Long term corporate video proposal
A local construction company contacted me re: an 8 month long video project documenting pre-fab building, shooting inside & outside construction and creating a demo video "work for hire". I met with the sales people, showed them examples of my work, the company asked for a proposal, I asked what their budget was, they replied, "give us a range".
I based the proposal on creating a "present day" version of the company's exisitng demo, with three price possibilities; varying in amount of hours shooting/editing, with a detailed breakdown that included hourly rates, illustrating where time and money would go, and info re: my company's liability insurance. When I met with the sales manager to review my proposal, he took off like a freight train with ideas, throwing out all types of things he wanted to do - showing progress at ultra-high fast motion with buildings going up in seconds; shooting "every day" at certain times, how this new video was going to be MUCH MORE detailed than the previous (existing) one. The sales manager also explained how I wouldn't "need" any extra crew mentioned in the proposal, since there was plenty of time & opportunity for one person to get any combination of shots/angles. I asked what "deliverables" the sales manager wanted during the 8 months, with no specifics offered to my question. After re-checking my proposal for pricing, he cut back the hours just spoken about to match the highest amount of shooting hours given with my three "possibilities" - "I want a number so I know what I'll be paying." The sales manager said the company wanted a contract with "a number". He also pointed out how "more jobs were coming up", and "I want to have all upcoming projects videoed". Hmmm...I have heard that one before... and up goes the big red flag.
To create the video with all the ideas and hours mentioned in the second meeting (before cutting back to match the largest amount in my proposal) would probably double the cost. This company filed Chapter 11 bankruptcy last year and is under new ownership - the video is part of their new marketing campaign. The only idea I have right now for dealing with the above is getting a substantial deposit and creating daily log/work forms where I would detail work performed, charge hourly rates, invoice, and get paid on a monthly basis, and time sign in's/time out's with a company reps signature on the form to verify the hours. The "employee" vs "subcontractor" is not what I am concerned with at this point, it's how to create an agreement fair to both parties. My working for "a number" with guaranteed foreseeable unknowns definitely doesn't seem fair to me.
Any thoughts on this would be appreciated.
[Bill_K] "My working for "a number" with guaranteed foreseeable unknowns definitely doesn't seem fair to me."
I certainly agree with you. Since this is such a long-term project, I would suggest that you calculate the total number of weeks projected to shoot the project, and propose a weekly target, such as 10 or 20-hours work per week, with an agreement to adjust at some point if necessary.
Post is a different matter. Since you are under no time constraints initially and you can edit at your own leisure, toss in a few hours per week while shooting progresses for digitizing, logging, and rough assembly. Then, once principle photography is completed you'll be well on your way and hopefully you'll only require a few weeks to complete the entire post process for which you should be paid weekly.
Does this help at all?
I would double the amount that you feel is fair because this guy is going to add things, one at a time, till you are doing twice the work anyway.
I have met with this guy twenty or thirty times during my career and had a bad feeling in my gut that paid off every time. He will want a NUMBER from you and he will squeeze you for all he can. Forget about future work unless he wants to give you an ironclad contract that YOUR lawyer approves of. Here's the deal: When you rent a place that is 1 Month FREE, it's always the last month. If he's going to give you lots of work, give him the discount at the back end.
My real advice is to give him a big number and LOCK the number of hours. Oh yeah, the part where he is telling you that you can do it all yourself and you don't need helpers, that's because he doesn't want you to sue over wages when he fails to pay. I just recently found out that when someone doesn't pay legit wages, this is a violation of labor laws and carries treble damages. This is a big deal and will shut a business down. Pay a contract lawyer a few bucks for a contract that you can use for all of your clients. Ig they won't sign, run away, quickly, because they have no intention of paying in full. Make sure the contract reads that ther are responsible for every dime. We've lost over $80,000 over the years a few hundred at a time. It doesn't happen anymore.
It's a dry heat!
Thanks for your replies; great advice, and I intend to utilize it. Steve - thanks for the link, it was very educational. Before I get involved in creating a contract, I want to revise the cost estimate based on what the sales manager said he wanted in the video during our second meeting (i.e., before he cut back hours to "match" the dollar amount in the proposal), and see his response. I have a gut feeling he will be asking for whatever he mentioned during our second talk - and a whole lot more. I did include the sentence: "A change in scope in the production will change the estimated costs", as the opening line in my proposal's "cost estimate" section. What the sales manager REALLY wants involves more work for 2 months longer than originally presented.
You've gotten some good advice here so far.
This guy has already said "the magic words", regarding the empty promise of future gigs if you give him a break up front. My rule of thumb is to walk away from the negotiation if this phrase ever comes up, because it is an infallible indicator of a swindler and grinder who will cost you more time and trouble than any "profit" you can get out of him. So I would personally refer him elsewhere, like your biggest rival, and be done with it.
But it sounds like you really want to pursue a deal with this guy. And you are right to be exceptionally cautious. Though if you're counting on the legal system being your only hedge against him, you're in for disappointments. Guys like this know very well how to game the legal system, appeal and counter-sue and get continuances all along the way, and drag things out till you give up the chase as unprofitable. You know he can do this since he's just declared bankruptcy. Not that all people who declare bankruptcy are crooks, (it can happen to very honest people with simple bad luck, to bumblers, or entrepreneurials like Trump, who seems to do it every other year so he can leverage billions) but people who do declare and *also* use the "magic words" fit my profile of very likely crooks and liars. To be charitable, he may be a bumbler, too. Also not a good sign you will ever make a profit off him.
