening. Don’t forget to give us a review of the podcast.

It means so much to me. Go over to Apple iTunes, leave us a review and a comment about what specifically you enjoy about this podcast so we can get more eyeballs on it. And share with a friend if you think this was helpful. All right. See you soon.