Not just great service, but a good price as well.
Cost Plus / Open Book vs. Fixed Price – the two “approaches”
Typically, we approach our many different projects using the following two options:
Cost Plus/Open Book:
Using this approach, we will prepare a budget for the specific project. Included in this budget is a pre-determined and fixed management fee. At this stage, we openly present and share all of these figures with the client. As the project proceeds, the client will pay only for all of the direct costs that are directly associated with their project.
Using this approach, and based on the specific plans and specifications, we will prepare a fixed price for the specific project. Certain allowances will be included and any changes or deviations from the initial “plan” will be individually tracked, monitored and invoiced.
When planning your project, be sure to include allowances in your budget and planning. Various situations can contribute to having cost and time over-runs. This list outlines some common considerations:
- Client changes: Changes made to the initial plan or specifications.
- Clients decisions: This is typically a direct reflection of the level of products (features and fixtures, etc…) that the client chooses for their new home. Based on the ultimate products and features that are chosen – the price (as a direct reflection of the budget and of the allowances) can change (both up and down) based on these decisions.
- Unknowns: From time to time, a project will “run into” what we refer to as un-knowns . These vary greatly (from: finding huge rock boulders in the excavation, buried oil tanks, unknown issues that only present themselves after walls are opened up, previous renovations completed incorrectly, knob and tube wiring, faulty plumbing etc.) and can also have an effect on the initial budget.
- Industry related price changes: In today’s robust market, the cost of materials, fixtures, supplies and labour are ever changing. These variables can (and do) most definitely affect almost every budget.