How to Address Scope Creep Without Damaging Your Client Relationships

Welcome to the Creative Mind Smart Money Podcast, where we turn financial confusion into creative confidence. I'm Samantha Ek, the keeper and fractional CFO for creative entrepreneurs. Each week, I'm sharing my financial expertise and actionable strategies to help you build a thriving creative business. Plus, you'll hear from industry experts who bring fresh perspectives on growing your business beyond the numbers. Because building a successful creative business starts with strong financial foundations. Your next chapter starts now. Welcome back to another episode of Creative Mind Smart Money. And today we're talking about scope creep. Now scope creep sounds like a completely made up word, but I promise you it's not, and it's probably one of the things that is majorly killing your profit margins. It's something that we don't talk about often because of course, as service providers, our goal is to serve. We want to serve our clients. We want to be able to actively provide for our clients. So scope creep can often feel like you're setting up some sort of strong boundary, but it's a good boundary if you catch my drift. I have experienced it myself where a client just asks me to do something small, whether that's hey. Can you please provide me with my financial statements for the previous month, or can you please provide me with my financial statements from the past year, or can you pull my bank statements, or something like that. Something that would normally either already be there or be outside of the scope of work that would cause me to spend more time on that work. And I've had tons of clients who've had it too, where they're doing something outside of the boundaries of what was originally set up in their contractor, in their terms. And now it's just gotten to a point where they are doing more work than they were initially supposed to. So the real question is, why do we as creatives or service providers often times say yes to extra requests without charging for them? And of course, like I just explained, there is a lot of different reasons. There is a lot of different financial regions. There is also emotional reasons. But I think the most important thing are the emotional reasons. The biggest one is people pleasing. There are a lot of us who are service providers who believe that we have to go leaps and bounds above others in order to serve our clients the best we can. And you can still provide a premium service and serve your clients in the best way possible without having any form of scope creep. Because scope creep is outside of the bounds again of your original contract or your original terms. You are providing the service that you have told them you are providing by providing additional services. You are not technically protected in that right because it's outside of your original scope that you would set up in your contractor in your terms. There's also that fear of seeming like you are a difficult person. Because if you tell someone, oh no, I can't do that because it's outside of returns. You kindly say that would cost an additional etc. People oftentimes feel like they're going to feel difficult. Nobody will want to work with them because why would you not just do this one little thing I'm asking you to do. And I've experienced this myself where I had a client come to me and start handing me AR. So AR is a counts receivable. They started handing me invoices. They started me telling me to do this to collect this, to make this payment, everything like that. And it was consistent. So it wasn't just once or twice a week. It was almost every day that I was doing something different for this client in accounts receivable. And it started to become this big pressure inside of me because they weren't paying for this accounts receivable. If it took a couple invoices a month, I generally don't charge my clients because you know, it's very simple. It's very easy to handle. But once it starts getting, you know, 30 invoices a month and I'm having to reach out to these clients vendors and say, hey, like you need to make sure this gets paid when I'm starting to process their payments and make their invoices, it does become a lot of extra work. So there came a time when I had to do a project client and say, hey, like a counts receivable is outside of our original contract terms. So I'm not actually able to provide that. And they were like, I honestly had no idea. And that happens more often than you think because your client thinks that you're just supposed to be doing this thing, but you didn't tell them that it's outside of your original contract and they don't know that. I promise you, clients are more than willing to actually understand what's inside of your contract terms and they might even be willing to pay above and beyond that if you just tell them. So obviously another reason for scope creep and why we have scope creep is unclear contracts or project boundaries. So if you don't have a very good written contract, like your contract doesn't state what is included in your contract, that can leave a lot of people confused because if they're thinking that originally, I don't know, let's just say your website designer and you didn't include legal pages in your website design and all of the sudden, they're like, hey, why didn't you include legal pages? It says that you do all of these pages in your website. And maybe there's like a term that says, including legal or something like that. I am not 100% sure, but they weren't sure based on your contract. So now you're like, oh, well, I guess I'll do it then because it wasn't very clear. And you didn't have a clear boundary is to say, you know what, that's really not a part of what I do. Contracts or legals should be set up by a lawyer. And then I can add them for you. Like it's a really simple ad, but I can actually like come up with the legal terms or like the policies and stuff like that for you. That's something you would have to do or get a lawyer to do. So there's always that risk as well. And of course, there's always the thought that'll only take me a second. When you think of something like, for example, like me with the AR, you're like, oh, it'll only take two seconds. It'll