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Advice on new business (contracts/insurance/etc)

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Dominick PietrzakAdvice on new business (contracts/insurance/etc)
by on Jun 18, 2011 at 5:16:14 am

Hey everyone! I've been reading a lot on the site, especially the insurance recommendations, and there's a lot of great information. I've decided to go with Traveler's Insurance, but I've yet to actually get it.

I recently started a business in which I would make videos for people's websites and offer services such as shooting short films, promo videos, and other video projects. I registered the company as an "S" Corp, and here is my website:

I was looking for advice on contracts. Where can I get them and how do I go about having clients sign them? Do I meet with the client prior to shooting? Or can they just "accept" it when leaving a deposit online.

That brings me to another question, when would they send the deposit? I've decided that I would take a 50% deposit before shooting, and then the remaining balance when the final product is ready.

Any advice would be greatly appreciated! (feedback on the site would be great, too)


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Jeff CadgeRe: Advice on new business (contracts/insurance/etc)
by on Jun 18, 2011 at 12:15:52 pm


Nice work, good luck in your new business.

We always do 50% up front and I always meet the client before except if it is a travel job.

I have a little advise, and this is my opinion, I think your rates are too low especially for the NY market and I don’t think you should place your rates on your website.

Maybe you can offer an introductory rate which leaves the door open for increasing them on the next project. Running my own small production for the past 25 years I’ve seen many changes in workflow, but one thing that hasn’t changed much is our rates. In spite of the recession my business is doing very good, I was able to buy a nice house, take 4 weeks vacation and put my kids thru school by not charging the low rates you’re charging.

But we’re still charging rates similar to the betacam days of the 90s. If you want to stay in business for the long haul I would consider adjusting your rates, you have to consider such things as a salary, taxes, healthcare, business insurance, rent for office, and new equipment purchases.

Good Luck!

Jeff Cadge

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Dominick PietrzakRe: Advice on new business (contracts/insurance/etc)
by on Jun 18, 2011 at 2:08:23 pm

Thank Jeff,

I also considered removing the rates and I think I will.

Thank you for all of the info, I'll try and adjust my rates to better suit the NY market.

Also, I sent you an email to see if maybe you can help me out with contract stuff?


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Craig SeemanRe: Advice on new business (contracts/insurance/etc)
by on Jun 18, 2011 at 4:50:43 pm

Hi Dominick, as a fellow NYer I wonder if I should offer you my trade secrets. ;-)

Rates, you might want to have a look at these two rate calculators.

Remember that your rates must cover ALL your business and personal life expenses.
It's very easy for people to forget large swaths of business expenses. That can include maintenance, having money for equipment replacement and software purchases, insurance, marketing, etc.

Keep in mind that large amount of work you do for you business will be unpaid ranging from training time, client contact, marketing and sales, accounting maybe, routine maintenance, research for purchases, etc. A reasonable model might be 20-25 billable hours per week and that 4 weeks of that to meet all your monthly expenses (both business and personal).

Putting project prices on your website may create unreasonable client expectations. One 4 minute project might take two days and another might take a week. Duration is not a very good price indicator. You also include your day rates, which may well conflict with your project rates given that duration is not a good indicator. I do think putting day rates on a webpage is not that unreasonable though certainly some would debate it. It should be qualified with statements that they may vary depending on equipment needs.

Your rates are very low for NYC. Are you carrying all that gear on the subway or using a car? Consider the cost of the wear and tear on the car, gas, parking (expensive in Manhattan), the possible need for an assistant, etc. There's nothing like carrying camera, tripod, light kit, 8 blocks from a NYC parking garage to an office building by yourself to understand the need for an assistant.

For contracts this is a good place to start (IMHO).
Note the comments in the article about leaving things open ended. His contract kits are very basic but they'll set you in the right direction.

As to payment, for me it can vary by the scope of the job. Sometimes I'm the shooter, sometimes full production and post production and even media buying (I do cable spots amongst my repertoire). It can be 1/3 in advance, 1/3 on editing, 1/3 on final approval. That can vary though depending on any possible costs I may incur specific to a job. Sometimes I get paid at the end of the shoot if it's a day or less of work. ALWAYS get final payment BEFORE DELIVERY. I make exceptions for regular clients who have a good payment history with me.

I do NOT believe in introductory discounts ever. It's a bad precedent. A client may get a discount on regular and/or high volume work. Reward repeaters and high volumes, not newbies. Introductory discounts usually bring in bottom feeders and these are not likely to be repeat clients paying higher rates for a second job. The discounts can be for the repeat clients because they actually save you on marketing and sales time and expense. As to what threshold results in a discount that depends on many things. It's good to note the full price and the discount on the paperwork so the client always understands your full rate. It's very rare that clients reach that threshold with me though.

Keep in mind that your best marketing is word of mouth from happy clients so low rates will hang like an albatross because recommendations will often come expecting the same low price.

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Rich RubaschRe: Advice on new business (contracts/insurance/etc)
by on Jun 19, 2011 at 12:01:20 am

We have been praised for posting rates. Client see that we too have not changed our rates in an eternity and we are fair.

It also makes it easy for them to do their own quick budget based on X number of hours. We have DVD duplication rates as well.

So in this world of radical transparency, eventually everyone will know your rates anyway. And if your competition tries to tell everyone you are more expensive, they can look on you site and see that they were flat wrong.

Google search video contract and you will get a ton of info to create your own....don't forget to add your own design touches and make it your own.

Good luck.

