Myth of the Flat Fee
80beans.com
Myth of the Flat Fee
1–10 of 32 posts
Re: Myth of the Flat Fee
#2This issue is why I'm not a contractor. I can't deal with estimates because they are always wrong. People claim to understand that, then fly off the handle when it comes up wrong.
Overestimating on purpose isn't the right way either, and not just for ethical reasons. Finishing early makes the client think you cheated them, and actually working the whole time makes you think you cheated yourself. Especially if you end up having underestimated after all.
And changes? Ugh. Clients truly don't understand why X is harder than Y, and they think it should cost the same.
I've been pretty successful in the past at guiding management into solutions that are easy to code and maintain, rather than the nightmare they asked for, but having to explain all that to a new client each time would be too much.
Re: Myth of the Flat Fee
#3A shameless plug but still a good read. I agree with this as most stories about "flat fees" often end up with: Well they gathered requirements. Gave us a flat fee. As time went on they started putting more junior developers on the project and the senior ones moved on. Eventually we just decided it's not worth paying them money anymore as code quality is degrading too much (even a non-developer can tell when the bugs creep in).
Re: Myth of the Flat Fee
#4This issue is why I'm not a contractor. I can't deal with estimates because they are always wrong. People claim to understand that, then fly off the handle when it comes up wrong. Overestimating on purpose isn't the right way either, and not just for ethical reasons. Finishing early makes the client think you cheated them, and actually working the whole time makes you think you cheated yourself. Especially if you end…
I completely agree. It's tiresome to repeat yourself over and over, specially when you know it's also in the clients' best interest to not work with someone who guesses (and therefore often overestimates to be on the safe side). I'm hoping our prospective clients will read this blog post first and then -still- want to contact us. They are the gems you want to work with.
Re: Myth of the Flat Fee
#5Amazing how often this happens to even large corporations. Sign a very expensive contract with a supplier at a "flat fixed fee", requirements are never detailed enough and always changing. Much better off paying time and materials or create a partnership where both benefit from the outcome
Re: Myth of the Flat Fee
#6I've got myself stuck in a "fixed price" contract, and while the number of features the client's asked for haven't really increased all that much, the depth of interrelation between those features was not at all apparent up front. Throw in agreeing to migrate existing data in to a new data structure without really understanding the nature and complexity of the existing data, and you've got a recipe for a long-overdue project. No one's happy. :/
Re: Myth of the Flat Fee
#7"Lies, damned lies, and software development estimates:"
http://weblog.raganwald.com/2007/06/which-theory-first-evide...
Re: Myth of the Flat Fee
#8This issue is why I'm not a contractor. I can't deal with estimates because they are always wrong. People claim to understand that, then fly off the handle when it comes up wrong. Overestimating on purpose isn't the right way either, and not just for ethical reasons. Finishing early makes the client think you cheated them, and actually working the whole time makes you think you cheated yourself. Especially if you end…
Personally I wouldn't do flat fee work unless the profit margin was astronomical or there was some other factor that made it heads-I-win, tails-I-win situation (this doesn't mean the client has to lose.)
Some kinds of work are eminently estimatable, if the requirements are stable. One time I was working at a job shop for a client who needed a PHP CRUD app. Because this was built within a framework, I was able to break the requirements down and estimate tasks to within 15 minutes and be able to schedule a week's work with about 10% accuracy.
The one trouble is I'd call up the client and show them what I was doing and she'd talk for 2 hours on the phone (which we'd bill $240 for at our rate) and have an endless list of small and medium-sized tweaks she wanted. Had I not put my foot down, she would have blown the budget and schedule completely. I did put my foot down and she fired our agency.
Fixed fee projects create moral hazard for the client: if you're really good in your sales process you might be able to get 4 out of 5 clients to be reasonable and make a profit on them. If you want to keep the 5th client you'll have them overrun the budget by a large enough factor that you lose what you made on the other 4.
Re: Myth of the Flat Fee
#9I've got myself stuck in a "fixed price" contract, and while the number of features the client's asked for haven't really increased all that much, the depth of interrelation between those features was not at all apparent up front. Throw in agreeing to migrate existing data in to a new data structure without really understanding the nature and complexity of the existing data, and you've got a recipe for a long-overdue…
Oh yeah, you can easily bill a month of full-time work for fixing an old app with a busted data model. After that you reach the place where you can sell a change that takes 30 minutes of work for $150 and really do it in 30 minutes, but getting there is expensive...
Re: Myth of the Flat Fee
#10This issue is why I'm not a contractor. I can't deal with estimates because they are always wrong. People claim to understand that, then fly off the handle when it comes up wrong. Overestimating on purpose isn't the right way either, and not just for ethical reasons. Finishing early makes the client think you cheated them, and actually working the whole time makes you think you cheated yourself. Especially if you end…
I completely agree. It's tiresome to repeat yourself over and over, specially when you know it's also in the clients' best interest to not work with someone who guesses (and therefore often overestimates to be on the safe side). I'm hoping our prospective clients will read this blog post first and then -still- want to contact us. They are the gems you want to work with.
To be fair there definitely are people who get burned several times by eLancers and cut-rate web shops in their town and eventually realize that they get what they pay for.