Creating Budget Clarity During the Design Process

Kyle: Before we jump in, a quick shout out to our friends at BuilderFunnel. AI is changing how homeowners find remodelers, and BuilderFunnel is already helping remodelers win big. Their clients are becoming top recommendations in ChatGPT and other AI platforms, generating new referral leads directly from AI search and seeing results like a 400% increase in AI driven referrals for a Charlotte remodeler. But it's not just leads, they've generated multiple millions for their clients from AI already. If you want your remodeling company to be one that homeowners find first, whether they're searching Google or asking AI, head over to builderfunnel.com slash R O T R. Builderfunnel.com slash R-O-T-R. Welcome to the Remodelers on the Rise show. Audra, I'm feeling a little I'm feeling a little feisty. I'm in a good mood. I'm feeling a little wild even. Is that okay? Or do you want me to calm down?

Audra: Wow. Yeah. No, I think that's great. Keeps it interesting.

Kyle: Because your energy, I know, but your energy is a little bit not crazy and not wild, like very even like passionate and very even, but very even keeled. You know, so I don't wanna I don't wanna be obnoxious. but you also, yeah, no, I think if you said it's okay, I think you're gonna you're gonna match my energy because sometimes, you get fired up about things and people might have to listen to this episode. Most people are like, hey. speed up the podcast and go one point five. Not with Audra and Kyle. Y you might want to go down to point eight to slow us down a little bit, folks.

Audra: Nope. No way. It's true.

Kyle: Yes. I I'm talking with Audra with L T D Builders down in what's the specific town in Florida, would you say?

Audra: We're in Parkland.

Kyle: Parkland, which is kind of near Boca Ratan and all that fun stuff, yeah? Yes. And it w

Audra: Yes, yes, serving the South Florida market.

Kyle: it was a good number of years ago. there was a gentleman named is a gentleman named Nate Baum, with Nate's Custom Renovations out in Lincoln, Nebraska. And you knew s how d what was the connection? You knew who?

Audra: Nate's brother married one of my good friends from high school.

Kyle: Yes.

Audra: And so I knew I knew him I was an acquaintance through that

Kyle: Yes.

Audra: relationship.

Kyle: So you were like, Man, I am I got this building business going, I got this remodeling business going. Is there somebody like from the outside that is a coach in this area? And you'd kind of connected with Nate. I had been working with Nate for a number of years. So Audre and I got connected. Thank you, Nate, for that connection. and also

Audra: Yes.

Kyle: thank you, Nate's brother, who married so and so.

Audra: Tiffany. Yep. Yep. True love. They are. yeah. Yes. True love wins. I know, me too.

Kyle: They still married? Everything going well with them? Yes. Yes. I love a good true love story. and Audra and I did some one-on-one coaching for a while, a lot around some financials and sales process and marketing and business strategy. she's been part of our peak peer group the last number of years. She is wicked smot, loves financials. sometimes we nerd out

Audra: True.

Kyle: on that. is is really reworked the the marketing and the sales process side. SOPs, et cetera, et cetera. And we were brainstorming some guests here recently on one of our Remodelers on the Rise team calls. And I said, hmm, I want Audra to come on and talk specifically about the budget roadmap. The budget roadmap. So we're gonna stay pretty focused on just talking about the budget roadmap today. so introduce yourself and your business a little bit more and then tell us where this budget roadmap even concept kind of came from. And then we'll dig into specifically what it is and how it can help the people listening.

Audra: Sure. so yeah, like you said, Kyle, we are based in South Florida. we primarily work in Boca Raton and Delray Beach in Palm Beach County, Florida. we've been here for 18 years now. And I'm originally from Lincoln, Nebraska. That's how I knew Nate and his brother Jay. And my husband joined my company back in twenty twenty. So we've been running it together as partners for the last almost seven years. And that has been really amazing and allowed us to grow and do a lot more than I would have been able to do when it was me, myself and I doing this. and yeah, so the budget roadmap came up. Yep.

Kyle: Hang on, hang on. It's been really amazing, but for all of the people listening to this, and there's a good number of of like husband, wife teams and whatnot, has it just been all like cupcakes and puppies and rainbows?

Audra: It's not puppies and rainbows all the time. but it is most of the time. It is most of the time. We're very compatible. John has a natural aptitude for exactly the area that I needed help with. And so our partnership has really it's it's worked great for us.

