Potential client wants line-by-line breakdown of my quote

I think your best bet is to write it up more like a proposal.
List out what you're going to deliver. 1 HD video of between 2 and 3 minutes. (good to mention if you're supplying royalty free music here or not, and that client will be responsible for licensing costs of other music)
List what it's going to take to make it. Who's supplying the concept and script? You or the client? Who will own that at the end? How many production days/hours using what crew? What type of camera? Are you charging a flat rate to make it or by the hour? You sticking to day rate or purely hours? Refund if you wrap early? (Don't do this!) Charge more if you go overtime? (Do this!) Are you hiring actors? How long to edit? Flat rate or hourly? Graphics? How many revisions are you giving them?
You can list all that out and apply a number to each category, preproduction, production, post, licensing/rights. That should be plenty of information for your client to make a decision without nickel and diming you too much. I'm not too surprised when clients ask for breakdowns. They just want to know what they're paying for, like $5,000 for "creative direction" or is that $5,000 going to rent $50k in gear, pay three crew members, license music, and get a couple days of editing?
 
Ok, since it was briefly mentioned, I have to ask. . .what are the ethical/business justifications for the whole markup thing? I.e. x rents for $350 a day but I charge client $400. . .WHY? I've never understood. Seems like the right thing to do would be to past cost directly to them, unless it's actually costing you something (mileage/time/lost work) to procure whatever that thing is. Especially when it's, say, renting a cam and charging a markup on that beyond what mileage/gas cost it takes to go pick up and return the gear. . .seems like I am now punishing the client for the fact that I don't own that particular cam.
 
Josh Bass said:
I charge based on my actual time with a camera, not years in the industry.
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Of course time served was only a form of valuing a 'creative fee'

Consider GUCCI.. they probably pay someone $100k to choose that 'blue is the new black'

Many jobs one may be making creative decisions that are very hard to value.. establishing a 'tone' for a piece of work.. which is an entirely different skill from operating the camera.

S
 
Renting has overhead, you need to receive it and ship it, or pick it up and return it. So there is more cost above the rental fee.
 
In addition to what has already been said. Remember, when dealing with some projects that are funded with grant money, you will have to account for every service provided. This indeed may cause for line item breakdown. I am currently working with a pretty big budget, on a grant funded project and it is exactly what was require of me. I actually benefited from the line item breakdown.
 
I've never dealt with a bigger client who wanted any such thing. For them, a flat price with a defined scope of work, or $XXX per finished minute, has always been enough.

I agree with the others; they're going to want to nickel-and-dime you for every little thing. The people who pay you the least usually make your life the most miserable.
 
I think every client is different but offering a proposal that itemizes a few line items in each of the categories of production, post-production and data management has always worked for me. As soon as they start nickel and diming, you use my favorite line: 'The bottom line is that we're simply not interested in doing this production (or not able to do it) for less than XYZ budget.' Don't be afraid of the take away if you're secure in the quality of your work.
 
Greg_E said:
Renting has overhead, you need to receive it and ship it, or pick it up and return it. So there is more cost above the rental fee.
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Sorry, I forget sometimes that I live in Houston, where almost everything is available within driving distance. So the shipping etc. not an issue. . .it's literally just how long it takes to go pick up/drop back off. I understand a small markup, that being the case, but some people add 25% or something to the gear fee. On a higher dollar item, seems out of whack.

And I definitely don't get it at all where personnel are concerned (i.e. PA charges $200 but I am charging client $300). I mean, I get it from a "cha-ching" standpoint, just not how it's justifiable.
 
