Scope Creep Solutions for Profitable Interior Design: Transcript

Katie Decker-Erickson [00:00:00]:

Hey, everybody. Welcome back to Success by Design. And you are catching us in the middle of a great series called Project to Profit. I am absolutely loving this series. And if you want to learn how to keep money in your bank account, this is where you need to be. Let's start with two truths and a lie today, like we always do. All right, here we go. Number one, over 50% of interior designers say scope creep is their number one profit killer.

Katie Decker-Erickson [00:00:27]:

Number two, most clients assume any extra request will automatically increase their bill. Number three, firms with strong change order processes can increase profits by up to 22%. All right, which one do you think is the lie? I am going to reveal the answer at the end of the episode. So have you ever been in the middle of a project and your client says, can we add just one more thing? If you haven't, perhaps you haven't been in business very long, because this is one of the things that creeps up on you quicker than most. Maybe it's a new paint color in the guest room or sourcing for another bathroom or adding one more round of revisions to just be sure you want to be accommodating because that is who you are. But suddenly your timeline's blown and your fee feels thin and you're wondering how you got here again. You're not alone. Scope creep isn't just frustrating.

Katie Decker-Erickson [00:01:24]:

It's actually really expensive for both your time and your energy. Over time, these little extras that we just talked about are adding up to serious profitability leaks in the business of your business. And worse, they train your client to start expecting the boundaries are flexible, which means you start to lose control of that process. So in today's episode, we're going to talk about how to confidently handle clients who ask for just one more thing without damaging the relationship. Right? Or sacrificing your profit. You're going to learn what to say, how to say it, and really important, how to put systems in place that prevent this from happening in the first place. So let's start out by calling it what it is. It is Scope creepy.

Katie Decker-Erickson [00:02:13]:

Not a favor, not a quick thing. It's actually extra work that wasn't included in the original agreement, and it needs to be treated as such. As I always love to say, you are lovable and billable all at the same time. In fact, I'll never forget when I first started in residential design back in Scottsdale in 2007, and I had a client who came to me originally for help with her great room. And then, yes, scope creep. And then, can you Stay for coffee. And then can you look at what I bought at home goods and tell me how you feel about it? And it kept going and going. And every time I left the client's house, I felt so frustrated and so irritated and I couldn't figure out why.

Katie Decker-Erickson [00:02:55]:

She was a lovely, lovely lady. The reality is scope creep was eating away at my business and at my boundaries. In fact, According to a 2024 Houzz survey, over 50% of interior designers report that unmanaged client requests are their top cause. That's right. Top cause of project delays and profit erosion. So when I am guiding designers through this, when we do one on one coaching, one of the first mindset shifts we work on is this. You are not being difficult by protecting your scope by you're being professional. It's okay to let it grow.

Katie Decker-Erickson [00:03:35]:

We just have to do so in a strategic way. Creep isn't bad as long as we have a schedule and a profit margin for it. Right? So the key takeaway here is every little thing has a ripple effect and respecting your scope is respecting your value. By the same token, I want to take a moment here because I have seen so many designers who jump to the word not know and are so afraid of scope creep that they don't see scope creep as a way to actually increase their profit margin because they don't have a process for it. Scope creep can actually be your biggest gift when it comes to growing a project and growing your bank account. But you have to know how to handle it and have those processes in place. So let's talk about that. If you listened to last week's episode, we dove into how to successfully onboard and set expectations from day one.

Katie Decker-Erickson [00:04:26]:

And that foundation is key. In fact, today's episode is actually building on that. So if you haven't listened to that episode, bop back and start there. Because it is so valuable to what we are discussing and really sets the framework for this conversation. That part of your process is where so many future challenges can be solved before they even begin. You've got to make sure that your contract includes and I said you've got to make sure and I do mean that this is a non negotiable, a clear definition of what's included, a written change order policy and your hourly or flat rate fees for out of scope work during your kickoff call. Verbally walk clients through this. Clients, remember what you emphasize.

Katie Decker-Erickson [00:05:11]:

In fact, I go so far as to say, hey, I know scope creep is going to happen. We welcome it. It will change the timeline and the budget but the reality is you'll get a better outcome and you'll get a project that you love. Clients get that. And also your contract should deeply reflect that you've accounted for this. If your contract doesn't account for this, come by our templated contract that allows you to change it, to customize it just for your firm, while still maintaining the structure of what you need to allow for scope creep and make it easy for your clients to not only create scope creep, but be charged for it. That's right, because like we said, there's nothing wrong with scope creep as long as you have the profit margin to go with it. In fact, a recent ASID report showed that projects with formal scope review and change order processes are 70%.

