Detailed Notes
Understanding fixed bid vs time and materials is one of the biggest challenges for developers, consultants, and small business owners. In Part 2 of our interview with Charly Leetham, we dive deep into the realities of scoping work, managing hidden requirements, handling missed expectations, and balancing fairness with sustainability.
Charly brings more than 40 years of practical experience to the discussion, sharing real-world lessons about pricing models, knowing when to use fixed bids, and how to protect both your client and yourself in custom software projects.
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🔹 In This Episode
We explore: • When fixed bid pricing works (and when it doesn’t) • How to handle unclear or evolving scope • What to do when you underestimated your own estimate • The hidden workflows that wreck fixed-price projects • Why time and materials is sometimes the fairest approach • How to charge ethically while still covering your learning curve
This conversation is a must-watch for developers, freelancers, and business owners navigating complex custom work.
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🔹 About Charly Leetham
Charly Leetham has over four decades of experience solving technical problems, designing systems, and helping small businesses thrive. After careers in engineering, tech, project management, and franchising, she founded Ask Charly Leetham, a trusted digital services company supporting clients worldwide. She’s also the host of Rise and Shine – Your Business Tech Boost, where she shares practical tech insights without the hype.
Facebook: https://facebook.com/askcharlyleetham Twitter / X,: https://x.com/yourbizmgr YouTube: https://youtube.com/askcharlyleetham Instagram: https://instagram.com/ask_charly_leetham LinkedIn: https://linkedin.com/in/charlyleetham
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🔹 Listen to Building Better Foundations
A podcast designed to help developers and entrepreneurs build smarter, stronger, and more intentional businesses.
Subscribe for more insights, interviews, and practical strategies.
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#FixedBidVsTimeAndMaterials #CharlyLeetham #SoftwareDevelopment #BusinessGrowth #DeveloperPodcast
Transcript Text
[music] [music] [music] [music] Well, hello and welcome back. We are continuing our season of building better foundations. We are building better developers the developer podcast. I am Rob Broadhead, one of the founders of developer, also the founder of RB Consulting, where we help you leverage technology to build a roadmap for success. Good thing, bad thing. Good thing is I am we are in holiday season. I am like planning out stuff for Thanksgiving and Christmas and things like that. The bad thing is is that I also have a little mini vacation. I've got a week vacation, like a working vacation coming up. And so I'm planning things for that. And then we also have obviously Thanksgiving dinner and the stuff around that and all of our gatherings. And then we're going to be on a vacation in the second half of December. And so there's just too many cool things to do. Life is literally almost too good. Uh but it's not so good that I can't spend a little time sharing it with Michael introducing himself. Hey everyone, my name is Michael Malash. I'm one of the co-founders of Developer. I'm also the founder of Envision QA where we help businesses build reliable custom software by combining smart development with thorough testing so you can grow with confidence. Check us out at envisionqa.com. Uh good thing, bad thing, uh like Rob said, we're getting close to the holidays and Thanksgiving. Uh it's kind of a double blessing uh for us because it's my daughter's birthday on the 24th, which is usually Thanksgiving, but this year it's the Monday before Thanksgiving. So, we get to actually split it up and have a couple special dinners. Uh and then I get to kick back and watch uh you know, the double header, the Lions play on Thanksgiving Day and enjoy my turkey. >> So, we are continuing. This is uh part two of our interview with Charlie Letham and um we will dive right into it. We're going to pick up right where we left off. So uh pencils up, time to crank out some notes. Oh, that's a that's an excellent answer. And it actually I'm going to flip it now because this is also the we also sit on the other side of it is so you know my my favorite example is the the customer that comes and says, you know, I want to build eBay and I've got a $500 budget, you know, or something like that. I want to build Amazon and I've got a $1,000 budget or something like that. So, what do you do? Um, and a little bit of this is sort of your thoughts on uh fix versus time and materials type projects. And then when somebody comes to you with a uh which you sort of laid out like I I want a website $500 or whatever their you know, whatever their budget is. I've got a hundred bucks to build a bud or $10,000. is how you approach those when it's um whether it's time of materials or it's a fixed bid and and trying to hit their their have that conversation with them I guess. >> So I I I think the question there is fixed versus uh time and materials. How how do you how would I approach it? >> If I can get a really solid scope of work, you are going to get five pages. Each page will have around a thousand words on it. It will have three or four images there. I don't have to do manipulation on these images. You're going to give me images. It's minimal manipulations. I don't have to go through and cut out backgrounds or do merges on things. Um so, you know, can I get a really tight scope of work? If I can get a really tight scope of work that I can then point to and say, now you're asking me to do this thing and it's not in this list of things. That's when I do time and material. H sorry that's when I do fixed price. Now I will try to do fixed prices more often than I will try to do time and materials. I think that that shortity for both for both parties. For myself knowing that this is what I'm going to get in the door and for my client saying this is what I'm going to spend and I'm going to get what I want for what what I'm spending. That that is the that is the goal for me. But it has to be that really really tight scope of work. You've got to be able to sit down and write out exactly what those deliverables are. You need to be able to at the end of the project put a tick next to each of them and say this is what you got. If you can't, that's when you need to go down to look, I need to do this on a time and materials basis. What I'm going to do is I and the way I approach it is what I'm going to do going to spend an hour. I'm going to look at this for an hour and then I'm going to come back to you and say, "Look, I think I can do it for this approice or I need another three hours or I need another four hours." Now, that's putting the control back in the client's uh hands. They can say, "No, stop right now. I don't want to spend any more money on this. This is I've hit my I've hit my appetite." Um, but it's also giving me some level of protection against Scope Creek blowout. Um, it's never an easy answer. I I would prefer if I'm doing time and materials or you know hourly based work to say I think it's going to take 2 or 3 hours let me