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What’s your percentage?
Hi,
I am slowly transitioning my video business. Currently I shoot talking heads and I tend to quote 200% of expenses. E.g., if a day’s work costs me about $500, I quote $1,000. The scope of my work, and my clients, are quite limited so I’ve never had to worry about thinking about this much.
Just to be clear, when I say ‘expenses’ I mean all the costs of the business plus the lifestyle that I’m after. This includes home, medical, a fancy car, maintenance, new gear, taxes and everything else under the sun.
Now, I want to get out of shooting talking heads and get into more varied kinds of projects – all paid work. I know how to budget for my expenses and the project. What I’m thinking is, if I’m doing a project that requires a lot of expenditure, say about $5,000 or so per day, can/should I continue with my 200% rule and quote $10,000?
Is that being greedy? Don’t get me wrong, I know I can charge for whatever the market will bear, but I’d like to get a feel for what others do. Furthermore, I don’t have a mind-blowing showreel to backup exorbitant quotes anyway.
To put it another way, if the market can only bear $1,000 per day, should I start assuming I need to get the job done for $500?
I don’t want to know how much you make, only how much you mark-up for your services. What’s your cut? What factors do you base it on?
Would appreciate any help. Thanks!
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2 Replies
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100% markup on below the line expenses will rapidly price you out of a competitive range.
Take a clue from the film world tradition of “above the line” and “below the line” quoting.
Essentially, above the line costs are fixed and administrative. It’s fair to list a production fee above the line (mine is on the FIRST line in bold and I explicitly tell clients this is what you’re paying ME to plan and execute your video project) The production fee should represent the fair profit you require to operate your business. It’s often calculated by determining how much time and effort the production will be – and is often the last number I plug into my quotes after I’ve done all the “below the line” numbers that help determine the actual scope of work.
Below the line are the production specific costs from equipment to editing and all the labor you’ll be sub-contracting to make your videos.
Below the line should reflect a markup over costs, but if you subject those costs to a massive markup your competitors can easily undercut you with less expensive gear or less qualified labor.
FWIW.
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Thanks, Bill. Great advice!
I’m pretty fair with my BTL costing, no markups. Like you said, it’s the ME part that I need to figure out.
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