Stop Making This Mistake When Pricing your Video Service
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- Опубликовано: 23 июл 2024
- Pricing creative services and especially video production can be confusing and there is very little information out there to show you what to do and what not to do.
There are actually three major mistakes almost everyone makes when pricing their video production services. I think if you can avoid all three, it will be one of the most helpful things you can do to grow a successful business.
I’ll break down a real-life example and show you where each mistake takes place, and how to fix it.
When pricing your video service, people usually do this:
Your labor + gear + other hired labor = Total cost
Three mistakes with this pricing model.
Mistake one - you didn't account for managing this project. Emails, packing the gear, hiring crew, invoicing, paperwork.
Mistake two - you didn't include the profit
If you want to be able to run a business, stop invoicing like a freelance.
Typically, you would add 20-25% in profit to your total cost of doing business including your time.
Mistake three - adding your profit as a line item in the invoice.
And the biggest issue that I've seen that causes people to get stuck is not building in the cost to acquire a customer.
Learn the exact blueprint I used to go from a struggling videographer, to running a profitable video production business, in this one-hour free training.
www.filmmakingmentor.com/Vide...
Learn the exact blueprint I used to go from a struggling videographer, to running a profitable video production business, in this one-hour free training.
www.filmmakingmentor.com/Video_Production_Accelerator_Opt_In
Does this mean that if a person wanted to see any of you work that they must buy and take a course.?
@@sutv6754 Think about that question and then remember this is at its very core about a business growing and making money. Saj runs a video production company, and wants to impart his knowledge by charging for that time to instruct and help others. This isn't about how to change a tail light on your 2015 Ford Explorer which, you can find plenty of free videos on RUclips that will teach you that.
@@meechcreativellc OK, Thanks for weighing it but not sure I under your comment. If I remember correctly I wanted to see the product he was making and charging so much money for. As you know there are many imposters on RUclips. I did end up seeing one of his videos he provided and it was top notch so I take him seriously. I'm not going to take the course now but maybe someday. Need to see if the proof is in the pudding. That's all. All good.
Thank you so much for this channel. So helpful. I just created a production company
As someone just starting out, this was incredibly helpful! I had never even thought about including any sort of profit margin.
I Started a video motion gfx business for music artist and quickly starting getting clients due to my good quality (worked with 80+ verified artist) one big mistake I made was providing high quality for low price...problem with this is people start to expect it every time (Hollywood quality for pennies) which then attracts more people with a low budget before you know it...its a RACE to the BOTTOM!!! Know your worth!
This is such a slap in the face. Thanks for the slap. I’ve been doing everything wrong and always wondered why I’m still not gaining any actual profit. Much appreciated for this video! New sub
Would love to see your approach to pricing post production.
So much value! Thank you for sharing 🙏🏽
Always valuable. Thank you.
Thank you this is so helpful. Wow!
Incredibly helpful video man, thank you so much for sharing your wisdom!
Thank you tremendously for taking the time to share this knowledge. Your channel has been a huge help in getting my company off the ground, the right way. I can’t thank you enough🙏
Love your videos Saj! Started with one m50 into video live-streaming concerts at the beginning of the pandemic, now have 6 canon's in my recording studio, and just got my 2nd BMPCC 6k, so awesome to have all your videos for help as I pivot from music to more professional video production
I watched this like 5 times in a row following along. Wow. Thank you man. I have a much better grasp on charging
This is very helpful information as I start to transit from a freelancing position to a business through getting out of this pandemic. Thanks a lot for sharing this!
Wow I've been stuck for a couple years trying to build and grow my production company and this video was tremendously enlightening thank you! Looking forward to the course!
This is so insightful. Thank you!
Thank you this is very informative as a person who came from freelancing and just started his company
This is eye-opening, Saj! Thank you!
Thank you so much for this video. I didn't realise what I'm doing until I saw this video. It's very useful. Thank you and have a nice day
Great video thank you!
Super helpful 🙏🏽 even better that you’re in Chicago and put that into consideration 🙌🏽 lucky to be from here
Well…absolutely fantastic content, very helpful tools.
Thanks so much for these videos Saj. I've learned so much already to apply to my business. Really appreciate you taking the time to share the knowledge!
Just subscribed ! Your advice is legit 🙏🏻👊🏻
Absolutely FANTASTIC video!!!
Thank you for sharing this!
This is immensely valuable. I've extensively researched this topic and found nothing close to the quality of this video. Thank you.
Best video on rates I've watched so far!
Excellent stuff, thanks for sharing all these tips, really helpful.
This is some reaaaal gold!
