Fixed-fee project

A fixed-fee project is sold at a single agreed price for a defined deliverable, regardless of how many hours the team actually spends. The contract typically lists what is included, what is excluded and how change requests will be handled. Brand identity work, website builds and most production engagements in agencies and studios are sold this way.

Profitability on a fixed-fee project depends entirely on staying inside the hours that were assumed when the price was set. Resource planners track planned hours against booked hours per role each week and flag projects that drift past 70 or 80 percent of budget before they are 70 or 80 percent done. That early warning is what gives producers time to renegotiate scope or absorb the overage on purpose, instead of finding out at delivery.

Related: time and materials, project margin, burn rate.