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Marketing

Fixed Price vs Time and Material

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Wondering what will the price of the project that you entrust to the agency depends on? Graphic designers use different methods to calculate the cost of their work. Read what are the methods Fixed Price and Time and Material.

Fixed Price, or a fixed price

The Fixed Price method is to determine a fixed amount for the entire project and to determine the scope and schedule of the designers’ work. The price offered by the agency will be the result of the analysis of your needs and the amount of time designers will spend on completing the task.

Such a method of accounting for the work done seems the most reasonable – after all, the client knows the price for the service in advance. It is worth bearing in mind, however, that with Fixed Price the amount given by the agency is usually counted “uphill“. It has its justification: taking into account the surplus, the agencies protect themselves against unforeseen obstacles and problems at work (and this happens quite often). When deciding on this method, one must also take into account that if the specification was not prepared properly at the very beginning, any change during the project will mean a price increase.

Time and Material, or current control over the project

When settling using the Time and Material method, you will not know the price of the entire project at first. This method will give you the opportunity to control its course at every stage, and you will pay the agency for the work done in the period you verified.

In this case, the designers do not rely solely on the guidelines received at the beginning, but they take into account the ordering party’s suggestions, thanks to which key decisions regarding the development of the project are made on a regular basis. In Time and Material, all changes and patches are not as expensive and time-consuming as in the case of Fixed Price. However, if the client does not know exactly what he is expecting, and there is a problem with the confidence of the designers – there is a problem and unnecessary costs.

Which method is better?

It depends. The Fixed Price method will work great if you are sure that you have precisely defined your project requirements, and for this, you prefer to entrust the implementation to specialists from the beginning to the end. Time and Material, in turn, will be a better choice if your project is complex and it is difficult to define it at the very beginning. If you are able to give the agency constructive feedback at any stage of the project, you can easily choose this method of valuation.

Fixed Price Time and Material
– a precisely defined final shape of the project
– checked or recommended agency
– no possibility of control over the project on the part of the client
– difficulty in precisely defining the shape of the project
– the possibility of ongoing verification of the work progress by the client

Or maybe both?

Some agencies – including us – use the combination of both methods to account for projects. To the agreed stage, the project is valued based on the Fixed Price method, while with additional ideas and further development of the project, we use the Time and Material method.

If you have questions about the above methods or would like to quote your project – write or call us. We will be happy to answer all your questions.

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