take no time at all. You know, I can do that in a second. You start to become like this blanket feeling of like, oh, you know what? It'll take two seconds. I'll just do it. But your time is worth more than a couple seconds. You know what I mean? Something that could take two seconds could end up turning into 15 hours. And I've seen this too many times with like cleanup costs. For example, I will give a client a blanket cleanup price and say, okay, hey, like this is what I'm going to charge you for your cleanup. And all of the sudden, they're adding on more things where we notice more things as we're going through their cleanup. And I realize, okay, you know what? Next time I need to calculate that. And very early on in the days of my business, I would give a very lower rate for cleanups, not realizing that as we're starting to clean things up, a lot of things could be changing and evolving because we could catch things that we might not have. So when I give high prices for the cleanups, it's not necessarily because I want to like overcharge you. It's because I have to cover my butt in case something huge comes up. And oftentimes there always is. There's usually some sort of issue. It is very rare for us to go through some sort of cleanup project and have it just work out 110% perfect every single time. Now of course, the other thing that we want to talk about is what is scope creep actually costing us. So there's a lot more than just a financial sense of it's costing us because your time is worth something. It's also an emotional cost because if you just say yes to everything, you say yes to everyone, you say yes to adding on these little things that you're like, oh, it'll only take me a second. It won't take me that long. You're going to start feeling drained emotionally and then drained also physically, but you're going to feel burned out really fast because you're doing these things that you never promised to do. And then you're also not getting paid for them. So again, if you agree something, you're like, oh, it'll only take a couple seconds, but it takes you five hours to do. Does that not drive you insane when your client has now just added five hours to work that was originally supposed to take maybe two or three hours or something along those lines. And when you add it up across in how you're a year, you know, you could realize maybe you had additional time to fit in six more projects. You had additional time to fit in 10 more projects, but because you took on these little additional things and you kept saying yes, and you allowed that scope creep to get to you, you lost that time to things that you could have been earning money for, right? So it's all about thinking about the bigger grander picture, especially when it comes to things like scope creep and saying yes or no to certain things. A lot of unbuilt hours again, like I said, add up faster than we think. So if you are a social media manager and for example, I have my social media manager and not you guys know JC, I've already you've seen her client study in our case study and everything like that. Honestly, if I were to hand JC something like, for example, I started working with an ads manager and I told her, hey, like, you know, I need some graphics done for these ads. Please, please, please, please charge me if this is outside of scope. Don't just do it. It's outside of scope and it does not fit in the terms of our contract. Please charge me because I'm not going to let her do work that is not right now. That's not everybody. There are not clients who will tell you, hey, if this is outside of scope, because a lot of people don't necessarily understand what's in scope and what's outside of scope. So they're not 100% sure, right? Of course, if you're doing a lot of work and you are time tracking, which we've talked about time tracking before and how important tracking your time is for making sure that you have an hourly rate, even though you're not charging an hourly rate, even though we're doing like value based pricing, that effective hourly rate that you're using to kind of like calculate all your pricing off of drop significantly because you're spending more time on projects you didn't realize you were spending time on. And then it can often turn a project that looked great into either a break even or a loss because you spent more time on it than you would have originally intended and the money that you thought you were profiting off of that ended up being sucked into these additional time that you were having with scope creep. So of course, what does that look like to address the scope creep without damaging your relationship with your clients because you don't want to be harsh, you don't want to say, "Screw you, I don't want to do this, you don't want to be that person," but you also want to respectfully place that boundary so that you and your client know that the boundary is there and then they respect it, you respect it, and hopefully that turns into repeat business, maybe future business because you've set up this firm and clear boundary between the two of you. So if something is mid-project, that's obviously a little bit harder, but if something's mid-project and you have very clear terms, you can always say, "Hey, as outlined in our engagement letter, this is all I'm covering, that is unfortunately not covered in our engagement letter. Here's what I can do, we can add it for X cost or you could always say, "I would love to do this for you, here's how much it's going to cost, the reason that I can't cover it is because it's not originally outlined in our scope." There's lots of nice ways to put it. If it's before the project, that's a great way to say, "Hey, if you're looking at the contract terms, this was not included, I can add it in right now before we get started, that way you have a clear outline of costs, etc., etc." There's lots of really nice ways to do it. You can of course have an add-on process already added. "Hey, I'll just get that added to your contract. All you have to do is approve it and it'll charge you right away and then we'll get going on that." Whatever that is, a lot of times like Honeybook, Dupsado, stuff like that, we'll just automatically add that and they just have to make an approval and