Fixed price vs. time and materials: which should you quote?

Two of your customers ask for a quote. One wants a firm number; the other has a fuzzy scope that could change. Bidding both the same way is a recipe for losing money. Here’s how to choose — and protect your margin either way.

When fixed price wins

Fixed price works when the scope is well-defined and you can estimate it confidently. Customers love the certainty, and you keep any efficiency gains. The risk is on you, so pad for the unknowns and write tight assumptions and exclusions.

When time & materials wins

T&M fits open-ended or discovery work — troubleshooting, restoration, or anything behind walls. You’re paid for what you actually do, but customers get nervous without a ceiling, so offer a not-to-exceed cap and clear rates.

Protect yourself either way

• Write explicit assumptions and exclusions — hidden conditions become change orders.
• Use allowances for customer-selected materials so overages are transparent.
• For fixed price, include a contingency line for the unforeseen.

Quote both fast

DoneDeal helps you build an itemized proposal fast — whether you present a firm fixed price or break the work into hourly labor and material line items with clear assumptions. Either way, you can send it and get it signed in minutes from your phone. Try it free.