Stop making these mistakes when pricing your jobs. EP #304 - Den Lennie

Videographers, you need to stop making these mistakes when you're pricing your jobs. If you're a videographer who's been struggling to get clients or get paid what you're worth, there's a very good chance you're making some mistakes in the way in which you price your jobs. You're probably not charging fully for everything you're actually delivering. So if you're struggling to get clients and you're not getting to charge what you think you're worth, then in this video I'm going to show you the biggest mistakes videographers make when pricing out their jobs. I've been in this business for over 25 years and I've seen a lot of people make these mistakes. These mistakes are specific to how they price their work. In this video, I'm going to break down those mistakes so you can avoid them. And more importantly, learn those extra tactics to make sure you can charge more per project than you are currently. So you can start charging what you're worth and attract more clients. And be sure to stick around to the end because I've got an absolute killer tip which is going to be a game changer for your mindset when it comes to pricing. Hey, I'm Den Lenny. And if you're new here, I have been a DP, a producer and a director for over 25 years and have worked across a broad range of video genres from broadcast television right through to corporate and also working with some celebrities the likes of Robbie Williams, Duran Duran, Cristiano Ronaldo. And in that time I've been able to work across a very, very broad range of clients. And I've got a good idea of how to price and at the premium end of the market. Now, if you're not yet subscribed, please click the bell and the subscribe button and make sure your notifications are turned on. It really helps us to grow this channel. Thank you. Mistake one is underestimating how long it takes to pre produce a video. Most people underestimate the hidden costs of pre producing, even for the smallest jobs. Let me just list some of the things that that you might do in pre production. Scheduling, booking crew, checking insurance, confirming talent, allocating resources, confirming the shoot day and time, selecting the appropriate equipment list writing the interview questions, conducting pre interviews, line producing, creating the call sheet, any workplace health and safety requirements, doing risk assessments, checking your insurance cover is valid for the location you're going to be on. Providing any public liability insurance documentation to the location you're going to be filming on, any permits Permissions, release forms, talent release forms, location release forms, or even a location recce or a storyboard or a shot list. All of these things fall into pre production. And for most people, they're not charging for this. So one of the best ways to make sure you're charging appropriately for everything you're doing is, is to ensure you charge an appropriate amount of time for pre production. And the best way to do that is based on hours. So let's say you're doing a $5,000 project, then maybe you'd allocate three hours to pre production or half a day. And in that half day you do the very basics of shot listing, having an idea of where you're going to be filming and making sure the crew are informed. But if your budget increases to 10,000, maybe you'd put a whole day into pre production and that would allow for pre interviews, more conversations with the client, and, and then at 20,000, maybe you'd have a whole day of pre production where you do recce and site visits and pre interviews with clients. So understanding the budget that's on the table will determine how much time you spend in pre. I can tell you this is where a lot of companies lose money by not thinking about the amount of time they'll spend in pre production and making sure they're being paid for it. The second mistake videographers make is, is only charging for the production day, the shoot and the edit. This is a huge mistake on a basic level. They look at the shoot day and they look at the edit time and they put together a price based on its X amount for the shoot day and X amount for a couple of days of edit, or worse, hourly for edits plus gear, if at all they charge for gear. A surprising number of videographers bundle their gear into their day rate. This is not the optimum way, but to do it, to gain the most profit. What I would always do is look at what a local rental company charges for the gear that you will be taking on location. What would it cost the client to go and dry hire that from that company? Not least of all factoring in them, setting up an account with that company, putting down a deposit, going and collecting the gear, making sure there's ample insurance cover, perhaps having to take an insurance policy just for the gear for those days and then delivering it back afterwards. Now what I would do is I would look at what that costs and maybe take 20% off the list price of the gear hire and use that as your benchmark for what your gear goes out a day. Because regardless of whether you go on the shoot or not, you still need the tools in order to be able to make that film a reality. And so by doing it this way, you're saving the client 20% on the dry hire cost plus all of the hassle. This is where you can make sure your gear habit is self funded. And that's a really smart way to be able to buy whatever you want, whenever you want. Now, if you think about it, a video production goes way beyond just a shoot and just the edit. There's the pre production, there's the creative process, there's looking at reference material, there's thinking about the job, thinking about how you're going to create it. Then there's the actual getting to location and figuring out all the logistics of that part, then bringing it back to post, ingesting all the footage, doing the offline, working out the selects, deciding what music to use, then presenting the first cut to the client, then getting feedback, then going back with a refined cut, then getting feedback, and then doing the online and finishing off and delivering the final edit. There's a lot more involved in this than simply turning up shooting and editing. And if you break down your post production process into those steps, you can charge more for each one of those processes. On a bigger production, you can be charging for a music mix, a sound mix, a grade online graphics, anymotion graphics. All of these additional services can be charged out hourly as a service beyond simply the word editing. Trust me on this, this is one way to really start jacking up your profits. And