Will this fixed-price project make money?

A fixed-price bid means you carry the risk that cost and time overrun. Before you sign, quantify it: what margin can you really defend, and what is the probability you end up losing money?

If you quote 20,000 USD against an expected cost of about 15,667 USD, your chance of losing money is about 3.2% — but the margin you can actually defend at 80% confidence is only about 11.8%. To hold a 20.0% margin at 80% confidence you would need to bid about 22,038 USD.

Try it with a real decision

Start with the example. Make it yours.

The numbers below are an editable example. Replace them with your own cost estimates; the answer updates as you type. Everything stays in this browser.

New to three-point estimates?

Optimistic: what it takes when things go well, without assuming a miracle.
Most likely: the outcome you would expect most often on similar work.
Pessimistic: a realistic difficult outcome. Include uncertainty, not an arbitrary markup.

Keep all three in the same units and put the most likely value between the other two. P80 means an estimated 80% chance of staying at or below a number under this model; it is not a promise.

These quick tools use a normal approximation, not simulated samples. The approximation can extend beyond your optimistic and pessimistic bounds, particularly for skewed estimates. For bounded task sampling, dependencies and separate risk events, use the full app.

Contract & cost estimate

Fixed contract price What the client is paying

Cost — optimistic (O)

Cost — most likely (M)

Cost — pessimistic (P) P ≥ O

Target margin at 80% confidence (%)

Currency label label only — no rates

Results

Scenario	P50	P80	P90
Estimated cost	15,667 USD	17,630 USD	18,657 USD
Your margin if you quote 20,000 USD	21.7%	11.8%	6.7%

Chance you lose money3.2%

Your quoted price20,000 USD

Minimum bid to keep your target margin at P8022,038 USD

Reading the table: a P80 cost means in 80% of outcomes cost stays at or below that figure. A negative margin at P80 means the P80 cost is above your quote; see the separate loss probability for how often a loss occurs.

Formula

cost at P = mean + z·σ, where mean = (O + 4M + P)/6, σ = (P − O)/6

margin at P = (price − cost_P) / price

P(losing money) = 1 − Φ((price − mean) / σ)

minimum quote for target margin m at 80% = P80_cost / (1 − m)

Normal approximation: P50/P80/P90 and the loss probability use a normal approximation to a Beta-PERT cost estimate — a fast, honest single-estimate shortcut, not a full simulation.

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What changes if…?

Keep these results, then adjust an estimate above to compare. Your baseline stays in this tab until you clear it or reload. Values are rounded for display.

Plain text with your assumptions, key results and any saved baseline. No account needed.

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Continue with the whole project

See what could erode your quoted margin

Model the work behind your price: task costs, overhead and specific risk events. Then compare the proposed quote against the simulated project outcomes.

This calculator approximates one total-cost range. It does not explain which tasks or risks drive a loss. All outputs remain conditional on the assumptions you enter.

Start with a project template Explore the full app →

The margin arithmetic takes seconds; defending the price behind it is the craft. Recommended reading: How to Remain Valuable When Intelligence Becomes Cheap .

Will this fixed-price project make money?

Contract & cost estimate

Results

Formula

What changes if…?

See what could erode your quoted margin

Product

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