Katie Decker-Erickson [00:06:05]:

That's an insane statistic, right? 70% more likely to stay on budget and schedule. This is something I am walking through often in my one on one coaching calls. We customize onboarding scripts that create clarity before there's conflict. That is what you want in your business, right? Clarity before conflict every time. Because clarity now prevents conflict later. So your takeaway here is set the boundary before the line gets crossed. All right, let's get real. What do you say when the request happens? You know it is going to happen.

Katie Decker-Erickson [00:06:41]:

Now what When a client says, can we just. How you respond here is deeply important, not only for your business, but for the relationship with the client that is creating and paying for your business. Right. It sets the tone for what's acceptable going forward and how this relationship is going to be handled. A simple way to respond that keeps that relationship warm while also maintaining your role as a project leader can simply be. Absolutely. That sounds like a great addition. We'll get that updated in our timeline and seamlessly worked in.

Katie Decker-Erickson [00:07:17]:

You're not putting up a wall with words like change order, additional cost, budget increase. Nobody wants to hear those words. We're not starting with that right out of the gate. You're simply confirming you have listened to your client and you see their request and you're still showing that you're in in control of the situation. Right. You're in charge of the timeline. You're going to work that in. And most clients understand that that is going to come with a budgetary implication or they wouldn't have hired you in the first place.

Katie Decker-Erickson [00:07:48]:

So once that idea is acknowledged, then you could follow up with the revised pricing. But be really clear here, that should not lead. It is a second, because leading with a price tag can feel combative no matter how nice you are about it. Leading with Partnership, on the other hand, keeps the momentum and the trust intact. If this feels familiar to you, yeah, you're not alone. These are exactly the kinds of challenges I am helping my coaching clients solve in real time. You can say yes, just make sure you're staying in the driver's seat and you have a process that helps you do so. Okay, Speaking of process, have a streamlined change order process.

Katie Decker-Erickson [00:08:34]:

Most people, whether you're the client or the designer, you hear the word change order and we get frustrated. A moment of self reflection here. Why do we do that? Because typically we don't charge enough for change orders. We get frustrated that it's changed the timeline and we are not sure how to handle it. What if though we look to change orders as in addition to the project, that allows us to expand the scope, create more profit and help develop an even better client relationship. Now all of a sudden, change orders have a much more positive light and you don't have to call them change orders anymore. Right. Once you've acknowledged the client's request, that process that you put in place kicks off.

Katie Decker-Erickson [00:09:21]:

There should be no delays, no confusion, and just a clear professional path forward for them. What does that look like? What are we adding to where we originally were when it came to the scope? What is the timeline? Here's the fee adjustment. You don't have to say change order cost. That sounds horrible, right? Nobody wants to be on the receiving end of that. Instead we're just putting in a fee adjustment and then space for the client to sign off on it. Or in the case of our contract, if someone asks something via email. Our contract was written in such a way that that becomes a revision to the scope and we can respond back an email letting them know the timeline and the additional cost, making it super easy. And we're still covered legally and so are they.

Katie Decker-Erickson [00:10:07]:

This is allowing you to stay in control of the project while you are still serving that client. If you need that contract, I'm going to put a direct link for it in the show notes because I think it is that important to making it's seamless for your client. This doesn't have to feel like more paperwork. It doesn't have to feel like another hurdle for your client either. That's why this contract is all about flexibility. It allows you to account for scope creep on the front end. You know it's going to happen, so why not plan for it? It's a seamless professional way that your client barely feels the shift. So you're not putting a bread tape.

Katie Decker-Erickson [00:10:44]:

You it's about being that easy button again for your client. You're clear, you're efficient and you're on brand for the level of service you're providing. Research from Design Manager shows that firms with documented change order processes increase their profits by up to 22%. Folks. That's a fifth of the profit margin. That's huge. So when I'm working with designers on this, we are building templates that make it fast and easy to respond professionally. Because also, speed is part of authority.

