Guide

Fixed-price development: what can honestly be fixed.

Fixed-price product development means agreeing the cost before the work starts, so there is no overrun risk on the parts that can be known. The honest truth is that not everything can be fixed: planning and well-understood delivery can be, but genuine research and development cannot be priced with certainty without either padding the number or hiding the risk. Good fixed-price work is about being clear on which is which, and often more can be fixed than people expect.

Three ways to price a build

Fixed price, time-and-materials, or day rate.

	Fixed price	Time-and-materials	Day rate
Who carries overrun risk	The studio. You pay the agreed number.	You. Overruns are billed.	You. Every extra day is charged.
Cost certainty	High on what is known, honest about what is not.	Low until the work is done.	Low, scales with time taken.
Flexibility	Scoped up front, changes are re-agreed.	High, change as you go.	High, direct as you go.
What it suits	Planning and well-understood delivery.	Genuinely exploratory or shifting work.	Short bursts and extra capacity.
Where it goes wrong	Padded or corner-cut if forced onto true unknowns.	Open-ended cost, weak incentive to finish.	No cap, no accountability for the outcome.

In short: fixed price puts the overrun risk on the studio for the parts that can be known; time-and-materials suits genuinely exploratory work; day rate buys extra hands without a cap. The honest approach fixes what can be fixed and is straight about the rest.

When fixed price is wrong

Fixed price is the wrong model for genuinely exploratory R&D. Any firm that offers a fixed price on truly uncertain work is either padding the number heavily or planning to cut corners when it runs over. If your project is mostly unknowns, time-and-materials with honest checkpoints protects you better.

We will fix what can honestly be fixed and be straight about the rest, rather than quote a comforting number we cannot stand behind.

FAQ

Questions, answered.

The known parts can be. Planning and the first stretch of well-understood delivery can be fixed with confidence. Where a product contains genuine unknowns, those parts cannot honestly be fixed without padding the number or planning to cut corners. Good fixed-price work is clear about which is which, and often more can be fixed than people expect.

On the fixed parts, an overrun is the studio's risk, not yours, because the price was agreed before the work started. That is the point of fixing what can be fixed: you carry no overrun risk on the part anyone could be sure of.

Because any firm that offers a fixed price on truly uncertain work is either padding the number heavily or planning to cut corners when it runs over. For genuine R&D, time-and-materials with honest checkpoints protects you better. We fix what can honestly be fixed and are straight about the rest, rather than quote a comforting number we cannot stand behind.

Where next

See how we price a build.

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