Be Wary of Time and Materials

Written by on May 7 2009

Be cautious when hiring a firm that charges by the hour (time and materials) rather than a fixed price. It is too easy to lose track of the budget and wind up paying A LOT more than the original estimate. Even the best firms, with the best intentions, can run into situations where things take longer than anticipated. There is no way around that risk if you are paying hourly. We have seen many projects come to us where the previous developers have used more money than they originally estimated to produce less functionality. Often, hourly goes so far over budget because it is too easy for the developer to say “we’re almost done” and be in that almost done phase for a long time. A good, trusting client will believe that for a long time, in for a penny in for a pound.

At Less we only charge hourly when we are taking over a project that someone else has started. For all new development we charge a fixed price. We have never gone over budget when the scope of the project has remained the same. Never. Not once. One way we achieve this is by breaking down large projects into two week iterations and having a fixed price on each iteration. Sometimes we’ll plan several iterations and price each one, changing the scope of each as needed when we get there. This way the client always knows where they are at and can plan their budget. After any iteration, the client can reassess our performance and decide to stick with us or walk away. By lowering project risk in this way, we build strong, trusting relationships with clients and have a much higher likelihood of project success.

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Steven

Hi I'm Steven,

I wrote the article you're reading... I lead the developers, write music, used to race motorcycles, and help clients find the right features to build on their product.

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