How do you establish a resonable ratecard? Industry standards?
I am a freelance DV cameraman/FCP editor in Las Vegas. In talking with collegues, I find that I am charging way less than some guys, and more than others (at $50/hr for me + gear). And then there is Craigslist, which is always asking us to give our time/gear/experience away for nothing and cheapens the entire profession. But how do you establish fair rates? Is there an industry standard or I imagine it varies by market? Do I have to call every guy in town and see what they're charging to see where I should be?
I think truly experienced and professional cameramen should stick together in maintaining a decent standard rate, but there are always the guys in college who just bought a DVX and will work for $10 - 15/hr.
Any insight would be appreciated.
The sad thing about craigslist low ball prices is that businesses (and yes there are businesses not just indy films . . . and some businesses posing as indy filmmakers) are getting people to work for next to free and some of those people are talented. That's foder for another thread though.
The "standard" rate is what you need to survive and grow with your business model.
Gather your total monthly expenses
Rent, food, utilities, insurance (health and gear), web page hosting, email service, cost of equipment, cost of maintenance, cost of software, cost of upgrading all that over 2 years or so (especially for computers, maybe 1 year for software, cameras it depends but 2 or 3 years is reasonable these days), car costs (and there are many), cost of consumables like video tape, office supplies, office furnature, living furnature, anything else you can think of.
Figure out what your yearly expenses are using the above (everything in your life!)
Assume about 20-25 paid hours of work a week.
You'll be spending the rest of the time maintaining gear, talking to prospective clients, maintaining web page, putting together demos, bookkeeping, billing, learning new gear and software, buying supplies and some time buying new software/gear. You may still find you're working 60 plus hours a week even with 20-25 billable hours.
You now can figure out what you need to charge to cover all your life expenses and maintain your business and replace software/gear when the time comes. At $50/hr working 20 paid hours a weeks (and probably 20-40 unpaid hours!) you'd be grossing about $1000 a week. Will that keep you going in Las Vegas?
Profit and life's enjoyment
Do you want 2-4weeks off during the year to enjoy life and prevent burnout or work on personal projects? Do you want to dine out, go to movies or sporting events? What about sick days or other life contigencies that will cut into your billable hours? There's money you'l want to go on vacation maybe. Buy some toys for yourself. Things that are fun but "non functional/live survival" purchases. Money to grow your business further rather than just maintain it. Cost of training classes for example? Gong to trade shows? Savings so you're not living from job to job. What about family expenses if/when you have kids? Factor all this in too.
Factor all the above in to what you should be charging for the 20-25 billable hours. To me, the difference between a "newbie" rate and an "experienced" rate is how one factors in the "profit" area. Newbies that charge below the base survival rate for their businesses hurt all of us . . . including themselves. They'll become hobbyists as they need to look for a "real job" to survive or they'll be "renting" their gear an craigslist or selling it on Ebay.
Keep the above in mind and you should be able to figure out what your rate should be.
In simplified form
Iit's all your expenses both personal and business, desired profit for fun stuff, 20-25 billable hours a week for about 48 weeks or so a year (include sick days and other time off).
You also need to factor in the true rental value of your gear.
Best way to compare is what does the gear cost to rent at the local equipment rental houses or facilities.
Take into account any discounts they offer and this will let you know a ball park figure on where you need to be.
Of course some low ball independent will hack his rates well below a reasonable amount but in the end those operators will end up going out of business as their cost of operation will exceed what they charge one day.
As an owner/operator you are at a disadvantage because low ball clients expect you give gear away for cheaply since they consider it as bonus income above your labor rate. Don't ever fall for the line "But if your gear is sitting around doing nothing why would you not want to at least make a little money on it for the day". The logic behind that is wrong because the client does not consider the minimum cost of operation (upcome, repairs, life cycle etc) for that particular gear.
The best trick when dealing with a low ball client when they want you to give the gear away for cheap is to explain you don't own the gear and need to subrent it. This automatically tells the client that you will have a fixed cost for the gear and there is no way to get around that.
If you give your labor and gear away you will never gain the respect of clients and always get the bottom feeders.
However when you are new to the business you need to develop a wide range of clients so a little give and take may be required.
Keep in mind the long term client you really want are the ones who will bring you repeat business time and time again because they see the value added services you personally can provide. Setting yourself apart from others in your business is all about what you can deliver personally which results in making you unique thereby valuable.
[tony salgado] "Of course some low ball independent will hack his rates well below a reasonable amount but in the end those operators will end up going out of business as their cost of operation will exceed what they charge one day."
But they're constantly being replaced by an expanding number of people willing to do that who believe charging low will grow their skills and their business . . . only to find they get lowballed when they raise their rates. When they go under they try to make side money by rendting way to cheap or selling on Ebay to the next lowballer.
While rental houses may charge $200 a day for a DVX100, some failed owners will rent it for $50 and others will work for $150 a day with gear.
Just to be clear I'm not talking about broke indy film producer wana bees. BUSINESS clients and those inquiring about local Cable Spots are balking at $50/hr with gear! I see MANY businesses thinly vailed as indy "doc" producers asking people to shoot for nothing or close to it.
You've gotten good advice on how to set your rates, but here's a different perspective.
I think we suppliers have tended to look at this issue too moralistically, and too much from our own point of view, and so we say, "It isn't FAIR that craigslist is helping undercut our bids." The reality is that there are many different markets out there, each with its own level of compensation. The same amount of effort can be rewarded well or poorly, even by the same client.
Personally speaking, I work in two markets: for non-profits and corporations. The compensation scales are radically different, but it suits me.
Between you and the economy, you'll find out what market you are in. It's just like applying for a job: if you aren't able to persuade a potential employer that you are qualified for a $100K job, you may have to look for a $15K job. But if you never APPLY for that great job (i.e. demand a nice respectful rate for your efforts) you'll never know whether you could have gotten it or not.
Enjoy the ride.
-- Bob C