spend that amount of time and I'll come back to you and have a chat about where we're at. Um yeah. Yeah. So I mean then then you get into coding projects and how do you put a how do you put a tick in a box next to a coding project and say it's a fixed price coding project. uh that one you're going to have to sit down and look at some historical data and say, "Look, it normally takes me this long to write do this type of project." If you don't know, then you should be doing that on a time and materials basis to start with and get your data together. Uh but again, have that conversation with your clients around I'm going to spend 4 hours. I'm going to get as much done as I can in that four hours and then I'm going to come back and say this is where I'm at. That's just my gut bill on that. It's always a bit of a >> Yes. >> So, say you've gotten into a fixed bid project and so I guess you might have already answered this, but if you've started with a fixed bid project and it's not like a website, but it is like a software project and you run into that issue where okay, you're still within the requirements, but you're over on the time. Do you just keep that time box or do you somehow figure out how to get that back to a times and material? >> Um, no. Look, honestly, at that point, that's my problem. That's not my client's problem. They came to me, they asked for my expert opinion, I gave them my expert opinion. I'm just going to wear that. I know a lot of people don't do that. Um, I may, depending on the relationship with the client, go back and say, "Hey, listen. This is going to take me a bit longer. Can we talk about what I've got, what I've costed you versus what I'm actually doing?" Uh, but if I have been overconfident with my own abilities, that's on me. That's that's not on you. I I And I I'll use the analogy. If you take your car to the mechanic for an oil change and they quote you, I think it's 350 bucks here for an oil change now. Uh, and it really is a case of, you know, they take the sump plug out, they drain the oil, put the sump plug back in, put fresh oil in, and the guy they're using messes it up for whatever reason. It takes them 4 hours instead of the 2 hours. I'm not going to pay for their mistake. I'm not going to pay because the the guy they had on didn't have the skill set. They quoted me $350. It was a it it is a defined deliverable. I'll pay 350. That's a learning experience that they can take in. They put that you I then take that information. I put it back into my systems. I put it back into my my cost analysis. Do have I got enough contingency? Have I got enough risk on my pricing? Have I overestimated on this? Have I underestimated on this? It all goes back into the pot of, yeah, next time I'm going to I'm going to cost more or I've got all these new skills now that's going to actually mean I can't I do it less. Um, in fact, a great example I can give you on that. I'm seeing a lot of spam hitting forms. Again, it's just it's this cyclical thing, right? You you put a form up, you you do all the right things. You get it locked down, spam doesn't go through, and then all of a sudden spam starts to ramp again. It's because they've worked out new ways of eating beating what you're already doing. That smarter mice. Uh, and I spent hours on a client's site um, just locking it down again and working out what was working and what wasn't working and checking what what forums were saying. I charged them a fraction of the amount of time I spent doing that job because I didn't think it was fair that they pay for me to do my learning. There is a point that you charge them to do a bit of learning, but I don't think I should charge them to do my learning. Then the next client came along the very next day and said, "I'm having this problem." I said, "No problems. I've got to fix. It took me 5 minutes and I charged them a fixed price to do it." So that's where I got it back because I had all that new knowledge. I I I I gave them what they considered to be a fair price. It was a fair price, but it wasn't they didn't pay me for the 2 minutes to do the job. They paid me for this the weeks worth of learning I had done before, basically. And and that's that's where I'm at with that. >> Mhm. What do you think? Go ahead. >> It's I'm kind of in uh a mixed boat right now. Uh recently worked on a a big fixed bid project that uh went way over budget. Uh in part due to miss requirements and um kind of missed opportunities with the client to understand really what we thought we were building wasn't really what we ended up building or essentially what they wanted really wasn't what they explained >> uh to us. Uh, and we're I'm even at the point of delivering the application and we're still running into some things that are uh big ticket items that need to be done in order to get this out the door. So, you know, yep, I'm eating the cost because it's not their problem that I essentially missed all this up front. But it is a pros and cons cuz when you go into a a situation with the customer to build them a custom piece of software, something that is for their business, for their day in and outs. And if they can't explain it to you or they leave something out, you kind of run into that situation of, you know, can you go back and ask for times of material on that or is that your mistake for missing it? And while there's opportunities to go back to the times of materials, it is hard because you missed it or it was missed in the process, but it is a fixed bid and it needs to be completed as close to the fixed bid as pro possible without really um negatively impacting your customer because it's on you. It's on the business. Uh, and hopefully the next time you go out and find the next customer, you you've learned from that and you know how to reset your expectations. And it's 61 half a dozen. I've had the same issues with the websites too, like like you said, you know, you go through and you build that and usually those are better, but when you get into software building custom applications, it it is more of a variable process and you're either going to be uh under or over if you go fix bit. And even with times and materials, you could still be over uh without really understanding it because of scope creep or you just run into something that was unforeseen at the time of uh you know the investigation during the requirements gathering. >> So you did a require if I if I might you did a requirements analysis like you sat down with the client and you went through that whole discovery process and you got a scope based on that or did they come to you and say this is what we want? Uh kind of both. Uh I had a premise of what they wanted uh from what the industry does, but they didn't need something as large as what some of the bigger players offer. So we came in with something a little more custom, a little more designed for them. And we sat down with them for almost a good 3 months going through their systems, the requirements, their processes. And there was just uh information that was missed. It was either I don't want to say necessarily withheld but it was just it's like muscle memory. It's things you do but you don't think about and those are the things that we that got missed. >> Yeah. So I Yeah. You didn't know to ask the question as to whether they did that