Wow, incredible advice!!!Thank you so much
Awesome. Thanks for sharing!
This is fantastic advice. Thanks for this!
You good sir are a SAINT for sharing this information ℹ️ thank you 🙏🏻 New Sub & a huge thumbs up 👍🏻 Cheers from Western Australia 🇦🇺
This is the video I needed two years ago. Thank you 🙌
My Sir, you have gained a new sub. Thank you for the information.
This video was so helpful! Thank you!!!
Extremely useful, THANK YOU 🙏
Man your channel is a gem
I can't stress enough how incredibly helpful your videos are! Appreciate all the knowledge you are sharing!
Happy to help!
I have been struggling for the last year on how I can grow from a freelancer to a small production company and how to work out costing for clients.
This video showing up in my feed is exactly what I needed to see and what I needed to hear.
Some excellent tips here and I shall definitely be putting them to use going forward.
Thank you for posting this video 🙂
Very valuable information. I love the point of hiring a DP if you can't make it but you make no money, so you need to account for company profit. I have not thought of it from that perspective but it makes absolute sense. No care brand charges just for labor, they need to mark up. Thank you, Saj for the insight!
Thank you bro , really helped a lot
No problem 👍
This video is gold!
This was unexpected and crazy good, I am only a editor but knowing this us really good.
Yooo I'm in Chicago as well! I tried to explain this when I first started my channel but you explain it way better lol. I def need to update mine! 👌
Solid video to address how to build your price. One thing left out was 'taxes'......that's another line item for many to have as a line item as well.
Yea. Since the hard costs are expenses and can be written off, I build taxes into the profit margin
Great video. I’m doing mostly corporate work and my line items are usually day rate and editing rate. I build everything into the day rate to avoid questions and having to explain everything that like items bring up.
That’s a great move.
Do your clients not ask why the day rate changes each project?
I’ve been running my video production company for 3 years and never thought to charge for the profit margin / expenses… realizing why it’s been hard to buy new gear
I love your videos, thank you! Line item budgets and placing profit into each line item (or not having specific line items at all): I hear you, and your argument makes sense. If we’re doing a corporate video we probably should usually follow that advice. Commercials are different, though. Those really require, at least for us, line item budgets and a profit/production fee line item at the end. Sort of a simplified AICP budget, really. Reason being, those types of clients really do want to see the details (and sometimes it helps us if they’re all “why didn’t we have a steadicam?” “Because it’s not in the budget…”).
Yea that’s true for us when doing commercial work through agencies. Agencies require line item. I guess this video was related to direct b to b work
Excellent. Thank you.
Great explanation and breakdown. Thank you. New sub.
thank you for this video Saj
This is an excellent breakdown! Thank you for making this video.
Musician, RUclipsr, filmmaker also from Chicago over here!! See you around, neighbor!
Thanks!
I always expect my shooter to have backup shooting gear in case critical elements like the main camera go out (doesn't have to be the same body, but just something that ensures we can capture to spec in case of issues). So yes, you should be charging something to have backup equipment on site - frankly it should be built in to the price of the main camera.
Thanks Saj, wish it was that easy in a competitive market, plus prospects often don't value video enough to pay 5k, 10k etc
It’s certainly not as easy as typing out these numbers. But it’s been over 10 years since I’ve done a video for under 5k and I’m in a very competitive market. Often times, people are trying to explain the value of video to the wrong type of client. If someone blinks twice about a 5k video and you’re still trying to explain the value, it’s time to move away from that client or market. I struggled for years to explain the value of video and turn realized there are clients that pay far more and already know the value and don’t need any explanation. But it does take time to get to that level
Great info
thumbs up for me. keep vids coming
Thanks, Saj. I wish I got this video last week, but I am grateful you shared this, and it has changed my mindset. Going back to my books and working better and smarter as a business
Thank you
Great information
Thank you. I just realized I let go of hundreds of thousands or even millions with the way I bill. I learned a lot.
So good man
Impressive.
Hey! That's an incredible video!
I'd like to add more to this to help improve upcoming photographers/cinematographers with their business.
I started my own studio about a year ago and had run into all the issues that you mentioned above.
And, i sat myself down to work out this issue.
I'd like to know - how can I reach out to you, to share my resources so that the material could probably be useful to your audience?
Hey send me an email info@newslatefilms.com
I've been watching many of your videos of for a while now. I'm a fan of them and your channel. I'd love to see what one of your 5000 dollars pro videos looks like. Do you have any you can show.
Hey here is an example newslatefilms.com/portfolio/company-profile/
@@Filmmakingmentor That's really great. Thank You.
Thanks for this! Any advice for finding clientele that value the work at this prices?