Kyle: Right. It has been. It's been a nice clean, like, all right, you know, okay, the the office side and the sales, the marketing, the estimating, the design side, let's get this thing all planned out, sold, et cetera. And then a nice smooth handoff to John and the production team has really worked out well.

Audra: Yes. Yes. And a lot of what allows our general experience to stay puppies and rainbows most of the time is that we have separate roles and we give each other the autonomy and authority in those roles to make decisions and to run things. So it works well for us.

Kyle: That's good. That's good. Be before we click the recording button, I said, Well, let's talk about this budget roadmap. Audrey, you kind of invented this and you corrected me.

Audra: Yeah, I did not invent this. I was having some problems when I transitioned from doing free estimating, writing detailed proposals, sending them to clients, and then, you know, being dismayed at how many of them didn't hire me after we spent, you know, 30 hours working on their project. Thanks to some of the techniques I learned from you. We switched to doing project development agreements.

Kyle: Mm-hmm.

Audra: But the next hurdle I ran into after I started using project development agreements successfully was clients saying, Hey, we had a range at the beginning of this. And then three months, four months, six months later, we get to this price and this price isn't what I expected. Even if it's in the range, or sometimes we're out of the range because now the the project has evolved and I

Kyle: Mm-hmm. Pause, pause. Three things so far. One, you said, you know, here we are three months, four months, six months later. Now we all need to pay attention to our cycle time. Cycle time from the time the design agreement signed to the signed contract. now in your case, yeah, it can take three, four, five months. You're doing some large projects, 800,000, this, a million this, 650,000 this. At the same time, everybody listening to this, start measuring your cycle time. You Ought to be able to say over the last 20 projects, it has taken us an average of 120 days to complete this. What gets measured gets improved. The next thing you mentioned was, you know, sometimes we get it to the end of it and it's higher, but we also change the scope of work. And our the memories and of our clients seem to get a little fuzzy and they forget that they decided to add this and add that. How do we? lead them through the process and keep that at the forefront so that they're not shocked at the number. I just wanted to touch on both of those things.

Audra: Yes.

Kyle: But but yes, that happens and you're sitting you're going, like I'm getting this pushback because the project has increased. So you had that problem. you had that problem. And then what happened?

Audra: Yes. Yes. And the other side of that is, okay, the project has changed or it hasn't. And now we get to a number and they're surprised by it, even sometimes because they forgot the range that we agreed to in the beginning,

Kyle: Mm-hmm.

Audra: you know? And then the other thing that was happening at the same time is clients saying, Well, I chose this tile and I chose these countertops, but I didn't find out how they impacted the budget until the end. And at the time I was saying, Well It's really hard for me to provide feedback because if I'm just giving you, okay, yeah, you picked the countertops, we're still good, everything's in budget, but I don't have all these other numbers. And so that may not be true. And so I was trying to figure out how to address this demand from my clients that was very clear that they wanted more information and they wanted more control. So I posted in your Facebook group.

Kyle: I'm so I apologize. That's that's good. Right, that's good self self-awareness to it. That's that's also it's we work so hard on optimizing the our processes to make it easier on us. And rightly so, like let's let's tighten this up, let's make this easier. But what you just said there is very important of like I'm recognizing as I'm watching my clients walk through my process. What were the two things you mentioned? They want more control.

Audra: And information.

Kyle: Yeah, they want more information and they want a little bit more of that feeling of I'm in control of where these hard earned dollars that I'm investing go. And I I just pause there because what a great thing to continue to think about, maybe talk about in your team meetings. how's our client reacting to our process? Is our c I had a conversation even this morning of one of my clients down in Texas going, you know, we are we we are messaging, we are doing so much in job tread. And I think we are losing some of that human touch. I think my clients want some more of that human touch. maybe our process is actually not helping our overall client experience. How can we find a good balance with that? so everybody listening, kind of think about that. What might that look like for you? So, yes, they want a little bit more information and control. Sorry, I keep interrupting your story, but it's good stuff. Yeah.

Audra: Absolutely. No, it's it's fine. It is good stuff. And I think that that that's what it comes down to is that my my process at the time relied almost entirely on them trusting me. And thankfully my clients do trust me. at least in this phase, you know, they they have to to get to that point. But, you know, it's like trust but verify, right? I mean, that's how the clients are feeling. And a lot of our clients are highly intellectual people, highly intelligent people. you know, we generally work with more a more affluent clientele

Kyle: Mm-hmm.

