The Company's fee

F

finchy

Well-known member
Hi guys,

Im just at the stages of drawing up our first budget for the client... and i am just wondering what you company fee is... in terms of what percentage of the overall costs do you add on for the 'Companies time'....10-15%? How do you usually go about making the actual profit from a job...?

Cheers in advance for any input!


Tom.
 
Add up all your costs, including your day rate for the work you're doing, and that's your budget. Some (most) folks would then mark up everything on that list a percentage for company profit. Then, on top of that, add some additional company profit. I usually want the company to clear a third of the budget.

Do not equate your time with company profit, because you want to get to the point someday where you can hire someone else to do what you used to do, and so each person doing work needs to get paid, even if that's you. Company profit is above and beyond that.
 
Thanks barry thats great!
So say if you had a job that came to $5k... crew,kit,expenses etc... you would charge around $6650 (+33%) to the client, which you would note down on the budget as 'company fee'...?

This may sound stupid...Im finding it hard to imagine a client being willing to add a 1/3 onto the budget when it would only cost $X amount to actually shoot... i know that is how we make our profit! but i'm just thinking of a way to put it so that it is not just an 'add on' that they don't benefit from... but thats just my inexperience with budgeting etc

Would you say the more experienced you are and the better track record you have.. the more 'right' you have to add 33% onto the overall budget...? as a new company, would it be good practice to maybe reduce our company fee as a gesture to new clients?


thanks alot!
 
I never give clients budgets. They give me the budget -- meaning, I ask them "what do you have budgeted for this?" and after some hemming and hawing, they'd say "we'd like to keep it under $7,000." So I'd say "great -- the budget is $7,000 then."

They don't ask where it gets spent or what you spend it on or why it costs $7,000, and largely they don't care. They are buying a finished video production.
 
Yeah thats sounds about right i guess.. i'm sure at some point i will be asked where the money is going but i guess they will understand that like any business, we need to have a mark up on our products too!
Thanks barry, very helpful!

Tom.
 
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