Katie Decker-Erickson [00:11:16]:

You're not twiddling your thumbs on the back end going, oh gosh, I wish I had a process for this. Oh no, we've got scope creep. Oh shoot, what am I going to do next? Instead it's oh, they want to expand the project. Great, let's do it. Your takeaway on this point is a smooth change order process makes you look prepared instead of punitive. Huge difference in how the relationship feels to the client. And I'm also going to go out here and go one step further. Know when and how to say no.

Katie Decker-Erickson [00:11:46]:

Sometimes the right answer isn't yes. It's a firm but gracious no. Maybe the request compromises the integrity of the design. Maybe it pushes the timeline beyond what's actually possible. Or maybe it's just not within what you want to do. And that is okay. I want to share something I borrowed from Parenting that works beautifully in business, too. It's what I call the correct and redirect with my kids when they ask for something that's not happening.

Katie Decker-Erickson [00:12:15]:

Whether, yeah, it's a cookie before dinner. Huh. Or screen time past bedtime. Yep, that happens at our house sometimes when I really on my A game. As a parent, though, I don't just say no and shut them down. I acknowledge that request, explain why it's not happening right now, and then redirect their attention to what is on the table. It's warm, it's clear, and it's in control. It's a not right now, and here's why.

Katie Decker-Erickson [00:12:43]:

And let's do this. You could do the exact same thing with your clients. Okay, let's play this out. Let's say your client wants to add in custom cabinetry. When you're already in the final stages of install, you're thinking, absolutely not under any circumstances. Right? And that's dead on. But instead of just saying no, you might say, I totally understand why that feels important. At this stage in the project, we need to stay focused on the core scope to deliver the best results on time.

Katie Decker-Erickson [00:13:11]:

But if that's something you want to do in the future? Maybe we look at custom cabinetry in phase two, when we work on the powder bath or the custom cabinetry in the family room or in the outdoor kitchen space, there's a way to give them other avenues. In psychology, this is called a face saving strategy. You're not just saying no, leaving them left to sit there and feel small. You're giving them an opportunity to say, oh, that's a great idea. Thank you for understanding. I really would like that. Or you simply say, I can absolutely see why you would want custom cabinetry. But the reality is that we have install scheduled this coming week for the cabinetry we have already ordered and paid for.

Katie Decker-Erickson [00:13:52]:

There is an opportunity though, that we could potentially change the pulls or create a more custom look on the cabinetry we've ordered based on the amount of money we have in our contingency fund. It's a lovely way to allow them to say, that's such a great idea. That would really help. Remember, you're not dismissing the idea. You're respecting the project and your process. When I guide designers through these moments in coaching, we talk about how to deliver a no. That's actually a leadership moment. It shows you're focused, strategic, and protecting both the design and the relationship.

Katie Decker-Erickson [00:14:29]:

What is your takeaway here? Saying no doesn't have to shut things down. It can actually guide the energy forward. So correct and redirect with confidence. The reality, folks, as you know, is scope creep is sneaky, but you can stay one step ahead of it and actually make it part of your business. You gotta identify it early. You gotta set expectations up front. You gotta respond with structure and know when to say no. Give yourself the freedom to do that.

Katie Decker-Erickson [00:14:59]:

All you people pleasers out there, who I talk to almost weekly, if you do this, you protect your time, your profit, and your peace of mind. It really works. So let's circle Back to our two truths and a li first, over 50% of designers say scope creep is their number one profit killer. This is true. Absolutely true. Number two, most clients assume any extra requests will automatically increase their bill. Ooh, here's our lie. Most actually assume it's included.

Katie Decker-Erickson [00:15:34]:

That's painful. Which is why communication is so important. And having a process that backs that communication and then three, firms with strong change order processes can increase profit margins by up to 22%. That is true. So just remember, you are not a doormat. And you're not a magician either. You are a professional. And professionals lead.

Katie Decker-Erickson [00:15:58]:

Setting boundaries is not just allowed. It's essential for the kind of elevated, profitable firm you are building. So if this episode helped you reframe how to handle those one more thing moments, take a second to follow the show and share it with a colleague who needs to hear this. And if you're ready to apply these strategies inside your own firm in a personalized boutique way. This is exactly what I help designers do in my one on one coaching. In fact, sign up for a 15 minute problem solving session with me free of charge. It's worth almost a hundred dollars. And let's go see if we can start working on whatever is the big issue that you're tackling in your firm right now.

Katie Decker-Erickson [00:16:39]:

You'll find the link in the show notes and remember, your business should be working for you, not you working for it. Until next time, take care.