Audra: that is used to having a little bit more than, yeah, it looks good, I'll get back to you. They weren't comfortable with it. And I got this feedback from pretty much every client across the board at some point. They're like, Hey, it all turned out okay, but I didn't like this. So I went to your Facebook group, Remodeler on the Rise, and posted

Kyle: Mm care close. ever everybody go to Remodelerscommunity dot com if you're not part of the Remodelers community on Facebook.

Audra: It's a great it is a great community. There's a lot of collaborative, collaborative effort on solving some of these common problems that we have. So I made a post there saying this is feedback I'm getting from my clients. I don't want to do line item estimates. I don't want to share the the details of the estimating process with the client because things that happen, you know, you get your electrical preliminary

Kyle: That opens a whole nother can of worms.

Audra: quote and then it gets shared with them and then it needs to be twenty thousand dollars and now they're upset because they got attached to the number. So, like, how do I how do I sh share with them what they need to know and also hold back what they don't need to know?

Kyle: Hm.

Audra: I got some good feedback, but I think the most valuable one that I got was another member named Elijah sent me a a document that he'd been using. And he was the one who coined it budget roadmap. That was not my initial brainchild.

Kyle: Okay. Elijah McDonald, a cut above, a wonderful remodeler in the Colorado Springs Pueblo area. he was used to used to be part of the VIP club. A wonderful guy. Shout out Elijah.

Audra: Yes. And a really nice and generous

Kyle: Yes.

Audra: peer in that way to share this with me. So we had some conversations around it. He shared that document. He told me how he was using it. And he said, This is we do meetings every couple of weeks to show the client how the range that we gave them at the beginning of the development is getting cinched down to their final contract number. And we've had good luck with it. Maybe you will too. Have fun. So I took that document and then tailored it to meet our needs and I've been using it ever since and it has been tremendously successful. I think I think that would be a great idea. I think that would be the best the best way to explain it.

Kyle: Should we should we show it to the people? Should we show it to the people watching this? Yes. And and we, if you're if you're watching the if you're watching the audio version of or you're listening to the audio version of this, check the show notes. We will link to it there. If you're watching the video version of this, then you are going to get to see what we have here. So this is this says budget roadmap. This is kind of number two. It says selections and revisions. And I want to I'll go ahead and read just the top portion of this. it says, Thank you for your continued collaboration as we refine your project's design and scope. Below you'll find an updated budget roadmap, a key tool that helps us track where the budget started and how it evolves as we progress through design, material selections, and permitting. What is the budget roadmap? The budget roadmap is a living document that reflects your our ongoing work together. It provides a structured View of how your project budget progresses from the initial analysis to a more defined estimate based on real design decisions, selections, and site conditions. As we finalize details, the budget may adjust to accommodate design refinements, material selections, building code requirements, and permitting needs. Our goal is to ensure transparency and help you make informed decisions that balance priorities, design vision, and financial feasibility. Even when you describe it to them like that or you summarize that, do people or even show an example of this as you're going through the early stages? Do people instantly kind of what's kind of the reaction to it? How have they been?

Audra: I think that there's some relief that I usually see early on that's like, okay, good. There's gonna be some structure around this.

Kyle: Mm-hmm.

Audra: however, they don't generally really get into it until we give them the first one. You know, it's one of those things you don't really

Kyle: Mm, good. Yeah.

Audra: have their attention until you have their attention. But once it's their numbers and their project plugged into this, then usually we start getting really valuable questions back and, you know, and feedback. So

Kyle: So so in this instance, we have this this is it says roadmap number two. So we're showing something we got roadmap number two and we've got some a roadmap number three that we'll show. so what this is showing down here in the budget progression, describe kind of how this section of things works.

Audra: So this that budget progression section is showing basically each of the roadmap documents. So the project analysis is what was on their project development agreement. And I'm sharing this particular example because as you'll see, the we ended up above the range,

Kyle: Mm.

Audra: but not for no reason, because we never do for no reason, right? So the original range when we discussed this project with the client was six forty to seven eighty. by the first budget roadmap document, which is after the and some of the initial selections have been made, we have a preliminary plan and layout. as what usually happens, they have now eliminated the lower part of the budget because the lower part

Kyle: hey, no, no, no, no, no. Most people, when we give a range of whether it's sixty-four thousand to seventy eight or six hundred and forty to seven eighty, they usually almost always end up selecting things that end up at the bottom of the range, Audra. Don't be lying to our people, our beloved Romags on the Rise listeners.

