Fixed Price Billing

Time and Management Billing

VS

Financial ROM Charts for Classic Car Restoration

FIXED PRICE MODEL

TIME AND MATERIALS

Requirements are detailed from the beginning.

SCOPE

There's an estimate of which requirements will be covered.

The provider takes big risks regarding rentability.

RISK

The client has more uncertainty regarding budget.

Respecting the scope and avoiding changes.

PROJECT MANAGERS PRIORITES

Adding more value on every sprint.

It's hard to adapt to unexpected challenges, and the process is bureaucratic.

FLEXIBILITY

Easy and flexible. A lot of adaptability to changes and challenges.

The team delivers exactly what the client asked for, not necessarily what was needed.

DELIVERABLES

Deliverables might be adapted because of insights provided during the project.

Might feel tense when it comes to unexpected situations.

RELATIONSHIP

Partnership spirit. Full involvement in every stage to provide the best results.

Respecting the scope and avoiding changes.

UPDATES

Adding more value on every sprint.

Known cost + backup from the provider to avoid risks.

FINAL COST

It is unknown in the beginning but can adapt to a budget.

It takes time to scope precisely.

TIME TO START

Ability to start right away.

Time and Materials VS. Fixed Price

Fixed Price

Time and Materials

Being certain about the cost.

Higher cost of the project

Established deadlines

Worse response to changing conditions

No need to control the process

Longer preparations

High flexibility to changing requirements

Lower control over the budget

Faster project start and dynamic decision-making process

Need for being much more involved

Better control overt the project

Uncertainty when it comes to the timeline

PROS

flexible approach to changes
high chance to create a marketable product,
earlier start to the project,
more control over the development process,
easier product optimization.

PROS

full control over the budget,
no need for client's active involvement,
more control over the timeline.

CONS

chance that the overall budget would be higher than the estimated cost,
high involvement of a client,
hard to plan the deadlines.

CONS

no flexibility in reaction to changes,
higher risk of creating a product with a little market demand,
sticking to a timeline/fixed budget can compromise the quality,
no room for optimization,
later start of the development,
risk of higher cost of the project.