Should I charge my customer more?

[Kell Smith]

Thanks folks

I'm a she, FYI. And no, I didn't think that assumption was un-PC at all.

Hmmm. Good points. Well I"ll start with an update. I explained to my client the issues regarding the raw footage, offered him a clip, told him it would be an extra charge, etc. He said it sounded like more trouble than it was worth, so that worked out. He also asked me to tape the another of his lectures - only in part, 45 ,minutes (which doesn't really matter anyway because I have to be there early to set up). He also wants me to tape an intro for his website - just really quick although I will have to light him, most likely - at the same time for $100.00 I'd like to go higher but like a spineless jellyfish I said yes, looking at the stack of bills on my counter. I'm also going to do some graphic design and lay out a brochure for him and have to research what to charge for that. If I could rewind a few days, I'd go back and raise the rate but it's too late now.

Regarding the bidding issue there are several things:

-As to experience level, I'm not brand new, but I'm not experienced either. I'm just starting to step out and do projects and don't feel comfortable charging the rates that more experienced people command.

- Bidding is a nightmare. People have suggested things but it's still very difficult to bid when you are just getting a feel for what goes into projects, work-wise, time-wise, experience-wise, etc. I worked up some packages for certain types of projects to get around that . But when it comes to projects like this, I really don't know what to charge. it's only experience that shows you how long it will take, what will go into it, etc.

- It's very difficult to compare with what others charge for the reasons stated above. Each project is different. Each person is different - work speed, equipment, experience level. So xyz per hour is different in each situation. I don't intentionally underbid because that hurts everybody. It's just that I don't know where to start. People have posted here and I have reviewed it - but it's probably time to pull that out and review again since I've done more projects and have some experience to work with, now.

-I fight a lot with the poverty mentality. In truth, for reasons stated above, not being aware of what people are charging, it never occurs to me to charge xyz per hour, because it's not even in my frame of reference. Then, I think that my experience level doesn't entitle me to the higher rates. Which has some truth to it but I still need to charge what I'm worth. What does Suze Orman call it? "Putting yourself on sale." Then, I settle for the lower rate because I'm afraid I'll lose the job, and I need the money. In truth people don't respect that. You end up giving away the store, and they respect you less than if you had charged a full rate. So it hurts you, and other video professionals as well because it brings rates down.

-I wish I could sit down once and for all and get a handle on the bidding thing.

EDIT
In my end-of-the-year organization this year, I'm going to sit down and review the bidding and pricing thing again and get a handle on it and make some decisions. I know my packages are fair rates, but the free-form bidding? Forget it.

[Craig Seeman]

Kell, do look at my formula again

http://www.dvinfo.net/conf/975252-post9.html

That's the base amount. You need to be able to make ALL your bills working 25 paid hours a week more or less. If you charge less than that you'll lose more than the job. If you need $25/hr to live and you're only getting $15/hr you're losing money because at the end of each month you're deeper in the hole. That's why many businesses go under within the first year.

Going above the base amount does depend on other factors such as market conditions and your skill/experience.

For the kind of work you're doing figuring out how long shooting takes is easy. The client tells you. DONE. You have to charge for a minimum number of hours since going to/from setup/breakdown COUNT. If you're driving there's wear on your car as well as gas and maybe parking fees. Whether the minimum is 2 hours or 5 hours might depend on typical travel for jobs but you're being taken away from other possible work (or finding work). You don't have to charge for the travel itself but if you can't make 3-5 hours pay for a job it'll cost you.

Editing can be very hard to judge in some cases. Just charge hourly. Client organization counts. Some clients take forever and some are decisive. YOU should not be taking the penalty for an indecisive client. I usually make the client a window time code dub (and charge for it). I tell them if they KNOW the shots they want after looking they'll save it on the editing. You HAVE to make the client RESPONSIBLE for some things. You HAVE TO.

If I have complete control I can do an estimate. I can estimate a range based on fast and slow clients. I can tell a client 4-6 hours for example if it's client supervised but I do tell them that their organization can affect that.

Doing something even CLOSE to accurate bid requires details from the client. You may have to ask questions.

I'd also recommend NEVER do flat rates. Always include one round of revisions in the estimate. There's a BIG difference keeping to a budget and doing a flat rate. Budgets allow you to cut certain things or going over on approval. Flat rate is asking for minimum wage or less. Flat rate means they can have you forever and never pay you another cent.