or not. They didn't think to tell you that they did this because that's just what they do. I used to contract into government and we used to do that with government and the amount of times I'd be there and we'd be pulling out a a networking system and put upgrading it and putting in something else and then this totally unrelated system would go down there like, "Oh yeah, that's right. That connects in up here on this little little spur that we didn't we forgot to tell you about." We've now got a complete network redesign. We've got >> So yeah, I get it. I it it's such a hard question to answer though, isn't it? Because you want to be fair with your clients. Uh but you still got to put the numbers on the table to be able to be there next month for them, next year for them. >> And that's what I struggle with particularly with the software development types of of projects. You know, if it's something that's very >> that's small that's bite-size that you can say, okay, it's very easy to scope it, then that's great. Espec and it is actually usually small. So, it's something where you're like, it's going to take, you know, 40 hours, 100 hours, you know, 10 hours, an hour, whatever it's going to be. And then you can figure out, you know, for me, then I can figure out like, okay, this is what's going to make sense for a fixed bid. Um, but once you get any bigger, uh, a lot of times I I actually I tend more to the time and materials because software development is just that kind of a thing. And I tell them, you know, I'll say, 'Look, I can give you fixed bid, but you know, fixed bid is going to be I'm going to for me to have the buffer that I need to make sure that because there's going to be stuff that's going to happen. There's going to be changes and I need to be able to make sure that I'm covered, then it's going to be probably far more expensive. So, I almost it's almost a blended approach, I guess, to that as I found has worked pretty well where I'll say, "Okay, here's the estimates. Here's our, you know, here's roughly what it's going to cost per hour. Here's roughly the amount of hours are going to go into it." And you know, for example, like let's just, you know, picking someone, it's like I look at I say, "Okay, it's going to be about a 500 hour project." Then I'll cost it out and say, "Well, here's what it's going to be." And I'll just be honest. I'll say, you know, usually I'll bump it up a little bit and say, "Okay, I'm going to I'm going to assume that it's going to be a 550 hour project." Um, and then say, "So, this is what we think it's going to be." And I'll say, "Now, if I can come in earlier, you know, lower." And so, I'll tell them maybe it's going to cost, you know, 500, 600 hours. give them a ballpark and say if I can come in lower, awesome. Um, and then I'll also say, you know, I'll be able to build into that as we get close to it, maybe at 50% in or 75% in where I can say, "All right, we're looking like we're on track or we're not going to be." And then even with the fixed bid, a lot of times I'm going to say, you know, even if it's not a fixed bid, but it's time and materials, there's going to be something I've put in their mind of a a top end anyways where it's like, okay, if I thought it was going to take 200, but now it's going to take 250 and it's basically because I just missed some stuff, great. I'm just gonna like I'm just gonna write that off. I'm not gonna build them that. Um if it's something but it even in those I want to have enough requirements. It really does it comes down to having the right requirements that you everybody agrees this is what we're doing and this is what we're going to build. And uh going into that a lot of times it does I don't know how many times I've I've had the conversation with the the owner or the you know the senior management or something like that. And part of requirements gathering for me is always sitting down with the the people that actually do it. And I don't know how many times I've been into that where I'm sitting with somebody that's like this their job. They said this is a tool they use and then I suddenly while watching them they're like oh well there's this other spreadsheet I use. There's this other thing I use and now suddenly the it's that thing you're like yeah that the requirements just changed because we had something that was very well defined and you guys need to know that this thing over here is actually a critical part of your business. >> Yeah. And they don't even realize it. like the the the business itself may not even realize it. And it's funny you say that. I was talking to one of my team the other day and I went, "Oh, I need this information." And they sent me this spreadsheet. And I went, "What's this?" Oh, well, I've been keeping this because I'm like, "But I've got the CRM. Why is is this not on this module in the CRM?" Oh, is that what that does? [laughter] So, they don't realize it because the staff themselves, um, there's two things that I find happen in that case, and we're probably digressing a little, but there's two things I find happen in that case. One, the staff hate the tool. They absolutely hate the tool. They will not use it. They will do anything they can not to use it, which will mean that they create their own little shadow shadow systems to do the job and then make it look like they're using the tool as as much as they possibly can. uh sorry three things in fact they hate it they haven't been trained on it so they don't know how to use it so they just end up doing other things because they look at they go we don't have the time we don't we can't understand it we we can't use it or the systems have changed around them which is sort of related to number two and they haven't been bought up to date they haven't got the memo to say no now we're doing it this way they haven't got the updated process they haven't got the updated policy and they're still using a system that they were using 5 years ago go because well that's how we've always done it. What do you what do you mean it changed? When did that happen? >> That is that is always the kiss of death. We're like well that's the way it's always happened. Okay. Well, let's really explore that cuz maybe the way we've always done it has has changed. Just like a website as you mentioned you you put a website out there. It needs maintenance. It needs touching up. When anything that you do your your employees will need that as well. they need like regular educational updates, training, things like that as well so they can know how to use the the new version of the systems and things like that. >> Um, this this has flown by super super fast. We didn't even get like the problem is we did we got off on the AI trail and we got really deep into that. Um, but there's just there's and there's so many other things we could go into. But before, you know, I don't want us to to run out of time without I know everybody else listening would love to like, you know, work with you, hear more about you, learn more about you. So, what are some of the best ways for them to reach out and contact you? >> My website asktalleam.com. If you put connect to hyphen me or connect Yeah, connect to me with the hyphens between the little minor signs, you'll get to my contact page. But even if you just go to my website, you'll