Yep I’ll have some videos coving that soon
This is so real
FYI. This method of calculating profit margin is incorrect. In his video he adds 20% ($618) to his total cost of $3400 which brings his total to $4080. If you take $4080 and remove 20% profit ($816) your initial invoice would actually be $3264. Instead you need to add ($850) to your invoice in order to actually get a 20% profit margin and your total invoice would need to be $4250
wow, but how did you calculate those 850$?
@@vladi_gavr
3,400 / 0.8 = 4,250.
4,250 - 3,400 = 850
PS. 0.8 being 20% less than 1. Such as value * 0.8 is 20% less.
There’s a difference between Markup and Profit Margin. The calculation he used in the video is called “markup” not “profit margin” these terms often get confused. Also in order to make a business profitable it is recommended to have at least a 30%-35% profit margin. This is when you have to have factor in rent, utilities, payroll, maintenance, vehicle, capitol purchases and inventory. You may be able to get away with less profit if you run a business out of your home. But if you want to grow your business you should look at a higher profit margin.
@@ARTAudioCan And in Quickbooks you can apply markup automatically that is hidden from the client too. Markup tools in QB are pretty powerful.
🤙🏽 very helpful
Did you come across situations where clients specifically ask you for a breakdown? And how did you deal with that?
Yea sometimes. I just broke down the invoice into pre-pro, production and post. Didn’t break down any more though. If they want line by line, you can just build in the overhead and profit margin into each line
Nice content, you got a sub.
I would add that 20% of profit margin is not that great considering that taxing in a lot of countries will eat that up especially if all the money for the hired freelancers goes through your company. I prefer going with 30% its a more safe variant. But I guess it also depends on the taxing in the country where you run your business. All the other things are right to the point.
At least in the U.S., tax would be another line, charged on the total you are charging the client, including your profit. Total, plus tax, equals new total. Either that, or you include that in your overhead costs.
@@bullettin i think you are referring to the sale taxes. There are also federal income taxes that vary depending on the yearly income. I was referring those.
Each of the forty-six US states with a sales tax makes their own rules and laws. In my state, taxes are applicable to tangible good sold, not services. You gotta check your local taxation, it’s not a blanket rule.
@@BrewReview i was referring to the federal income taxes that you get at the end of the year depending on your yearly income. The more income passes through your business you could get in a higher tax level. I'm not in the USA and I guess a lot of viewers are not also. But I know that you have different income tax levels in the USA also.
I don’t think you can pass your income tax expense on to clients.. can you? Is that normal?
Awesome, Hey do you mind to cover this same topic for video editing side as well? Thanks
Working on that video soon
You briefly mentioned that you were going to talk about pricing for editing in a separate video. Can you link it?
How do you add the profit into the actual total cost of the project? Meaning where do you list it? Sorry just heard the answer on the end of the video. Thank you.
We need guides on video editing business!!
Ok
great episode! keep rocking! what about taxes, how u calculate that?
I can talk about it in an upcoming vidro
@@Filmmakingmentor that will se amazing! thanks
This is outstanding information and we are using these steps in our business and upgrades must be part of the equation. The pre production work, I wasn't charging for. Every thing else, including insurance, I'm fine.
How do we know what to charge for gear?
Great video and it was very helpful. I'm not in video production, but the subject of pricing is something that so many people need help with and it's relatable to just about every field.
I do have a question that may be too wide open to really answer. It concerns overhead with things like insurance, rent for an office, things that have a definite cost to you that you know ahead of time what they'll be for a year, as opposed to something like advertising where you may have the ability to suddenly use something that is much cheaper.
How do you approach building that into the pricing of a job? Do you do anything like seek to take care of one months rent for each client? Or do you approach it like you feel it won't be a problem to get a certain number of clients per month or per quarter, so you factor in each job to take care of a percentage of rent?
The second option for me. I know my monthly overhead that I can’t change. Rent, salary, insurance, subscriptions, ect. I basically built in some buffer into the profit margin to account for overhead that is a hard cost. And I know how many jobs we need to do to cover that overhead each month. If we don’t get that number, it eats into the profit margin
@@Filmmakingmentor Okay. Thank you.
Nice tut. Thx. QUESTION: How you deal with some other freelancer offer to the same client with half the price you submit.?
That usually means it’s the wrong client. There is always going to be someone cheaper on the smaller job, but the higher end you get, the closer the pricing. No one is doing jobs at my level for half the price. If the client hears that, they know that person has no idea what they are doing.