If you don't have enough info to make a bid (which is a budget NOT a flat rate) then you MUST ask more questions.

Sometimes clients simply can't provide the details because they don't know. If a client simply says I want a 3 minute video about my business or product I ask to see their web page. Then I'm in control. I can look at their web page (or any other marketing material) and come up with a concept I KNOW I can execute (otherwise I wouldn't recommend it of course).

BTW an hour of shooting certainly doesn't have to be the same rate as an hour of editing. There's lots of variables with an hour of shooting depending on the gear you need. Camera costs less per hour than camera, lights, crane, dolly, steadicam, 2nd sound.
Editing is me and my computer no matter what and I don't have to leave my office.

Selling yourself is another story. You may only need $25/hr to cover your expenses but you might be worth $150/hr. Only you and the market can decide that. You may/may not EVER know what "other" people are charging. You can probably see their work on their web pages though and you'll have an idea what they're talents and specialties are. There may be no "other' if you specialize in something.

Packages only work when everything is very well defined. I can have a package for a local cable spot that's 4 hours shooting (camera, tripod, audio only) and 8 hours editing for example. They do script (I'll review) and vo in needed, I provide stock music. If they want more they pay more. It gives the client a base budget though if they need a bottom of the barrel price.

[Adam Gold]

Kell --
Very well put, and I understand all you are saying although I would urge you to move past your insecurities relating to what your time is worth.

There's another thread very near this one that actually links to an online calculator where you input your monthly expenses, and then can come up with a baseline which you can then use Craig's very good formula with. So it's all in Black & White and there's no ego involved.

No one can stop you from being a "spineless jellyfish" except you. And when you actually "lose" a job you didn't really want anyway because you were too expensive, it actually feels great. But you absolutely must experiment with price elasticity because if you don't, you will never know how much the marketplace values you and you will forever be underpaid. In other words, with each job, you bid more and more until you stop getting work -- that's how you know you've reached your level.

You only have so many hours a week to sell. It is imperative that you get an amount you are comfortable with for each of them.

[Craig Seeman]

There's this
FreelanceSwitch Hourly Rate Calculator

[Kell Smith]

Yes, I do like that formula a lot!!! I wasn't ignoring it. It's a really nice way to approach it. I'm going to revisit my entire budget and work it. And thank you everyone for the advice. I'm sure also there are a number of other threads that address this.

The biggest part in that non-package rate bidding is knowing how long something will take. I have a tendency to massively underestimate that. And the customer is going to want some idea of what it will cost them, realistically, so I have to be able to give them an idea. And then also, time goes into planning and so on as well.

Surely as time goes on, it will become more clear how long projects will take. I"m getting a better idea with each new project.

You know, I have another business part time, work that I absolutely detest. But it's very simple, I'm good at it, I know exactly how long a job will take and what to estimate, and I wouldn't dream of underbidding. If someone wants less money I tell them to go find a student who will work more cheaply, but may not be as experienced. I get very insulted when they try to bargain me down and get me to work for less. It's easier to do since I hate the work, also. And I must say that when they move on, I do feel great because I didn't disrespect myself by undervaluing or cheapening my time. But there's still not the confidence yet in the video area. I'll have to get past that. It's getting better. At least now when my friends want me to work for free I am starting to tell them no.

I really do want to make sure I am in scale with the others in the field so as to be charging the correct amount, and I also want to be a small part of keeping rates strong for videographers as opposed to driving them down.

But the high and middle-end people? I have no idea how they bid or charge. It's not even in my frame of reference. Therein lies a problem. I'm operating out of a much smaller context, financially and need to expand the ideas for what's possible as a rate.

EDIT
Thanks for the cool calculator link also.

[Tim Polster]

Kell,

It sounds like you are on the path to getting your rates set, so I would like to offer a few tips:

If you are uncomfortable with quotes or on the spot negotiations, always tell the client you will review the job and get back to them. This will allow you to get your thoughts together away from the moment and come up with a balanced quote.

Make a list of hourly rates - shooting, shooting with lights, editing etc... and keep it by the phone or nearby so when somebody calls about pricing, you will have a reference so when you are searching for what to charge, you will not give away the farm.