find you'll find me there. Uh I'm basically on every social media platform bar Tik Tok, you won't find me on Tik Tok, but you'll find me on LinkedIn, Instagram, uh Facebook, and X. And that's all on on my my website. I run my own community, ask Charlie.locals.com. You're welcome to come and join there. And that's for business owners who just want to get a better handle on their tech uh in a in a safe environment. I shouldn't say that, you know, [clears throat] just where you want to ask those questions of this isn't working, how do I do it or what do I do here? Uh that that's I'm I'm trying to grow that one for business owners to come in and have those conversations with me and with each other cuz they there's heaps of information between each other that they can share as well. Um you there's my podcast that goes out every other day, asklelam.com/mpodcast. You can listen to me there, listen to me pratt on about this sort of stuff every other day. So, what do you is that uh is that simply you or do you have guests on there or you just you sort of go through some of your your your uh pains of the moment? >> Uh so, every other day it's pretty much pains of the moment. It's it's me paddling on about, you know, this I'm seeing this, I'm doing this. If I if I you know, if there's nothing that's really topical, I've got a whole set of topics that I like to run through. For example, I've done a whole se series on Microsoft uh M365 and how to set up your mail and the things to do and the the the quality of life settings you can do, how you can delegate a me uh an email box, how you can uh create shared mailboxes, those sorts of things. So, I try to do little topics within the within the podcast itself. And every now and again, I have a guest on and you know, we'll sit for an hour and just have conversations like this. And they're they're always fun. They are always fun for me. Yeah, I can I can tell these have always been great. I I prepped you beforehand and said that we've never had a bad guest and you are not the first. So, you're not going to be the one that's suddenly be our our bad guest. This has been this has been incredible. Like I said, it's uh it's almost frustrating because there's so much else that we could talk about. So, I really appreciate your time and your energy and and wandering with us as we have wandered through this this conversation of the last, you know, hour or so. Um, Michael, any closing thoughts? >> I just want to thank you. It's great having this conversation with you and getting your insight, especially on, you know, fixed versus uh, you know, time and materials. And hopefully we'll have you again on the show. >> I would I would love to come back. And hey, I really enjoyed that conversation. that that was a really one good one for me because it really helps sort of just get that mind going about where am I at, what am I doing, how do I do it, is there something I need to go back and and review for myself. So, thank you. >> Yeah, those are and that actually that goes to your community, anybody that's, you know, out there that's listening. I think um I definitely recommend any you know this her community or something like that because these kind of conversations are the ones that do really help as a as an entrepreneur as a business owner is to just hear other thoughts because it is it's the kind of things that we get into. It's like well that's I'm doing that the way because that's the way I've always done it or that was the way I taught it and then you realize that oh there's some other approaches and the next thing you know you're going huh I wonder if I should maybe you know embrace that a little bit or research that a little bit more. So it is some of the best way to learn is sometimes the best way to learn is learning from the uh those successes but also mistakes of others and and making sure that you can you know carve your own path built on top of those. >> Absolutely. Look, thank you so much. >> So we'll wrap this one up. Thank you so much for your time. We appreciate you and and hanging out with us for a while. uh everybody as uh we will have the links in the show notes and uh we will be back uh with another episode before you know it. Uh but thank you so much for your time and have a good uh rest your day. >> I will you you guys have a good evening. >> Okay. >> You too. Thank you. >> All right. And we'll just bonus material here essentially. Um yeah. Uh I was just going to say if there's any you have any any parting thoughts or anything like that. Uh really it's been a great uh great conversation from the start. >> I was actually thinking because this is actually for developers. It's really about just get out there and try it. Uh get your processes, get get what it is you want to do really clear in your mind. Uh even if it's just for that 5 seconds that you're doing something or that 10 that 10 minutes you're doing something. As a developer, there is so much we can be doing and there's so much we do do. Uh it it should be fun. It will be frustrating. It absolutely will be frustrating. If it's not, you're not doing it right. Um but just yeah, just be really clear about what it is you want to do for your client or for whatever it is you're doing and stick to that. And if it's not going the way you think it should, step back. Take a take a step back. Take take a deep breath. go and talk to someone else and say, "Let me bounce this off of you and see what comes out for you." Because we all developers tend to get into that bubble. Like, I know I do it and I'm having a problem. And yeah, my dad my dad's an ex-tech like he he's an electrician and did did electronics and communication and he'll say, "What's wrong?" And I'll go, "Blah, oh, there it is." [laughter] And I'll find the answer because I've spoken it through. I've looked at it from a different perspective. So, just have some fun with it. That's all. Yeah, we always see >> my wife is my sounding board for that. She is non tech and she just basically lets me rant, you know, ramble on and eventually I will answer my own question. >> The amount of times I've done that, I got a really good mate who every now and again I'll just get on the phone and said just listen. Just don't say a word. Just listen. And he does. He Mhm. Uhhuh. Oh, good. You got the answer. Great. >> Glad I could help. Glad I could just sit and listen. All right. All right. Well, thank you so much. Uh like I said, we'll send you links uh as these come available >> and u love to hear more from you and we'll try to connect with you in the various place ways that we can. And uh definitely keep in touch and um check some of these things out. And uh I guess that being said, have a good uh since it's nice uh got your morning started hopefully on a good good note and you have a good rest of your day. Charlie, >> I will do. Thank you so much for your time, guys. Have a good evening. >> Thank you. >> You too. Take care. >> Bye. >> [music] [music]
Transcript Segments
[music]
[music]
[music]
[music]
Well, hello and welcome back. We are
continuing our season of building better
foundations. We are building better
developers the developer podcast. I am
Rob Broadhead, one of the founders of
developer, also the founder of RB
Consulting, where we help you leverage
technology to build a roadmap for
success.
