Fixed price vs time and materials: which one to sign

Fixed price means you agree the cost before work starts, and the studio carries the risk of it taking longer. Time and materials means you pay for the hours actually worked, and you carry that risk. Neither is wrong. The right one depends on how well the work can be defined before it begins.

We work on fixed price. Here is why, and when the other model is the better choice.

Time and materials: when it fits

You pay an hourly or daily rate for the time spent. It works well when:

• The work can't be defined up front, such as open-ended research or exploratory prototyping.
• You have your own product lead directing the team day to day.
• The engagement is ongoing capacity rather than a product with an end.

The catch is that the estimate isn't the price. If the work takes twice as long, you pay twice as much, and you often find out late. A time and materials contract needs a cap, weekly reporting against it, and someone on your side watching the hours.

Fixed price: when it fits

You agree a single price for a defined scope. It works well when:

• The outcome can be written down: a website, an MVP's core journey, a launch film.
• You have a budget that can't move, which describes most founders before Series A.
• You want to compare quotes on the same basis.

The catch is change. A fixed price only holds for the scope it was written against. Studios that pretend otherwise either pad the price to cover surprises or quietly cut corners to absorb them.

Who carries the risk

	Fixed price	Time and materials
Work takes longer than planned	The studio	You
You change the scope	Priced as a change	Absorbed into hours
You know the total up front	Yes	No, only an estimate
Flexibility mid-project	Through change entries	Built in

How we make fixed price work

The weak point of fixed price is scope change, so that is where our process is strictest:

• The price is named in writing before work begins. The proposal holds a written brief, a watch-by-watch plan and the price.
• Changes are logged, not absorbed. Anything outside the brief becomes a change entry with its cost and time, approved by you before we start it.
• You see progress every Friday. A working build at a preview link and a log entry for every project, so a slipping week is visible in a week, not at the invoice.
• Payment follows the work. 50% commitment to open the log, 30% at the midpoint watch, 20% when it ships. Starter Builds are 50% to start and 50% on delivery.

Which one should you sign?

• If you can describe the finished thing in a page, sign fixed price, and ask how changes are handled before you do.
• If you can't describe it yet, buy a small fixed-price discovery first (for us, a Starter Build from $1,500) and fix the price of the rest once the scope is clear.
• If you need ongoing capacity with your own lead directing it, time and materials with a cap is the honest model.

For a fixed price on your project, book a scoping call. You get the brief and the price in writing within three working days of the call.