June 16, 2010
by Kris Simmons
|Determine what your half-day and full-day rates need to be in
order for you to make an acceptable profit as a freelance videographer.
This might be the most important decision you’ll make when setting up your freelance videography business.
How much should you charge for your services?
I’ve always believed that you should never leave money on the table when negotiating a deal with a customer. In other words, if a customer expects to pay $1,000 for you to shoot for a day, you shouldn’t offer to do it for $700. On the other hand, if a customer only wants to pay $700 for your services, you shouldn’t turn it down just because you ordinarily like to make $1,000 for a day’s worth of work.
Regarding my pricing strategy, I try to charge somewhere close to industry standard rates so that I make as much money as possible while remaining competitive when compared to other videographers in my market.
For a one-person camera crew, my day rate is $1,200. This includes my camcorder, tripod, wireless microphone, light kit and up to 10 hours of time working on the shoot.
My half day rate for a one-person crew is $800 and includes the same equipment package and up to 5 hours in the field.
For most customers, this rate is acceptable. For others, it’s more than they have in their budget for the project. When a customer indicates that my rates are higher than they want to pay, I simply ask them what they have in their budget for these services. Then, if what they are comfortable paying is within range of what I’m willing to accept, I’ll book the gig.
I typically won’t accept anything less than $700 for a full day of shooting and $500 for a half day but I rarely have to go that low. Most customers who have experience hiring freelance videographers are familiar with industry standard rates and fully expect to pay them. Then, when they call you in the future, they’ll pay the same rates again and again.
The best strategy is to set your rates according to industry standards so you have something to go by when people ask what you charge. Then, be willing to negotiate from there so you can book the gig.
In my mind, a guaranteed $700 for a day’s worth of work is far better than getting nothing because you refused to accept less than what’s on your rate sheet.
A bird in the hand is better than two in the bush. $700 in your checking account is better than $700 in your competitor’s account. Plus, when that customer needs to hire a videographer for another shoot, who do you think will get the call? The other guy will…every time. Think hard about the lifetime value of a new customer before you turn down a freelance gig because they didn’t want to pay you full rate.
Another thing to keep in mind is that if your rates are too low, a customer might perceive you as not qualified compared to other videographers in your area. If their rates average $800 to $1200 for a full day of shooting and your rate is $500, odds are good they’ll hire one of them instead of you.
Having rates that are too low can make you look like an amateur regardless of how long you’ve been working as a professional videographer.
There will also be opportunities when you are asked to work using someone else’s equipment instead of your own. For these cases, you’ll need rates for just your time that doesn’t include the use of your gear.
I prefer not to work without my own equipment because I like to make the extra money but freelance beggars can’t always be choosers. Again, guaranteed money is better than no money.
My full day rate without equipment is $500 and my half-day rate is $350. These are pretty standard in the industry for experienced videographers so your rates may vary. If you are in a position where you are still trying to make a name for yourself, you may want to charge closer to $300 for a full day and $150 for a half day.
The same rules apply here as they did above when it came to negotiating rates. When asked if what your rate is for shooting with someone else’s equipment, tell them but be open to charging less if their budget requires it.
Always, always, always remember that guaranteed money is better than no money. If someone is willing to book you today for $300 but you have a deal that has a 50% chance of going through that will pay you $500 to shoot on the same day, take the guaranteed money. You can always try to convince the other customer to shoot on a different day by offering them a discount.
Or, if they can’t shoot on a different day, you can book the gig anyway at the higher amount and call one of your trusted videographer friends to cover the shoot for you. The customer pays you $500. You pay the other videographer $300.
The net result is that you made $300 on your shoot and $200 from the other shoot all in the same day. Then, when you get paid for the other shoot, you cut the videographer a check and off you go. Plus, you have two satisfied customers who will call you for future work.
I’ll talk later about the importance of networking with other industry professionals in your area. One of the main reasons for doing this is so you can have several videographers you trust who can cover shoots when you aren’t available and so you can double, triple or even quadruple book gigs on the same day.
If your goal is to make more than six-figures with your freelance videography business, you’ll have to book multiple gigs at the same time on a regular basis. It’s possible to do this if done correctly. The more trusted partners you have in your network, the more money you can make on a given day, week or month.
One final thought about setting your freelance videography rates. Even though there are industry standard rates for these services, its up to you to manage your finances so that your rates will cover business expenses and your personal salary each month.
When you are first getting started, it’s vitally important that you run your household and business as lean as possible. Get rid of all unnecessary expenses and restructure your debt if possible so you can reduce monthly payments.
In this business, there will be great months followed by terrible months regarding sales. Keeping your monthly expenses as low as possible will put you in the best position to achieve success. It is possible to support your family and to even provide a luxurious lifestyle with your freelance income but many families find that having a second income from a spouse’s job makes things a lot easier.
If you have two incomes in your household, you have the option to charge less than your competitors for your services. Just keep in mind that you’ll run the risk of customers not taking you as serious as your competitors because your rates aren’t in line with theirs. Tread carefully.
I suggest you quote industry standard rates but that you be willing to negotiate down as far as you are comfortable doing so in order to get the gig. Then, when it comes time to invoice the customer, put the industry standard rate first followed by the amount you chose to discount the rate in order to help the customer meet their budgetary requirements.
This way, they’ll understand the true value of your service and that you did them a favor by discounting the rate to meet their needs. This will go a long way in building good will with that customer and will greatly increase the odds they will only want to work with you should they have the need in the future.
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