Buying software
Fixed-price vs hourly calculator
An hourly quote costs hours times rate, and then more if the work runs long. The hidden overrun is the extra hours times the rate. A fixed price stays at the agreed total. If the fixed price includes a premium for that certainty, compare the premium with the overrun. The cheaper path is the one that costs less after the overrun, not the one with the smaller number on day one.
Start from the hourly quote you were given. Add how far similar projects ran over. The result is the invoice you should expect, and what a fixed price at that same starting number would have capped.
How far similar projects ran past the estimate.
Zero compares the same starting number.
Splits both totals into a monthly figure. It does not change the totals.
Hidden overrun on the hourly quote
$9,000
A fixed price of $30,000 is $9,000 under the invoice you should expect if the hours run over.
- Quoted total
- $30,000
- Hours × rate, before any slip.
- Expected hourly invoice
- $39,000
- Fixed price
- $30,000
- Per month over the timeline
- $10,000 fixed
- Hourly expectation is $13,000 a month.
Planning model, not a quote. A KeenCraft engagement is a fixed Statement of Work after a free strategy call.
How the number is calculated
- Quoted total = estimated hours × hourly rate.
- Expected hours = estimated hours × (1 + overrun percent). Expected invoice = expected hours × rate.
- Hidden overrun = expected invoice − quoted total. That is the buyer's extra cost if the estimate slips and billing stays hourly.
- Fixed price = quoted total × (1 + certainty premium). Leave the premium at zero to compare the same starting number. Raise it if a fixed bid is higher because the studio is holding the overrun.
- A fixed price costs less than the expected hourly invoice when the overrun dollars are larger than the premium. The monthly lines divide each total by the timeline.
Starting example
The figures below use the fields the calculator opens with. Change the fields and the live result updates. This example stays on the page so the formula can be checked without the form.
- Quoted hourly total
- $30,000
- Expected invoice if it overruns
- $39,000
- Hidden overrun
- $9,000
- Fixed price versus that invoice
- $9,000
Questions this calculator answers
Why does an hourly software quote grow?+
Because the invoice is hours times rate, and the hours are an estimate. Extra revisions, a late integration, and unclear acceptance all add hours. The buyer pays each of them. A fixed Statement of Work moves that overrun off the invoice and onto a written change, scoped separately.
Should I add a premium for a fixed price?+
Add one if the fixed bid in front of you is higher than the hourly quote for the same scope. The calculator then shows whether that premium is smaller than the overrun you think is likely. A premium of zero compares the quotes as if they started equal.
Is a cheap fixed bid always safer?+
No. A fixed number with no acceptance tests can hide a prototype you cannot maintain. The useful comparison is a defined scope, a total, and a way to reject a milestone. That contract is described in why growing businesses should buy fixed-price software, not hours.
Does KeenCraft bill hourly?+
No. Engagements are a fixed Statement of Work. Scope, milestones, and the total are written before code starts. New work found mid-project is a new scope, not a larger timesheet.
Ready to build something that saves you money from day one?
Book a free 30-minute call. Tell me what you're trying to build or fix, and I'll tell you honestly whether KeenCraft is the right fit and what it would take.