May 11, 2024

“But I’ll get killed by scope creep!”

When first exposed to the idea of giving fixed prices for project work, hourly billers often have a reaction like:

“NOOOO! I’ll get killed by scope creep because I can’t control everything!”

Here’s an example from a comment on one of my LinkedIn posts:

”It’s true [that we can give fixed prices] when we control the whole process, meaning we are in total charge of the outcome. It becomes tricky when success is partly in the hands of the client. Example: coaching.”

I disagree.

Giving fixed prices is only tricky if your margins are super low.

(Don’t believe me? Imagine how little you would care about scope creep if your prices were 10x higher.)

To figure out how to get higher margins, you can Google for my MAX PRICE FORMULA, but here’s the TL;DR:

The three components of the MPF are DESIRE, MONEY, and OPTIONS.

DESIRE - The client is desperate for the results you help them achieve
MONEY - The client has high buying power
OPTIONS - The client has few (or no) other acceptable alternatives

If desire and money are high and options are low, then you can set your prices astonishingly high relative to your level of effort.

This creates high margins, which makes it much less tricky to set fixed prices, even when the possibility of scope creep exists.

Yours,

—J