In my last note, I laid out the problem with hourly billing: it shifts all the risk onto you and has a tenuous connection to outcomes.
So what’s the alternative? Fixed-price projects.
Here’s why they work better for both sides:
- Your risk is capped. You know the cost upfront.
- My incentive is quality and efficiency. If I can deliver a quality solution faster, you get the value sooner and that means progress on your side.
- We’re both focused on outcomes. We’re aligned on what is to be achieved and get to work. Each fixed-price project I do lays that out in a clear “scope of work.”
Think about it: why would you want to pay more for someone to take longer? Slower usually indicates less skilled. And if the person you’re hiring is less skilled… why hire them in the first place?
And in the nonprofit world, slower isn’t just more expensive if you’re paying hourly — it ends up being more painful. A CRM project that drags on distracts staff, irritates your board, delays programs, and pushes off consolidating to a “single source of truth” you were counting on.
Now others will fallback to a pseudo fixed price called an “estimate”. This can sound better but the reality is it’s an educated guess with an hourly cap. Why? Because neither side is quite clear enough on the scope. They both hope it works out.
But this still keeps the risk on you and who you hire can still can escape their responsibility. Essentially you’re taking a good chance of re-entering the negotiation phase part way thru a project; it’s madness.
An estimate is not a fixed price. An estimate is just a decent guess at how many hours something might take. If the hours run over, you pay more. The risk is still on you.
A fixed price is different. It comes from a honest angle of: here’s the outcome, here’s the cost based on my experience — and that number is solid. If I misjudge the effort, that’s on me, not you.
Here’s the deal:
Fixed price aligns us both toward timely delivery and results. If I misjudge scope, that’s my problem, not yours. That’s why fixed pricing creates a win-win: capped risk for you, aligned incentives for me, and outcomes that matter.
So next time you’re thinking about a CRM project, ask yourself: is this an estimate or a fixed price with clear results.