Audra: I always try to explain to the client at that phase that this 640 number is the least that we can accomplish the minimum objectives of what you're trying to do here. And in order to stay in that lower part of the range, we would have to do da-da-da-da-da-da-da in order to make that happen.

Kyle: Good.

Audra: Most of my clients eliminate that right away. Yes, we want to do the steam shower. Yes, we want to use quartzite. We want a full backsplash. We want, you know. We want natural wood floors. Okay, well then we're out of the bottom range. And that's reflected here on the first roadmap, which is the second line. So we've now moved from the the bottom of the range has been eliminated. The very top of the range at that time was also eliminated.

Kyle: Yeah, so initial selections and preliminary plans, we updated the estimated range to seven fifteen to seven fifty.

Audra: Right. And then in the selections below, we've started doing transparent selection pricing. So these are material selections presented without markup. this is individual to every contractor how they want to do it, but we ultimately found that if we're presenting with markup and they shop around, it makes us look expensive. It makes our vendors look expensive. So we present these these without markup so that it's clear to them if they're looking at other vendors or sources so that they're seeing real numbers. and they

Kyle: Okay, so we've got count we've got cabinetry numbers, we've got countertop, stone material, tile material, wood flooring. And what you just described there is an approach to how we are kind of presenting our pricing and our selections, in that, you know what, we have found that it's a little better for their experience and maybe offering a little bit of transparency here to allow them to see those numbers directly. Now, where that could come to bite you is. If they end up choosing countertops that end up coming in $10,000 higher, it may be hard for us, especially if it's later in the process, to bake in that additional our normal markup and margin on that additional 10,000. but you already might anticipate that a little bit as you're putting your numbers together. But that's one of the you know, downfalls, you could say, of this approach. But you can guard against that as well. The the positives of breaking it out you found to be. outweiging the negatives. Okay.

Audra: Yeah. And generally those differences and markups tend to kind of wash out because they'll end up choosing something. They care less about the cabinetry in this case. They just want white cabinets. They don't care. So maybe their cabinet budget ends up a little low. They spend a little more on tops. It usually shakes out to be close enough for us to be comfortable with it. And

Kyle: Good. So even what we've covered so far, just the the concept of showing on a sheet of paper the original range, the updated range. And now now here we're getting into which is where we're at, which is bolded, selections and revisions. We've now got a range of seven thirty-five to eight twenty. What happened what happened here?

Audra: This was where the client started getting new ideas. And they said, you know, while we're doing all of this, maybe we should go ahead and do some built-ins in the office and go ahead and do a feature wall at the, you know, at the fireplace. And these were things that had not been accounted for in the original analysis.

Kyle: Mm.

Audra: So in the area where you're pointing with your mouse now, this is where we tell them what has changed from the last time we met until now. So These are kind of the things in in progress. And so you see that we've we've incorporated some optional new items into those into these numbers. And we've also given them, I'm not sure if you can see it on this document, Kyle, but underneath where the material selections are, we also have a section, this one. This is a section where we allow for scope differences. So, you know. Yeah, we're thinking about doing the fireplace wall. We're thinking about doing the office built-ins. But you know, now that we're thinking about it, maybe we don't need to do the steam shower. How much would we save if we don't do the steam shower? So

Kyle: Mm-hmm.

Audra: these are not totally fixed numbers. These are our ballparks and guesstimates on our end, but we can look at the trades involved, get pretty close here, and then if they decide to incorporate or remove items, then we go back to our estimate and do the fine-tuning. to get it exactly right. But this really we found helps with decision making because do you want to do the office now or not is

Kyle: Yeah.

Audra: a lot easier decision to make when there's a price tag attached to it.

Kyle: How has how has it been to be able to put obviously you're emphasizing adjustments are approximate? You put that in all caps, not approved. The values below are not included, even underneath here, ballpark price only. Have you found it challenging to be able to put a number next to living room fireplace wall ballpark price only? Or is it like, look, no, Kyle, it's it's a ballpark. We put some, you know, numbers together, we get close because for what we're trying to do for the client here. Close enough's close enough. Some people really struggle with this. How how do you find it?

Audra: I think it's in how you explain it to the client because

Kyle: Mm-hmm.

