Fixed Cost or Fixed Price, also known as the Fixed Budget Model works best for short-term small or medium sized projects.
Unlike the Time and Material model, Fixed Cost requires well-designed project specs, scopes and requirements delivered before project development launches.
No changes usually take place while the product is under development. Everything flows according to pre-defined requirements.
Considering requirements are to be pre-defined, you will be forced to invest time and resources into their complete creation and analysis from the start.
This model does not require deep direct communications or collaboration between clients and service providers.
Deadlines are set up and met, considering teams are aware of the entire scope from the beginning, thus stating precise dates of product delivery.

Best solution

This model is predictable and reliable, as anything beyond the pre-discussed budget is literally ‘problems of the service provider’. Costs do not rise due to newly emerged factors, yet such processes still lack a touch of flexibility up-to-date applications may require. Due to possible risks service providers obligate to, this business model may be slightly more expensive in terms of particular, risky pieces of the project.

If you are fully aware on what exact solution you require, you have invested time and resources into analyzing the market and harvesting feedback from potential users; you know the exact amount of money you are willing to invest as well as the time when you will require the solution – a Fixed Cost model of cooperation is exactly what you need.