Day rate or fixed price? How builders should decide, and how to protect yourself either way
Every builder has been burned both ways. A fixed price on a job that turned out to have rotten joists and a hidden well. A day-rate job where the client decided after week six that it was "taking too long" and stopped paying. The choice is not about which is better; it is about matching the method to the uncertainty and writing it down properly.
When a day rate makes sense
Day rate (or time and materials) is right when nobody can define the scope: opening up a Victorian house to see what is behind the plaster, a long snagging and repair list, a refurbishment that is being designed as it goes, or small works where the pricing effort would cost more than the job.
Protect yourself with a written agreement that states the rates per person per day and the hours that make a day, how materials are charged (cost plus a stated percentage), how plant and skips are charged, that invoices are weekly or fortnightly, and that payment is due within seven days. Give a written estimate of the likely total and a clause saying you will warn when 80% of it is reached. Keep a daily record of who was on site and what was done, with photos. A site diary that the client can see removes almost every argument before it starts.
When a fixed price makes sense
Fixed price is right when the scope is defined: drawings exist, a specification is agreed, and the unknowns are limited. Clients prefer it, lenders insist on it, and done well it is where builders make their best margins, because efficiency is rewarded.
Protect yourself with a quote that is specific about what is included and excluded, provisional sums for genuine unknowns (foundations, services diversions, asbestos), a list of client-supplied items, a stated assumption about access and working hours, and a variation procedure that says any change is priced and approved in writing before it is done. Then a contract and a payment schedule tied to stages.
The hybrid that works
Most good domestic builders use a fixed price for the defined work plus provisional sums and a schedule of rates for the rest. The rates (per person per day, per cubic metre of extra excavation, per metre of extra drainage) are agreed up front, so when the unknown turns up there is no negotiation, just a measured extra. EstiMate quotes are built this way: the itemised price, the provisional sums shown separately, and variations priced from the agreed rates and approved by the client with one tap.
Pricing the risk
A fixed price should carry a contingency that reflects what you do not know. A new-build on a clean site might carry 3%. Opening up a 1900 terrace might carry 10% and still be a gamble; that is a job for provisional sums or a day rate for the opening-up stage followed by a fixed price once you can see the structure.
What clients hear
Clients hear "day rate" as "no limit" and "fixed price" as "no extras". Both are wrong, and the quote is where you correct them. A day-rate agreement with a budget estimate and weekly reporting feels controlled. A fixed price with provisional sums and a clear variation procedure feels honest. The builder who explains this at the quote stage is the builder who gets paid without a fight.
Get paid either way
Whichever method, invoice on the agreed cycle, chase automatically, and never let more than one payment stage of exposure build up. EstiMate's invoicing issues the stage or weekly invoices from the job, takes card payments, and chases overdue ones for you. The contract that goes with the quote carries the payment terms and the variation procedure, signed online before you start.
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