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How much is too much?...

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OlavNossumHow much is too much?...
by on Jan 21, 2006 at 4:25:33 am

Apart from editing videos, building motion graphics, creating DVDs, etc. on my own, I currently have local clients that get referred to me who I do the same kind of work for. This is not my full time profession but I would like it to be someday. To get there, I


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Mark SuszkoRe: How much is too much?...
by on Jan 22, 2006 at 1:35:23 am

Is this your hobby, or is it your business?

If the former, you have no problem.

If it's the latter, your enjoyment is no longer the first concern. The idea that you only charge more for work you hate leads to you working on stuff you hate all the time, only making money from things you hate, and chasing away the fun projects to someone else.

I can tell you that as long as you keep this "I'm not worthy" attitude, you WILL fail at the business end of this. You have to have the stones to turn down a gig that's too low, if you are in business.

It's like baseball: if you just indescriminately swing at every pitch they throw, you will strike out fast. If you let a few outside ones go by, the pitcher has to work harder...

Translation: you are being measured at every negotiation, and if you don't demand a minimum amount, they sure aren't motivated to pay you more just because you have an honest face. You will either not get the job, or get too much work for the rate you quoted, to the point you will be LOSING money. Or, to add insult to injury, they will subconract work out to you, while charging some other client for you PLUS a big markup for THEM. THEY will get more business for giving good quality at what is PERCEIVED by their customer to be a fair rate; you will be slaving away for nothing by comparison.

Yes, it is hard to turn down ANY work if you need the money. But you are not going to grow if you stick with minimum-wage rates, and the longer you stay a "lowball", the more likely it is that clients will pigeonhole you as only worthy of their lowest-level, cheapest work. I see people and companies doing really poor work sometimes, yet they are charging high rates, and not losing any business over it.

If nothing really challenging or high-profile is coming in, stick with the day job, save up whatever it takes, and make your own productions that are more ambitious. If you can't find a place to sell them, at least they become part of your portfolio, and future clients can see you are more than they expected. Then you are not beholden to low-paying clients just to generate examples for your demo reel.

So, what is a FAIR rate to ask? That is the big question! It's calculated from many factors. You could search the past posts here with the words 'rate' in the title, and get a book's worth of good, detailed advice. The digest version: understand ALL the *true* costs of doing buisness before you set a rate, or you will always be charging too little.



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OlavNossumRe: How much is too much?...
by on Jan 22, 2006 at 3:04:38 am

Thank you very much for your helpful response. To answer your question if it


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webfilmsRe: How much is too much?...
by on Jan 22, 2006 at 3:18:56 am

Hey you ask some good questions. I think you should have different rates based on the work and also type of client. Include your equipment in your hourly rate. For video editing on FCP you could charge 50 per hour for yourself plus eqipment. Maybe for graphics work 25 per hour. Then lower rate for church, documentary or school projects low budget work for half price but let these people your normal rate and you are doing a favor. Most people ask what type of project. You would charge more for a commercial verse birthday video motage. That being said you learn as you finish each job and that helps your confidence. About copy rights, it belongs to the creators of the project and unless you can get permision to copy don't do it. You wouldn't want someone to copy your work.


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OlavNossumRe: How much is too much?...
by on Jan 22, 2006 at 3:57:55 am

Thanks; I never thought of telling them my real (high) rate but then giving them a discount to make it sound like they get a great deal. Awesome!

I must have been a little unclear about the copyrights of big name sample work. I don't want to copy other peoples work, I want to know if it is o.k. to come up with my own ideas to create a "mock" commercial with motion graphics for a well know company. They are not a client of mine, but can I still use their logos and world renowned name to make a piece that could attract other customers? Is there a problem with making "mock work


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Mark SuszkoRe: How much is too much?...
by on Jan 22, 2006 at 4:13:39 am

I think showing the made-up spot in your public reel is ethically and legally shaky, except maybe if you submit it to the actual company as a "pitch". Their trademarks are copyrighted: if Pepsi wants to mock Coke in a commercial, they still need Coke's permission, and they pay substantially to get it.

If it was me, I'd make it an imaginary product that looked close enough to an existing one, but not exactly like it, that even someone without much imagination would be able to make a fair comparison.



