Most of us work in creative fields because we like being creative, not because we wanted to become accountants or salespeople. Unfortunately, most of us wind up wearing those hats as well. The following is a post by Matteus Clement, an independent video pro located in Vancouver Island, Canada. Matteus has taken an innovative, flat-rate approach to budgeting his videos, and has generously agreed to share his insights, as well as a sample of one of the production agreements he and his small-business clients sign off on.
If you struggle with the “business” side of the photo/video business, you’ll find Matteus’ approach very interesting. Whether you agree or disagree with his approach and his pricing (keep in mind, his prices are in Canadian dollars), it’s terrific food for thought.
I’ve been producing videos ever since I went overseas in 2003 with my Canon Z60 DV tape camcorder. It was only three years ago that I decided to take the plunge into my own business, Mazo Media. Since then, I have learned a lot of new video techniques because of necessity and learned a lot of business practice from mistakes.
I have found that a flat rate quote system works much better than an hourly/daily rate (at least in my region). I believe that most owners/managers find peace of mind in a fixed cost as opposed to a project that can balloon out of control.
I have included a mazo media quote template that I have used for the last three years. I have slowly added amendments after having misunderstandings with clients over what was covered and what wasn’t, as well as limits on stuff like edits. (25 revisions are not acceptable). My closing rate is about 80%. The quote is your way of setting boundaries
The biggest mistake I made in the beginning was trying to assess the value of the video, not of my time. The video market here on Vancouver Island is slim and other video production professionals keep their numbers hidden to stay at an advantage. So it was hard to try and say, “John charges $200 for this video and Susan charges $1500, so I will charge $750.”
That system doesn’t work.
It doesn’t work because John is filming in his mom’s basement with a handycam and Susan has been filming for 10 years and films on a RED Scarlet. While this method will allow you to give a ballpark of you in the local industry, it doesn’t do much for quotes. The “Ah-ha!” moment for me was when I asked myself, “What do I want to be paid per hour?”
After that, I was able to build quotes with a flat rate by working some math of my desired hourly rate along with my experience of how long the style of video takes. So when Busy Bee Honey calls me for a product video, my experience shows me these take about 10 hours of film and edit time PLUS transport/drive time PLUS client meetings. Assuming you want to get paid $25/hr, you’re already at $250 + drive time. Then you can add in revisions, 2-5 hours depending if the client collaborates with you online or in person. Add in a cancelled shoot, which I give a pass on in the quote (but build into the final price because it always happens.) I can also assume based on past experience that there will be 2 filming days because either I botched a shot or the client really wants a new angle/idea. So with all that in mind, at $25/hr, I can imagine that this job would be at least $500.
Now while that may seem clear-cut, there are a few other things when building a quote. I like to save 10-20% of each job to save for gear or repairs, depending on how bare my cupboards are. You also have to think about gas in your car and the cost of rentals into your quote.
If you’re new, you’re not going to nail it every time. I still have jobs that creep under the hourly rate that I set for myself and that’s not a bad thing. Maybe it’s for a job that I loved working on OR for a client who is giving me regular gigs. As I said, it’s an experience thing and that comes with time and mistakes.
While I have made a detailed breakdown, I know that owners and managers flip right to the last page to see what the price is. If they have sticker shock, they can go back and see all the work that goes into the production. I have come to understand the clients perspective: They meet me once, get a quote, we film a couple times and BAM! They get an invoice for what looks like to them 5-10 hours of work.
So with all that said, let’s break down my template and see why I put some stuff in.
These are basically the list of notes you made while you were talking with the potential client about the video ideas. These may seem like obvious points BUT if you are working with in a larger organization, the person you spoke with may need to take it to their boss for approval and some of the points may need revising. Also, some jobs are going have multiple videos in one contract. To keep things clear, it’s best to lay it out here rather than later when a client claims they were getting 4 videos not 3.
CONCEPT / STORY BOARD
I’ll be honest, I can’t remember the last time that I did one. The clients I have had have accepted my vision and taken at face value. But this does give the perception that there is some planning going on and you’re not just winging it (even if you are).
FILMING (not shooting)
Yeah, avoid the word shooting in the industry, even in Canada it freaks people out.
Name your locations and any costs that they may have (rentals / permits)
I also include clauses in the beginning to show my policy around cancelled shoots that may result because of the client or because of external circumstances (weather). Your time is worth something and make it known.
Note: always think about permission. I went to film a union leader infront of a hospital that had hundreds of his union members in it and security STILL kicked us off the property.
