Rates

[Drew Ott]

What do you fellow freelancers do to figure out how to price yourselves? I'm speaking specifically of freelance shooters who work for other production companies.

I live a somewhat frugal existence and have never needed to be aggressive about my rates. However, recently I keep discovering that people less talented than me have been successfully charging a lot more than me, sometimes with the same clients. It's not about the money, it's about the disrespect from the clients.

I've heard that a good way to price yourself is value-based pricing. If the job is worth $10,000, and you believe you provided half of the value, then you should charge $5,000. The problem is that if you're a freelancer, you never know exactly what the job is actually worth. It's difficult to determine your value if you're missing information.

What do you do?

 

[cyclone]

I disagree with your interpretation of the situation. If $X is what you charge (or if $X is what they offer and you accept it), that's your problem, not theirs. Sometimes ya gotta say "no". And the "no" shouldn't be flip or out of spite...just tell them that you love working for them, but that you have a double booking that day and the other client is paying $XXX. They'll catch on.

 

[Drew Ott]

I agree that I am the one making the mistake. I have been happily accepting offers, assuming "good will" from the client. It turns out that I've been accepting low-ball offers. Next time I will be more wise.

My main question, though, is: How do you accurately price yourself?

 

[AndreeOnline]

My main question, though, is: How do you accurately price yourself?

1. You need to price yourself to sustain the quality of life your looking for.
2. You need to deliver results/services corresponding to the price level you're at.

While these might be two broad "duh" statements, it's basically as simple as that—at the core. Of course, this "advice" is not what you're looking for. You want actual prices.

But first: don't ever—as in never, ever—price a service you offer, based on the time it takes to complete it. You might have developed a preset for a title or graphic that takes 4 seconds to apply that you should still charge $300 for if you include it. Same if you develop a intricate node structure in Resolve that helps you get the most out of your camera when isolating skin tones so that you can set your images apart from the rest: that might be a 2 second drag-drop operation for you, but it lands as a $1500 line item on the bill as "advanced secondary color correction". That line item is something you pitch to your client when you finalise the 'deliverables' and the scope of the project.

Let me be clear: this is NOT ripping anyone of. It's just that you need to identify and quantify what you are actually delivering in terms of value. You don't need to worry about what the whole project is worth (if you're not solely responsible), but you always need to charge 100% of what you are delivering.

Where the rubber meets the road:

• pick a major rental house in your area. Download their rental prices and list all the gear you own and what they charge for it per day. Create a spreadsheet with your gear that's easy to reference so that you know how much to charge for your equipment on jobs. They go as separate items. You will basically rent your gear to your clients on jobs. You never rent for less than a whole day. So day rates here.
• Find out what videographer day rates are in your area (not including equipment). You can sell 1/2 day rates, but never less. 10 minute job? Half a day.
• In your spreadsheet, start to list services like color correction and editing. Text and 2D animations are one thing, 3D is something else.
• Will you do a separate voice over recording? New line item.

This list could go on. Just break the type of job you normally do down into smaller chunks and price them accordingly. The next time you get a job it's easy:

You need to go to the client on two occasions for most of the day (=two day rates), plus two days worth of rental for every item you own. Then you add post work services like color correction and compositing (can also be simple stuff like adding titles).

The next time you do this and you think you'll charge $650 for a 4 minute film with audio and some titles… your spreadsheet will tell you to charge $3800—and that's when the dime drops. Congratulations, your in business!

Good luck!

PS. And don't forget, the real product you sell… is you.

 

[Bassman2003]

Great post. It is not easy as you have to be around for a while to really see the value. Sometimes the value is in just showing up on time and trying!

 

[unadog]

There are some good tools online for calculating your "Cost of Doing Business":

Article:

http://www.lincolnbarbour.com/blog/2012/02/24/photo-biz-do-your-codb-to-create-your-pricing/


Calculator(s):

https://nppa.org/calculator

https://asmp.org/content/codb-calculator#.V2WWk7grKhc



More articles:

http://digital-photography-school.com/how-to-calculate-your-cost-of-doing-business/

http://photography.tutsplus.com/art...w-find-your-cost-of-doing-business--cms-23244

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These are mostly photography based, but the process should be the same. This isn't about how to price your services, but about the minimum you need to charge to stay in the business.

You should also be somewhat aspirational. Even if you live in a cardboard box & ride a bicycle, some day you will want to have a significant other/ partner/ live more like an adult. Have a car, auto insurance, health insurance, some savings, etc. (Speaking as someone who made $12,000 to $14,000 a year while bicycle racing in my early 20's. After getting a degree in Photography, Philosophy, and Sociology- a lucrative combination!)

Cheers!

 

[TheDingo]

I think you also have to factor in what the market will pay for the type of project you are quoting on. Here in Toronto some clients will expect you to own sufficient equipment to get the job done and will only pay rental fees for specialty items.

>>>This isn't about how to price your services, but about the minimum you need to charge to stay in the business.

If the market will only pay X dollars for a project and you have lots of competition willing to deliver this project at X dollars, then you're going to have to decide if you want the job at X dollars too or just pass on it and try to find something better.

In the mid 2000's I noticed that some local shooters had got rid of their studio space in order to lower their day rate, and because of this location shooting and studio rentals became a lot more common in Toronto.

