What is Project Based Pricing?
Project based pricing is a fixed pricing model providing one flat fee for a specified project. This model is best suited when project requirements, specifications and scope are definitive. This model provides a neutral ground between hourly-pay and performance-pay.
Before initiating the project both project requirements and quote are locked. Reliability in price and efficiency in work is certain. This model requires elaborate and substantial agreement so there is fair result to both client and service provider. Every intricate aspect of the work should be included in the agreement to get the best result to both parties. Milestone based pricing is applied where achieving every milestone requires a part of payment.
What it means to clients?
Clients know exactly what they are getting and for what price. The details of the agreement and time frame for each phase should be explicitly defined. One limitation a client comes across is adapting the project requirements on the go. Planning ahead is necessary for unanticipated requirements once the project is initiated.