then they can go ahead and get charged for that. Obviously, you want language that feels natural and not confrontational when you're talking about it. So don't say, "Don't be defensive and be like, "No, I can't do that. That's not included." Just be like, "Hey, in the terms of our contract, you know, because that's very natural. In the terms of our contract, this is what was included, I can add that for you, no problem, but here's what it'll cost." You know what I mean? Instead of being confrontational or defensive in any sort of way, you're saying, "This wasn't in our terms, but here's how I can add it for you." That makes sense to you a little more comforted and a little less. Now, I'm not saying put the terms. Now, if they're very argumentative, obviously put the terms in plain as day, but obviously most of the time when you say, "Hey, in the terms of our contract, people are going to go and look at the terms themselves and say, "Oh, you know what, you're right, that wasn't in there. I'm sorry. That's my bad." Of course, there's a difference between being flexible and being a pushover. If something is truly going to take you two seconds, it's a simple button press, that is being flexible. You're like, "Okay, you know what, no problem." But if something is literally going to take you, and you know it's going to take you more than a couple seconds, don't put pushover into, "Okay, I'm just going to do it." Look at the cost of that. If you determine that that is within your boundaries, then of course, do it. But if you're like, "You know what, no, this is going to cost me a lot more time than it's worth. I need to charge for it," then very kindly talk to someone. I'm the type of person that if someone comes to me and they're like, "Hey, like, I need to add X or I need to add X, I'm never going to say no to them." Because as a service provider, I understand that there are things that are outside of the boundaries and outside of the bounds. There are certain people that don't, so of course, you need to know that. Now, obviously, there is a way to protect yourself from scope creep up front. And that is by having a very solid contract or proposal to prevent that scope creep before it even starts. Because, of course, if they have a very, very, very clear idea of what is outlined, it's going to cause you less problems. So obviously, it's going with a very good contract, it's going to define your deliverables very clearly. Even in a section that's labeled deliverables or services or whatever it is, they know exactly what they're getting. So they can see exactly what's outlined. They know if anything is not included, they're like, "Oh, okay, I see that that's not included. I might want to ask about that so that maybe we can add that on," or something like that. Because if you also put like a what's included section, and a what's not included section, that'll give them a very clear aspect of what they can do, and what they cannot do within the scope of your work. And then, you know, that also gives them the availability that maybe if they don't want to work with you or they find someone else who doesn't include that for a different cost that gives them that idea, right? So it also helps you to make sure that the clients that you're bringing into your business are very aligned with your contract terms and a very aligned with your service as a whole. And of course, you can always have some sort of revision limits. So if you are a website designer, you know, you can say, "Hey, we have two rounds of revisions. After that, it would cost you additional. If I need to go back and do more revisions," or if you're a graphic designer saying, "You know, we have two rounds of revisions for this logo. After that, I need to church you more because at this point, you know, it's taking a lot of different time." That way, you know, if someone has your visions are very clear on it the first time, so you're only going through one round of revisions and not having to have a bunch of extra work that is being added on. So scope creep is very vast, but it can be mitigated very quickly by understanding that one can hurt your costs in your time. It can hurt your availability to have a intake on more projects. And of course, it can hurt your relationship with clients if they don't have a very clearly detailed outline boundary as to what is outside of that because if they find out down the road that, you know, what they thought was included is now not included, that can always hurt your relationship with future clients and potential clients as well. So after this episode, what I would love for you to do is obviously you can start with a lawyer and make sure that your deliverables are clearly outlined in your contract, but also just make sure that when you are communicating with clients and you have that on your website, what is very clearly detailed? Obviously a contract is essential, but also having this on your website is going to make sure that you have people that are coming to you that leads that are coming to you that are completely aligned with what you're delivering and know that there might be add-ons. You know, you can even add an add-on section on your website saying, "Here's what you could potentially add to your service to whatever it is that we're doing a website, graphic design, social media services, whatever it is." And just know that your time is valuable. Shift your mindset to be like, "Okay, my time is valuable. If something is obviously not going to take me two seconds, I need to charge for that because my time is worth something and I need to know that." Okay, if you guys love this episode, as always, please make sure to like, get, share, and subscribe, share it on social media, bring some more people to the podcast. I appreciate you guys listening and I love, love, love all the recent listens on the podcast. I appreciate it so much. I'm so excited to keep doing this for you guys. We're almost at a hundred episodes, which I can't believe and I can't wait to celebrate that episode with you guys. But as always, if you need anything, feel free to shoot me a message on social media or my email. I appreciate you so so much and I wish you the best week ever. We'll see you next week. Farewell fellow travelers. [Music]