I don’t like surprise invoices. If I received a quote, I expect the work to be completed at that price. Naturally there will be exceptions here and there, but when something comes up that affects the final price, I want to find out about it immediately. Not on the final invoice when all the work has been completed.
That leaves a sour taste in my mouth.
This is why we have started using a Change Budget on our larger projects.
This is a new concept when it comes to website projects. Let’s find out how a Change Budget can let you sleep better at night, knowing that there won’t be any surprise invoices.
What is a change budget?
A Change Budget is a line item included on a proposal, and forms part of the total project fee. Depending on project complexity and the project definition, a Change Budget can be anywhere beteen 15% and 35% of the project fee.
The Change Budget is only used for changes over and above the approved project scope. It is only paid once you as the client has approved a change in project scope.
How does Change Budget work?
Let’s say your website project consists of 20 pages, and standard website functionality (e.g. a map and a contact form). Based on this scope, we prepare a quote.
During the project, you realize that you need to include Online Bookings. Or perhaps your business model has changed to include online sales. Perhaps you move to a new CRM system, and the website must integrate with the new CRM system. These changes does not form part of the original project scope, and instead of leaving these for a phase 2, they need to be implemented right away.
Thanks to the Change Budget, and a quick signature from you, the work can be included in the project. The portion of the Change Budget that was allocated, is added to the final invoice.
NOTE: These are all real life examples of changes in scope from real projects. On each of these occassions, the client in question was happy to sign a Change Order to use their Change Budget.
On some projects the Change Budget is not used, and is then not billed to the client at all.
Example 1: Simpler Project requires a smaller Change Budget (15% of Project Fee)
Project Fee: R50 000
Change Budget: R7 500
Total Project Fee: R57 500
Example 2: More Complex Project requires a larger Change Budget (30% of Project Fee)
Project Fee: R50 000
Change Budget: R15 000
Total Project Fee: R65 000
Does this mean we are padding the quote?
The first time most clients hear about Change Budget, they all ask: “Isn’t Change Budget the same as just padding on a project fee?”
No. We don’t believe in padding projects. We take our time to figure out the scope of a project. Based on our initial discussions with a client, our research, and our experience from more than 300 WordPress projects, we can accurately quote on 90% of projects.
Many website designers and developers will pad their quotes. We believe that is often because of them being too lazy to really figure out what needs to be built. Them not doing the homework shouldn’t cost you more.
Do you really want to work with someone who is too lazy to ask the right questions so that they can give you an accurate quote? Will they refund you if that padding is not used? Will they even admit they are padding their quote? If they can’t accurately quote on price, what are the odds that they will deliver the project on time?
Why do larger projects require a Change Budget?
Well, because no one likes surprises.
For roughly 10% of projects, we accept that we don’t quite know which challenges might arise. We might discover in the middle of the project that a certain plugin is required. We might have to pull in a specialist developer to solve a particularly complex problem. We might have to raise support tickets, and pay for tools to troubleshoot certain problems.
We might realize that we need 3 extra pages for a new product or service that you just launched. Perhaps a more advanced filtering system is required.
Larger projects take more time, and this can often mean that the website must adapt to a business environment that has changed, and often to an industry that is changing.
On smaller, less complex projects the Change Budget is often a smaller percentage of the Project Fee. On some small projects, we do not include any Change Budget.
Why larger organizations like the Change Budget?
You know how tough it was to get budget approved for the project. You don’t want to go back and admit that we got the scope wrong, and that we need to have more budget approved. That is not an easy conversation to have.
With the Change Budget, we are prepared for unforeseen changes and have the budget for it. And each time something comes up, you can decide whether you want to use the Change Budget for that item.
Plus, if we don’t use the Change Budget, you look great for delivering a project under budget (not something too many large organizations can say about their website projects!).
What happens when no Change Budget is used?
If no Change Budget is approved to be used during your project, you are not billed anything outside of the project fee. Which means you have just delivered your project under budget. Well done!
If you have any other questions related to how the Change Budget can work for you, reach out here.