Entrepreneur
Article
By Andrew Neitlich

When do you give fixed bid?

By Andrew Neitlich

On larger projects, and especially those with fairly un-savvy clients (technologically speaking), it makes sense to go with time and materials bid.

But there are times to give a fixed bid:

– Simple projects where it is easy to estimate time and materials, and there is little risk of conflict over scope or the definition of “done.”

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– Projects when you want to get a foot in the door and show what you can do, even if you may only break even (e.g. client could be very valuable long term). Best to do this on small, niche projects.

– When you have packaged your solution in a repeatable way, and so know what you need to spend to provide results.

– When certain audiences demand it. For instance, many construction firms are used to providing fixed bids, and insist that certain IT vendors do same. But here, you have to be darn sure you know what you are getting into before you go after that kind of market.

Do you agree or disagree?

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