Once a while though, you will lose jobs to cheaper people that are actually good and don’t yet understand their value, but they don’t stay around long
@@Filmmakingmentor Could'nt think of a better approach. Thats relieving. Thx.
This is super great advice but as a one man show, when I keep adding all those "extras" the final price will seem way too much to the clients for a video done just by me. I need to overcome that.
Yea it’s a lot more difficult when you do a solo video. But I would try it when you get a new client. Even if it’s just the pre-production part and bump on your rate for profit
@@Filmmakingmentor thanks man. I will try it out! I really like taking into account the gear used. Do you have an excel or google sheet template for tracking down what gear is been used how many times w / projects? It would be awesome to have a visual graph of that.
I use quickbooks for it: each item has a line item and then it puts out a report if you look at the breakdown
@@Filmmakingmentor thanks for the suggestion. I think I'll build something in google sheets.
Not all heroes wear capes
fucking amazing video! this is perfect becous i am in this prosess of changing over right now so this was perfect! thanks!!!!
Do you guys always hire an assistant/grip when using lights? I often work as a solo filmmaker for documentary/corporate work and I feel not comfortable to carry and set up lights meanwhile I have to focus on camera, sound, directing (and sometimes client talking to me). So I was thinking when pricing next costumers to offer lighting only with an extra budget for assistant-grip… or some basic lighting should always be included? What do you think?
I don’t do one person jobs anymore. I used to but it’s harder to charge the right amount and someone has to do eat too much, increasing the risk for mistakes.
Include it in your offer. Don't do the things you dislike and distract yourself. Works for everyone's benefit. Charge his hour rate 120%, and you gain from it even more.
Charging for gear is interesting. If you own the gear, do you still charge?
Well the video answered that question - but how do you decide on the fee to charge for equipment?
I have a newer video that breaks that down from last week.
3:11 How do you go about pricing your gear costs to the client? Do you go off what it would cost to rent the equipment? We typically just charge for labor and the equipment is included, but I definitely see how we're undercharging. We're a two-man crew and do everything ourselves, so just trying to get an idea how to go about it!
Yea we charge based on rental house pricing around us. You also don’t have to show it as a line item in the invoice. You can build it into your rate. But it’s important to separate the two internally.
@@Filmmakingmentor Perfect, thank you!!
Did I miss you mentioning the sound guys gear? I know you said he'd bring it, but it should be a line item also.
Yea I can be. The guys I hire bill me together. Labor and gear. So I don’t see their breakdown. But it can be. Like 700 labor and 550 for gear
@@Filmmakingmentor right, but my point being the client shouldn't think they're getting great for nothing, so a trend didn't start. Good stuff. Just a note from the backseat 🤣
Yea for sure. I usually don’t share this type of breakdown with my clients anyway. It’s more for internal pricing and budgeting for me. I only share pre-production, production and post-production costs with my client in a budget. Not line items
Another video full of practical knowledge. I realized that never included the fee of using my own gear. What would be a reasonable fee for a 10k $ worth of gear in Chicago area cause I am from here too...thank you sir.
I would like at a rental house website and charge per item, similar to what they charge.
What about the competitors? You have to be in the market range. What’s the reason clients will pay 3x more?
Yea you do have to be in a range. But I’ve found that every real company that I compete with does exactly this same thing. In the freelance world, it’s harder. So I usually don’t complete on price as much and compete on skillet. Also once you specialize and become the market leader in the specialty, pricing competition goes out the door. I know a production company that can charge 5x what I can in one category, because they are the expert and well known for that style of video.
Also I should mention, I wasn’t suggesting 3x price. I’m saying to charge competitive rate for labor and gear, don’t do free work during pre-production and charge 20-30% profit margin which is what every service company in any location does to survive long term
Skills should be more of a priority for someone starting off when is the moment of breakthrough that a freelancer knows when he is ready ?
Yea for sure. I think skills first, gear second and then learning self promotion or marketing and the business side. It’s gradual process. Hard to point at a moment when you feel ready in any stage
This happens in all trades.
Yea that’s true
How do you determine what to charge for your video gear? Is it a percentage of the total cost of the package?
Easiest way is to look at a website of a rental house and charge something similar
@@Filmmakingmentor Thank you!
If i give online lessons using my macbook, is ok to ask the institute to pay the insurance of this computer and repair/performance? i am not video maker, just composer, but wonder if the rules are similar
This usually doesn’t apply to computers for some reason. I would try to raise your rate in that case and build in the cost into your hourly rate for the computer expenses
@@Filmmakingmentor yes i am doing in this direction. The ignorance of the employer about the fact that i ak being teacher AND technical assistant (when it comes to organizing online lessons in MUSIC alone) + counting just teaching hours and not the overall value+preparation/research + teaching, annoys me. But i am hired as "freelancer" this means i can set the basic fair rules still (but with risks of loosing the job....) He pays just the hour, as it were a normal lesson for a class from time to time. Thx!
