A Fixed-Price model is a pricing approach with a predetermined and agreed-upon price for a specified scope of work. It requires a well-defined set of project requirements, deliverables & timelines. Once the project scope is defined and a fixed price is agreed upon, it cannot be altered without renegotiating the contract terms.

Budget Control: The client knows exactly what the custom software development cost will be, which aids in budget planning and ensures that the project will not exceed the allocated funds.

Minimized Risk: Since the vendor bears the risk of any cost overrun, the risk to the client is minimized.

Clear Expectations: Due to the well-defined project scope and deliverables, both the client and the vendor have clear expectations of what the project entails.

The Time and Materials (T&M) model is a pricing approach where costs are determined by the time & resources spent on a project. Clients pay for the work hours the development team spends & the materials used. This model offers flexibility as it allows for adjustments to project scope and requirements during the process.

Flexibility: This model allows for changes in project requirements and scope throughout the development process. It accommodates evolving needs and unexpected challenges.

Transparency : The client is billed for actual work done and resources used, making it easy to see where the costs come from.

Optimal Solution: With more flexibility and continuous feedback, this model enables the development of a product closely aligned with the client’s evolving needs.

In a Milestone-based Pricing model, for make customer comforatble, the custom software development project is divided into several key stages or milestones. Payment is tied to the successful completion of these milestones, which can be certain functionalities, features, or stages of the software.

Risk Mitigation: This model allows clients to assess progress at each milestone and provides opportunities to correct course if needed.

Encourages Efficiency: The need to complete milestones to receive payment encourages efficient and timely work from the custom software development team.

Transparent Progress Tracking: The division of the project into measurable stages allows easy tracking of progress and quality assurance at every step.