Audra: one of I think that one of the things that I personally do really well that bodes very well for my business is I value accuracy to maybe an obnoxious degree. I'm a perfectionist and being totally accurate all the time is really important to me. at the same time. waiting for the perfect accurate number doesn't help anyone here. And that's

Kyle: Rage.

Audra: exactly how I explain it to them is we will get to the perfect accurate number, but this is a decis like I'm trying to help you make a decision here.

Kyle: Yes.

Audra: So whether it's 17,000 or 15,000 or 20,000, it you know, I we'll we'll see when we get there ultimately if this is something that you decide that you want to make the investment in. But if 15 to 20,000 doesn't work for you for this, take it off the list. And

Kyle: Yes.

Audra: If we explain it that way, they understand.

Kyle: So that so that's coming. Yes. And that's coming from somebody like you just professed yourself as a perfectionist. So for you to be able to put this type of ballpark together, what I see is, you know what? Cycle time, the amount of time this is taking to keep the project moving, the ability for the client to start to make some decisions just by seeing rough numbers, it is allowing my perfectionist nature to step aside because I'm also a salesperson. I'm also a business owner. I'm also elegantly leading this person through the process. So I need to tamp down some of those perfectionist tendencies and be able to do this. What I see too often is, well, okay, yeah, let us skip back to you with the built-ins quote and the living room fireplace wall. Now I'm getting in touch with my trade partners and waiting a week for this. And now this thing has stalled out and time kills deals. So, way to go on being able to just kind of give some approximates because that's all people need. To go yes, no, no, yes, yes. Okay, perfect.

Audra: Hundred percent.

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Audra: And the other thing, Kyle, besides aside from just being a killer of time to get all of that detailed accuracy, the other thing that we noticed is that it confuses our trade partners. There's

Kyle: Mm.

Audra: so much mud in the water now with we gave you a set of plans. Okay, now we need it this way. Okay, now now tell me how much it would be if we did these built-ins, but tell but then what if we don't do that? And then what would happen?

Kyle: Yeah, take take out Matthew's bath, but add in this. Yeah.

Audra: Right. It it confuses them. It creates unnecessary work for everyone. And then what would happen is we get to the end of the job and we're like, okay, we're ready to order. And now it would be, you know, we we ordered them with this because we thought this was happening, you know. So this allows us for the most part to not even get the trades involved. Or I could make a call to my cabinet guy and say, Hey, that the built ins that they were,

Kyle: Give me give me a ballpark.

Audra: yeah, the b what what what are we looking at for this? You know, and It's not in writing. It doesn't become part of his estimate. He doesn't send a formal quote for it. And that way the the meat of the project stays very

Kyle: Yeah.

Audra: clear.

Kyle: And that and that's why I wanted to emphasize it because I think a lot of people listening to this struggle with that. And it it delays things, it makes things harder. I'm thinking even a lot of the people listening to this have estimators on the team. And how do we explain to our estimators these two things? One, I want you to be super detailed, leave no stone unturned and and get this thing right and really think through it. On the other hand, hey, sometimes just kind of ballpark it. Just call, just call the fireplace guy and say, hey, what about this? Estimators listening to this, business owners, perfectionists listening to this, you have to hold those things in intention. And it's okay to hold those things in tension. It is called an estimate on one point, right? but we can just get bogged down and stalled out here. But what you're showing here is I'm keeping the client experience in mind and I'm keeping them moving the client through decision making in mind. I'm gonna make it easier for them to say yes, yes, no, no, no. To this and then I'll dig into the details because we're gonna get into the details. We're going to make sure that when this contract is signed, the scope of work is detailed, the selections are made because we want this experience for the client to be amazing. We don't want a bunch of delays because we've put off selections. We don't want a bunch of slippage on our project because we didn't get into the weeds and the details and the scope of work. No, no, no. We're professionals here at LTD. We're gonna do that. but at the same time, we're gonna keep this thing moving. And the budget roadmap is a great way to do that. I'm gonna click on The other version of the roadmap, which I think is going to show up. I clicked the wrong one. that's going to show the second w document here, which was revision number three, if I'm not mistaken. we're just gonna close out of that one. Okay. Hang on, hang on. The the

Audra: Yeah, so this is the one

Kyle: way Riverside does this is a little tricky, but no, I think we're cooking. There we go. There's number three.

Audra: Beautiful. Yeah. So this is this is the final budget roadmap. as you can see, our current estimated investment is the same, low and high. We've arrived at a number. And I think that the one of the the most important things to note here is that this client was totally okay with this number, even though it

Kyle: Mm-hmm.

