Episode 96: How to Address Scope Creep Without Damaging Your Client Relationships

Welcome to the Creative Minds Smart Money podcast, where we turn financial confusion into creative confidence. I’m Samantha Eck, bookkeeper and fractional CFO for creative entrepreneurs. Each week, I’m sharing my financial expertise and actionable strategies to help you build a thriving creative business. Plus, you’ll hear from industry experts who bring fresh perspectives on growing your business beyond the numbers. Because building a successful creative business starts with strong financial foundations.

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Welcome back to another episode of Creative Minds Smart Money. And today we’re talking about scope creep. Now, scope creep sounds like a completely made-up word, but I promise you it’s not. And it’s probably one of the things that is majorly killing your profit margins. It’s something that we don’t talk about often because, of course, as service providers, our goal is to serve. We want to serve our clients. We want to be able to actively provide for our clients. So scope creep can kind of often feel like you’re setting up some sort of strong boundary, but it’s a good boundary, if you catch my drift.

I have experienced it myself where a client just asks me to do something small, whether that’s, “Hey, can you please provide me with my financial statements for the previous month?” or “Can you please provide me with my financial statements from the past year?” or “Can you pull my bank statements?” Something like that — something that would normally either already be there or be outside of the scope of work that would cause me to spend more time on that work. And I’ve had tons of clients who’ve had it too, where they’re doing something outside of the boundaries of what was originally set up in their contract or in their terms. And now it’s just gotten to a point where they are doing more work than they were initially supposed to.

So the real question is, why do we as creatives or service providers oftentimes say yes to extra requests without charging for them? And of course, like I just explained, there are a lot of different reasons. There are a lot of different financial reasons. There are also emotional reasons. But I think the most important thing are the emotional reasons. The biggest one is people pleasing. There are a lot of us who are service providers who believe that we have to go leaps and bounds above others in order to serve our clients the best we can. And you can still provide a premium service and serve your clients in the best way possible without having any form of scope creep, because scope creep is outside of the bounds, again, of your original contract or your original terms. So you are providing the service that you’ve told them you are providing. By providing additional services, you are not technically protected in that, right? Because it’s outside of your original scope that you would set up in your contract or in your terms.

There’s also that fear of seeming like you are a difficult person, because if you tell someone, “No, I can’t do that because it’s outside of our terms” — you kindly say that would cost an additional, et cetera, et cetera — people oftentimes feel like they’re going to seem difficult. Nobody will want to work with them because, why would you not just do this one little thing they’re asking you to do?

And I’ve experienced this myself where I had a client come to me and start handing me AR. So AR is accounts receivable. They started handing me invoices. They started telling me to do this, to collect this, to make this payment, everything like that. And it was consistent. So it wasn’t just once or twice a week. It was almost every day that I was doing something different for this client in accounts receivable. And it started to become this big pressure inside of me because they weren’t paying for this. Accounts receivable — if it’s a couple of invoices a month, I generally don’t charge my clients because it’s very simple, it’s very easy to handle. But once it starts getting to 30 invoices a month and I’m having to reach out to these clients and vendors and say, “Hey, you need to make sure this gets paid,” when I’m starting to have to process their payments and make their invoices, it does become a lot of extra work.

So there came a time when I had to approach that client and say, “Hey, accounts receivable is outside of our original contract terms, so I’m not actually able to provide that.” And they were like, “I honestly had no idea.” And that happens more often than you think, because your client thinks that you’re just supposed to be doing this thing, but you didn’t tell them that it’s outside of your original contract and they don’t know that. I promise you, clients are more than willing to actually understand what’s inside of your contract terms. And they might even be willing to pay above and beyond that if you just tell them.

So obviously, another reason for scope creep and why we have scope creep is unclear contracts or project boundaries. So if you don’t have a very good written contract — if your contract doesn’t state what is included — that can leave a lot of people confused. Because if they’re thinking that you originally, let’s just say you’re a website designer, and you didn’t include legal pages in your website design, and all of a sudden they’re like, “Hey, why didn’t you include legal pages? It says that you do all of these pages on the website,” and maybe there’s a term that says “including legal” or something like that — they weren’t sure based on your contract. So now you’re like, “Oh well, I guess we’ll do it then,” because it wasn’t very clear and you didn’t have a clear boundary to say, “You know what, that’s really not a part of what I do. Contracts or legals should be set up by a lawyer, and then I can add them for you.” It’s a really simple add, but I can’t actually come up with the legal terms or the policies for you. That’s something that you would have to do or get a lawyer to do.

