Fixed Cost Websites vs. Pay-Per-Hour: Which Is Smarter?

I've worked with both pricing models. I've seen clients get burned by hourly billing that spirals out of control. I've also seen clients get locked into fixed-price contracts that don't fit their needs.

After managing dozens of projects with both models, here's what I've learned: for most businesses, fixed-cost websites are smarter. But not always. Here's when each works, and why.

The Hourly Billing Problem (And Why It Hurts You)

Let me tell you about a client I had last year. They hired an agency with hourly billing. The estimate was €5,000 (40 hours at €125/hour). The final bill was €12,000 (96 hours).

What happened? Scope creep. Change requests. "Small" additions that added up. The agency wasn't malicious—they were just billing for time, not results. Every change, every question, every revision added hours.

The client was stuck. They'd already invested time and money. They couldn't walk away. They had to pay.

That's the hourly billing problem: you're paying for time, not results. And time always expands to fill the budget.

Why Hourly Billing Creates Bad Incentives

Hourly billing creates misaligned incentives:

For the agency:

• More hours = more money
• Fast work = less money
• Efficiency = less money
• Problems = more money (fixing things)

For you:

• Every change costs money
• Questions cost money
• Revisions cost money
• Problems cost money

The agency is incentivized to work slowly, add hours, and create problems. You're incentivized to avoid changes, skip questions, and accept problems.

That's not a partnership. That's a conflict of interest.

The Fixed-Cost Advantage: Aligned Incentives

Fixed-cost websites create aligned incentives:

For the agency:

• Fast work = same money (more profit)
• Efficiency = same money (more profit)
• Quality = same money (fewer problems)
• Results = same money (happy clients)

For you:

• Changes are included (within scope)
• Questions are free (part of the process)
• Revisions are included (within reason)
• Problems are fixed (part of the guarantee)

The agency is incentivized to work fast, be efficient, deliver quality, and solve problems. You're incentivized to communicate clearly, provide feedback, and work together.

That's a partnership.

Real Cost Comparison: The Numbers

Let me show you real numbers from actual projects:

Fixed-Cost Example

Project: 5-page marketing website Fixed price: €5,000 Timeline: 7 days Final cost: €5,000 Result: Delivered on time, on budget, no surprises

Hourly Example

Project: Same 5-page marketing website Estimate: €5,000 (40 hours at €125/hour) Timeline: "2-3 weeks" (vague) Actual hours: 72 hours Final cost: €9,000 Result: Delivered late, over budget, lots of surprises

The difference: Fixed-cost saved €4,000 and delivered faster.

When Hourly Billing Makes Sense (Rarely)

Hourly billing makes sense in specific situations:

1. Unclear scope:

• You don't know what you need
• You're exploring options
• You need discovery work

2. Ongoing work:

• Maintenance contracts
• Continuous development
• Support services

3. Very flexible timeline:

• No deadline pressure
• Iterative development
• Continuous changes

4. Research projects:

• Technology exploration
• Proof of concepts
• Experimental work

For most website projects, these don't apply. You know what you need (a website), you have a timeline (you want it soon), and you want a fixed scope (what you agreed to).

When Fixed-Cost Makes Sense (Most of the Time)

Fixed-cost makes sense for most projects:

1. Clear scope:

• You know what you need
• Requirements are defined
• Deliverables are clear

2. Timeline matters:

• You have a deadline
• You want it fast
• Time is important

3. Budget protection:

• You have a budget
• You need predictability
• You can't afford surprises

4. Standard projects:

• Marketing websites
• E-commerce sites
• Business applications

For most website projects, fixed-cost is smarter. You get predictability, aligned incentives, and better results.

The Scope Protection: Why It Matters

Fixed-cost contracts include scope protection:

What's included:

• Defined features
• Agreed deliverables
• Standard revisions
• Basic support

What's not included:

• Major scope changes
• Additional features
• Extensive revisions
• Ongoing maintenance (usually separate)

Change process:

• Changes are quoted separately
• You decide before work starts
• No surprise bills
• Transparent pricing

Hourly billing has no scope protection. Every change adds hours. Every question adds hours. Every problem adds hours.

Common Objections (And My Honest Answers)

"Fixed-cost means they'll cut corners"

No. Fixed-cost means they're incentivized to work efficiently, not cut corners. They still need to deliver quality, or they'll have problems to fix (which costs them money).

"Hourly billing is more flexible"

Flexible for who? For you, it means every change costs money. For the agency, it means more hours. Fixed-cost with a clear change process is actually more flexible for you.

"Fixed-cost locks me into a contract"

Yes, it locks in scope and price. That's the point. You know what you're getting and what you're paying. Hourly billing locks you into paying for time, regardless of results.

"Hourly billing is more transparent"

Is it? You see hours, but do you know if those hours were necessary? Fixed-cost is more transparent: you know the price, you know what's included, you know what's not.

The TEDECA Approach: Fixed-Cost, Transparent Pricing

At TEDECA, we use fixed-cost pricing:

Fixed price: You know the cost upfront. No surprises.

Clear scope: We define what's included. No confusion.

Change process: Changes are quoted separately. You decide.

Quality guarantee: We deliver quality, or we fix it. No extra cost.

Transparent pricing: Everything is clear. No hidden fees.

We're not trying to maximize hours. We're trying to deliver value efficiently. Fixed-cost aligns our incentives with yours.

How to Choose: Decision Framework

Here's how to decide:

Choose hourly when:

• Scope is unclear
• Timeline is very flexible
• You need ongoing work
• You're exploring options

Choose fixed-cost when:

• Scope is clear
• Timeline matters
• Budget protection is important
• You want aligned incentives

For most website projects, fixed-cost is smarter.

The Bottom Line

Fixed-cost websites vs. pay-per-hour: for most businesses, fixed-cost is smarter.

Fixed-cost advantages:

• Predictable costs
• Aligned incentives
• Faster delivery
• Better results
• Budget protection

Hourly billing disadvantages:

• Unpredictable costs
• Misaligned incentives
• Slower delivery (incentivized)
• More problems (incentivized)
• No budget protection

At TEDECA, we use fixed-cost pricing. You know the cost upfront, we're incentivized to deliver value efficiently, and you get better results.

If you want predictable pricing and aligned incentives, get your fixed-price quote in 24 hours and let's build something without surprises.