So, forge ahead if you must, but always with the principle that each phase of work must be paid off in full before the next is started or delivered. YOU ARE NOT A BANK. Do not allow him to make interest on YOUR money.
Funny its a builder asking you for the estimate; because when people try to pin me to a figure without specs up front, I often ask them what should a house cost, then I describe how a mansion and a tar paper shack both keep the rain off your head, but the difference is in the details, materials, and workmanship. Builders are masters of juggling these factors when THEY make bids.
Looking over the elements of the proposal you touched on, we have a bunch of time-lapse, which could be set up semi-automated with a lot of capital expenditure up front for a mounted camera, enclosure, power, (insurance) etc, or done on a daily visit basis with a digital stills cam and converted to hi-def movie later in post. Doing it that way means you have to go on site every day there is construction, blocking at least part of each day from being used for any other money-making business you want to do. You HAVE to charge something for this "opportunity cost". it also isn't "finished" until the very end, so he will want to not pay you until delivery. You cannot afford to allow that. Again, YOU ARE NOT A BANK.
It may be that you can't come up with a figure for the time-lapse that fits his budget, in which case perhaps a 3-d animation is perhaps a better deal: using photos of the actual components of his buildings for texturing the model, you can throw together a nice simulated time-lapse build of his building in CGI in a fraction of the time, and it has the bonus features of infinitely variable viewpoints, camera moves, and reveals of features, things you culd not do with a conventional time lapse. You have to wait for the real building to be finished with time lapse, not so with animation. The CGI also gets a head start in that you can digitize his construction blueprints or import his CAD files thus avoiding a lot of modeling work. You could go straight to texturing and animating. If you don't "do" animation, this could be a job you farm out to someone experienced, or you could use it as a way to get paid for learning how to do it yourself. A little risky for you, but a new skill and software you can apply to many other jobs later.
Back to your negotiations. Your builder does not get the right to tell you how few or many people you need for crew. You and your budget and timetable decide that. If you are sure you need more bodies on the job, and there isn't enough money to do that, then you don't have a deal. Plain as that. Not the deal he wanted, anyhow; you have to say that that's just not possible, and try to go on ahead and cme up with other approaches that fit the available resources. Make substitutions.
Sometimes you just will not be able to get to a mutual agreement. You have to be able and willing to walk away from any negotiation or it really isn't a negotiation. Some jobs just are not worth the cost of trying them. This is not a failure on your part. I heard a lecture from a guy once who worked in CGI/post, back in the 80's. When asked how to budget and bill, he said he starts the discussion by saying "I don't even turn on the machine for less than x thousand dollars".
That's not hubris or ego; that's him knowing HIS true costs of doing business, the minimum amount of time and money he needs to make his operating costs and see a profit. If the figure is below this number, he knows he is wasting time and losing money, and the client is either too small or too poor for him to service. He could be more productive running new tutorials to learn some new technique , so he could market himself better, or he could do better spending his time networking, working the phones trying to dig up accounts or just to maintain good relationships with past good clients. Anything that would lead to a positive balance on the accoutning ledger. If he takes the marginal job, he's unavailable for a better one. Opportunity costs. Very important concept.
I would tell you not to pursue this job, but it is your call. Just be careful, and be ready to walk away at any time unless your minimums are met.
Thanks Mark, for a very detailed response and LOTS of good advice. My gut feeling after the first meeting with the sales & marketing vice president was they may have chosen not to quote "a budget" in order to get a low-ball price, and seal that "number" in a contract; which is why I included "a change in the scope of the production will change the estimated costs". You never know, so putting time into a proposal would most likely reveal more details re: motives and personalities.
I HAVE heard that before, "...we have lots more work and want to use you....yada, yada, yada...". I know those deals usually go nowhere and I ask them, "If you have that much work, why don't you try and save money and do it yourself? Get a mini DV cam and an iMac." Those people usually go silent.
I'll submit a revised proposal, based on the "change in scope of the production we discussed". When someone tells me what they want; it always turns out that really is what they are going to push for, whether they intend to pay for it or not. When the company's graphic artist called me he said the sales & marketing VP goes nuts over anything 3D, so I brought samples of 3D work & AE animations included in my demos to our first meeting. That may be a factor in deciding if this company chooses me to do the work; - then I get a deposit and they pay their bills along the way.
I like what Steve Wargo has posted on his website about pricing: "You get what you pay for and you don't get what you don't pay for" & comments posted about "charity work"; i.e., greedy people just don't do it.
Lots of good advice here on the subject. Here's my $0.02
Since this is a 'work for hire', you might want to include in your contract that all rights to the video remain with your company until payment is received in full. You also might want to include a clause that gives you rights to use the video to promote your company's services.
Thanks for your input; I liked the wording. I did state to the sales & marketing VP I wanted to retain rights to utilize the production for demo purposes when we spoke last week. I submitted a revised proposal based on a lot of the advice in this thread. If the company decides to go for it, I will have an attorney draft the agreement.