Audra: was substantially above the range that we initially talked about. And I really believe that the reason that they were comfortable with this is because they saw exactly what happened. They saw their selections, they saw and at this point we've removed all of those things have been incorporated in.

Kyle: Yes.

Audra: and that's discussed above, but we had gone through each of those options and they added and removed the things that they wanted. So the the price came in higher, but really the price is subjective because, you know, the it it's the the price that we're going to spend and what you want. And it in all of these scenarios, it comes down to do you want to spend less money or do you want to get more scope? And they get to decide and it leaves them feeling like they have control over this part of the project. And that's really what we want them to feel that way all the way through the project in every step of this, that it is their project, it's their home and it's their money and they're the ones in charge. So this gives us good balance and

Kyle: Yeah, incr incredibly helpful

Audra: Directing that.

Kyle: tool to keep it keep this very murky, tricky thing clear for the client where they can go back to each stage in the budget stage in the budget roadmap and see how we got here. Without something like this, it just it it understandably gets murky. It's not because they're not paying attention or because they're not care. There's so much coming at our clients when we're walking through these selections. this this final ones for those of you listening to the audio version, we were at the 735 to 820 once we started going through things. And then the final contract price ended up being $818,639. I love that the current estimated project investment ranges from $818,639 to $818,639. In other words, we have achieved our fixed price contract here. And you emphasized it earlier, but I'll emphasize it again. The current budget update. These are the updates that have happened between our selections and revision stage and our final stage. Yes, to all trade partner proposals have been received, selections have been received. Optional items added. We added the office, the bar, the living room built-ins, and vinyl flooring on the second floor loft. We have removed the steam shower. We have added the tankless water heater. The body sprays have been added to the master bathroom. Cable railing selected for stairs and second floor loft, and walkthrough with electrician and homeowner will be scheduled. Any requests outside the original scope will be billed separately. So we still have that little thing out there. We still have some electrical things that we'll walk through, but here's your fixed price. And we have to stop apologizing for the price to our client. Like you said, this client's happy to spend this, aren't they? Yeah.

Audra: Yeah, yeah, they are. And this client was delighted with the outcome. it you know, this was one that and the other thing that we've really been working on and have improved dramatically over the last couple of years is our change order rate. We're now at the point where when we get to that fixed price with our clients, we have on almost every job we have less than two percent of the of that amount in change orders by the time we finish. So in an industry where 20 to 50% overages are very common, we're doing it in one to two percent. But the reason for that is because all of those things that they wanted to add were addressed in the budgeting phase instead of in the construction phase. So that we guide

Kyle: We could sp we could

Audra: them into teasing that stuff out of them. What

Kyle: Yeah.

Audra: else do you want to do here? I want to know about it now. I don't want to find out about it in three months.

Kyle: How do you feel how do you feel about change orders in general, Audra? What's your attitude towards them? Why?

Audra: I dislike them very much. they interrupt our flow and management of the job. there is no way that I have found a charge enough for them to not lose money. And the client feels like we are killing them every time. So it's

Kyle: Mm.

Audra: j like everybody feels negative about it.

Kyle: But Audra, they're a necessary they're a necessary thing in the remodeling process.

Audra: They are they are necessary, but they need to be kept to an absolute minimum. And most

Kyle: Mm. What were you what were you aver on a project like this before you were really taking the design and project development more seriously, you were averaging how many change orders?

Audra: anywhere from, you know, five to ten probably. but our percentage was in the, you know, very consistently five percent, as much as ten percent. You know, we were never with a with a with a good planning process, we were never in that, you know, twenty to fifty percent range. But

Kyle: Yeah, yeah.

Audra: even ten percent over on an eight hundred thousand dollar project doesn't feel good to the client. So it's if we can avoid it, we want to avoid it.

