You sign a contract for the application. You pay. And then it turns out that you don't know if the code is yours. Or that you add more every month because „a little more hours came out.” Familiar? How to settle is not just a question of budget. It's a decision about who owns what and how you pay for the changes.
In this text: fixed price, time and material, bundled billing (as an expansion of fixed after MVP) and subscription. Plus what provide in the agreementso that non-contract models include full copyright transfer, and with a subscription, know that you are buying licensed access, not ownership.
Fixed price, a fixed price for a defined scope
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Fixed price means: you set the scope (specification, list of features), software house prices the whole thing and you pay a fixed amount for delivering this scope of work. The budget is known in advance. The risk of cost overruns falls on the contractor; if something goes wrong, they’re the ones who end up paying the difference, not you.
Example from life: A chain of three hair salons needed an online booking system. Instead of simply saying, “We want a booking app,” they sat down with the developer and described: 6 screens (salon selection, date, time, service, customer data, confirmation), confirmation e-mail, simple panel With a list of reservations for today and tomorrow. Specifications for 4 pages. Pricing: PLN 45,000, delivery in 10 weeks. The customer knew how much he would spend and when he would get the product. No surprises in the bill.
A reverse example: If the same client had come in saying, “I want a booking app” without providing any specifics, the developer would have either rejected the fixed-price quote (too high a risk) or quoted a high price “just to be safe.” Or, after three months, it might turn out that the “franchise panel” consists of 20 screens, not 2, and annex, surcharge. Therefore, fixed requires clarification at the start.
Minus: Changing scope during = usually an addendum and surcharge. That's why fixed price often goes hand in hand with MVP: First you make a minimal (fixed) version, then you expand.
In the contract NECESSARY: full copyright transfer to the code and all creations of the project to you (or your company). Not an „exclusive license,” but an transfer, then the product becomes your property. I know of a case where the contract specified “transfer of rights upon full payment.” The customer paid the final installment, and only then did they receive written confirmation that the code and documentation were being transferred to them. Without this provision, he could only „use,” not sell or transfer the project. This is no small thing.
Time and materials (T&M): you pay for the time
Time and materials is billing for actual hours (or days) worked. Flexible: you can reprioritize, add features, cut scope on the fly. Ideal, when requirements are fluid or you are just testing an idea and don't want to lock yourself into a rigid specification.
Example from life: Startup with an idea for Marketplace connecting contractors with customers In a niche industry. It wasn't clear at the start: whether payments should be made right away, or just „inquiries” to begin with; whether the panel for contractors should come first, or the landing for customers. They agreed with SH T&M with a cap of 120 hours for the first 2 months and weekly sync's. After 6 weeks, we found that customers were more likely to fill out an „inquire” form than to register - have shifted priority for notifications and a simple CRM for inquiries. If it were fixed, they would have to add an addendum. With T&M, they simply changed the backlog. Bill for 2 months: about 110 hr., within the scope of the CAP, the product in the hands of users.
Minus: No rigid cost ceiling. Without good communication and oversight, bills can spiral out of control. Another customer, without a cap or a monthly review, found themselves with bills totaling 3× more, than he assumed. It is worth determining, for example. monthly limit of hours or „cap” per phase and keep an eye on reports (what was done, how many hours).
In the contract same as with fixed: full copyright transfer to the code and materials produced for the client. You pay for the work, and the end result is to be your property.
Fixed-price package pricing based on MVP, for a package of enhancements
Packaged in practice Developing fixed price after MVP. You already have a working product (e.g., an MVP). Instead of opening a big „phase 2″ with no end in sight, you establish a enhancement packages: For example, „Package A: admin panel + reports”, „Package B: integration with payments”. For each package -. fixed price, clear scope, predictable budget.
Example from life: Owner booking apps for small practices (cosmetics, physiotherapy) had an MVP: booking form, calendar, confirmation email. It worked -. approx. 200 bookings per month In the first 3 months. Instead of „let's do everything now,” they agreed with SH packages:
- Package A (admin panel + export to CSV + basic reports): PLN 22,000, 6 weeks.
- Package B (Stripe integration, online advance payment): PLN 18,000, 4 weeks.
- Package C (SMS notifications, reminders): PLN 12,000, 3 weeks.
He started with A; he needed the reports for the accountant. After two months, he added B. He paid a known amount in advance for each package. No unfinished T&M or one big „phase 2″ for £150,000.
Benefit: cost control as you continue to develop. You don't have to define the entire system right away. You choose the next package when you're ready, and you're all set for that part again.
In the agreement: full copyright transfer To the code and materials produced within the package on you. Each package = your ownership, just like with classic fixed price.
Subscription, licensed access, not ownership
Subscription is a different tale. You pay for access to the finished product (SaaS, platform, tool) or for maintenance/support -. But you do not acquire ownership of the code. You benefit from license. The manufacturer (software house or supplier) remains the owner; you buy the right of use, usually to a certain extent (users, modules, time).
Example from life: A company with a fleet of 15 cars (deliveries, service) needed a system to track routes, refueling, and maintenance. Instead of building its own app, it purchased subscription to a ready-made platform for fleet management: approx. 500 PLN net / month For 15 vehicles, implementation included, support included. No code ownership, has access. After six months, it changed its business model, reduced its fleet, and discontinued the subscription service. Access expired. She exported the data (routes, reports) within 30 days, as specified in the contract. If she hadn’t checked the provisions regarding data export beforehand, she might have been left without a copy. Therefore, when subscribing, read: what about the data after the end.
When it makes sense: when you don't want to invest in building and maintaining your own system, but would rather use a ready-made one. A conscious decision: you know it not your property. If you stop paying, your access will be terminated.
In a contract with a subscription there is no full transfer of rights...and that's how it should be. The important thing is that it was written explicitly: What the license covers, for how long, what happens to the data after (export, storage period). No insinuations.
Summary: ownership vs access
- Fixed price, T&M, package: contract ensure full transfer of copyright to code and creations on themselves. Then it Your ownership.
- Subscription: you pay for licensed access. It's not your property, and that's the point. It's important that the terms of the license and the data are clear.
Choose the model for your purpose: predictability (fixed / package), flexibility (T&M) or a ready-made tool without custom code (subscription). I always Check the legal provisions—it’s not a minor detail, it’s the foundation.
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