It's time to rake in the profits with Fixed Priced contracts
Where there is risk, there is reward.
Ubi periculum, ibi praemium - where there is danger there is reward.
A fixed-price contract is basically saying: “Here’s the price. It won’t change. Pinky promise.” For the client, that’s comforting—no surprise invoices lurking in the shadows (though, always read the fine print). For the vendor, it’s a gamble: they take on the risk, so they pad the price with contingency. And don’t expect an hourly breakdown. How they deliver is their business.
When does this work best?
When you control the deliverable.
No pesky third parties to derail you.
The job is straightforward.
Example: At one company, we offered an AS/400 patching service for $15,000 per machine. Sounds hefty, right? But here’s the kicker: our engineer had automated the process so well, the whole job took about two hours. Margin? Over $14,000. Was that gouging? Nope—the client was thrilled because their previous provider billed Time & Materials and blew the budget every time. We gave certainty, they got peace of mind, and our CFO ne…
