Fixed-fee

A fixed-fee arrangement, also known as a flat fee, is a payment structure where a predetermined, unchanging amount is charged for a specific service or project, regardless of the actual time or resources expended. This contrasts with hourly rates or cost-plus models. The fixed-fee model offers clients predictability in costs and simplifies budgeting, but it requires careful scoping of the project to avoid scope creep and ensure profitability for the service provider.

Fixed-fee meaning with examples

• The law firm quoted a fixed-fee of $5,000 for drafting the will and related documents, providing the client with cost certainty upfront. The client liked that the fixed-fee meant that the client would not pay hourly rates regardless of how long it took.
• Our website design package includes a fixed-fee of $10,000, encompassing the design, development, and initial content population, making it easy for small businesses to budget their online presence.
• The consulting firm charges a fixed-fee of $25,000 to conduct a market research study, presenting the findings in a comprehensive report at the end of the study. The fixed-fee was preferred over hourly rates for certainty.
• The software implementation project was structured with a fixed-fee of $50,000, this was designed to encourage timely delivery and prevent cost overruns. The project was completed within budget.
• A home renovation company offered a fixed-fee quote of $30,000 for remodeling the kitchen, providing the homeowner with a guaranteed price despite potential unforeseen issues that often arise in renovations.