Follow these three simple steps to stop your firm from over-delivering on projects, and increase your project profitability.

 

We’ve previously discussed the two terrors that eat into your project profits; the evil twins we call Under Quoting and Over Delivering.

We discussed how to scupper Evil Twin #1 - under quoting - in this post, and now we're going to focus on how you can deal a similar blow to Evil Twin #2.

As it turns out, the first step in combating over delivery is to make sure you’re not under quoting in the first place. If you’ve already fallen victim to Evil Twin #1, you may have killed your chances of making a profit before you even start.

So, let's assume you've got the first Evil Twin nailed, an accurate fee accepted by the client and the job won - it’s time to deliver the project. As with under quoting, there are three steps you can take to prevent over delivery.

1. Give your team a well-defined scope
2. Track time and continually compare it against the budget
3. Review and learn

We’ll take each of these in turn and explain how you can accomplish them.

 

Step 1. Give your team a well-defined scope

 

We’re sure your team are all eager beavers ready to dive into the next project and crack on with delivery. If your delivery team are full of creatives, they’ll likely want to deliver perfection too – high quality work is why you’ve hired them after all!

But it can often be the case that they focus on delivering the project without bearing in mind how much time has been allocated to do so. It may be that they’ve devised a fantastic concept, but it’s going to take twice as long to deliver than you’ve quoted for.

One of the team here at CMAP used to run an incredibly profitable design studio, and the reason it was so successful is because it was drilled into the team that the first question on any project was 'how long have we got?'

Getting your people into the habit of clarifying the scope before hitting the drawing board will help them gain focus, temper the scale of their ideas accordingly, and manage their time much more efficiently.

So, whilst it's important to be clear with your client about what they can expect, it's equally crucial to tell your team how long they’ve got to deliver it.

 

Step 2. Continually track time spent against your budget

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It's important to track time not just against each project, but individual tasks. This allows you to properly investigate any areas that need attention.

 

Hopefully we don’t need to tell you how important it is to get your team to fill out their timesheets. Some places will tell you that timesheets are dead, but we couldn’t disagree more. They’re as essential as they’ve always been in ensuring you’re not spending more time on a project than you’ve budgeted for.

That said, there are a number of ways you can help your team understand the value of timesheets to encourage accurate recording.

The key with tracking time though, is to do so against specific tasks, not just the project as a whole. Doing so allows you to pinpoint any problem areas, and rectify any issues where necessary.

For example, if you notice that your team have booked extra time against the ‘Design Concepts’ task, you can investigate why. If you learn that the client asked them for a fourth concept in addition to the quoted three, then you can justifiably bill the client for that extra work.

You can't do this if you’re only tracking time against the project as a whole though, so be specific with those timesheets!

 

Step 3. Review and learn

The final step in eradicating over delivery in your firm is to make a habit of project reviews.

Looking back at a completed project can help you identify what went well (so you can replicate it going forward) and any areas that went off-track for correcting next time out.

For example, if the project went over budget, you may have been able to get more money from the client if they went beyond the agreed spec. On the other hand, if it turns out you under quoted in the first place, you can learn from that and make changes to how you quote for similar projects in the future.

Similarly, if you quoted 3 days for design concepts but your designer spent 5 days on them because the brief wasn’t clear enough, you can adjust your briefing procedures so your team are all on the same page.

Whatever the reason, despite the temptation to immediately jump onto the next project, it’s always worth spending some time reviewing what’s happened so you can apply any lessons going forward.

 

Step 4: Success

There’s a lot of info there, but to recap, these are the three key steps you should take to avoid Over Delivery:

1. Give your team a well-defined scope
2. Track time spent against your budget
3. Review and learn

If you can develop these good habits alongside robust quoting practice, we can guarantee you’ll see a significant impact on your profits.

 

 

Find out how CMAP integrates timesheets and makes them a doddle for your team to complete, giving you an accurate picture of project performance:

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