Time and materials or fixed fees? What’s the smarter way to tackle your next website?

Website projects are like snowflakes: they have a lot in common, but each is also a little different. And when you’re talking to folks about how to build, upgrade, or migrate your organization’s website, the proposals you receive may outline vastly different approaches, prices, and pricing structures. They, too, are like snowflakes.

There are a lot of reasons for this. For the purpose of this article, I’ll focus on pricing structures– specifically, the pros and cons of overhauling a website on a fixed-fee (sometimes also called a flat fee or project) basis, versus on a time-and-materials (or hourly) fee basis.


Websites are truly different than other communications projects

Most communications projects that nonprofits navigate follow a standard linear path:

  • Set strategy/write a brief
  • Design and write
  • Revise
  • Print or upload (if digital)
  • Distribute
  • Analyze, and learn from the results

Writing and design are the areas in this process that are most challenging to estimate– you never know if you’ll get the right design in Round 1 or Round 35. Still, writing and design can be estimated and pinned down by detailing how many original designs (or words, if it’s written)  will be developed and how many rounds of revisions will be made. The rest of the process is predictable enough that the folks you’re working with should be able to reliably estimate how long it will take and arrive at a fixed-fee that’s tied to their anticipated scope of work. 

Website projects follow a process that’s similar, but have a few additional variables: 

  • Set strategy/write a brief
  • Develop content strategy (based on user and organization needs and goals)
  • Audit existing content to determine what must be edited, eliminated, and created for new website
  • Develop site structure (information architecture) and wireframes (blueprint)
  • Design
  • Start coding
  • Build site
  • Write/edit any copy that’s missing or no longer in good shape
  • Migrate/upload content into new site
  • Test
  • Launch
  • Keep updating/revising the site’s content, structure, and other components to stay fresh and relevant

Some stages in this process can also be clearly defined and scoped up front– for instance, developing the site’s content strategy, structure, and designing a fixed number of templates or modules. If the site’s goals and objectives are fairly standard, other elements can likely be determined in advance based on an assumption that they will follow conventions and use tools that are standard and off-the-shelf. 

But there are some steps in this process that can also be hard to scope out in advance– for instance, how much of the website’s copy will be migrated to the new site as-is, and how much will need to be edited or totally re-written.


The known versus unknown – and how that should impact the pricing model you select

Let’s say that a nonprofit organization wants to create a new website that provides information about who they are and what they do, makes it easy for their clients, donors, and other key stakeholders to find what they need and take action in typical and predictable ways. This website needs to integrate with other software used to track donors, clients, send emails, etc- all of which are industry-standard (for example, Raiser’s Edge, Bloomerang, Salesforce, MailChimp, etc). In many instances, WordPress will be a cost-effective content management system that will meet these needs. It offers  templates, features, and plug-ins off-the-shelf to make posting new content, donating, signing up for enews or events, selling merch, and other standard actions easy. 

Given how well-trodden and predictable the scope of work is on this project, a freelancer or agency can likely prepare a proposal to build this site on a fixed-fee basis. That’s because the scope of what will be built is clear, predictable, and similar to  a lot of other projects they’ve done in the past. If the nonprofit opts to move forward, it will be important to understand the assumptions and parameters that have informed this estimate so expectations are clear about how much customization may or may not be possible, what’s included and what’s out of scope, etc. 

But what if the situation is more complicated? Many larger organizations have websites with much more technical complexity, for example. They are often (but not exclusively) built in Drupal and include code that has been custom-built to meet an organization’s particular needs. Smaller organizations sometimes can have more complex technical requirements too – especially if they use unusual or non-standard software, or if they have more complicated data and information management requirements. 

In these cases, it’s going to be hard for a freelancer or an agency to estimate the project on a fixed-fee basis and be likely to get it right unless they’ve worked deeply in your system already and know your organization’s needs well. Instead, they will probably need to conduct a Discovery and Planning Phase in order to understand your technical requirements and get their arms around what they are working with. 

The same is true for writing content for your new website. If you want to outsource any writing, editing, or other changes to the site’s content, you’ll either need to complete a discovery/content audit step first, or you’ll want a flexible way to tackle the project downstream. 


But what about my budget? 

If you hire a professional web development firm like Advomatic or one of our peers, they’ll likely charge you a fixed fee for this Discovery and Planning Phase. The “deliverable” will be a clear technical plan or roadmap that will outline what has to be built, what its acceptance criteria is (eg how you and they will know something has been successfully built), and how much of a priority each item is for your organization. Next, an agency partner creates a ballpark estimate of how long it will take to complete defined scopes of work (for instance, all the tasks in your A, B, and C priority lists). 

If we were together right now this is the moment where you might turn to me and say, “But I’m a nonprofit with a fixed and limited budget. I can’t work on a time and materials basis– that would be a runaway train. I need to know I’m going to get this thing fully built in my budget.” I hear you – and you’re absolutely right. So the challenge becomes managing your fixed budget as you work through a project that may not be very predictable at the outset. 

The way agencies typically do this is by estimating how long each phase of work might take– often as a range– so you can review and approve them incrementally, based on your priorities. The nice thing about working this way is that you are in control of what gets prioritized and what can wait– and you’re still working within a total budget you have control over. When the unexpected happens, you can shift gears and reprioritize easily. 


So how do you decide? 

When planning your next big project, ask yourself how realistic it will be for the folks you’ll be working with to predict the scope of your content and the technical requirements. If they’ve done a lot of projects in the past with similar parameters and what you need is clearly defined from the start, then working on a fixed-fee basis might be your best bet. If not, be open to working on a time and materials basis. Starting with a fixed-fee planning/discovery phase will help ensure that all the details are clearly defined and understood, mapped to your budget, and that unfortunate surprises are avoided later in the process.