Fixed Bid Contracts Rule the Universe

A lot of freelancers and consultants use fixed bid contracts. So much that they rule the consulting universe. (video below)

Your customers likes your work, but doesn’t quite trust the duration and cost of the project. They want assurances that the cost won’t exceed a limit they feel comfortable with. That’s natural. Once you establish a working relationship, the need for fixed bid contracts may go away. But until then, you agree to a single price for the project.

And once you have arrived at a the fixed price, you might ask for a starting payment. That discussion naturally leads to milestone payments. The conversation leads to something like this. “How about a quarter upon signing, and a quarter in the middle, and then one big payment of one-half at the end?” To which you reply, “How about one-third, one-third, and one-third.” “Done.”

This little video may inspire you to try milestone billing for yourself.