Fixed-Price vs Hourly: How to Contract Development
Budget certainty versus flexibility, and how to get both.
Most people frame this as a choice between budget certainty and flexibility, and then pick the wrong one for the wrong reason. The honest answer is that the best engagements use both: a fixed price for work that is well defined, and time-and-materials for work that is genuinely still being discovered. The skill is knowing which part is which.
Here is how the two compare, and how we structure projects to give you the best of both.
| Fixed-price per phase | Time and materials | |
|---|---|---|
| Budget certainty | High, known per phase | Lower, tracked as you go |
| Flexibility | Change between phases | Change anytime |
| Best when scope is | Well defined | Still being discovered |
| Risk on estimates | Sits with us | Shared, pay for time used |
| Overhead | More upfront scoping | Less upfront, more tracking |
| Best for | Defined milestones and MVPs | Ongoing or evolving work |
When fixed-price fits
Fixed-price per phase works when the scope of that phase is clear: a defined MVP, a redesign, a specific integration. You get a known number and a known deliverable, and the estimating risk sits with us rather than you.
When time and materials fits
Time and materials fits ongoing or evolving work where the requirements will keep changing: long-running product development, maintenance, or anything where locking scope upfront would just force guesses. You pay for the time the work actually takes.
Our honest take
Pick fixed-price for defined work, time and materials for evolving work, and use both across a project. We usually scope the first phase as a fixed price so you start with a known number and a clear deliverable, then move to flexible time for ongoing development. Either way, you get transparent tracking and no surprises. Tell us about your project and we will propose the structure that fits it.
Common questions
Which do you recommend for a first project?
Usually a fixed price for a tightly scoped first phase, such as an MVP or a defined deliverable. You get a known number and a clear result, which is the lowest-risk way to start working together.
How do you avoid surprise costs on time and materials?
We track work transparently, agree a budget and check in against it regularly, and flag anything that would change the number before it does. You stay in control of spend the whole way.
Still weighing it up? Tell us your situation and we will show you the fastest path to a product you are proud of, and how we would build it.
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