Tried a flat fee model for 6 months and lost 30% of my profit

I switched all my retainer clients to flat monthly fees last January, thinking it'd simplify things, but ended up eating the cost on scope creep from two big accounts. Has anyone figured out a way to make flat fees work without getting burned on revisions?

2 comments

2 Comments

the_terry12d ago

Saw a post on LinkedIn the other day from a guy who does flat fees but builds in a 20% buffer for revisions and scope creep. Said it saved him every time. Maybe try that and see if clients push back.

theabennett12d ago

The "scope creep from two big accounts" is exactly where the flat fee model breaks down. You have to define scope really tight in the contract or you're just giving away your time. What worked for me was charging a flat fee for a set list of tasks, then having a separate hourly rate for anything outside that list. I put it right in the proposal so clients can't pretend they didn't see it. Also, I set a hard limit on revisions per month, like three rounds max before it triggers a new invoice. Most clients respect the boundary once they see the numbers.