 

[Josh Bass]

Indeed. Related to that is, are you enough of a businessman/salesman to get those clients that will pay "your true worth"? You start upping your fees by 400% without those sales/business skills in place you may find yourself completely without work.

 

[Publimix]

W The problem is that if you're a freelancer, you never know exactly what the job is actually worth. It's difficult to determine your value if you're missing information.

You are right about that. Getting all the information about the job is the first thing you should do.

Value, rate and pricing can be an interesting mix.
Pricing is a marketing tool, we have expectations about high or low prices: 'to cheap, can't be good, expensive so it must be good'
Finding your rate is less complicated, there are different methods to do that. (calculate, compare, etc.)

1: calculate or find your rate.
2: you have to determine your minimum rate, (that is never ever go lower than that.)
3: try to get the information about the job, how many people, budget, duration etc. etc.

After you invested some time researching, you have a good base for negotiation. Start with a high rate and don't panic when the client wants to negotiate. But never go below your minimum rate. It will destroy your self esteem. You will lose the respect of your client if you drop your price too much.

Some people are born negotiators, most of us have to learn it the hard way. Investing in a course can be very useful.

Succes!

 

[AndreeOnline]

Here in Toronto some clients will expect you to own sufficient equipment to get the job done and will only pay rental fees for specialty items.

That is kind of like saying you should buy camera, support, light and audio gear out of your household cash to "get the privilege" to "gain valuable experience" by producing video content for them?



Lot's of people own cameras today. I understand that taking on smaller jobs for some money is a great way to offset the cost of that next lens we're drooling over. At the same time the demand for photos/videos for businesses online presence has never been greater. This creates a niche in the entry level market where hobbyists meet smaller clients. In time, larger and larger clients will try to cherry pick up-and-coming talents in these waters that haven't established themselves yet—and get a great deal.

This IS the market and MINDSET of hobbyists. We all pass through there. But be careful to not be perpetually stuck here. You will probably find it VERY difficult to charge the same client significantly more later, if you give yourself away for cheap in the beginning.

Running a business, full time or part time doesn't matter (I'm part time myself), you need to cover your costs of business. You don't pay for stuff with your own money. You might invest up front, but the cost should be covered in full by clients later.

The space between hobbyist and professional is huge gray zone today. You can operate anywhere you're comfortable. But my initial answer above was based on the assumption that we're talking about sustainable, professional services (i.e. where we're charging for getting out of bed, our equipment and gas driving to our clients).

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So, isn't the real question then: how do you get 'real' clients?

Under promise, over deliver. Deliver on time. Be organized and prepared. You can be tough as long as your clear and honest. Offer a complete product (like video+photos+animation) so that your client only needs a single point of contact. Be nice, but don't be a sucker. Make yourself the product.

 

[Josh Bass]

I still think it's also very much about "sales". . .you can under promise/over deliver all you want but if you still only attract folks with $400 to spend you're never going to get people to spend $4000 or $40,000. Got to learn how to a) cross paths with those other folks and b) get them to hire you.

 

[Publimix]

I still think it's also very much about "sales". . .you can under promise/over deliver all you want but if you still only attract folks with $400 to spend you're never going to get people to spend $4000 or $40,000. Got to learn how to a) cross paths with those other folks and b) get them to hire you.

John is right about that. One good $4.000 client equals ten $400 clients.

Bottom line is, you have to be more than a good craftsman/professional, you need some sales skills and negotiating skills too.

The good news is, you can learn and train these skills.

But the 'over deliver principle' will be beneficial for the long term. Even better when you communicate that to all your clients and prospects. And ask your clients to do the same, let them be your best advertisers.

 

[TheDingo]

At the same time the demand for photos/videos for businesses online presence has never been greater.

And the supply of shooters to produce a job has never been greater, so you work at the rates the market will bear or find some other way to make a living.

I got out of the pro photography market because of the large number of photo school graduates that live with their parents, they own a pretty good kit, and are happy to make $15K per year. Some of them are pretty good shooters too, but they've devalued the photo market by selling themselves too cheap.

 

[AndreeOnline]

And the supply of shooters to produce a job has never been greater…

That's kind of what I said in the sentence before you started quoting me. Everyone with a camera is a potential 'producer'. Many will work for almost nothing, because all they worry about is financing part of the Sigma 85mm 1.4 A when it comes out. And it's only a $1000!

…so you work at the rates the market will bear or find some other way to make a living.

Yes, kind of. But you need to establish foothold in the right market. Think of ways to be a problem solver for clients that have a budget for an actual production. I'm not saying it's easy or straight forward. The bitter reality is that you often need some sort of personal connection or special skill.

An interesting parallel could be the little niche market that uses Cinema 4D's mograph dynamics engine to render medical simulations. There's a market just for that: visualising how chemical compounds attaches to viruses or proteins and what not. Cinema 4D can do lot's of stuff, but that's all they use it for and make a living out of. Of course: these persons have a good understanding of the chemistry behind it and just use the software as a tool.

But that's one way to make a video career too. Use the camera as a tool to illustrate what you know and sell/pitch it to clients who are willing to pay for that material. That client likely won't be a friend's soccer team that needs 'fresh material' for a home page or a 'non profit' who believes you should follow their lead and donate your work.