Look at this recent job and ask yourself, "what would I have rather made for that amount of work?" Then base your "new" rates at or close to those rates and give them a try for a while.

It is not easy, but if you have the talent, the rates will take care of themselves.

[Kell Smith]

You charge more for shooting with lights?

I am hoping that with time and experience, I will be able to charge higher rates for the time.

So... what would you guys have charged for the work I mentioned? I know what I would have liked to have made but am not sure what is fair for the job.

Part 1 -Setup, no lights, film lecture one for clips, one camera, one wireless mic. So far eight internet clips with minimal editing/correction and one revision to shorten some clips. Two hours review time with client although if I had thought of it, I would have made a review disc with a time code and let him get back to me on it. $200.00

Part 2-Film lecture two. Not sure yet about lighting for lecture, probably none. Lighting in his office for a 30 sec or so intro "Hi, I'm Joe Blow" for his website. A few clips from lecture 2. Probably a time code review this time around. Then, burning all clips to DVD for him for future use. $100.00

Part 3-For you graphic design types - I'm going to design a full color two sided trifold brochure. Probably won't be that difficult as I'll take the look and feel of his website and carry it over. No estimate yet. Suggestions??

[Tim Polster]

For sure yes.

Lighting opens up a can of worms and requires a lot more input, equipment cost and expertise.

[Kell Smith]

What percentage more do you charge for shooting with lights?

[Tim Polster]

Well it is a little tough to say because I really only shoot without lights when I am hired by another company as a shooter or if I am shooting a live event.

My rates with camera only would be about 1/2 to 2/3rds of what shooting with lighting costs.

I use lighting for everything I produce as it obviously looks best.

Lighting also takes a lot more setup time and you play the role a designer as well. The number hats you wear starts to stack up when you get past just operating the camera.

So this is where half and full day rates come into play.

[Adam Gold]

Originally Posted by Kell Smith

So... what would you guys have charged for the work I mentioned? Suggestions??

Without knowing how many hours you put in there's no way to know. Just guesstimating, I think you charged about half of what you should have, given your stated level of expertise.

Go check out the calculator at the link above and plug in the resulting recommended hourly rates to your actual time spent for project one, then use that as a basis for the other projects.

Another factor we don't know, because you didn't provide this info, is what market geographically you are in. That makes a big difference as "USA" is a pretty big place. Just from the recent responders, Brooklyn, Arlington and Woodinville would all likely have different rate scales.

But ultimately, no one can decide what's right for you... which is why there haven't been a lot of concrete figures mentioned. Only you can decide this.

[Craig Seeman]

Our cost of living/expenses/gear/market are all different so the exact dollars may not be meaningful. The reasoning may be though.

I'd charge a 3 hour minimum for the shoot.

The Time code burn in depends on amount of shoot material but it's the time it takes to input the video plus time it takes to encode the DVD at about 2/3 my edit rate.

Since the client would know the 8 clips or so walking in the door that could be 1 to 1 1/2 hours with tweaking the color and cleaning the audio. Compression (unless they're long clips) wouldn't be more than 1/2. So that might be 2 hours total. I only have 1 hour minimum on editing since there's no schedule or travel inconvenience. Edit is also only 75% of shoot rate.

So it would be 3 hours shoot, 2 hours edit, DVD depends on how much shot. If there's 3 hours straight shooting that DVD could take nearly 6 hours to make so it might be 4 hours edit rate for that at 2/3.

Some would have an even lower dub rate for that. Keep in mind that the input for the DVD would be input for the edit (at full edit rate rather than 2/3) anyway so they're paying a bit lower for input with the added expense of the DVD.

Put it another way
3 hour shoot
6 hour DVD (2/3 - 4 hour billed)
2 hour edit and compression.

Let's say no DVD
3 hour shoot
5 hour edit (3 hour input, 2 hours for client to pick the clips and me to edit and compress)

Basically if I only shot 30 minutes that DVD cost goes WAY down of course and so does the edit time.

Here's my thinking given lights and shoot minimum. I'm in NYC/Brooklyn and most of my shoots are in Manhattan.