How do you handle travel? A lot of my jobs are 1 hour to 2 hours away.
I used to change miles for it but now just include in my time and rate. So if the shoot requires 2 hours of travel, that is part of my time.
I found that if I account for good profit, these small amounts don’t make a big difference
Great, thanks for the advice!
Oh... I definitely misunderstood the title and have no business being here xD
15 YEARS AGO...!! I'm just thinking how far i have left to go ;(
Yea I’ve been at this for a long time
Bro I'm going thru all your vids u got me mentored fully
How many businesses can afford a $5k video production? VERY FEW! How is 20% profit covering the 30% income tax? or self employment tax?
Well the profit margin is the only part that gets taxed and you won’t have self employment tax if you are an s-corp. the rest of the cost is a business write-off and you won’t have pay tax against it
And there is a huge amount of business that can and do pay 5k plus. It’s hard to get those clients as a single person video creator, but it’s all any production company I know does. We haven’t done a video for under 5k for nearly a decade
@@Filmmakingmentor Fair enough, I work with small businesses not big wasteful corporations so the budgets are definitely not the same.
@@chadillaq It's not necessarily a "wasteful corporation" that has a larger budget. Any client should be paying for the value of the product you produce. If your work helps them make more profit, you should get a share of that by charging accordingly. Their image is directly affected by the content being produced.
@@bullettinI totally understand and agree but like I said, small businesses don't have those size budgets. $5k is a ton of money! that is 4 or 5 months of mortgage payments so to act like it is common for a daily shoot actually misleads the up and coming video entrepreneurs. Notice how I am challenging the message because it isn't realistic for most people building a business while working with other SMALL businesses. No one starts out and gets a $15k gig with Ford.
Where are you finding clients paying $80ph!? I struggle finding work for minimum wage here in the UK.
I used paid ads to get these type of clients. It’s usually small business to mid size business and we make marketing videos for them. 80 an hour is pretty standard for this type of work. I was making that as a freelance DP even. I’ll make more videos about getting these type of clients
@@Filmmakingmentor simplified and more realistic quotes for the majority could be of more use. One man band type of freelancers. 5 years ago I had retainers totalling £6000 per month. These days I struggle finding any work at all.
I blame Gary Vee and his ‘work for free’ rants
That’s the problem though. Most people are struggling because of staying as a one man band and fighting for the small budget stuff. My entire channel is design to help take people from freelancer to running a small video production company, which is exactly what I did. The days of making a lot of money as a one man band are going away and this transition is needed to make more money. So I’m teaching exactly what I did to do that, because that’s what I do now.
No real production company works for free, but freelancers will always do so and that’s why freelancing as a one man band is so damn hard these days, because it’s hard to compete with free
@@Filmmakingmentor agreed.
I need help. I just found your channel. A friend of mine asked me if I could do a video for his wife's shoe store. She saw a video I did of him training at his gym; he's a professional boxer. So he said we'll pay you for it. I said sure. This would be my first paid job. However, I'm trying to figure out which route to go. I was thinking a flat fee of $500 for the day including the editing process. But he mentioned she wants drone footage also (I just got certified so I'm able to do this). So with that included the price would have to go up. Since this is my first paid job I could charge $700-$800. But out of curiosity, what would you recommend? Should I ask him what their budget is and go from there? Or just charge them what I think it's worth? I don't want to undervalue my service just because it's my first paid job.
That’s sounds like a fair price if it’s your first job and you can use it as an example for upcoming jobs. But yes, it’s best to ask if they have a budget range in mind and you can offer them something within their budget. Sometimes, the budget will be higher than your rate and you can actually make more and spend more time on the video
@@Filmmakingmentor Wow! Thanks for the response. I appreciate it! What if he says he doesn't have a budget in mind?
@@Filmmakingmentor Another question, hoping you see this. What about doing the job first and then deciding on a price for it? If it comes out really good I could charge $700-$800 with no hesitation.
Yea ...get ready to be rejected on 90% of gigs
You can do ten 1k gigs or one 10k gig. I’m here to help people get to the next level with the right client and the right pricing, not fight for scraps at the bottom
1 out of a 100 comments say this which is a false belief that somehow 4-5k videos are expensive and don’t really exist. That is by far the biggest problem in the business and why people struggle. In my world and the type of clients we go after, it’s starts at 5k. If you bid lower, you get laughed out of the room