Kyle: Yeah. And and yeah, so some of you listening to this, you hear where I was going with that. Now, even before you really started to lock down on design development, you still weren't too bad. Like you st you still were pretty detailed. You still were taking care of things. But the idea of look, two percent or less of slippage. Ideally, we got some grippage on projects, and you see grippage on a lot of your projects because you're watching your job costing and we review that. and it's just it's a little bit of a mentality. We are going to put more effort into our Project before the hammer hits the job site. and we're gonna do that for the benefit of our client, we're gonna do that for the benefit of our financials, we're gonna do that for the benefit of our overall stress level. Remodeling is still remodeling, but don't, people, don't fall into this trap of, well, change orders are Kyle, like you we open up the walls and we find things. Of course, yes, that will always be the case. But don't slip your change order that you should have never had if you had a properly done design development. Don't tie those two things together. Yes, there are things that will pop up, but make sure you start getting ticked off about change orders. You start getting ticked off that we don't have the finalized tile. And now all of a sudden they're selecting a different tile because even though they selected that one at the last minute, now you ordered it and it's back ordered. Who looks like the fool? You look like the fool. You're the one getting, you know, sitting there going, crap, can I put my full margin on this? Because they're already kind of ticked about having to choose this.

Audra: Yes.

Kyle: Now all of a sudden we're playing defense. We're on our heels. No, no, no, no. Do what Audra's describing

Audra: It's the worst.

Kyle: here.

Audra: Yep. It it has helped us. it has helped us tremendously. It and I think that's the other thing. I'm using that heavily in my sales and my marketing now, this, you know, this two percent number. And it is, and I emphasize it with my clients. I show them throughout the process. Hey, look, we had a one point four million dollar budget on your on your project, and we're almost done, and you have twelve thousand dollars in change orders. That's remarkable. That we should celebrate that, you know?

Kyle: Mm-hmm. Mm-hmm.

Audra: And and they go, yeah, you're right. I mean twelve G's is twelve G's, but on a one point four million dollar project to only have twelve thousand

Kyle: Very small.

Audra: dollars in discretionary scope differences, you know, and they were things like, I forgot I hate bifolds. I didn't notice that you had bifolds on, you know, in two of these rooms. I want them to be okay, well, we already ordered them, sorry, but yeah, if you want to change them now, we can okay. Th twelve hundred dollar change orders on a on a million dollar job is very palatable, but I emphasize it to my clients and then I emphasize it to my prospects. So when my prospects call my clients, this comes up in the conversation because it's

Kyle: Yes.

Audra: important. It's something that a lot of other renovators are not providing.

Kyle: Two two things I heard there. One, when my prospects call my clients. How a lot of people aren't doing much of that. And I think especially especially that just said add effects using hand gestures. Evidently I just did something that prompted Riverside to go, Do you want some reac well to play with that? Cassie, please make a note. Turn on reactions to express yourself with hand gestures during a video call. Interesting technology.

Audra: Don't know if that's a good idea, Kyle. That that might

Kyle: I don't know, maybe it is. It just popped up and it literally took over my screen. So it distracted me. But that idea of, hey, don't be shy about connecting some of your wonderful clients with some of your prospects. Don't be shy about being a little weird and asking that client who you did that full first floor remodel for in a very similar high-rise condo as an example, and asking if they might be able to, if you might be able to bring a prospect over, talk about some no-like and trust building. That would be that would be huge. and then I had a second thing that I was gonna comment on, but the hand gesture thing threw me off. also here's my talking point of the day. In this AI age where we think that we're gonna automate this and add effects using hand gestures and this and that, instead of being AI, be analog. Go old school. I just got two handwritten thank you cards in the mail today. I just wrote a piece of content about it. And I I literally caught myself smirking when I went to the mailbox and saw that I had two handwritten I wonder what these are. It was like a gift. I was like, what's going on in here? in this AI age, get more analog. Get more analog. But I digress.

Audra: Yeah. And and I will point out too, you know, we use a lot of AI, we use project management software, all of that, but our our budget roadmap updates are done in a spreadsheet. And it it

Kyle: Hm. Keep it simple.

Audra: doesn't it we've created a format that works for us. It only takes a few minutes to update and it's one of those things we've talked about, should we automate this, should we work it into builder trend? But we really don't need to. You know, we have a process that works and it only takes a few minutes to do and sometimes that's okay too. So

Kyle: Darn right. Darn right. That was a nice, tight, clear, organized podcast. I'm quite proud of us. Quite proud of us. you're the you're the one that brought. Yes. Yeah, and I know,

Audra: Thank you. Me too. Me too. And I'm glad we got to talk about this because it's a good it's a it's a good topic. It's helped me a lot.

Kyle: I know the people will appreciate it because when you shared it with our peer group, I think you shared it at our last in person retreat. I think like when we got the takeaways at the end, they're like, I'm gonna incorporate this budget. Roadmap. I'm going to cover it. And a lot,

Audra: Back in March, yeah.