If it's me camera, tripod, wireless mics, I'm on the subway and it's 3 hour minimum
Once you add lights it's car, driving in traffic, finding parking on street or in a lot (additional expense), assistant to help. That's 4 hour minimum and 25% more per hour. I found at 50% more they'll cancel the lights. I actually make more money at 25% and a higher minimum. BTW this rate happens as long as I need the car. Then the lights come along anyway. The clock starts ticking as soon as I start unpacking the gear. In other words client is paying for setup time.

That :30 office shoot is going to cost more than the lecture (and it should IMHO). Unless he's a pro on camera, that 30 seconds can take close to an hour. I direct at that point and will work to get a good take out of him and it's going to take time to light the office too, maybe even move the furniture around.

So here's how the numbers look in simple form as percentages.

Shoot 3 hour minimum - 100%
Shoot with lights 4 hour minimum - 125%
Edit 1 hour minimum - 75%
DVD Time code - 50%

This way you can insert your $ amount and get the numbers you might want.
Tim and Adam might have different reasoning and it would be just as valid. We all may have different business models. The main thing is that at the end of the month ALL the bills get paid both personal and business and profit is what you want and what the market will bear for your skills/experience.

What to do when the potential client says they can get it cheaper? Say good luck and good bye. Typically they'll claim a much lower price. Sometimes they'll say "I can get a college student for $x. Find a polite way to tell them McDonalds is also much cheaper than a gourmet restaurant.

What to do when some wants you to fix the botched job after eating at McDonalds? I first ask them EXACTLY what they didn't like about the job. That'll actually tell me about the client's character and what might need to be done to fix the job. I make clear there's a limit to what can be fixed. Blown out video and distorted audio is gone. Titles and graphics normally can't be removed unless I have the camera masters. They pay hourly and I give them NO ESTIMATE. I will NOT do an estimate on a verbal description on a job like that. They often either don't understand or underestimate the issue to make it sound easy. If they want me to look at the material I'm charging for that too. BTW if they don't pass the "character" test I simply won't take the job.

[Jay Gladwell]

Originally Posted by Craig Seeman

BTW if they don't pass the "character" test I simply won't take the job.

Here, here!

Some say I'm crazy, but I've turned away very "lucrative" jobs due to the "characters" that approach me. All too often such "opportunities" wind up costing me!

For me, more often than not, the character factor plays a greater role than the money making potential.

There are the occasions when a nut will slip under the radar. Those are pure tortutre!

[Shaun Roemich]

Kell: I've found it easiest to separate my labour from my equipment when costing jobs.
- I'm $x for an 8 hour day, $.5x + 50 for a half day
- My camera kit with batteries and tripod is 2 - 3% of purchase price per day and includes batteries, charger/AC power supply, one wired and one wireless mic and not much else.
- Light kit is a flat rate per day that is higher than 3% of purchase due to known consumable cost (bulbs/luminants)
- Audio kit (additional mics, wireless, adaptors, boom pole & mic, field mixer and headphones) is a percentage of purchase + a small nominal fee for consumables like batteries.
- Tape is cost + x% markup
- Timecode window burns are a percentage of my edit rate
- Editing is at edit rate
- Renders are at a fraction of edit rate if unattended, otherwise at edit rate. This applies to DVD/web encoding as well.
- DVD duplication and printing are at my general labour rate.

This works for me. Hope this helps.

[Kell Smith]

Hi all,
Still waiting to get a chance to really go through what you all suggested , look at my current pricing and packages, and try to make some decisions. Haven't forgotten you - just waiting to sit down with that.

I went back and spoke to my customer and told him that in accepting his 100.00 offer I thought maybe I had underbid myself just a bit, since it would take the same amount of time to come in, set up, do half the lecture as the whole lecture, even if the lecture itself was shorter than the first one, as well as capture, clip logging and output time. I offered to meet him halfway at 150, although I said since I had originally accepted his offer I would honor the 100.00 if he thought that was the fair thing to do.

He doesn't know if he's even going to do the intro, he has to think about it, so it may just be the lecture.
I don't know if I did the right thing here but really felt I needed to speak up about it since I was really feeling as if I had accepted an offer hastily and in desperation. It's not that much more money but I do need it right now. It probably would have been better left alone as a learning experience. I hope he wasn't offended but he seems to still want to do it. We are going to talk more about his other brochure project and the earlier clips when we meet later this week. Same issues happening with the brochure. Not even sure what to bid or what is scale.

Do you think I did the right thing?