# Substep 21: Determine Business Model

**Purpose**: Determine how the service will be paid for (for external contracts)

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## Instruction

**Before building contract sections**, determine the business model:

"First, let's determine the business model - how will this service be paid for? This helps us structure the contract correctly.

**What business model fits this project?**

1. **Fixed-Price Project** - Set price for a defined scope of work
   - Best for: Projects with clear deliverables and scope
   - Includes: Not-to-exceed clause, upfront payment recommended
   - Example: "$50,000 for complete website redesign with 5 pages"

2. **Hourly/Time-Based** - Pay for actual time worked
   - Best for: Ongoing work, uncertain scope, flexible requirements
   - Includes: Hourly rate, time tracking, optional not-to-exceed cap
   - Example: "$150/hour, estimated 200 hours"

3. **Retainer** - Monthly commitment with minimum hours
   - Best for: Ongoing support, regular availability needed
   - Includes: Monthly retainer amount, minimum hours, availability expectations, hourly rate for overage
   - Example: "$5,000/month retainer for 20 hours minimum, $200/hour for additional hours"

4. **Hybrid** - Combination of models (e.g., retainer + project work)
   - Best for: Complex arrangements with multiple work types
   - Includes: Multiple payment structures combined

Which model fits your situation?"

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## After User Selects Business Model

**Confirm understanding**: "So you've chosen [model]. This means [brief explanation of what this means for the contract]."

**Note the selection**: This will determine which sections we include and how we configure payment terms, not-to-exceed, availability, etc.

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## Next Step

After determining business model:
→ `../05-build-contract/22-build-section-01-project-overview.md`