one more thing, just because you can do a lot of that nowadays on really cool computers, that's one machine, doesn't mean you shouldn't charge separately for each of the steps in the process. That is a number one tip to make more money, my friends. The third mistake that videographers make is not controlling the timeline and the feedback loop in post production. What I mean by this is delivering the offline to the client and then waiting for them to come back to you with feedback. Or worse still, having the feedback coming into you in different drips and drabs from different people or stakeholders in the project. It's critically important to maintain your profits that you give the client a very clear timeline for when you want the feedback and that it must be consolidated feedback or better still, using something like Frame IO where all the feedback can be consolidated and there's one person commenting on the video. So there's one line of communication between you and the client. The number of Videographers who get stuffed because the client's not coming back with the feedback quick enough. As soon as you start to have multiple projects on the go, you could have five, six or 10 projects all waiting for feedback and an editor and an edit suite sitting empty being paid for. And then all the feedback comes back at once and you're suddenly under the pump. This is a terrible way to run your business and one that can really screw your profits. Not only that, generally speaking, you won't be billing the final invoice until you deliver the final product. So so many filmmakers get stuck waiting for feedback from clients. So the better way to do this is to ensure that you have very clear timeline laid out to the client. A bit like a build slot. When you have a new car made, there's certain things happen on certain days and if you stick to them, you will maintain your throughput of production and you'll be able to build the jobs on time and increase your profits in the process. And more importantly, collect your cash quicker. The fourth mistake that videographers make is not charging a production or a production admin fee. Now if you don't know what that is, let me explain. In the simplest terms, it's anything that happens on production that is not line itemized and is charged as a percentage of the production budget. So let's say the budget was $5,000. If you were to charge a 10% production fee, that would be 10% of $5,500. And this goes on every quote beyond a certain size. I would say anything over five to $10,000 should be having a production fee. So what are some of the things that you could have included in a production fee? If a client says, hey, what's this extra charge for? Well, you say initially there's a lot of things that happen in the business which are not line itemized. Things like light and power, heating, Internet, telephone, banking charges banking costs when employing a team of contractors. So every time you pay someone, you're being charged the processing and payment of accounts, invoicing, producing carnays for overseas jobs, any equipment, maintenance or depreciation on core items of gear which you use on every job that perhaps you don't bill for calling and booking crew, production management, production coordination, making the call sheets, preparing all the legal and insurance paperwork for a shoot, getting licenses and location release forms, and any other non line itemized element of a production that is your production fee. And I would say that my clients tend to charge between 12 and a half and 15% on every project and this is one way to really increase your profits and create a guaranteed profit margin on every project. It also means you're not absorbing those costs and it gives you more profit to then redeploy back into the product business. It's a very smart move and one that I highly recommend you do. And I promised you a bonus tip and I think this one is a game changer and it's all to do with your mindset. The thing you want to avoid, the most important thing is allowing yourself to believe that the client only has so much money and that you want to be charging a fair price for what you're doing. Now, what I mean by this is oftentimes we'll think, hey, this is only a three hour job and it's only going to take us, you know, 20 minutes to get there, 20 minutes to get back, maybe four and a half hours in total. And you could say, well, let's only charge them 4 or $500 for this. But the client might be flying in from overseas and they were thinking about bringing an entire crew from overseas. That would have cost them $10,000. So in that scenario look to charge somewhere between 2 and $3,000 as a ballpark. I'll leave you with a very quick story. Back in the early 2000s, I was called while I was working at London Tonight by the entertainment desk who said, hey, Prince, as in the Prince the artist formerly known as was doing a private concert in the Cafe de Paris in Leicester Square and they wanted someone to come along and shoot some vox pops of the celebrities. I'm talking Kylie Minogue, Natalie Imbruglia and Sarah Cox, who's the DG in the uk, and other big name celebrities who are at the gig. Talk Watch. Now, I knocked these off in about an hour and a half. Quick shot of Prince arriving at the gig. I was then invited to stay and watch the gig, which frankly was pretty amazing. But afterwards I said to the client, look, I don't really know what to charge you for this. It was only really a couple of hours of work. And the producer said to me, you know what, we had a full film crew book to shoot this on film and that was £18,000. So why don't you charge me two grand? The work itself was only a couple of hours. At that time a freelance cameraman was probably charging £350 a day. I could have charged them £350 and been pretty happy. Instead I charged them £2,000. Value is always in the eye of the beholder, so be very careful. You don't undercharge for your services. If you do your research correctly and you ask your clients the correct questions, you'll have a greater understanding of the value of the problem you are solving. And based on that value, you can push your pricing to match.

You've been listening to the Video Business Accelerator podcast with your host, Den Lenny. If you are a video business owner who is tired of going it alone and would benefit from mentorship, support and weekly accountability, then mouse over to www.videobusinessaccelerator.com to learn more about how the Accelerator program can help you today. Don't forget to subscribe and rate the show over on itunes, and we'd really appreciate you taking a few minutes to leave a review.