How much to charge for a commercial project similar to this one?
I have been asked to produce a couple of 5 minute training videos similar to the one on this website.
I will be charging per video, and the client has asked how much it would cost to produce. I have all the equipment needed but I don't want to over or under charge. Any ideas?
From research people seem to charge between £50 and £150 per minute of edited film.
I've done many of these for healthcare facilities. You don't charge by the finished minute, rather, you charge just below what you think they have in mind as their max.
That looked like they did it themselves or someone just a smidge above amateur produced it. In the US it would be difficult to charge more than $2000 for something like that. Their audio was atrocious and I'm sure you could do a much better job just hanging a boom over them. So, figure a one man band half day shoot, they supply any narrator which you record at the time, and a one day edit with a couple of back and forth revisions.
The only thing positive I can say about about bidding on, being awarded and then producing a couple of these types of videos is:
1) You can then shop them around as samples to bigger hospitals with bigger budgets and perhaps break into them.
2) At the hospital you produce these for you then become known and can worm your way into various departments and bid on their videos.
The proper way to make your bid is to estimate the hours it will take to shoot, plus the hours you'll spend editing and finishing it, and multiplying those hours by your established hourly or day rate.
You don't already know your day rate? That's the amount YOU (not any competitor, just you, specifically) need to charge, per hour or per day, not only to break even against your costs, but to make a reasonable profit. Charging less than your day rate means you are in fact LOSING money. Charging more than your day rate is possible sometimes, but then you want to make sure you're still not the MOST expensive person in your area for this level of work.
How do you figure your day rate? Search this particular forum because it has been covered in detail literally a hundred times.
Just offering a flat rate on gigs like this can be a huge mistake: you'll either end up under-charging, and leaving money on the table, or over-charging, chasing work away. Rarely does a flat rate bid hit the bullseye of exactitude. It often happens that clients don't give you everything you need up front to make the project work, or they come back with changes that stretch out your time spent., versus the flat rate you bid. Like the crappy audio in that example video: fixing that, if you can, could add hours. Are you gonna just give those hours away?
And under-charging creates a problem for you in that you end up with a rep as a "lowball" person, and you will find that everyone will resist you when you try to raise your prices later.
I respect Ned, but might disagree with his answer, unless what he means by a flat rate is that he's done his hours homework first, figured it using his day rate, then packaged the results to look like a flat-rate bid. He may or may not have. A kind of smart-ass answer to pricing is "whatever the traffic will bear". In some ways that's correct, since demand drives price. But what you will do with that concept is benchmark the local competitors and try to price yourself in the upper third of whatever their range is, while keeping at or above your minimum day rate... Then you'll have some room to add markup as you will.
Pay no attention (or very little) to what others charge as a flat rate. First, their circumstances and resources are going to be different than yours, so it is an unfair comparison. You may be competing against a high school hipster working out of mom's basement: he doesn't probably pay anything into pro expenses like insurance, rent, rights to the music he uses, investments in equipment, etc. So his margin is bigger, but he's playing Russian Roulette on every job. He's one failure away from chucking it all and going to work in a bike shop or whatever. You are in this as a career, as a business. So you have to play by business rules and make expenditures and investments that need to be recovered thru a reasonable pricing structure. Or you might as well get a plastic name tag and spatula.
Second, this is a business involving craft and artistry. It's not an assembly-line job. It is not something you can easily commoditize like buying pallets of copier paper, each alike, and only differentiated by price. Each job brings unique problems in lighting, color correction, audio treatment, graphics. And more.
And if someone ever says: "Cut us a discount on this first one, and we'll make it up later with more business for you"... that is your signal to smile and leave the room immediately.
I respectfully disagree. That was the method I was taught many, many years ago but now the video producing scene is hyper competitive and video has become a commodity. A month doesn't go by where I don't get to bid on low to high budget projects and I win some, lose more. When approached for our video services all inquiries break down into one of two categories:
1) The prospect asks you what you would charge for the whole thing based on the parameters they provide which can be vague and sketchy.
2) The prospect tells you what they have to spend max and asks if you can do it for that amount.
They usually have an idea as to their budget but sometimes they're just "curious" as to what a video would cost because they are video virgins, but if it's corporate they most likely have been tasked to outsource the video "and not go over X amount of dollars." It's always best if somehow you can find out what that amount is and come in right below it.
