How does a small business account for unexpected issues

How does a small business account for unexpected issues

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This may seem like a simple issue, and it may even be for large corporates who never seem to care if they lose a client or more.

How does a small business recover costs after the fact?

At SignForce we firmly believe that once accepted, the quote we give is the quote the client must pay – to the point that we have only had to revise quotes on three occasions in the last 20 plus years.

This is not always practical as there are times when the game changes mid game resulting in additional costs being incurred, costs that should be carried by the client.

A recent example occurred at SignForce when a client asked SignForce to quote on an installation. SignForce quoted on two teams for 10 hours, the client accepted the quote and we got to work. The quote was based on a number of assumptions, however, once on site when the assumptions were tested, it was discovered that installing the signs would probably take longer than expected.

SignForce being the business we are we proceeded to work for 22 hours straight, increasing the number of two man teams from the two that were quoted to an eventual four by two man teams.

In this sort of situation what is the best way to ensure that the business gets FAIRLY rewarded for the additional time.

From the writers perspective there are a number of options, including:

  1. Work the time quoted on, possibly giving an extra 10%, and then leave site. While this may be financially beneficial to the business in the short term, it could also alienate and upset the client, especially if the client feels let down and does not manage to meet THEIR deadline, which they could then blame on you, the last subcontractor. Or,
  2. On the initial quote stipulate the time and number of teams that are quoted for, including an overtime rate so the client is aware of what any overtime will cost them. For this option it would then be wise at the end of the official quoted time to confirm with the client that they are happy for your team(s) to continue working at the stipulated overtime rate. It is also a good idea to ask if there is a limitation to the number of additional hours the client is prepared to pay for, so everyone is on the same page and there are no hard feelings after the work is completed. Or
  3. Complete the work as required and take the potential loss for the additional costs that the business will incur for both the overtime worked and the (potential) loss of productivity if the team(s) are not capable of working the next day. Or
  4. Complete the work as required and enter into a new negotiation with the client for the overtime worked. Or
  5. Complete the work as required, remind the client of what the original quote and leave it to the client’s discretion for them to make an additional payment to cover the increased cost.

What additional options could you add and which of the above options would you use?

The past is behind us and can only be used to learn from, so moving forward which option(s) would you recommend be used up front to ensure that the business covers any unexpected, additional costs should overtime be worked or standing time be required?

When asked what they would do, ChatGPT advises that: When a small business finds that the work quoted on turns out to be much more than anticipated, they should approach their client with an honest and transparent explanation of the situation. They should provide a detailed explanation of the additional work that needs to be done, and why it is necessary, as well as an updated quote of the total cost. The small business should also offer an explanation of how they plan to adjust the timeline to accommodate the additional work, and how they plan to address any potential delays or issues that may arise. Finally, they should remain open to discussing potential compromises or alternative solutions in order to come to a mutually beneficial agreement.

Interesting input.

If you are looking for a dedicated, professional team to help you ensure you meet your installation deadline, SignForce is available.

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