Sometime you will do the editing, sometimes another person will. Editing is where the magic happens. I have had clients edit footage themselves only to come back later to ask me to do it. I then charge double hourly. I always encourage clients to let me edit.
I hate graphic design. I hate titles. Text is a dirty thing on my video. Okay, maybe that’s a little far but I Definitely do not like graphic design and expect the company to provide it. I prefer PSD files as they work so nicely with Premiere (I’m with Alexander on this one, Adobe is killing it)
ACTORS / ACTRESSES
Find out what the market rate is in your region. I can often get away with friends and family but there are only so much that you can find. This is where having a HUGE facebook friends list is great. I quote around $100 per actor per day but some clients have a special need that requires more – i.e. supermodel, swimsuit, male with tattoos, etc.
Most of the time, companies will spring to have their employees and the owners in them. I prefer this, it feels more genuine to the commercial. It does mean that you will have to REALLY spell things when directing them… they are not professional actors.
Sometimes you are shooting in remote locations and the client is renting the generator. What ever it is, just another thing to lay out boundaries.
I am a one man crew but I have this section just incase I do bring some assistants. Some clients want to know if there will be people in their house/business/car.
A few times I have been flown over to Vancouver to work and that’s billed into the cost. This is also here as a friendly reminder about YOUR costs of transit and build it into the quote. If you know that you’re driving 100miles each way for a shoot, just include the cost of gas into your quote and label this as “Transportation costs are included in the quote”
NARRATION VOICE OVER
There is so much voice over work in commercials. I have a terrible voice for VO’s. Find some talents and find out how much they cost. I have also worked for clients who required other languages. Establish who is paying for that talent.
I get my music from audiojungle.net. My clients can browse it and their licences are pretty open.
LENGTH OF VIDEO
This one is a weird one with clients and you HAVE to ask in the consultation as well as lay it out here. I had one Chinese Restaurant owner who wanted 3 minute videos highlighting their buffet. I did it but shorter is better.
Oh for the love of all that is good and kind… include this in all quotes. I have had a few clients who have really dragged their feet on getting their end of the deal ready. The moment there is a money counter on the weeks passing by, clients seem to be just as interested in getting the job done!
I have done retainers from day one. This saves you from eating some costs in case the client bails. I have broken the policy into two parts for a good reason. I take all the retainer if we have filmed anything, even if for 5 minutes. I do this because I rent gear, use gas, made the quote, consulted the client, hired actors and invested time/money… I do not want to be the loser on this situation.
If I have filmed nothing and they cancel, I keep 50% of the retainer because I have invested time into the project and time is money. Overall, these policies make sure that the client keeps skin in the game and to date, I have had not one client cancel part way through.
BONUS – TYPES OF CLIENTS
Most of my clients are owners/operators of the business. It’s awesome. They are more direct, accessible and eager to finish. This is also where 90% of my referral business comes from.
Compare that against the corporate client and you have good reason to charge more. My corporate clients are slow to respond or deal with because of the inherent bureaucracy that exists within these organizations. Most take 2 months just to set up a shoot and they also seem to be the slowest to pay you the remaining amount. It’s not a criticism, it’s a reality. So don’t be shy about going from $25/hr to $35-$50/hr, most of them have deep pockets. Some corporate clients include: colleges, university, unions, political parties, government.
A FEW OTHER NOTES
Talking about money is only awkward if you can’t set your boundaries. When you go to meet the client, bring a notepad and pen to take notes, even if they are a few.
My favourite question to ask a client part way though is, “What is your budget for this?” It allows the client to set the ceiling on the project and establish if you are with in their price range. If they shrug and say, “I don’t know” I like to throw out some numbers relative to the client, “Are we talking about $5000 (or some absurd number), $2000 (the number I wish for) or $1000 (My rock bottom number). This has been hands down the best way to establish the baseline and figure out if the two of you can work together.
YOUR TIME IS WORTH SOMETHING
Also, NEVER work for free. EVER. The only time I work for free is for a charity I believe in AND that I can tag my business logo at the beginning of the video (who watches to the end?).
I have done too much free work for what appeared to be “high profile” clients which never materialized into referrals. Plus, the “client” will micromanage this shit out of you even though you’re working for free… because it’s their business/brand. Even if it’s your friends band, ask for $50 to cover gas, the food you’re going to eat while out on the road and some wear on your gear.
If you’re going to do free work, let it be something that you love and you will get a great product. That’s what I did for this video.