Often, the budget discussion can be a difficult one to have with clients. Even when clients are seemingly forthcoming about their budget, we sometimes later learn that they weren’t completely honest about their budget during initial conversations. I understand the logic, many people think if they say they have less to spend that will help keep their price down. It is true that if you state a budget for us to work towards, we will do our best to design something for that budget. However, many times after creating a design that meets the budget, we find out the client had “hidden money” to spend that they didn’t let onto from the beginning.
This approach may seem logical, but it is counterproductive. After spending many hours drawing and estimating to meet a budget, and then learning the client has more money to spend, we basically must start the whole process over again. Not only is this frustrating as a business owner, but it also delays the start of construction (and completion) and adds to the costs for design and estimating.
I often use cars as analogy to homes and I’m going to do it again, by sharing a short story. When I was 17, my sister-in-law bought a new car and intended on giving me her old Honda Civic before I went away to college. Unfortunately, before she had the chance, the car caught on fire and was totaled. Instead, she gave me the insurance check to go purchase my own vehicle. I was 17, that check was pretty much all the money I had, so I went car shopping at used car dealerships for a car $6,000 or less. I was very upfront with every salesman that I had $6,000 to spend. What did they show me? Here’s one for $9,000…I only have $6,000. Well what about this one for $8,000….I only have $6,000. Well here’s one for $7,000, I’m sure your father could pick up the other $1,000….I only have $6,000. Eventually, I ended up buying one listed at $9,000 for $6,000, but it left a bad taste in my mouth. Which part of I only have $6,000 did these salesmen not understand? I decided that whatever I wound up doing in life, I would never treat people that way. I would listen to what they tell me and work with that information and not try to sell them more than they said they could afford.
Maybe I was naïve, and maybe I still am, but I was honest about my budget and expect clients to be honest with us about theirs. I treat their money like it was my own. This is especially true for cost plus contracts where clients essentially give us a blank check to bring their dream to reality. I don’t ever want to face questions about how wisely their money was spent. I honor and take seriously the budgets we are given. This is why we need budgets to be accurate, with no hidden money showing up later.
The whole design/build process is based on trust. If you trust the company you are working with, give them the real budget at the beginning of the process. They will do their best to honor that budget and provide you the best value for your money. If you don’t trust who you are working with, you need to keep looking for someone you do trust. Hire a respected firm and trust them with your budget. They won’t use it against you, rather they’ll use the information to help you.