Fixed-price development

In short

• A fixed price is one total for a written scope, agreed before the work starts.
• It moves the risk of overruns to the studio, so the scope has to be clear enough to price.
• Changes still happen. A written change process decides how they are priced and approved.
• Time and materials suits work that cannot be defined yet, such as early research or a product whose direction shifts weekly.

Also called: Fixed-price contract, Fixed-bid project, Fixed-fee software development.

How fixed-price development works

The client and the studio agree on a scope of work that says what will be delivered, on which platforms, by when, and what is left out. The studio prices that scope as one total, usually paid in stages. If the work takes longer than the studio estimated, the studio absorbs the extra time. If the client asks for something outside the scope, it goes through a change process and is priced on its own.

The model works because both sides commit to the same written document. A price is only as fixed as the scope behind it is clear.

When Choie scopes a project, that document lists the deliverables, dates, price, and payment split, and it arrives with a fixed price within two days of a 30-minute intro call.

Fixed price vs time and materials

Under time and materials, you pay an hourly or daily rate for the time the team spends, plus any costs such as software licenses. You know the rate in advance and the total only at the end.

Pros and cons for each side

For the client, a fixed price gives certainty. You know the number before you commit, you can plan funding around it, and the studio has a reason to work efficiently. The cost of that certainty is less room to change your mind mid-project without a conversation about price. A studio may also add some margin to cover the risk it takes on.

For the studio, a fixed price rewards good estimating and efficient delivery. It also means eating any overrun, so a studio that estimates badly will either pad its quotes or argue about every small change. Time and materials reverses both. The client takes on the overrun risk, and the studio is paid for every hour, including the ones spent on detours.

What makes a fixed price work

• A written scope both sides have read. Deliverables, platforms, workflows, and timeline in plain language.
• Named exclusions. What is out of scope matters as much as what is in, because that is where most disputes start.
• Acceptance criteria. An agreed test for when a deliverable is done, so the final payment is not a matter of opinion.
• A change process. New ideas are written up, priced, and approved before anyone builds them.
• Visible progress. Regular working builds let the client spot a misunderstanding in week two, while it is still cheap to fix.

Choie's builds follow this pattern. A new live link goes out every Friday for the client to use, and payment comes in three steps: at the start, at design sign-off, and at launch.

When time and materials is the better fit

Some work cannot be scoped honestly yet. Early product discovery, research into an unfamiliar technology, rescuing a codebase whose problems are unknown, and long-running product work with shifting priorities all suit hourly or monthly billing better.

A common approach is to split the work. A short, paid discovery or prototype phase answers the open questions, and the build that follows can then have a fixed price. This is often the most sensible route for an MVP.

Choie splits the work the same way. Its one-week coded prototype is a fixed $4,900, credited in full to a build that starts within 60 days, and ongoing product work is a monthly engagement that can be canceled any time, effective at the end of the paid month. See pricing and how a project runs.

Common questions