So there’s always that risk as well. And of course, there’s always the thought that “it’ll only take me a second.” When you think of something like, for example, the AR situation, you’re like, “It’ll only take two seconds. It’ll take no time at all. I can do that in a second.” You start to have this blanket feeling of, “You know what? It’ll take two seconds. I’ll just do it.” But your time is worth more than a couple of seconds. Something that could take two seconds could end up turning into 15 hours.

And I’ve seen this too many times with cleanup costs, for example. I will give a client a blanket cleanup price and say, “Okay, hey, this is what I’m going to charge you for your cleanup.” And all of a sudden they’re adding on more things, or we notice more things as we’re going through their cleanup, and I realize, “Okay, next time I need to calculate that.” Very early on in the days of my business, I would give a very low rate for cleanups, not realizing that as we’re starting to clean things up, a lot of things could be changing and evolving because we could catch things that we might not have. So when I give high prices for cleanups, it’s not necessarily because I want to overcharge you. It’s because I have to cover myself in case something huge comes up. And oftentimes there always is — there’s usually some sort of issue. It is very rare for us to go through some sort of cleanup project and have it work out 110% perfect every single time.

Now, of course, the other thing that we want to talk about is what is scope creep actually costing us? There’s a lot more than just a financial cost, because your time is worth something. It’s also an emotional cost, because if you just say yes to everything — you say yes to everyone, you say yes to adding on these little things that you’re like, “It’ll only take me a second, it won’t take me that long” — you’re going to start feeling drained emotionally, and then drained also physically. You’re going to feel burned out really fast, because you’re doing these things that you never promised to do and you’re also not getting paid for them.

So again, if you agree to something and you’re like, “It’ll only take a couple of seconds,” but it takes you five hours to do — does that not drive you insane? Your client has now just added five hours to work that was originally supposed to take maybe two or three hours. And when you add it up across an entire year, you could realize maybe you had additional time to fit in six more projects, maybe 10 more projects. But because you took on these little additional things and kept saying yes and allowed that scope creep to get to you, you lost that time to things that you could have been earning money for. So it’s all about thinking about the bigger, grander picture, especially when it comes to things like scope creep and saying yes or no to certain things. A lot of unbilled hours add up faster than we think.

So if you are a social media manager — and you guys know Jayci, you’ve seen her case study and everything like that — honestly, if I were to hand Jayci something like, for example, I started working with an ads manager and I told her, “Hey, I need some graphics done for these ads. Please, please, please, please charge me if this is outside of scope. Don’t just do it. If it’s outside of scope and it does not fit in the terms of our contract, please charge me.” Because I’m not going to let her do work that isn’t compensated. Now, that’s not everybody. There are not always clients who will tell you, “If this is outside of scope, charge me,” because a lot of people don’t necessarily understand what’s in scope and what’s outside of scope.

Of course, if you’re doing a lot of work and you are time tracking — which we’ve talked about time tracking before and how important tracking your time is for making sure that you have an hourly rate, even though you’re not charging an hourly rate, even though we’re doing value-based pricing — that effective hourly rate that you’re using to calculate all your pricing drops significantly because you’re spending more time on projects you didn’t realize you were spending time on. And then it can often turn a project that looks great into either a break-even or a loss, because you spent more time on it than you originally intended, and the money that you thought you were profiting off of that ended up being sucked into this additional time from scope creep.

So of course, what does that look like to address the scope creep without damaging your relationship with your clients? Because you don’t want to be harsh. You don’t want to say, “Screw you, I don’t want to do this.” You don’t want to be that person. But you also want to respectfully place that boundary so that you and your client know that the boundary is there, and then they respect it, you respect it, and hopefully that turns into repeat business or future business, because you’ve set up this firm and clear boundary between the two of you.

So if something is mid-project, that’s obviously a little bit harder. But if something’s mid-project and you have very clear terms, you can always say, “Hey, as outlined in our engagement letter, this is all I’m covering. That is unfortunately not covered in our engagement letter. Here’s what I can do — we can add it for X cost.” Or you could always say, “I would love to do this for you. Here’s how much it’s going to cost. The reason that I can’t cover it is because it’s not originally outlined in our scope.” There are lots of nice ways to put it. If it’s before the project, that’s a great way to say, “If you’re looking at the contract terms, this was not included. I can add it in right now before we get started, so you have a clear outline of costs,” et cetera.