Often there is "project creep" where the scope enlarges and you must make it clear when you're dealing with the bottom budget clients what your limits are. I just lost $80 because I forgot to bill for one stock footage shot that wasn't in the estimate so I didn't remember to tack it on. That $80 represents a decent restaurant dinner with the wife.
As to hourly, I think only a fool would contract services by the hour unless they were sitting side-by-side with the editor. I say this as one who used to have to supervise the edit sessions, often at post houses or when the gear became portable and affordable, in freelance editors' living rooms and small extra bedrooms. I can assure you that all editors are not the same speed, same with DPs. It may be of interest to learn what the person thinks they're worth by the hour, as a curiosity. However, if you are the client you don't want to hire a producer or prod co without a good idea as to the "not to exceed" figure is.
If you subscribe to the tutorial service http://www.lynda.com for $25 a month there's a producer/professor: Anthony Q. Artis, he has a course that is great on budgeting but it is for far more complex projects than this. Also, Walter Biscardi has a podcast above:
In sum, the hospital that has asked you "how much", they don't care what you are by the hour. As Mark says, that can be a starting point for you to figure out if it is a profitable endeavor. Put yourself in their shoes, if they aren't virgins then they have been approached for video services and have an idea as to what this should cost. If you get a whiff that they are shopping it out for three bids, which many orgs have to do by policy, then it means you have to be in the range of your market's competitors, and in the Chicago area it would be hard to get them past the $2000 range due to extreme competition. You have to be very fast, own your own gear and able to work solo in order to make this type of gig profitable, which I think will take 1.5 days of one's time.
And that's how I do it. I also make sure it won't conflict with some other gig that's more profitable in terms of schedule.
We may disagree, but I think your argument, with examples, actually bolsters mine:-)
I agree that the clients need not know the underlying mechanics of how you reach a price, or how many hours your estimate is based on, But YOU need to know that, absolutely, before you lay out a number.
When they tell you a "not to exceed" number, that's actually helpful. With that, you can gauge if the job is worth your time right away, and tailor your shooting and post techniques in the planning stages, eliminating an expense or replacing an expensive method with a cheaper variation. Like: "For that price, I can do the shoot, but not with the sweeping slider/jib moves: those would add x dollars to the cost if you really wanted them". or: " For that price, I can make this work, but you'd have to cut the number of locations from three to one. We can do that with a script revision, or I can do some clever re-dressing of the same location to make it look like three different rooms. But to get the cost down, something has to give. And it's not going to be my fees."
So this is not like a commodity transaction for a consumer product. This is a negotiation over details of a custom build. Like picking the options for a car or house, the cost differences come out of the details, level of craftsmanship, and quality of materials.
And it may be that the job ISN'T worth it for the price they want. Then what you do, is refer them to your biggest enemy competitor. Let HIM eat the costs and lose the time spent on such a job. You are free to look for a better one, one that pays instead of costs.
If you're feeling charitable, and the job is truly something more along the lines of something Bob from Accounting can do with a copy of a screen recording software and powerpoint, or a pdf file, or an audio recording, be honest and tell them they can/should DIY that. And for a reasonable fee, you'll set them up so it works and works well for their needs. At the end of the day, your job title isn't really Video Maker. Your job is solving communications problems, and video is just one tool for that. Serve the client's needs in this way, and you'll get not just their respect, but their repeat business because they believe you are working in their best interest.
You can call that overly altruistic, but it's worked for me several times in my career.
Yes, that's all true. If I feel it's not worth my time, they can't afford someone like me, I offer to put them in touch with my "young up n' comers", meaning cheap kids just out of school. I tell them they will need "adult supervision" but will probably be half of what I charge. These prospects are very grateful, they didn't want to have to post on Craigslist. And the kid who gets the gig, usually one of my rookie crew members, is eternally grateful to me, thus building loyalty and good will.
However, as the decades have gone by, they seldom return the favor as they mature and grow busier. Human nature I guess...
[Ned Miller] "the tutorial service http://www.lynda.com for $25 a month there's a producer/professor: Anthony Q. Artis, "
As an aside: Lynda.com is free for 7 days, via their facebook promo.
[Richard Herd] "Lynda.com is free for 7 days, via their facebook promo."
Fab tip, but I can't find it on their FB page, do you have a link?
Thanks and very much appreciated.
All the Best
@madsvid, London, UK
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I don't know if this works.
Their standard promo, it appears. You'd have to give a credit card and be sure to cancel the subscription.
Found it, thank you!
All the Best
@madsvid, London, UK
Check out my other hangouts: