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    <p>Per-hour is generally lower risk for you, because slippage and feature-creep therefore become the client's problem.</p> <p>On the other hand, it is generally much easier to negotiate a fixed-cost project with clients: far lower risk to them, and they don't need to think about how to figure out whether you really are working those hours you are claiming or just answering StackOverflow questions :-P</p> <p>If you have to compete with other people for the project, fixed-cost tends to be more competitive, but riskier. You might end up taking ten times as long as you estimated to complete the project...</p> <p>Fixed-cost does have one major advantage for you though: flexibility. What if the project only takes you 1 hour, and you billed a fixed-cost for ten hours? You've just earned yourself 9 hours to browse StackOverflow at your leisure. or put it another way: you no longer are under any obligation to account for your movements or actions, or log your hours, or not to chat to people in googletalk or whatever whilst you're working. Which is rather nice I feel...</p> <p>As far as 'per page' or whatever... more generally, I would try to divide the project into smallish chunks, with specific technically objective measures at each point, and get the client to sign-off and pay for those chunks as you complete them. That way there are few surprises, for you and the client. The client gets a warm and fuzzy feeling that you're working on things and progressing in a timely manner: he/she can see that, it's fairly transparent. You in your turn get a similar reassurance that the client is not just going to run off with the code at the end, since the client is paying in small amounts along the way. Finally, if you find that you're over or underestimating the time, you have some leeway to revise them somewhat for later chunks, via negotiations with the client of course, but the situation is fairly transparent for both of you. It's not like you work for months and then realize actually it will take years...</p> <p>Summary:</p> <ul> <li>fixed cost is riskier but gives you more flexibility, and tends to be much more competitive</li> <li>per-hour is low-risk, but, not as exciting: there is no direct reward for coding quickly, and you're under the obligation to make time-sheets, not do anything except work during those times, and so on</li> <li>for fixed-cost, to keep risks low, and the client happy, breaking the project into smaller chunks lets the client see that work is progressing, and means that you can bill the client as you go along, rather than presenting a huge bill at the end, and the stress and risk associated with that</li> </ul>
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