Kyle: and to their credit, because Ramaler's on the rise, one of their run of the things about being a Ramaler on the Rise is you're an implementer. So if

Audra: Yep.

Kyle: you if you watch this, if you listen to this, and you're like, this would be super helpful on my next project, instead of this murkiness of who's how are the budgets changing? Let me kind of swipe this idea, make it my own, and implement it. Audre, what would you say would be a good way to wrap up this podcast? Maybe you want to emphasize. something that we covered or maybe something else comes to your mind that you'd like to share with your friends in the remote industry.

Audra: Well, one thing that just came to mind as you were describing that, is that one of the things that I've noticed about the budget roadmap specifically is I think in the project development phase, I things feel very abstract and a little bit scary for clients. You know, they've decided to go into this. Usually they've committed to us without a really clear picture of the cost. It takes them out of a competitive bidding situation that most of us know is better for them.

Kyle: Mm-hmm.

Audra: But it may not feel that way to them in the moment. And I think that one of the things that the budget roadmapping does, whether you do it the way that we do it or some other some other version of the same concept, is it takes a lot of these abstract things that you're working with your clients on and puts it in writing and and attaches numbers to it. And that provides this that no like and trust that we're trying to build. It provides some of that because you're really putting, you know, you're putting the pen to paper. which is hard to do in that stage. So I think that a lot of it has to do with actually figuring out these numbers and presenting them. But I think that there's also like a symbolic gesture that's going on here where you as the leader of this project are showing them that you're making commitments, even micro commitments in these,

Kyle: Yeah.

Audra: you know, in these small ways. And it builds

Kyle: Yeah.

Audra: that trust and builds that comfort for them. So when you get to the point that you're ready to start. They really feel like you're on the same page.

Kyle: Yes. And it's interesting because you're not being like somebody said full kimono, like opening up the full kimono. I don't know what that means,

Audra: Yeah.

Kyle: but I think it's like I don't know what it means. but you're being transparent, you're being transparent with things, but you're not like revealing everything. You're just revealing

Audra: Right.

Kyle: some of it and giving them insight. And frankly, a lot of your clients, that's all they really want. Now, some remodelers go full transparency, like boom. You know, you you think of you know Michael Anch's and the and the cost of project execution. You wanna know how much that plumber charges? Bam, there's your number. There's your specific number for that material. And he prices it using the cost of project execution and overhead expenses and net profit. There's a lot of different ways to do this, but we're selling in 2026. We need to be more transparent, maybe just even in this type of way than we were in 2023. And especially when you are Entering into the bigger projects, an 800,000 this, a 600,000 that people need and people desire and they want. And frankly, I think it's very fair for them to want to understand how their dollars are being spent here. That doesn't mean they need to know every nook and cranny. You can choose to do that or choose not to do that. Or you can do what you do, which is a little bit of transparency that gets them to nod their head where they go, that makes sense. I understand it. So Audrey, that was excellent.

Audra: Yeah. And showing showing them the numbers that they actually have the c power to change. I think that that's really what it comes down to, whether it's the materials themselves or the options. But like if you want to change this big number, this is where you get where you have the control. They like that. Everybody likes that. Yep.

Kyle: Yes. Absolutely. Absolutely. we had talked about being done at quarter after, it's eighteen after. because you had an appointment you're going to. What what's the appointment you're going to? Is it a new prospect? Is it presenting? What's the deal?

Audra: no, just regular run-of-the-mill doctor appointment. Yeah, fun times. Yep. Even

Kyle: No. No. Okay. that's great. People, doctor's appointment.

Audra: contractors have to go to doctors sometimes, right? Yes. Totally agree. Thank you. Yes. Thank you so much for having me today. All right, bye.

Kyle Hunt: Thanks for tuning into the Remodelers on the Rise show. Whether you're listening or watching, I appreciate you being here. If this was helpful, make sure you're subscribed so you don't miss the next one. We're putting out new episodes every single week focused on helping you build a better remodeling business with real stories, practical ideas, and things you can actually take and use. If you're on YouTube, hit that like button and turn on notifications so you know when new episodes drop. If you're listening on a podcast app, a five-star review goes a long way and helps more remodelers find the show. We've got great links below or in the show notes where you can connect with us, check out our remodelers community and learn more about our coaching and resources. Appreciate you very much. See you on the next episode.