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The better way? Time & materials.. Fixed quotes work for well defined scope and mitigated unknowns. When things aren't static, when there are too many unknowns

The better way? Time & materials.. Fixed quotes work for well defined scope and mitigated unknowns. When things aren't static, when there are too many unknowns, risk (in giving a fixed price) increase, often significantly. I've seen plenty of solo-ists and agencies give the client the price they wanted and then go well into to red trying to deliver. An alternative is to be heavy-handed in your estimate. Eye it up and 2x it, or 3x it.

Etheryte 3y ago
Seconding this, the only reasonable way to do this business is either fixed money or fixed output, you can't have both at the same time. You can give estimates, yes, but be very clear that this is an estimate, not a binding offer. If you're selling fixed money and fixed output at the same time you're always bidding against yourself.
spatley 3y ago
I disagree on T&M. Billing by the hour penalizes those that have developed the patterns and skills to go faster. Fixed price is the only way to be better than the other firm and have that lead to an advantage on your bottom line.
- LaundroMat 3y ago
  Seconded. T&M leads to unproductive discussions, like when you had to try out different libraries to get the job done. The client can easily ask why you didn't know library X was the best candidate before you spent time they pay for to investigate.
  - chiefalchemist 3y ago
    Well, if it were fixed price you'd eat that discovery, correct? T&M doesn't stop you from not billing for something. Again, the question was: There are too many unknowns. The answer is T&M. Btw, they can be combined. Fixed price on the knowns, and T&M on the unknowns. Put it this way, I've seen 5x more fixed price projects go sideways than T&M. That's how bespoke work works best.
- chiefalchemist 3y ago
  Not really. If you're worth more you charge more. There's a reason a trans-Atlantic ticket on the Concord cost more. Hint: It wasn't because the food was better. To get in a price battle with another bottom feeder for a project with too many unknowns (and likely a client with higher-than-budget expectations) is a classic fool's errand. We all know the rule: Fast. Cheap. Right. Pick two.

Etheryte 3y ago

Seconding this, the only reasonable way to do this business is either fixed money or fixed output, you can't have both at the same time. You can give estimates, yes, but be very clear that this is an estimate, not a binding offer. If you're selling fixed money and fixed output at the same time you're always bidding against yourself.

spatley 3y ago

I disagree on T&M. Billing by the hour penalizes those that have developed the patterns and skills to go faster. Fixed price is the only way to be better than the other firm and have that lead to an advantage on your bottom line.

LaundroMat 3y ago
Seconded. T&M leads to unproductive discussions, like when you had to try out different libraries to get the job done. The client can easily ask why you didn't know library X was the best candidate before you spent time they pay for to investigate.
- chiefalchemist 3y ago
  Well, if it were fixed price you'd eat that discovery, correct? T&M doesn't stop you from not billing for something. Again, the question was: There are too many unknowns. The answer is T&M. Btw, they can be combined. Fixed price on the knowns, and T&M on the unknowns. Put it this way, I've seen 5x more fixed price projects go sideways than T&M. That's how bespoke work works best.
chiefalchemist 3y ago
Not really. If you're worth more you charge more. There's a reason a trans-Atlantic ticket on the Concord cost more. Hint: It wasn't because the food was better. To get in a price battle with another bottom feeder for a project with too many unknowns (and likely a client with higher-than-budget expectations) is a classic fool's errand. We all know the rule: Fast. Cheap. Right. Pick two.