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How to Stay on Budget

Filed under Budgeting

I know, you think or say the word budget and you get hives, right?! But every design project needs a budget and the most important aspect of a job is staying on budget, which means investing the “right” amount into the design project. The biggest asset most people own is their home. So how do we, as designers, help our homeowners/clients get the best return on their investment and stay on budget?!

I’ve got the answers you need with these tips to staying on budget during your design project:

  1. Start the design project with a detailed budget
    I know. Of course! But, sometimes you get so excited to see transformation that you just want to start!! Just. Don’t. Do. It. You need to communicate with your client about what their desires are before you even begin. I’m sure you know what you want to do, but you need to know what your CLIENT wants to do. Certainly, when budgeting, it’s the time and place to “sweat the details” and itemize each expense.
  2. Make sure that you and the client understand the costs
    Ballpark costs are a great start, but be sure to work with contractors and trades who have proven that they have an understanding of REAL costs. Yes, you can start the project and add on to the project, but take time to discover the ramifications of a decision. So, you decided to add a new window. Fantastic! But, wait. The costs for a new window include not only buying a new window and installing it, it could also mean drywall work, new framing, new painting, and in the case of my house it meant adding shear wall to the entire exterior of the house! What!?Yes. That lovely reality meant removing the exterior siding, taking it down to the studs and reinforcing the existing structure. Then, putting it all back together. Yep. A little more complicated and pricey! Clients don’t like those kinds of surprises!
  3. Keep on budgeting
    Remember, your budget is never fixed. It evolves as you go through the design process and its different stages. Your clients must be taught and reminded of the budget variances. If you are doing remodeling or construction, codes must be adhered to which require changes—just like the window example above—and sometimes people don’t think it through.You may have a price change in fabric or furnishings. Or, if you do add another window, you will need additional window coverings. Make sure you and your client understand everything. If you do add to a project, then something else will have to go. This is where the magic of compromise comes in, and staying within budget sometimes means finding a compromise you and your client will be happy with.
  4. Savings don’t mean adding on elsewhere
    Sometimes, you can save money on a product or service for your clients. Go ahead and do that, but don’t feel the need to spend it elsewhere right away. Rather, use it with purpose because you will need it later! Every single project will have something that goes off track and costs more than what was budgeted. No matter how well you prepare, there are always overages.
  5. Keep a contingency plan
    Yes, even with preparation, constant communication and dedication, something will bring you off budget. It’s not a matter of IF it will happen, it is WHEN it will happen. It may not be a catastrophic problem, but those constant small changes add up over time. Sometimes an extra $100 here and $1,000 there can give your clients a huge shock! Make sure to keep clients informed and invoiced for even minor costs. If you throw a big bill later, your clients will be upset. Every trade and team member that touches the project along the way is a potential for added costs or delays in your project.
  6. Get actual costs as soon as possible
    At the initial meeting and drawing stage, you can’t get actual costs, but you can get estimates based on your experience or your vendor’s experience. When you get the green light based on your drawings, get actual costs ASAP.
  7. Be prepared to adjust your plan
    When a cost comes in higher than you had hoped, start shifting your vision. Sometimes, this is a good thing. Spending time on a particular issue often leads to a better result. Necessity is the mother of invention as they say.
  8. Extras, extras, extras
    Don’t just add extras and hope your client loves them! If there is something you find that you feel fills a hole during installation, leave it there on memo with the price and an invoice. If the client doesn’t want it, you can return it. If there is an extra that pops up, get a signed proposal from your client. Remember, it’s their money and they need to approve it no matter how much it adds to the final design aesthetic.
  1. What if prices come in slightly higher than you’d hoped?
    Then, defer to your client. A $1,000 over your estimated price may or may not seem like a lot to you, but if you believe it is the best and “right” piece, leave the decision up to your client. They have their own views on money and while designers act as gatekeepers, your client’s money is their money.
  1. Wants versus needs (yours and your clients)
    During a design project you might need to have a discussion about wants and needs. Needs are required to make a room functional. Everything else is just a want. In order to stay on budget, you and your client might need to periodically have this conversation to keep expenses in check.
  1. Stages
    If your selections are coming in way over your client’s budget, then have a talk with your clients. Explain that the best and “right” pieces are coming in over their budget and tell them why you think they are the best and “right” pieces. Maybe they need to do the project in phases, so the home will fit their vision.

I hope you have a great week and I send you best wishes for keeping your design projects on budget.

Click Here to Download 10 Tips to Help You Stay on Budget

XOXO,

Kathleen

 

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