[thelist] Fixed Cost Estimations

Geoff Sheridan retrocool at gmail.com
Thu Jul 21 07:35:39 CDT 2011

If you tell your client that your quote is up to 4x off, she will not only not 
like your fixed price, she may be very suspicious of your estimate too, and in 
my view rightly so. You are also saying that in order to work to a fixed fee you 
take the worst case scenario and use that, but if you do more than one fixed fee 
job you should be able to share the risk among your clients.
If there is a cone of uncertainty, even your original hourly estimates should be 
higher to account for this, shouldn't they?


On 21/07/2011 13:15, Fred Jones wrote:
> In response to the recent thread about T&M vs Fixed Fee, I have a question.
> First I will note that I never had a Materials cost, just a Time
> one--all I do is make web sites. :)
> Anyhow, I think everyone knows about the "Cone of Uncertainty" which
> means that my estimate today, before the job begins, is up to 4x off.
> Therefore it would appear to me that if I do fixed fee, I would charge
> my hourly rate times my estimate times FOUR.
> An older developer (a friend of mine) told me the same thing once--he
> said to multiply by between 2 and 5 if I do fixed fee. Is that what
> people do?
> I have someone just now who is asking about a fixed fee for a site
> rebuild. I told her that I would *probably* be willing to do it for 4
> times my estimate.
> Just checking in with thelist about this however :)
> Thanks,
> Fred

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