Good thing, bad thing. Good thing is I
am we are in holiday season. I am like
planning out stuff for Thanksgiving and
Christmas and things like that.
The bad thing is is that I also have a
little mini vacation. I've got a week
vacation, like a working vacation coming
up. And so I'm planning things for that.
And then we also have obviously
Thanksgiving dinner and the stuff around
that and all of our gatherings. And then
we're going to be on a vacation in the
second half of December. And so there's
just too many cool things to do. Life is
literally almost too good. Uh but it's
not so good that I can't spend a little
time sharing it with Michael introducing
himself. Hey everyone, my name is
Michael Malash. I'm one of the
co-founders of Developer. I'm also the
founder of Envision QA where we help
businesses build reliable custom
software by combining smart development
with thorough testing so you can grow
with confidence. Check us out at
envisionqa.com.
Uh good thing, bad thing, uh like Rob
said, we're getting close to the
holidays and Thanksgiving. Uh it's kind
of a double blessing uh for us because
it's my daughter's birthday on the 24th,
which is usually Thanksgiving, but this
year it's the Monday before
Thanksgiving. So, we get to actually
split it up and have a couple special
dinners. Uh and then I get to kick back
and watch uh you know, the double
header, the Lions play on Thanksgiving
Day and enjoy my turkey.
>> So, we are continuing. This is uh part
two of our interview with Charlie Letham
and um we will dive right into it. We're
going to pick up right where we left
off. So uh pencils up, time to crank out
some notes. Oh, that's a that's an
excellent answer. And it actually I'm
going to flip it now because this is
also the we also sit on the other side
of it is so you know my my favorite
example is the the customer that comes
and says, you know, I want to build eBay
and I've got a $500 budget, you know, or
something like that. I want to build
Amazon and I've got a $1,000 budget or
something like that. So, what do you do?
Um, and a little bit of this is sort of
your thoughts on uh fix versus time and
materials type projects. And then when
somebody comes to you with a uh which
you sort of laid out like I I want a
website $500 or whatever their you know,
whatever their budget is. I've got a
hundred bucks to build a bud or $10,000.
is how you approach those when it's um
whether it's time of materials or it's a
fixed bid and and trying to hit their
their have that conversation with them I
guess.
>> So I I I think the question there is
fixed versus uh time and materials. How
how do you how would I approach it?
>> If I can get a really solid scope of
work, you are going to get five pages.
Each page will have around a thousand
words on it. It will have three or four
images there. I don't have to do
manipulation on these images. You're
going to give me images. It's minimal
manipulations. I don't have to go
through and cut out backgrounds or do
merges on things. Um so, you know, can I
get a really tight scope of work? If I
can get a really tight scope of work
that I can then point to and say, now
you're asking me to do this thing and
it's not in this list of things. That's
when I do time and material. H sorry
that's when I do fixed price. Now I will
try to do fixed prices more often than I
will try to do time and materials. I
think that that
shortity for both for both parties. For
myself knowing that this is what I'm
going to get in the door and for my
client saying this is what I'm going to
spend and I'm going to get what I want
for what what I'm spending. That that is
the that is the goal for me. But it has
to be that really really tight scope of
work. You've got to be able to sit down
and write out exactly what those
deliverables are. You need to be able to
at the end of the project put a tick
next to each of them and say this is
what you got. If you can't,
that's when you need to go down to look,
I need to do this on a time and
materials basis. What I'm going to do is
I and the way I approach it is what I'm
going to do going to spend an hour. I'm
going to look at this for an hour and
then I'm going to come back to you and
say, "Look, I think I can do it for this
approice or I need another three hours
or I need another four hours." Now,
that's putting the control back in the
client's uh hands. They can say, "No,
stop right now. I don't want to spend
any more money on this. This is I've hit
my I've hit my appetite."
Um, but it's also giving me some level
of protection against Scope Creek
blowout. Um, it's never an easy answer.
I I would prefer if I'm doing time and
materials or you know hourly based work
to say I think it's going to take 2 or 3
hours let me spend that amount of time
and I'll come back to you and have a
chat about where we're at. Um
yeah. Yeah. So I mean then then you get
into coding projects and how do you put
a how do you put a tick in a box next to
a coding project and say it's a fixed
price coding project. uh that one you're
going to have to sit down and look at
some
historical data and say, "Look, it
normally takes me this long to write do
this type of project." If you don't
know, then you should be doing that on a
time and materials basis to start with
and get your data together. Uh but
again, have that conversation with your
clients around I'm going to spend 4
hours. I'm going to get as much done as
I can in that four hours and then I'm
going to come back and say this is where
I'm at. That's just my gut bill on that.
It's always a bit of a
>> Yes.
>> So, say you've gotten into a fixed bid
project and so I guess you might have
already answered this, but if you've
started with a fixed bid project and
it's not like a website, but it is like
a software project and you run into that
issue where okay, you're still within
the requirements, but you're over on the
time. Do you just keep that time box or
do you somehow figure out how to get
that back to a times and material?
>> Um, no. Look, honestly, at that point,
that's my problem. That's not my
client's problem. They came to me, they
asked for my expert opinion, I gave them
my expert opinion. I'm just going to
wear that. I know a lot of people don't
do that. Um, I may, depending on the
relationship with the client, go back
and say, "Hey, listen. This is going to
take me a bit longer. Can we talk about
what I've got, what I've costed you
versus what I'm actually doing?" Uh, but
if I have been overconfident with my own
abilities, that's on me. That's that's
not on you.
