[Tips & Tacos 004] What do service providers, home renovations, and hotels have in common?

If you’re a service provider then you know sometimes you have to buy additional items to keep the project moving. Check out this edition of the Tips and Tacos Newsletter to learn how to keep your projects moving without waiting around for client approval.

If you’re a service provider, especially a web designer, then you know sometimes you have to buy additional items such as fonts, plugins, etc to keep the project moving.

You definitely shouldn’t be covering these items out of pocket, unless you just got it like that, but most of us don’t! So your contracts should explicitly state that the client is responsible for the cost of any 3rd party tools or services and that invoices are due immediately for these items.

I was definitely using this method up until the light bulb went off last week. Going forward, I’ve decided to add a contingency budget to my projects.

If you’re familiar with HGTV, then you’ve probably heard the renovation teams talk about a home improvement project’s budget. It’s very common for them to also add a little cushion for contingencies such as if they open a wall and find mold that needs to be removed.

Without the cushion, they’d be unprepared for any incidents that may arise in the renovation. If you provide any type of service, then I’m sure you’ve experienced a monkey wrench suddenly being thrown at your perfectly planned project.

I know it’s happened to me before. Most recently, I was hired to complete a membership website redesign. Initially, I thought I’d be able to handle a special request from the client by using the MemberPress WordPress plugin.

What ended up happening is that I had to hire a 3rd party developer to create a custom plugin to achieve the client’s special request. This was not included in my client’s original estimate. So of course, I had to explain this to my client and invoice for the additional cost.

Although my client was receptive to the solution, it still required me to have this back and forth communication before moving the project forward. Had I already been using the contingency budget approach, things would have gone a lot smoother and resolved quicker.

You should be thinking the same way when you’re working with clients. So instead of invoicing your clients as issues or new concerns arise, go ahead and add an additional line item for contingencies.

In my space, WordPress plugins are my most common 3rd party purchase and can cost anywhere from $99 and up. If we need multiple plugins then that can easily start adding up. Plus it adds additional time for invoicing for each little item.

If by chance we don’t end up using any or all of the contingency budget then I’ll repurpose this money for future support. You can also choose to refund the contingency budget.

Although this is a new idea for me, the idea of a contingency budget is common for a lot of industries. Think about hotels. Most hotels require a security deposit for incidentals that may occur while you occupy the room.

Including a contingency budget in your projects will also create a better client experience. I don’t know about you, but I hate when I’m told one price for something then I end up having to throw more money at it to fix the problem. It’s way better to let the client know you ran into an issue and are resolving the problem than to have to tell them about the issue and ask for more money.

What do you think? Will you or are you already using a contingency budget in your projects? I’d love to hear your thoughts and recommendations on this.

Tacos Forever,

Karmen K. | Director of Taco Relations