If you want to start doing fixed price jobs I would suggest that you do the following first to avoid learning some very expensive lessons about your ability to estimate jobs:
(1) read the spec for a job that you're going to do on an hourly rate basis
(2) make a very detailed layout of how long you think you will spend implementing each part of the spec
(3) total it all up, write down the number and multiply by two, then multiply by your hourly rate
(4) write down the resulting number as what you could have quoted your customer with a huge safety margin of 50%.
(5) next, proceed to do the job as you planned, hourly rate
(6) keep track of your time (you need to do that anyway, but do it in a bit more detail, what part of the spec took how long)
(7) add that all up, multiply by your hourly rate, compare with the number you got in step (4).
If you end up 20% below or further than the number you got in step (4) you are more or less ready to try (small!) fixed price jobs.
Keep in mind that it only takes one big fixed price job to sink your reputation or to totally eat up the profits of many otherwise successful jobs. It took me a really long time to get good at this.
Keep in mind that it only takes one big fixed price job to sink your reputation or to totally eat up the profits of many otherwise successful jobs. It took me a really long time to get good at this.
Do you mean sink your reputation because you underbid and then can't afford to finish the project, or something to that effect?
Depending on how bad you get it wrong it might actually get to that. If you're lucky you will lower your margins, if your less lucky than that you'll eat into your savings, if you're very unlucky then you might have to tell your customer there is no way to deliver at the agreed upon price.
And that can get very ugly, especially if you cause bad things to happen to your customer.
(1) read the spec for a job that you're going to do on an hourly rate basis
(2) make a very detailed layout of how long you think you will spend implementing each part of the spec
(3) total it all up, write down the number and multiply by two, then multiply by your hourly rate
(4) write down the resulting number as what you could have quoted your customer with a huge safety margin of 50%.
(5) next, proceed to do the job as you planned, hourly rate
(6) keep track of your time (you need to do that anyway, but do it in a bit more detail, what part of the spec took how long)
(7) add that all up, multiply by your hourly rate, compare with the number you got in step (4).
If you end up 20% below or further than the number you got in step (4) you are more or less ready to try (small!) fixed price jobs.
Keep in mind that it only takes one big fixed price job to sink your reputation or to totally eat up the profits of many otherwise successful jobs. It took me a really long time to get good at this.