I I And I I'll use the analogy. If you
take your car to the mechanic for an oil
change and they quote you, I think it's
350 bucks here for an oil change now.
Uh, and
it really is a case of, you know, they
take the sump plug out, they drain the
oil, put the sump plug back in, put
fresh oil in,
and
the guy they're using messes it up for
whatever reason. It takes them 4 hours
instead of the 2 hours. I'm not going to
pay for their mistake. I'm not going to
pay because the the guy they had on
didn't have the skill set. They quoted
me $350. It was a it it is a defined
deliverable. I'll pay 350. That's a
learning experience that they can take
in. They put that you I then take that
information. I put it back into my
systems. I put it back into my my cost
analysis. Do have I got enough
contingency? Have I got enough risk on
my pricing? Have I overestimated on
this? Have I underestimated on this? It
all goes back into the pot of, yeah,
next time I'm going to I'm going to cost
more or I've got all these new skills
now that's going to actually mean I
can't I do it less. Um, in fact, a great
example I can give you on that. I'm
seeing a lot of spam hitting forms.
Again, it's just it's this cyclical
thing, right? You you put a form up, you
you do all the right things. You get it
locked down, spam doesn't go through,
and then all of a sudden spam starts to
ramp again. It's because they've worked
out new ways of eating beating what
you're already doing. That smarter mice.
Uh, and I spent hours on a client's site
um, just locking it down again and
working out what was working and what
wasn't working and checking what what
forums were saying. I charged them a
fraction of the amount of time I spent
doing that job because I didn't think it
was fair that they pay for me to do my
learning. There is a point that you
charge them to do a bit of learning, but
I don't think I should charge them to do
my learning. Then the next client came
along the very next day and said, "I'm
having this problem." I said, "No
problems. I've got to fix. It took me 5
minutes and I charged them a fixed price
to do it." So that's where I got it back
because I had all that new knowledge. I
I I I gave them what they considered to
be a fair price. It was a fair price,
but it wasn't they didn't pay me for the
2 minutes to do the job. They paid me
for this the weeks worth of learning I
had done before, basically. And and
that's that's where I'm at with that.
>> Mhm. What do you think?
Go ahead.
>> It's I'm kind of in uh
a mixed boat right now. Uh recently
worked on a a big fixed bid project that
uh went way over budget. Uh in part due
to miss requirements and um
kind of missed
opportunities with the client to
understand really what we thought we
were building wasn't really what we
ended up building or essentially what
they wanted really wasn't what they
explained
>> uh to us. Uh, and we're I'm even at the
point of delivering the application and
we're still running into some things
that are uh big ticket items that need
to be done in order to get this out the
door. So, you know, yep, I'm eating the
cost because it's not their problem that
I essentially missed all this up front.
But it is a pros and cons cuz when you
go into a
a
situation with the customer
to build them a custom piece of
software, something that is for their
business, for their day in and outs. And
if they can't explain it to you or they
leave something out, you kind of run
into that situation of, you know, can
you go back and ask for times of
material on that or is that your mistake
for missing it?
And while there's opportunities to go
back to the times of materials, it is
hard because
you missed it or it was missed in the
process, but it is a fixed bid and it
needs to be completed as close to the
fixed bid as pro possible without
really
um negatively impacting your customer
because it's on you. It's on the
business. Uh, and hopefully the next
time you go out and find the next
customer, you you've learned from that
and you know how to reset your
expectations. And it's 61 half a dozen.
I've had the same issues with the
websites too, like like you said, you
know, you go through and you build that
and usually those are better, but when
you get into software building custom
applications, it it is more of a
variable process and you're either going
to be uh under or over if you go fix
bit. And even with times and materials,
you could still be over uh without
really understanding it because of scope
creep or you just run into something
that was unforeseen at the time of uh
you know the investigation during the
requirements gathering.
>> So you did a require if I if I might you
did a requirements analysis like you sat
down with the client and you went
through that whole discovery process and
you got a scope based on that or did
they come to you and say this is what we
want? Uh kind of both. Uh I had a
premise of what they wanted uh from what
the industry does, but they didn't need
something as large as what some of the
bigger players offer. So we came in with
something a little more custom, a little
more designed for them. And we sat down
with them for almost a good 3 months
going through their systems, the
requirements, their processes. And there
was just
uh information that was missed. It was
either I don't want to say necessarily
withheld but it was just it's like
muscle memory. It's things you do but
you don't think about and those are the
things that we that got missed.
>> Yeah. So I Yeah.
You didn't know to ask the question as
to whether they did that or not. They
didn't think to tell you that they did
this because that's just what they do. I
used to contract into government and we
used to do that with government and the
amount of times I'd be there and we'd be
pulling out a a networking system and
put upgrading it and putting in
something else and then this totally
unrelated system would go down there
like, "Oh yeah, that's right. That
connects in up here on this little
little spur that we didn't we forgot to
tell you about." We've now got a
complete network redesign. We've got
>> So yeah, I get it. I it it's such a hard
question to answer though, isn't it?
Because you want to be fair with your
clients.
Uh but you still got to put the numbers
on the table to be able to be there next
month for them, next year for them.
