When Fixed Pricing Feels Safe (But Isn’t)

A few weeks ago, I sat down with a friend who runs a mid-sized software agency. He’d just wrapped up a fixed-price project for a client.

At first glance, everything seemed perfect:

• The contract? Rock solid.

• The price? Clearly defined.

• The scope? All laid out.

But halfway through the project, the cracks started to show.

The Problem Begins

It started small. The client asked for a new feature. “Just a little addition,” they said. Then another. And another.

By the time they were done, the project scope had ballooned into something completely unrecognizable. But the price? That stayed the same.

My friend tried to manage the changes. He really did. But his hands were tied. The fixed-price contract left no room for flexibility.

And suddenly, he was faced with an impossible choice:

1. Absorb the extra work and take a financial hit.

2. Push back and risk ruining the client relationship.

Both options hurt. By the end of the project, he’d burned through his time, money, and trust—all without turning a profit.

Why Fixed Pricing Feels Safe (But Isn’t)

On paper, fixed pricing sounds like the perfect solution.

- It feels predictable.

- It promises simplicity.

- It gives everyone a sense of control.

But in the real world? Tech projects are rarely predictable.

Scope changes. Requirements shift. Unexpected challenges pop up.

A fixed-price contract locks in costs—but it also locks in your flexibility. And when the project inevitably evolves, you’re stuck with three bad choices:

Cut corners. Absorb the costs. Argue over what’s “in scope.”

That’s not control. That’s chaos.

What Smart Contracts Do Differently

Here’s the truth: no contract can eliminate risks entirely. But the best ones don’t even try.

Instead, they anticipate change and build in processes to handle it. Here’s what a smart contract includes:

1. A Clear Change Order Process

Your contract should outline exactly how scope changes are managed.

How are requests submitted? Who approves them? How do timelines and costs adjust?

When the process is clear, there’s no room for misunderstandings.

2. Flexibility Negotiated Upfront

Be honest with your client from the start: projects evolve. Build in mechanisms to accommodate those changes—like buffer time, additional fees, or flexible milestones.

3. A Shift in Mindset Around Fixed Pricing

Fixed pricing can provide stability, but it shouldn’t trap you. Treat it as a starting point, not a cage. Flexibility and stability aren’t enemies—they’re partners.

What Happens If You Do This

Let’s go back to my friend’s situation, but this time, he’s armed with a solid change order process.

When the client requests a new feature, he doesn’t panic. He simply refers to the contract:

“We can absolutely add this feature. Let’s create a change order to adjust the timeline and budget accordingly.”

The client? They’re on board because the process was outlined from day one. The project adapts smoothly.

And my friend? He gets paid for the extra work. No stress. No resentment. No financial loss.

Final Thoughts

Fixed pricing isn’t the enemy. But it’s not a foolproof strategy, either. The best contracts strike a balance: they offer cost stability and room for adjustments.

By planning for change upfront, you protect your business from surprises—and keep your clients happy. In the unpredictable world of tech projects, flexibility isn’t a luxury.

It’s important.

Btw you need my help with drafting custom contracts for your high-ticket projects, then reply "Contract".

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