Josh Bass said:
Ok, since it was briefly mentioned, I have to ask. . .what are the ethical/business justifications for the whole markup thing? I.e. x rents for $350 a day but I charge client $400. . .WHY? I've never understood. Seems like the right thing to do would be to past cost directly to them, unless it's actually costing you something (mileage/time/lost work) to procure whatever that thing is. Especially when it's, say, renting a cam and charging a markup on that beyond what mileage/gas cost it takes to go pick up and return the gear. . .seems like I am now punishing the client for the fact that I don't own that particular cam.
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You can charge them exactly what you rent it for. Nobody says you have to mark it up, but don't think that there aren't costs involved in renting gear beyond the amount of money you pay the rental house. What's your time worth? How much time did it take you to call the rental house, drive over to pick it up/return it, check it over when you brought it home, etc. That time adds up and you should get something for it. There's also the carrying cost of your money that went to the rental house before you got paid by the client. There's also the chance that at some point you might not return a piece of gear right on time for whatever reason and now you're shelling out $350 for that extra day that you can't charge the client. That $50 markup over the last few jobs has just paid off!
It's really up to you. I don't charge markup on gear rental as a line item, but I do figure in the time as part of my overall estimate of hours for a job.
Side note...Way back when I used to have to regularly rent some gear from one of our local rental houses they'd always knock off some amount from the list price. This was a way for regular customers like me to be able to make markup while still showing the same rental price to the client that they'd get if they just called the rental house. I don't know if that's too common these days, but it was a nice way to do it back in the day.
 
i misspoke when i first brought this up...i get the idea of a SMALL markup on those items, just not the amount many folks say they do. as for the other stuff...my time is literally worth nothing. i would love to be home chillin instead of running around town or whatever but i think most would agree that is not worth anything. i would not be making money somewhere else were i not running around getting gear, so not worth anything from that angle either. i very seldom rent from actual houses (mostly rent from very forgiving colleagues), and when i do, usually arrange for return in a way that i could not possibly be late (day after last day of gig, before 10am/noon, many folks wont bill extra day. i guess in a less forgiving market or if you have to ship etc. those things are valid.
 
Something I put in all budgets and estimates is the phrase "Rights and licenses transfer to client upon payment of balance due."
 
Josh Bass said:
my time is literally worth nothing. i would love to be home chillin instead of running around town or whatever but i think most would agree that is not worth anything. i would not be making money somewhere else were i not running around getting gear,
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I think that's a pretty poor way to look at that. Time is your only non-redeemable resource. Once you spend, it's gone forever, and there is no way to get more of it. If you want to spend it just chillin at home that's your call.

Strictly speaking of numbers and business, you really have to do the math. If you could work a 40 hour week job @ $30/hour for 50 weeks out of the year, that's $60,000 a year. Unless you can make that doing freelance video, you are literally burning money. Which is fine if you love it and do it for passion - great. That's the cost of doing what you love!

But keep in mind that *whatever* your possible rate at a "normal" job would be, even say $15/hr @ $30,000 a year, you need to be sure you're covering that doing freelance otherwise you're really going to end up in hole long term. Your hourly rate should cover the hours you put into your business that AREN'T billed - things like time put into taxes, education, gear shopping, research, etc. If you work 500+ unpaid hours a year, you don't really make your hourly rate that you bill a client. Those unbilled hours are a huge part of doing business... not to mention minus all of your expenses (website, insurance, business card, gear, gas, etc.)

So let's say you bill $85 an hour and work 1000 hours in a year, raking in $85,000. Cool! Now less all your expenses, divide that up with your 500 some unpaid hours, and factor in your higher tax rate. Suddenly your hourly rate and yearly income is looking a whole lot more down to earth... sub $50/hour, without a full year's worth of paid employment.
 
Josh Bass said:
Ok, since it was briefly mentioned, I have to ask. . .what are the ethical/business justifications for the whole markup thing? I.e. x rents for $350 a day but I charge client $400. . .WHY? I've never understood. Seems like the right thing to do would be to past cost directly to them, unless it's actually costing you something (mileage/time/lost work) to procure whatever that thing is. Especially when it's, say, renting a cam and charging a markup on that beyond what mileage/gas cost it takes to go pick up and return the gear. . .seems like I am now punishing the client for the fact that I don't own that particular cam.
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Does you local supermarket charge you the same for a loaf of break or a bottle of milk as it costs them to make it?