>> And that's what I struggle with
particularly with the software
development types of of projects. You
know, if it's something that's very
>> that's small that's bite-size that you
can say, okay, it's very easy to scope
it, then that's great. Espec and it is
actually usually small. So, it's
something where you're like, it's going
to take, you know, 40 hours, 100 hours,
you know, 10 hours, an hour, whatever
it's going to be. And then you can
figure out, you know, for me, then I can
figure out like, okay, this is what's
going to make sense for a fixed bid. Um,
but once you get any bigger, uh, a lot
of times I I actually I tend more to the
time and materials because software
development is just that kind of a
thing. And I tell them, you know, I'll
say, 'Look, I can give you fixed bid,
but you know, fixed bid is going to be
I'm going to for me to have the buffer
that I need to make sure that because
there's going to be stuff that's going
to happen. There's going to be changes
and I need to be able to make sure that
I'm covered, then it's going to be
probably far more expensive. So, I
almost it's almost a blended approach, I
guess, to that as I found has worked
pretty well where I'll say, "Okay,
here's the estimates. Here's our, you
know, here's roughly what it's going to
cost per hour. Here's roughly the amount
of hours are going to go into it." And
you know, for example, like let's just,
you know, picking someone, it's like I
look at I say, "Okay, it's going to be
about a 500 hour project." Then I'll
cost it out and say, "Well, here's what
it's going to be." And I'll just be
honest. I'll say, you know, usually I'll
bump it up a little bit and say, "Okay,
I'm going to I'm going to assume that
it's going to be a 550 hour project."
Um, and then say, "So, this is what we
think it's going to be." And I'll say,
"Now, if I can come in earlier, you
know, lower." And so, I'll tell them
maybe it's going to cost, you know, 500,
600 hours. give them a ballpark and say
if I can come in lower, awesome. Um, and
then I'll also say, you know, I'll be
able to build into that as we get close
to it, maybe at 50% in or 75% in where I
can say, "All right, we're looking like
we're on track or we're not going to
be." And then even with the fixed bid, a
lot of times I'm going to say, you know,
even if it's not a fixed bid, but it's
time and materials, there's going to be
something I've put in their mind of a a
top end anyways where it's like, okay,
if I thought it was going to take 200,
but now it's going to take 250 and it's
basically because I just missed some
stuff, great. I'm just gonna like I'm
just gonna write that off. I'm not gonna
build them that. Um if it's something
but it even in those I want to have
enough requirements. It really does it
comes down to having the right
requirements that you everybody agrees
this is what we're doing and this is
what we're going to build. And uh going
into that a lot of times it does I don't
know how many times I've I've had the
conversation with the the owner or the
you know the senior management or
something like that. And part of
requirements gathering for me is always
sitting down with the the people that
actually do it. And I don't know how
many times I've been into that where I'm
sitting with somebody that's like this
their job. They said this is a tool they
use and then I suddenly while watching
them they're like oh well there's this
other spreadsheet I use. There's this
other thing I use and now suddenly the
it's that thing you're like yeah that
the requirements just changed because we
had something that was very well defined
and you guys need to know that this
thing over here is actually a critical
part of your business.
>> Yeah. And they don't even realize it.
like the the the business itself may not
even realize it. And it's funny you say
that. I was talking to one of my team
the other day and I went, "Oh, I need
this information." And they sent me this
spreadsheet. And I went, "What's this?"
Oh, well, I've been keeping this because
I'm like, "But I've got the CRM. Why is
is this not on this module in the CRM?"
Oh, is that what that does? [laughter]
So, they don't realize it because the
staff themselves, um, there's two things
that I find happen in that case, and
we're probably digressing a little, but
there's two things I find happen in that
case. One, the staff hate the tool.
They absolutely hate the tool. They will
not use it. They will do anything they
can not to use it, which will mean that
they create their own little shadow
shadow systems to do the job and then
make it look like they're using the tool
as as much as they possibly can.
uh sorry three things in fact they hate
it they haven't been trained on it so
they don't know how to use it so they
just end up doing other things because
they look at they go we don't have the
time we don't we can't understand it we
we can't use it or the systems have
changed around them which is sort of
related to number two and they haven't
been bought up to date they haven't got
the memo to say no now we're doing it
this way they haven't got the updated
process they haven't got the updated
policy and they're still using a system
that they were using 5 years ago go
because well that's how we've always
done it. What do you what do you mean it
changed? When did that happen?
>> That is that is always the kiss of
death. We're like well that's the way
it's always happened. Okay. Well, let's
really explore that cuz maybe the way
we've always done it has has changed.
Just like a website as you mentioned you
you put a website out there. It needs
maintenance. It needs touching up. When
anything that you do your your employees
will need that as well. they need like
regular educational updates, training,
things like that as well so they can
know how to use the the new version of
the systems and things like that.
>> Um, this this has flown by super super
fast. We didn't even get like the
problem is we did we got off on the AI
trail and we got really deep into that.
Um,
but there's just there's and there's so
many other things we could go into. But
before, you know, I don't want us to to
run out of time without I know everybody
else listening would love to like, you
know, work with you, hear more about
you, learn more about you. So, what are
some of the best ways for them to reach
out and contact you?
>> My website asktalleam.com.
If you put connect
to hyphen me or connect Yeah, connect to
me with the hyphens between the little
minor signs, you'll get to my contact
page. But even if you just go to my
website, you'll find you'll find me
there. Uh I'm basically on every social
media platform bar Tik Tok, you won't
find me on Tik Tok, but you'll find me
on LinkedIn, Instagram, uh Facebook, and
X. And that's all on on my my website. I
run my own community, ask
Charlie.locals.com.
You're welcome to come and join there.
