As long as there have been projects, they have found ways to be delayed for a variety of reasons. Some reasons are mundane, some reasons are ridiculous, and some reasons seem downright offensive. Yet when you get into it, most delays come down to one simple reason—funding!
It may not have been the obvious reason behind your last project’s delay, but trust me, it was. Unfortunately, there is rarely a reason for a project to be delayed that ultimately can’t be rectified with money. Electrical not ready? Hire more electricians. Products not arriving on time? Drop-ship it overnight. Building inspectors won’t sign off on the build and hand over the keys? Well actually, money won’t help this problem, because that would entail bribery. Seriously, don’t bribe people; you’ll go to jail. But just about every other delay can be rectified with more funding thrown at your project.
Funding delays are just that: delays. They are just like any other impedance; they have no special powers just because they involve money. It just means you have to find a way to turn those funding delays into opportunities to not only get and keep the project, but to ensure that project is making you money. Most people view funding delays as situations where their projects get downsized and profit margins shrink, until they are taking the project strictly as a make-work situation that keeps your people in the field. I, on the other hand, like to use these funding delays as opportunities to up-sell and increase our profit margin. Before you attempt to upset a project that’s been delayed due to funding, first you must analyze how you’ve got into this situation in the first place. What was the cause for your projects funding delay? Without that knowledge you won’t get anywhere. In my experience, there are a couple of issues that typically cause funding delays.
This one is really a kicker. If your client doesn’t have the budget to complete the project at time of signing, it’s quite possible that they never did. This may lead to a bigger issue in your company’s procedures, which we don’t have time to address right now. But don’t let that discourage you; just because they don’t have the funding for the project you initially proposed, doesn’t mean that they don’t have funding for a slightly more cost-effective project that still fulfills the desired end results. If your client decides against your initial project due to insufficient funds, but you then provide a cost-effective solution that your client can green light—you’ve now sold a project you had just lost! Making some money is always better then making no money.
Expectations are a fickle beast: manage them incorrectly, and you can get into big trouble. Exceed expectations, and you’ll usually get more business then you can handle. When it comes to your clients’ expectations and how those expectations relate to their budget, is where the fun begins. We’ve all had those clients that have more than enough funding for their projects, but their expectations exceed the projects scope. It happens all the time; then it falls onto us as integrators to attempt to meet the clients’ expectations without increasing their budgets. This is usually when the funding delay begins. In situations such as this, it becomes imperative to manage our clients’ expectations and to do everything in our power to ensure that our clients’ expectations are inline with their budgets to alleviate the chance of funding delay. When we work with our clients throughout the project, we can help them stay on track and keep our project on the go.
Change orders can be the difference between getting paid and your project losing funding. Every job has them, and the best-managed companies are able to track and properly bill for these change orders effectively. The key to keeping change orders from delaying your projects’ funding is to have a policy in place that is clearly outlined in your proposals and a contingency fund built into your scope to cover unexpected changes. Personally, we like to have a small percentage that scales depending on the project type and scope, to ensure that we’re covered for minor change orders that are bound to come up. We always know that problems will come up, and keeping your clients abreast of changes as they happen ensures that your clients aren’t met with large, unexpected, additional billings that delay your projects’ funding. By building an allowance in, you’re already ahead of the game and solving funding delays even before they happen.
This goes hand in hand with change orders, but unexpected expenses usually become the biggest contributing factor to funding delays in a well-planned project. Many times these expenses come from completely unrelated issues that aren’t covered by your scope of work in any way. We recently had a project for a major hotel property that encountered such an issue. The issue that arose indirectly affected us, but wasn’t a part of our scope. Due to this situation, we had a complete work stoppage that threatened to significantly delay our project. The work that was required to allow us to continue our project normally went through another channel. But by working with the project managers, we were able to decrease their costs of the unexpected issue by expanding our scope to include rectifying the issue. This savings allowed there to be no funding delays on the project, as we were already approved contractors for this project, and it meant that our actual billings increased, yet it saved them money in the long run. Sure, it added some additional paperwork, but we came out with higher billings and a higher profit margin.
- I never like when projects are delayed due to funding, but many times there are ways in which you can take a funding delay challenge and turn it into a profitable experience. And yet, sometimes your project will be delayed due to funding that can only be resolved in time. But don’t let that discourage you from doing everything in your power to alleviate funding delays wherever possible.
Matt D. Scott is the president and founder of OMEGA Audio Video, in London, Ontario, Canada. Scott had his first encounter with pro audio at age six when a PA loudspeaker fell, cracking his head, and leaving a scar to this day. After mopping up the blood, Scott started his AV career and has been working in pro AV, commercial AV, and residential AV ever since. Scott loves the industry and all things tech! A self-professed tech-head, Scott shares his opinions on social media, local radio, omegaaudiovideo.com, mattdscott.com, and through various publications. Follow him on Twitter @mattdscott.