There are lots of really nice ways to do it. You can have an add-on process already set up — “Hey, I’ll just get that added to your contract. All you have to do is approve it and it’ll charge you right away, and then we’ll get going on that.” A lot of tools like HoneyBook, Dubsado, stuff like that will just automatically add that and they just have to make an approval and then they can get charged for it. Obviously you want language that feels natural and not confrontational when you’re talking about it. Don’t be defensive and say, “No, I can’t do that. That’s not included.” Just say, “Hey, in the terms of our contract, this is what was included. I can add that for you, no problem, but here’s what it’ll cost.” Instead of being confrontational or defensive in any sort of way, you’re saying, “This wasn’t in our terms, but here’s how I can add it for you.” And that makes them feel a little more comforted and a little less put off.

Now, I’m not saying — if they’re very argumentative, obviously put the terms in plain as day. But most of the time when you say, “Hey, in the terms of the contract,” people are going to go and look at the terms themselves and say, “You know what? You’re right. That wasn’t in there. I’m sorry. That’s my bad.”

And of course, there’s a difference between being flexible and being a pushover. So if something is truly going to take you like two seconds — like it’s a simple button press — that is being flexible. You’re like, “Okay, you know what? No problem.” But if something is literally going to take you more than a couple of seconds, don’t be a pushover and just do it. Look at the cost of that. And if you determine that it is within your boundaries, then of course do it. But if you’re like, “You know what, this is going to cost me a lot more time than it’s worth — I need to charge for it,” then very kindly have that conversation. I’m the type of person that if someone comes to me and they’re like, “Hey, I need to add X,” I’m never going to say no to them. Because as a service provider, I understand that there are things that are outside of the boundaries. There are certain providers who don’t handle it that way, so of course you need to know that.

Now, obviously there is a way to protect yourself from scope creep upfront, and that is by having a very solid contract or proposal to prevent that scope creep before it even starts. Because if they have a very, very clear idea of what is outlined, it’s going to cause you fewer problems. With a very good contract, your deliverables are defined very clearly — even in the section labeled “Deliverables” or “Services” or whatever it is. They know exactly what they’re getting, so they can see exactly what was outlined. They know if anything is not included. They’re like, “Oh okay, I see that that’s not included — maybe I want to ask about that so we can add it on.” Because if you also have a “What’s Included” section and a “What’s Not Included” section, that’ll give them a very clear picture of what they can and cannot do within the scope of your work. And then that also gives them the information they need if they want to explore other options — and it helps you make sure the clients you’re bringing into your business are very aligned with your contract terms and your service as a whole.

And of course, you can always have some sort of revision limits. So if you are a website designer, you can say, “Okay, we have two rounds of revisions. After that, it would cost additional if I need to go back and do more revisions.” Or if you’re a graphic designer, “We have two rounds of revisions for this logo. After that, I need to charge you more, because at this point it’s taking a lot of extra time.” That way, if someone has revisions, they’re very clear on it the first time, so you’re only going through one round of revisions and not having a bunch of extra work added on.

So scope creep is very vast, but it can be mitigated very quickly by understanding that it can hurt your costs and your time. It can hurt your availability to take on more projects. And of course, it can hurt your relationship with clients if they don’t have a clearly detailed boundary as to what is outside of that. Because if they find out down the road that what they thought was included is actually not included, that can hurt your relationship with future and potential clients as well.

So after this episode, what I would love for you to do is consult with a lawyer and make sure that your deliverables are clearly aligned in your contract. But also just make sure that when you are communicating with clients and have that on your website, it’s very clearly detailed. Obviously a contract is essential, but having this on your website is also going to make sure that the leads coming to you are completely aligned with what you’re delivering and know that there might be add-ons. You can even add an add-on section on your website saying, “Here’s what you could potentially add to your service,” whether that’s a website, graphic design, social media services, whatever it is. And just know that your time is valuable. Shift your mindset to: “If something is obviously not going to take me two seconds, I need to charge for that, because my time is worth something.”

Okay, if you guys loved this episode, as always, please make sure to like it, share it, subscribe, and share it on social media to bring more people to the podcast. I appreciate you guys listening so much, and I love, love, love all the recent listens on the podcast — I appreciate it so much. I’m so excited to keep doing this for you guys. We’re almost at 100 episodes, which I can’t believe, and I can’t wait to celebrate that episode with you guys. But as always, if you need anything, feel free to shoot me a message on social media or by email. I appreciate you so, so much and I wish you the best week ever. We’ll see you next week. Farewell, fellow travelers.