And that's for business owners who just
want to get a better handle on their
tech uh in a in a safe environment. I
shouldn't say that, you know,
[clears throat] just where you want to
ask those questions of this isn't
working, how do I do it or what do I do
here? Uh that that's I'm I'm trying to
grow that one for business owners to
come in and have those conversations
with me and with each other cuz they
there's heaps of information between
each other that they can share as well.
Um you there's my podcast that goes out
every other day, asklelam.com/mpodcast.
You can listen to me there, listen to me
pratt on about this sort of stuff every
other day.
So, what do you is that uh is that
simply you or do you have guests on
there or you just you sort of go through
some of your your your uh pains of the
moment?
>> Uh so, every other day it's pretty much
pains of the moment. It's it's me
paddling on about, you know, this I'm
seeing this, I'm doing this. If I if I
you know, if there's nothing that's
really topical, I've got a whole set of
topics that I like to run through. For
example, I've done a whole se series on
Microsoft uh M365 and how to set up your
mail and the things to do and the the
the quality of life settings you can do,
how you can delegate a me uh an email
box, how you can uh create shared
mailboxes, those sorts of things. So, I
try to do little topics within the
within the podcast itself. And every now
and again, I have a guest on and you
know, we'll sit for an hour and just
have conversations like this. And
they're they're always fun. They are
always fun for me. Yeah, I can I can
tell these have always been great. I I
prepped you beforehand and said that
we've never had a bad guest and you are
not the first. So, you're not going to
be the one that's suddenly be our our
bad guest. This has been this has been
incredible. Like I said, it's uh it's
almost frustrating because there's so
much else that we could talk about. So,
I really appreciate your time and your
energy and and wandering with us as we
have wandered through this this
conversation of the last, you know, hour
or so.
Um, Michael, any closing thoughts?
>> I just want to thank you. It's great
having this conversation with you and
getting your insight, especially on, you
know, fixed versus uh, you know, time
and materials. And hopefully we'll have
you again on the show.
>> I would I would love to come back. And
hey, I really enjoyed that conversation.
that that was a really one good one for
me because it really helps sort of just
get that mind going about where am I at,
what am I doing, how do I do it, is
there something I need to go back and
and review for myself. So, thank you.
>> Yeah, those are and that actually that
goes to your community, anybody that's,
you know, out there that's listening. I
think um I definitely recommend any you
know this her community or something
like that because these kind of
conversations are the ones that do
really help as a as an entrepreneur as a
business owner is to just hear other
thoughts because it is it's the kind of
things that we get into. It's like well
that's I'm doing that the way because
that's the way I've always done it or
that was the way I taught it and then
you realize that oh there's some other
approaches and the next thing you know
you're going huh I wonder if I should
maybe you know embrace that a little bit
or research that a little bit more. So
it is some of the best way to learn is
sometimes the best way to learn is
learning from the uh those successes but
also mistakes of others and and making
sure that you can you know carve your
own path built on top of those.
>> Absolutely. Look, thank you so much.
>> So we'll wrap this one up. Thank you so
much for your time. We appreciate you
and and hanging out with us for a while.
uh everybody as uh we will have the
links in the show notes and uh we will
be back uh with another episode before
you know it. Uh but thank you so much
for your time and have a good uh rest
your day.
>> I will you you guys have a good evening.
>> Okay.
>> You too. Thank you.
>> All right. And we'll just bonus material
here essentially. Um yeah. Uh I was just
going to say if there's any you have any
any parting thoughts or anything like
that. Uh really it's been a great uh
great conversation from the start.
>> I was actually thinking because this is
actually for developers. It's really
about just get out there and try it. Uh
get your processes, get
get what it is you want to do really
clear in your mind. Uh even if it's just
for that 5 seconds that you're doing
something or that 10 that 10 minutes
you're doing something. As a developer,
there is so much we can be doing and
there's so much we do do. Uh it it
should be fun. It will be frustrating.
It absolutely will be frustrating. If
it's not, you're not doing it right. Um
but just yeah, just be really clear
about what it is you want to do for your
client or for whatever it is you're
doing and stick to that. And if it's not
going the way you think it should, step
back. Take a take a step back. Take take
a deep breath. go and talk to someone
else and say, "Let me bounce this off of
you and see what comes out for you."
Because we all developers tend to get
into that bubble. Like, I know I do it
and I'm having a problem. And yeah, my
dad my dad's an ex-tech like he he's an
electrician and did did electronics and
communication and he'll say, "What's
wrong?" And I'll go, "Blah, oh, there it
is." [laughter]
And I'll find the answer because I've
spoken it through. I've looked at it
from a different perspective. So, just
have some fun with it. That's all.
Yeah, we always see
>> my wife is my sounding board for that.
She is non tech and she just basically
lets me rant, you know, ramble on and
eventually I will answer my own
question.
>> The amount of times I've done that, I
got a really good mate who every now and
again I'll just get on the phone and
said just listen. Just don't say a word.
Just listen. And he does. He Mhm. Uhhuh.
Oh, good. You got the answer. Great.
>> Glad I could help. Glad I could just sit
and listen.
All right. All right. Well, thank you so
much. Uh like I said, we'll send you
links uh as these come available
>> and u love to hear more from you and
we'll try to connect with you in the
various place ways that we can. And uh
definitely keep in touch and um check
some of these things out. And uh I guess
that being said, have a good uh since
it's nice uh got your morning started
hopefully on a good good note and you
have a good rest of your day. Charlie,
>> I will do. Thank you so much for your
time, guys. Have a good evening.
>> Thank you.
>> You too. Take care.
>> Bye.
>> [music]
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