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Ron LindeboomRe: How much is too much?...
by on Jan 22, 2006 at 3:51:26 pm


[OlavNossum] "I never thought of telling them my real (high) rate but then giving them a discount to make it sound like they get a great deal. Awesome!"

As Mark Suszko says, if you never get ahold of the true cost of doing business, you will likely never succeed at it. Only use discounts when you absolutely have to, not as a quick fix to get some business -- which if it's too discounted, will be the kind of business that gives you work but not any profit. You will be paying for the privilege of doing work for them. When it truly makes sense to discount something as a compromise in which you give up one thing to get them to commit to another, in writing -- those are the only commonsense times to do something like that -- then, for maximum effect and goodwill, send them an invoice with the full should-have-been pricing with a discount applied to show the balance. Also note on the invoice the reason for the discount and get them to sign it. This helps preserve your true value and doesn't erode your "perceived value" as quickly as just caving in with quick discounts.

Best regards,

Ron Lindeboom


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Ron LindeboomRe: How much is too much?... -- a P.S.
by on Jan 22, 2006 at 3:56:51 pm

[Ron Lindeboom] "send them an invoice with the full should-have-been pricing with a discount applied to show the balance. Also note on the invoice the reason for the discount and get them to sign it"

I am not saying that this is a contract or anything of the type. I just have found in my years of doing business that people of honorable intent will initial the clause for you as a recognition of what we have agreed to between ourselves. In almost every case where I have done this, the people honor the agreement even though it is not really a contract. It's just a way of clarifying things and maintaining a sense of value when a compromise is needed to get something else that you want in another area of your dealings with a client.

Compromise isn't always bad, unless you are the one doing all the compromises and not extracting any of your own.

Best,

Ron Lindeboom


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John HartneyRe: How much is too much?...
by on Jan 24, 2006 at 3:06:02 am

There's a sign in the cafe test pilots used to frequent in the movie "The Right Stuff" that sums up a typically American/texan point:

Too Much Ain't Enough



John Hartney
werks.tv
Elgin, Illinois - Chicago area
847.608.1357


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Charlie KingRe: How much is too much?...
by on Jan 25, 2006 at 8:15:43 pm

I have never done work at a discount. My rate is my rate, and will continue to be my rate. Based on hours worked. If I am not doing anything but my equipment is, I can't do a full job so teh rate is the same as if I am working. Only exceptiion is if there is a time such as sleeping at night that I could set up an overnight render adn teh client is aware that it is done that way at a discount, then a discount is practical. The only exception has always been if I am really involved with a charitable organization, then I will give my work for free as a labor of love, but then too that is also tax deductable. The low budget projects, don't take as much time to do which is how they are low budget.
Never ever put something into a reel that was not for an actual client, it implies that you did their work when in reality you did not. that is unethical at the absolute least and could be unlawful if the production comapny who does their work wants to sue you.

Charlie

ProductionKing Video Services
Unmarked Door Productions
Flamingo Las Vegas Hotel
Las Vegas, Nevada


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OlavNossumRe: How much is too much?...
by on Jan 26, 2006 at 2:12:11 am

Thank you everyone for all your great advice! I have a bunch more questions but I will save them for future posts! Thanks again!
-Olav


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Bob ColeRe: How much is too much?...
by on Jan 27, 2006 at 1:33:47 am

[Charlie King] "The only exception has always been if I am really involved with a charitable organization, then I will give my work for free as a labor of love, but then too that is also tax deductable."

?
I have been told I can not take a tax deduction for donating my labor.

I do admire your stance about never discounting, and donating labor entirely for charitable causes.

My mileage differs; I discount for non-profit orgs, but I do charge, to keep them from taking, and taking.... If there's no fee, they don't respect you as much, and they have no incentive to be businesslike in terms of finishing a project.

-- Bob C


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Mark SuszkoRe: How much is too much?...
by on Jan 27, 2006 at 4:27:23 am

Bob, one way to handle that kind of thing is something I call "virtual billing"; creating an invoice with the rates and work description and the total amounts it *would* have cost them elsewhere. One way to use this when they keep coming back for more freebies is you can tell them your budget has a cap on the cash value amount of free billings per month, reative to paying customers, and they've exceeded that limit for the month: they can either wait another month for the next available freebie time, or they can continue on a "non-virtual" cash basis right away, like the other paying clients.


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