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How much should I charge - video explanation

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Craig SeemanHow much should I charge - video explanation
by on Sep 17, 2011 at 5:27:59 pm

This is a really good primer for "How much should I charge?" question often asked by newbies. It's geared towards photography but the principles are the same for video.









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Dwayne SchnellRe: How much should I charge - video explanation
by on Sep 17, 2011 at 5:49:41 pm

very good. thanks for posting.


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Mark SuszkoRe: How much should I charge - video explanation
by on Sep 17, 2011 at 6:14:06 pm

He's pretty spot-on. Problem is, too many newbies are too impatient to go thru the entire exercise, so they just want a number pulled out of your, um, hat, without doing the homework first/ Then they come back and complain that that random rate was turned down by all the local clients as top high, or they are really excited that they are getting a lot of bookings, but confused as to why they are still going bankrupt every month.

And they benchmark the local rates to compare where they stand in relation to the market locally. While you should never cut your rate just to no be the most expensive guy, particularly after you've done all this calculation and know your cost of doing biz, it is nice to be somewhere in the middle to upper-middle of your market. If you are the top cost among rivals, you need to look hard at what that higher cost brings to the "value equation": are you effectively marketing the things that make you cost more? Or do potential customers just think you have expenses that are too high? This gets into the example of two cars that both get across town in the same amount of time, but one gets you there in much more style and comfort and/or reliability. The difference is all in the craftsmanship and execution, and in the quality of the materials. You have to be selling and explaining that extra difference, if you want to wrest business from people who shop only on price.


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Craig SeemanRe: How much should I charge - video explanation
by on Sep 17, 2011 at 8:28:02 pm

[Mark Suszko] "Problem is, too many newbies are too impatient to go thru the entire exercise"

Those types have always existed unfortunately. It's the same with owning gear. Buying something and using it competently are not one and the same. It's good to see a business that sells gear, promoting video that trains people to stay in business. Of course it benefits the sponsor because a successful business can buy more gear in the long run.

[Mark Suszko] "are you effectively marketing the things that make you cost more? Or do potential customers just think you have expenses that are too high?"

The interrelationship is worthy of another video.
One factor is marketing. Price is not marketing. One has to know both how to reach your target market

Another factor is mentioned in the video, supply and demand. As demand for you increases so can your rates.

A third factor is sales. Neither Price nor Marketing substitute for sales.
It's value vs price. Simply put, a well produced video that costs more may actually better reach the client's goal whether it be revenue for the client or something a bit more abstract. One has to sell value, not price, at least as one's skills and resources improve.

Key in the video is that Daily Cost of Doing Business. Even a newbie must cover that. It may well be there's a big overlap between the people who don't spend 15 minutes (time of this video) to learn that and the folks who don't spend time learning the basic operation and workflow of the equipment they use.

One thing that's not clearly covered in the video is work time. Call it "time expense" if you will. They do mention 250 work days for a work year but one also has to factor in paid hours in a work week. If you're basing your rate on 40 hours of paid work a week you're leaving out the unpaid hours of marketing, sales, training, maintenance. They alluded to that on a job bases when he mentioned getting to/from location and setup/breakdown but that's job specific. There's the business stuff not attributable/billable to specific jobs. I think a realistic model is about 20-25 hours paid work.

This also explains the value of repeat clients. Repeat clients can allow you to spend less time doing marketing and sales. And of course one of the most effective and least expensive marketing is word of mouth from happy clients. This can be the big boon or bust when effective. Good word of mouth with a profitable rate grows your business. Word of mouth with clients touting an unsurvivable rate can make you both busy and bankrupt as you mention.


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