The Ruby Freelancers Show 004 – Fixed Bids vs Hourly Work

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    Panel

    Charles Max Wood (twitter github Teach Me To Code Rails Summer Camp)
    Eric Davis (twitter github blog)
    Evan Light (twitter github blog)
    Jeff Schoolcraft (twitter github blog)

    Discussion

    Fixed bid
    Time and materials
    Give a budget to the client
    Scope creep
    Do you renegotiate the contract on scope creep?
    Short fixed bids can help manage costs and risk
    Customer management
    Fixed vs. Hourly is a discussion of risk
    Provide options for a fixed bid
    Multipliers for each unknown
    Risk is added for each new technology added to the stack
    Alan Weiss
    Start up with a courting period and then renegotiate after the courting period
    Shorten the scope of the project
    When you lower your bid, remove features (value) from the bid
    Charge more!

    Picks

    Find a Mastermind or Group of people who do what you do (Chuck)
    Heil PR-40 Microphone (Chuck)
    Other dynamic (Chuck)
    Behringer XENYX (Chuck)
    Roland R-05 (Chuck)
    Resounder (Chuck)
    Adobe Audition (Chuck)
    Million Dollar Consulting (Eric)
    The Consulting Bible (Eric)
    Peepcode Play by Play (Eric)
    Destroy All Software (Eric)
    (anti-pick) iMac Microphone (Evan)
    (anti-pick) Eric Davis' Internet Connection (Evan)
    Math Minute Additions (Jeff)
    Steel City Ruby Conf (Jeff)
    Mass Effect 3 (Jeff)
    Star Wars the Old Republic (Evan)

    Transcript
    CHUCK: Anyway I’ve got to hang up and get off so–

    EVAN: Yeah, whatever.

    ERIC: Yeah you got what you need out of us. I see.

    CHUCK: Yeah exactly.

    EVAN:  At least you kiss us after you f— us.

    JEFF: That has got to be the sound.

    CHUCK: Hey everybody! Welcome back to the Ruby Freelancer Show. On today’s panel we have Eric Davis.

    ERIC: Hello.

    CHUCK: We also have Evan Light.

    EVAN: Hi!

    CHUCK: And we also have Jeff Schoolcraft.

    JEFF: What's up?

    CHUCK: Now we’ve kind of been a quite bunch this morning, so we have to see how the show goes. So we were discussing what we want to talk about and one of the things that somebody brought up (and I’ve been asked a few times) is whether or not to take fixed bids. And I'm pretty sure I know what you guys are going to say, so if anyone wants to chime in and share their opinion on whether fixed bids or hourly, or either one or both are okay, go ahead.

    ERIC:   Well why don’t we start with actually defining what fixed bid is, because I see people say, don’t do fixed bids. But they actually don’t mean the same thing on someone else.

    CHUCK: Okay, so when I say fixed bids, what do you think?

    ERIC: For me, it’s basically a set cost, typically a set of features and then there will typically be like a set deadline which goes wishing by usually.

    CHUCK: Right, and then the other side of the spectrum is every hour I work, you pay me X amount of money right?

    ERIC: Yeah and some people consider that hourly.

    CHUCK: What else would you consider hourly?

    JEFF: Not government based, we will call fixed bid from fixed price and that's all the expenses everything, you are doing for whatever scope the project is, rolls up to some big number.

    And the other to way to do, is time and materials. So, you charge for every minute you work on that project and every pencil you buy or whatever you do to clear it up. But that is the other, I don’t know, vernacular terms I heard for those two billing concepts.

    CHUCK: Right. I want to see you code with a pencil, that would be fun.

    JEFF: Sometimes it will be faster.

    CHUCK: It's easier to debug. You just turn it over and use the eraser right?

    ERIC: Yeah I actually do it lot on index cards, when modelling or whatever, just kind of write stuff on index card. If it's not going to look like it's going to relay just throw the index card away. It’s a lot faster than removing code.

    CHUCK: That's true. That’s kind of an interesting planning phase or I guess modelling phase. And you can do agile, so that you are consistently updating your model as you code.