The Design Roadmap Part III: Your Design Budget & 3 ways to Deal with the Unknown

The three parts of the Design Roadmap are like a tricycle with three wheels, all of which are needed to keep your projects moving forward smoothly.  In my previous two blog posts,  I talked about the first two wheels on the tricycle, your Design Process and your Design Schedule.  This week I’m going to add in the third and final wheel: the Design Budget, i.e: How much it’s going to cost. 

Ok, let’s get real.  No one likes to talk about design Budgets.  I mean, booooring, right? And not only that, but they’re stressful too!  For real,  if it’s possible for something to be simultaneously boring and stressful, that’s what design budgets would be.  

One big reason Design Budgets are so stressful is that they feel like an attempt to control the uncontrollable.  I mean, if all of our projects and clients were exactly the same, creating a design budget would be no problemo, right?  But there are so many moving parts and unknowns, it can be a bit overwhelming.  So today I thought I’d discuss 3 unknowns that come up in creating design budgets and how to deal with them.  

First, let me start by saying that in this blog post I’m going to use the terms “budget” and “estimate” interchangeably.  Technically they’re not the exact same thing, but for our purposes they’re close enough.  You may use either of these terms in your business and the ideas expressed below still apply. 

Second, I also want to clarify as we get started that my business has always charged hourly for design, not flat fee.  So I give my clients design fee estimates up front as a courtesy so they have some idea of what to expect and can plan accordingly.  They also help me to plan my upcoming income and time.  So keep that in mind as you read my tips, that they apply most closely to this model.  If you charge flat fees, the tips still apply, you’ll just want to tweak them slightly to fit your business model.  

Unknown #1:

How long is it going to take the client to make a decision?  Are they going to take 10 trips to the tile store to pick out their tile or only one?  How do you deal with this?

The answer: Create a standard number of revisions, showroom trips, etc.  that are included in your design budget, based on the average number you see in your projects.  List this out and let the client know that your estimate is based on that.  If you’re charging hourly for design, when they go over their standard number of revisions, etc. you’ve already set up their expectations ahead of time that it’s going to cost more than your original estimate, so you don’t have to stress out about it.  

Unknown #2:

The client keeps adding little things to the project that make it impossible to stick to my original estimate. 

The Answer: I have a handy little line item on my invoices called “Owner Requested Updates.”  When the odd little request comes in that goes off script but really isn't big enough for a full-on contract addendum, I track it under this category in my time tracker and invoice accordingly.  I get to go over budget without really going over budget, and as a bonus, I have more accurate reporting later when I go back and review how long the project took me.  For instance, my hours to complete the kitchen are still clear, and not jumbled up by that odd request to pick out a paint color for the powder bath.  

Unknown #3:

Construction Administration.  This is all of the work you do after design is completed when the project is under construction.  As an independent designer who has never been exclusively affiliated with a specific General Contractor, I find that the time I spend on the project during construction varies wildly from project to project.  On some projects, I will hand off the drawings and literally never hear another word until the project is complete.  On other projects, I’ll get calls and requests from the Contractor on a daily basis and we may spend 10 hours a week or more on the project for 6 months straight, adding up to a large chunk of design fees!  How to create a budget for this?

The Answer:  I don’t include Construction Administration in my overall design budget.  We charge hourly for this service and I give the client a monthly range that we typically see for our projects.  I tell them “Construction Administration is typically between $xx - $xx per month during construction and leave it at that.  

So there you have it, three unknowns that are probably stressing you out in creating your design budgets and how to deal with them.  I hope they help you feel a little bit more relaxed when you create your budgets.  So much of it is setting up expectations with our clients ahead of time so they’re ready for some of the unknowns on the project as well.  When we’re clear about what we can control and have a way of handling the unexpected ahead of time, we get to sit in that sweet spot between rigid control and go-with-the-flow that I like to call relaxed control.  That’s a win!

If you’d like more support in creating your design budgets and understanding how they relate to planning out your upcoming income and time, you’re going to want to check out my Design Roadmap Course. I break it all down for you and put all of the pieces together.  You can learn more here.