Of course not, it is only reasonable they make a profit on it. Plus when they order it they are carrying certain risks, and using their expertise as where to order it from, and it takes time and effort to do so, all these things are worth something!! You could break it up into fine detail all of this, but that is silly for most purposes. Just refer to it as "mark up".
 
Making a mark up on stuff.. And people is entirely normal unless your creative fee is really high.

-we are in this game to pay for kids wives houses
-Those things take admin and also management

when your pa bails he loses $200 you have to go mental on the phone and get it sorted - maybe pulling someone in at $400 - all those $300 billed for $200 laid out cover the loss you make on this occasion.

also on a broader note it is imo important to charge industry norms.. Anything else kills the industry for every one.
 
morgan_moore said:
also on a broader note it is imo important to charge industry norms.. Anything else kills the industry for every one.
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Mmmhmm - often killed by people who only think they can afford to work at that rate until they realize they CANT.

I shudder to think of how much more I could have/should have charged when I was younger.

It's not really the game of capitalism and competition, its more ignorance. When selling a physical product, there is zero misunderstanding about what your actual expenses are. Creative freelance is weird, its an intangible cost, and it doesn't take long to realize its completely unsustainable to charge the low rate many people are, and it perpetually kills the market. It's becoming a market dictated by the young, inexperienced, and unprofessional on the low-mid range, with the only real takings left at the higher end. I forsee a lot of 18-24 year old filmmaker who are quickly forced to give up on a burgeoning career unless they can make it to the top of their game and corporate work - which is ironically not where many want to be, as you lose the end-to-end creative freedom and joy.

Maybe that's fine and the nature of life and the future! But it is a bummer to lose an industry that many people could find great satisfaction in (and that the mid range industry could find better quality, more professional contractors in if the younger crowd were able to grow up and make a sustainable living and let their experience continue to grow)... lost to short sighted low balling of prices. You might be able to make that work for a couple years, but you certainly won't make a living out of it or support a family on it, and it makes it impossible for the industry to survive.
 
Josh Bass said:
.what are the ethical/business justifications for the whole markup thing? I.e. x rents for $350 a day but I charge client $400. . .WHY? I've never understood. Seems like the right thing to do would be to past cost directly to them,
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If you are doing this, you are going out of business or not running a business. It is not possible to pass things on at cost. At the absolute minimum, if our business has a pass-through item such as a rental, the mark up is 35% or we are not in business.
 
Your time is actually the ONLY thing worth money. Value of time should always be the biggest part of any budget, whether it is in pre-production, production or post-production. I am hired for a job for me and my time, what I bring with me is my skills and craftsmanship. You are ALWAYS paying for my time. The work itself I do gladly, but any time I could be home chilling is time you need to pay for.

Gear is just stuff. Commodities are just product. Our time is our worth. Don't forget that.
 
On the question of markup, remember that if you are charging for anything then you are responsible for it. Responsible for arranging for it, responsible for making sure it is there and performs properly, responsible for returning it, responsible for it not breaking and messing up the job, responsible for it not getting broken and costing additional money, responsible for any taxes or other costs associated with its employ, on and on. The markup is because you are taking on the burden of these responsibilities.

There are jobs where I just show up and perform my duties then leave. There are other jobs where I'm in charge of everything involved in making the whole shebang happen. I certainly should get paid more if I am involved in more.
 
Thanks for the answers gents. . .I guess they're just philosophical differences. I will always tell folks I'm a terrible businessman, probably be never be rich or even "well off", but I simply can't add 30% to everying (gear and labor) and still be working. Client base/market won't support it. Not right now anyway. I'm simply not that special. The rates are what they are and they're not going to change any time soon.
 
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