How To Empower Your Clients With Informed Budget Responsibility

So you’re sitting with a client who’s been to showrooms, Pinterest, Houzz, friends’ newly renovated homes, 5 star hotels …. almost anywhere to gather inspiration for their project.

With all these ideas, they’re like a kid in a candy shop, stuffing their pockets full of lollipops, sherbets, strawberry & creams, licorice…….yeah!

They’re so excited!……Sadly, their joy could be short-lived.

That’s because you’re the bad-ass guarding the shop’s front door who’s going to ask them to either pay for the lollies or empty their pockets and put some back on the shelf.

None of us cherish this gate-keeping role.

Asking a client to pull back on their designs and/or selections can be emotive, high-risk, occasionally heart-breaking and almost always time-consuming. Understandably, some clients need significant support during these conversations.

Instead, imagine if you could empower clients to make a more tangible connection between construction budget and their design choices from your very first conversation.

Imagine if you could help them engage more deeply, more efficiently and with better informed expectations.

I’d like to share with you an approach with 5 steps to painlessly help your clients almost self-manage when it comes to budget management.  So, here goes:

Step 1. Your First Meeting

Gathering a great brief is crucial to developing an appropriate design response. Suffice to say, the client’s brief is incomplete without a budget conversation.

Asking for the client’s budget the first time you meet helps you understand how serious they are and how close they are to progressing their project. 

Typically, prospective clients will have one of three responses when you ask their budget in the early stages:

Budget response 1: They specify a figure that’s their upper limit. 

Generally, these types of clients are straight up and are quite open about their financial circumstances. They do not have a contingency budget and, typically, need to stick to the budget range they’ve nominated.

They’re the real deal and are quite progressed in their thinking about the project.

Budget Response 2: They nominate a figure saying it’s ‘about’ this much

Often this client has set aside some contingency budget but keep it quiet in the belief that it will be consumed too quickly if they nominate it. 

As yet, they don’t trust you so work to establish trust and showcase your expertise in how you can support them through the journey.

Budget Response 3. They ask you to tell them

This client is still in the early stages of their project planning and will need your help to coax out a budget with which they’re comfortable. Often explaining that you can design a $200k project or a $2M project is really up to them helps crystallise their thinking.

To help clients develop informed expectations show them other projects you’ve completed and reveal their construction budgets. They’ve probably already seen (and liked) these projects – that’s why they’ve called you in.

Giving them construction figures with help them fill in the gaps and set their own expectations about the budget that’s required to support their project.

Progressing without at least a ballpark budget at this stage is perilous!

Step 2. Feasibility

As you develop your thinking, always provide the client with the most informed budget estimate possible. Your goal is to avoid budget surprises (for everyone).

If you need them to review their budget, now is a key stage in the process that they’ll be more open to changes in budget or going back to the bank. Leaving this to later in the process unnecessarily increases angst.

Some options in developing these early estimates, being:

1. Applying a m2 rate – whilst this can vary markedly for various sites, builders, projects and designs it’s often a fast and easy way to crunch some numbers.
2. Engaging a friendly builder – If you have a builder who you feel will reliably support you through the initial costing
3. Obtain an online concept estimate from an Australian professional construction estimator such as ProCalc

Step 3. Fit out Quality

It’s important to be clear about fit out quality at this stage giving clients tangible values of what you deem to be ‘mid-range’ or ‘premium’ pricing for various products. This conversation will baseline clients’ expectations later in detailed design when they play a key role in selections.

Step 4. Concept Development

Once you’ve confirmed feasibility and standard of fitout, you might start developing concept options to test preferences and budget impacts. Again, using the m2 rate, friendly builder or construction calculator will help you tease out the ‘what ifs’.

Provide this information back to the client so they have a full snapshot of their options and the likely cost impacts.

Put them in the driver’s seat when collaborating. This allows them to own the whole process and feel more comfortable about progressing to build.

Step 5. Pre Quantity Surveyor

As you guide clients through to the final concept there will have been changes, comments, tweaks and add-ons.

So your final concept will capture these refinements – as should you’re updated budget estimate.

Again, communicating the impact of design changes immediately will help your clients make informed decisions.

Your goal here is to honestly and accurately position the clients price expectations in preparation for a QS report.

Step 6. Quantity Surveyor

The QS formalises and confirms construction budget. They provide important registered and insured protection for you and your clients when developing detailed designs that will go out to tender.

You can now progress detailed designs safe in the knowledge that your client has fully engaged and truly understands their budget scenario.

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