Earlier quoted context omitted.
This is good advice. I've been freelancing for 7 years. When you're talking with potential clients, it's reasonable to spend an hour or so talking about the project requirements and the client's needs and expectations, not to mention discussing your own background experience, to see if it's a good fit. I might then spend another hour or two looking at the client's specs and putting together an estimate. But I don't d…
Another rule for a small freelancer: Bill hourly. Never accept a fixed-bid contract. These small clients will withhold payment until every last detail meets their desires. Plus, it's NEVER a good enough specification. Also, most clients will change their mind about they want when they start seeing results. Suppose you take a fixed-bid contract that you expect to take a month. You do your month of work and deliver it…
My conclusion is that fixed-price bids are bad only if there is a lot of risk -- in this case, the bid amount was far lower than it should have been, the client was underfunded, etc.
Nowadays, I recommend making fixed-price bids that are large overestimates. I am taking a risk in making a fixed bid, and in return the client gets the surety of a fixed amount. If my fixed bid is supposed to literally be my average expected time times my hourly rate, then there is a 50/50 chance (or likely more depending on the client) I will lose money on the deal!