Rich Rubasch
Tilt Media Inc.
Video Production, Post, Studio Sound Stage

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Dominick PietrzakRe: Advice on new business (contracts/insurance/etc)
by on Jun 19, 2011 at 4:08:30 am

Thanks Craig and Rich!

Craig, I took a look at those sites and they're great. The rate estimators are very useful and I'm gonna re-read that video university article tomorrow. Thank you for taking the time to give me all the info. I read through it and everything you said makes sense. I took the rates down from my site and just inserted a contact form. For now that'll work just fine. In the future I'll put maybe hourly rates for services that don't vary too much, like Rich has on his site. I may order the contracts from the video university site, they sound like just what I need. Great link! I will definitely be doing 50% before and 50% prior to delivery of the final product. Thank you for letting me in on your trade secrets ;-)

Rich - For now, I took the rates off and once things settle and I decide on more stable rates I'll put some of them up. I noticed you do duplication, which duplicator did you go with for that? I was thinking of doing that as well, as I recently filmed a school concert and had to make like 30 dvds using my burner on my Mac, haha.

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Dominick PietrzakRe: Advice on new business (contracts/insurance/etc)
by on Jun 20, 2011 at 8:20:56 pm

One more question - taxes.

It's getting very confusing as some services require taxes and some don't. Do I need to charge tax? And if so, when and how will I know?

For example:

1. I complete a video that a client will put up on their site. I don't see why there would be sales tax as he is not reselling it.

2. I camera operate with my own equipment on someone's shoot, for a short film/documentary. It seems like I would charge tax as they will be distributing it possibly for profit, right?

Please help me out with this :-)


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Todd TerryRe: Advice on new business (contracts/insurance/etc)
by on Jun 21, 2011 at 3:30:51 pm


As for taxes, that's a question best asked of a CPA in your area, as tax laws can vary wildly from state to to state.

But in general, you charge sales taxes on goods you deliver. On services you deliver, you do not. There are of course, city, county, and state sales taxes that may or may not come in to play.

Now, often businesses will bend those rules. Say, you hire a carpet cleaner to come to your home and clean the carpets. You might find "sale tax" included on your bill, when in reality since that is a service the company (depending on the laws of that area) didn't have to charge the sales tax at all. In all likelihood, they know that and are just pocketing it.

Here at my company we mostly produce television commercials, and in the days before digital delivery we sent out hundreds and hundreds of Betacam tapes every year. The question was, do we charge sales tax, and if so...on what? Do we charge tax on the $20 tape only? Or on the $15,000 production that's on the tape? Or none at all?

In the end, we have never charged one penny of sales tax. Our contention is that we are purely a service and are not selling a hard hold-it-in-your-hand product, and should not charge taxes. To cover my rear, we have always contended that we do not sell the dubs that we send out to television stations and cable companies... we only charge for the dubbing service. In fact, all of our tape labels have a tiny disclaimer line on them that says "This videotape remains the property of Fantastic Plastic and must be returned upon request." Of course, we never make that request and definitely don't want them back.

A couple of other production companies in our area do charge sales tax on things like dubs. A friend at one of them once told me, "You can say you're not selling goods and not charge taxes, but that's going to come back and bite you."

However, we went through city, county, and state tax audits a couple of years ago (nothing that we did wrong, it was just that our turn was up). In every instance the auditors completely agreed with us that we were selling services only, and should not charge nor would we be liable for sales taxes. (They did, however, stick us on tons and tons of expensive gear that we had bought out of state from places like B&H Photo where we were not charged sales taxes ourselves).

In your two examples (creating a web video for your client, and working with your equipment on someone else's shoot), neither of those would likely be taxable at all. However, again, ask a CPA in your area.


Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.

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Neil HurwitzRe: Advice on new business (contracts/insurance/etc)
by on Jun 21, 2011 at 3:48:03 pm

Hi Dominick,
Just read this thread and checked your site,
I would recommend that you delete the button for rates
or put something in there that is not asking for a prospective
clients contact information. Lots of people find it objectionable
to be asked for that before they even qualify you as a potential
vendor. They don't want to be flooded with solicitations.
As for taxes, Run to your accountant and ask for advice.
The taxing authorities are relentless in the pursuit of any
nickels that think they have a claim on and penalties and interest
add up much quicker than you could ever imagine.
Good Luck, NYC is a tough market.

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Dominick PietrzakRe: Advice on new business (contracts/insurance/etc)
by on Jun 26, 2011 at 3:13:49 am

Well, I requested a tax certificate anyway, just in case I need to charge tax for something in the future. I will talk to a CPA in my area, who I believe is the guy that setup my corporation. He was running late last time I went so we kinda hurried out. Thanks for all of the info, Todd. I agree that the services I'm providing should not be subject to sales tax, especially after reading about tax stuff online.

I agree about your statement on the contact form, Neil. I realized after you wrote that, that I always hate filling those out and never want to, haha. So I put some basic rates back up, but I also wrote that they are only meant to be used as estimates, as project requirements are all different and might cost more/less.

I have another question:

How do I go about filming live events? I've been covering school concerts/plays at the High School I went to, and what I do is I film the concert and then sell the DVDs of it. I don't mind that I barely make any money off it, as I'm good friends with the staff/teachers, and I'm glad to help 'em out. I'll probably continue doing that for them, but what about other concerts I might want to do at other places? Do you charge per DVD, or do you do a flat rate like, let's say $400 which includes 20 DVDs, and then if they want more it's extra?

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