Florida Roofing - June 2021

Page 88


Change Orders and Managing Your Business It is easy and stress-free when you start your business by working for friends, making verbal agreements, doing great work and getting paid for it. But in the real world of construction, you better get a signed contract and be prepared to handle change orders – in writing. There will always be “those customers” who will expect more than what they contracted for. You must clearly define the scope of work in the contract and include detailed pricing for any change orders. This protects you, your business and its reputation. Without a contract, there can be no change orders. Contracts are of the utmost importance to hold both you and your customer accountable. If a client does not want to work with a contract, your best bet is to move on. Those are the same customers who will claim you promised extra work, even when you did no such thing.

penalties, allowing for added work.

Create a Change Order Process

There are various reasons for change orders, from inaccurate specifications to drawing and design changes or a lack of coordination with various parties. Material substitutions can be problematic and may lead to higher costs. Construction industry data indicates that change orders account for 8 to 14 percent of the cost of capital construction projects. They can lead to cost overruns of 11 to 15 percent and Key Contract Elements push back project completion by as much as 20 perConstruction contracts are typically filled with clauses, cent. Customers need to know this. but two major components must be included – the By creating a change order process for your comscope of work and price. pany, you can effectively moderate risks for disputes. Sit down with your customer to work out every Shared buy-in is essential for the contractor, the owndetail of the project. Include the cost of any potential er, subcontractors, consultants and customers. change orders in these discussions. Use an itemized A change order is an amendment to your original list, providing your customer more transparency, which contract and creates a record of what you agree to will help you calculate the value of changes. provide to your customer, along with associated costs. The contract should include a time frame for Stay on top of subcontractors to ensure they impledeliverables, default conditions, payment terms and ment agreed-upon changes.

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