It’s exciting when someone wants to hire you to shoot a video for him or her. Then, they ask you, “What are your rates?”
Some people have rates set in stone, but many will be thinking, “It depends.” It’s a tough tightrope for some to navigate. Quote too high, you might lose the sale. Quote too low, you’ll feel like you got ripped off. Where’s the happy medium?
Here are 12 tips to help set rates for your video production services that will be fair for you and your client.
Let the Production Factors That Matter Most Determine Your Quote
When you’re determining how much to charge for a video production, make a mental checklist of what factors will play the biggest part in the overall cost. Director and New York Times photographer Vincent LaForet looks at not just at how much money the project will cost him, but also how much time (“Time is the most precious resource,” he says). He also takes a hard look at how interested he is in the job and whether it will push him forward in terms of doing something new.
Determine How Much Work Will Go Into What You Quote
Some production houses charge per project, others by the hour. How can you determine what will work best for your company? T60 Productions opts to charge by the day.
Although it gets one-hour video shoot requests, the company factors in all of the pre- and post-production work, traveling to and from the shoot, converting the video files — all things that extend that shoot way past an hour. Just because the actual filming may take an hour, don’t forget how much more time you’ll be working on it after the cameras stop rolling.
Add Up the Cost of Doing Business
Before you name your price, take a breath and add up what it’s going to cost you ahead of time to get things rolling, Videomaker Magazine suggests. Figuring out this number now will help you determine how much you’ll need to make a profit. Upfront costs could include things such as equipment and hiring a staff to help you.
Offer Several Services and Pricing Tiers
Another factor in how you determine your rates is how many options you offer your clients. Heavy Digital, for example, can produce videos for a variety of price points. the company can supply anything from a solo videographer to a full-fledged production crew. If you can supply multiple options, you put yourself in a position to upsell.
Have a Plan in Case the Scope of the Project Grows
When you create an estimate for your client, it’s really just an educated guess. There’s no way to predict additional costs that might creep into your production and eat your profits. To protect yourself from a scope creep, video405 owner and director Patrick Kirk recommends putting a revisions process in the contract that lets you start to charge your client by the hour after they’ve exceeded an agreement upon revisions limit.
Don’t Underestimate What Your Services are Worth
It can be easy to fall into the trap of giving a lowball offer to a client so you can win the job, but you’re doing yourself a disservice when you do that. That doesn’t mean you just list a non-negotiable price, but you know what your time and talent is worth. Proudly state what your quote is and see what your prospective client says. Don’t let fear determine what your services are worth. Let your work do that for you.
Find a Happy Medium Between Your Lowest Quote and Highest
If you’re just not sure how much you should quote a job for, take your pie-in-the-sky number, take the very least amount you’d find acceptable for the gig, then find the average of those two numbers, cinematographer Gary Elmer suggests. The number should get you within what you’re looking for.
Once you have that number, you can always adjust it depending on how much you want the job, how complex or time-consuming it might be, and whether it could lead to more work in the future.
Overestimate Your Production Costs
The last thing you want to have to do in the middle of a video production is go back to the client and ask for more money, filmmaker Alexander Fox at Crew of One writes.
When you’re drawing up an estimate, provide a little cushion (on your end) so that you are covered in case an unexpected expense (you need extra cast members, more equipment, etc.) arises. Otherwise, you’ll end up either paying for something out of your own pocket, or having to make that dreaded call asking for additional funds.
Take Inventory of How Much Available Time You Have
A lot of times, your rates can come down to simple supply and demand, writes KRE8 Enterprises President and CEO Kris Simmons. When the demand for your services is high and you’re busy, consider charging more so you can hire additional staff to help you complete the project rather than having to turn down the work.
On the other hand, when things are a slow you might want to bring your quote back to normal or even go a tad under it to increase your chances of getting the job.
The timing is important, too. Simmons recommends not lowering your quote if the job is a few months away from getting started. You wouldn’t want to give a low quote because you need the work then become unavailable to take on a higher-paying gig later.
Seek Out Higher-Paying Clients
If you want to put high quotes for your work out there, you can increase your odds of earning that much by reaching out to companies or individuals that can afford your rates. If you shoot a corporate video, a bigger company can most likely afford to pay you more than a smaller business could. You’d also probably have more flexibility with the production budget working with a larger company, too. If you’re already established with a client base, try to raise your rates at least 10%.
Use the Project Type to Decide How You’ll Charge the Client
If you’re not sure whether to charge by the day, hour or project, sometimes what you’re working on can determine that for you. For example Phil Ebiner from Video School Online suggests charging by the hour for extending projects like editing a documentary, but charging by the day for videography or other set work because the amount of time you could be on the set on a given day is unpredictable. If you’re shooting a company video or a similar project, charge a flat project fee.
Take a Look at What Your Competitors are Charging
There’s nothing wrong with taking a peek at what others in the industry are charging for their services. When you do your research, start with the most expensive company, suggests Envato Tuts+ copy editor Andrew Blackman. Starting at the top will give you an idea of what the biggest in the business are charging and will help you decide whether you can or should be charging that much, too. If you don’t think so, you at least you know you can offer a comparable discount.