Revenue Leaks – Episode 4: Not Charging for Change Orders? Here’s What That’s Costing You

Man, I've been there more times than I can count. You finish a job, high-fives all around, and the customer texts you a happy emoji string. Everything felt smooth. Then you pull the final P&L, and bam—your margin's half what you expected. No disasters, no call-backs, just... poof. Where'd it go? Nine times out of ten, it's those little "while you're here" changes that nobody billed. Extra outlet. Pattern flip on the floor. One more vent. They seem like nothing in the heat of the moment, but they add up to real money slipping through your fingers.

This is Revenue Leaks, episode four, and we're zeroing in on change orders. I'm not here to lecture—I've said yes to plenty of these myself back when I was running crews. But after years of watching good jobs turn marginal, I started tracking it. The fix isn't complicated, and it won't piss off customers if you do it right. Let's walk through why it happens, what it really costs, and how to plug the hole without grinding your jobs to a halt.

Why We Let Change Orders Slide

Think back to last Tuesday. Your HVAC guy's up in the attic, ducts half-run, and the homeowner pokes her head in: "Hey, could we add a vent in the office? You're already here." You (or your lead) give the nod. Why? It's quicker than pulling out a form. Keeps the vibe good. Avoids that awkward back-and-forth. And honestly, it feels too small to fight over.

That's the trap. We're wired to keep momentum—tradespeople fix problems, we don't create them. A verbal "sure" feels like goodwill, not a business decision. But here's the rub: that yes never makes it off the site. No photo, no note in the app, no text to the office. Crew finishes, moves to the next job, and assumes it's in the original scope. Meanwhile, your bid's now fiction.

I've seen it worse with multi-crew outfits. One team's all "no problem," another's sticklers. Homeowners get confused, your bookkeeper's scratching her head, and suddenly you're explaining why Job 17 ate it while Job 18 printed money.

The Hidden Costs That Stack Up Fast

These aren't freebies—they're theft from your own pocket, layered across your whole operation. Let me break it down, piece by piece.

Start with labor. That sink move? It's not just 20 minutes—it's pulling tools, recutting pipe, patching the wall, and testing the line. Hours vanish. Materials? Swapping cheap vinyl for something fancier mid-install means you're eating premium stock. Schedules? One delay snowballs—your roofer's late to the next pitch, triggering OT or reschedules that tick off other clients.

Don't get me started on your crew. Top guys hate "free work." It kills morale, makes them feel undervalued. I've had techs quit over it: "Why bust my ass for nothing?" And at closeout? Your bid said 25% margin. Reality? Break-even after all the tweaks.

Do this across 20 jobs a month, and you're not talking pocket change. You're talking enough to hire another hand or buy that new rig you've been eyeing.

Stories from the Trenches

This stuff happens every week. Here's how it plays out in real shops I know.

Flooring guys: Halfway through a big open-concept space, client says, "Rotate the chevron here—it'll flow better." Crew tears out a section, realigns, and glues it back. Extra day of labor, no change order.

HVAC: Ductwork's in, but "one more supply in the bonus room?" Means rebalancing the whole system—blower tweaks, airflow calcs. "No biggie," they say.

Plumbing: Vanity shifts two feet. Reroute drains, vent stack, and supply lines. Drywall dust everywhere. "We'll eat it to stay on schedule."

Roofers spot decking rot next door: "Might as well fix it now." Shingles, felt, flashing—hours up high.

Electricians: Kitchen reno calls for two extra cans. New circuit leg, junction pulls, and inspections. "Minor add."

GCs coordinating it all: Door swings flip, rippling to framing, wires, HVAC returns. Everyone chips in extra, nobody tracks it.

Crews think they're heroes. Clients love the service. Your spreadsheet cries.

What It Does to Your Business Long-Term

Let this fester, and it poisons everything. Customers learn to ask for extras—they start expecting it. "You did it for my neighbor." Next thing, it's baked into negotiations.

With crews, inconsistency kills. Team A bills; Team B doesn't. Disputes pop: "Why'd they charge me $X?" Your data's junk—no clean trends for bidding. Margins swing wildly, 10% one month, 25% the next. You're flying blind.

It trains your people wrong, too. They stop seeing their time as valuable. Turnover spikes. Growth stalls because you're always playing catch-up.

The Back-Office Mess

Peel back the curtain—it's chaos.

Verbal OKs die on site. No docs, no invoice line. No process means foremen override bids solo. Bills come short, write-offs pile up. Customers flip on "surprise" ads: "Nobody told me!"

Fixing It, Jobsite-Style

I've tested this myself—no software mandates, no drama. Just habits that stick.

First, set the table early. Contract or walk-through: "Changes need a quick OK and fair price. Keeps us transparent and on track."

Document like it's your job (it is). Phone pic, note scope/time/parts. Two minutes max.

Approve smart: Anything over a tweak, ping the office. "Add vent? Est. X time/Y materials." Google Sheet or text chain—done in 60 seconds.

Price it real: Time + stuff + your markup. Tell 'em straight: "Extra light: labor + fixture." They get it.

Invoice it clean: Pull approveds into lines. Weekly huddle: "What's repeating? Adjust bids."

Pilot on one crew. Watch leaks vanish. Customers? They trust guys who draw lines clean.

Make It Your Reality

Those "small" changes? They're your revenue. Next time, pause. Snap it. Approve it. Bill it. Margins firm up, crews respect you more, jobs close strong.

Try one step this week. You'll see.

What's your biggest change order headache? Hit the comments—next episode's on you.