[Videographers] - How to Add An Extra 15% Profit Instantly! EP #321 - Den Lennie

Let's talk about production fees. Is a production fee something you automatically charge a client or is this something that's an alien concept to you? Well, in today's video, I want to talk about production fees and why you should be charging them on your video projects. Now this is a clip taken for one of my coaching calls inside the vba. If you'd like to learn more about that, you can click the link below. And if you do enjoy this content, please do like and subscribe. It really helps us to grow our channel so we can give you more great free content like this. So let's jump into the coaching call now and show you how how you can articulate what a production company fee is and how you can charge it and make more money.

Most people don't add a production fee. Now it's probably harder to put a production fee on a 5k project than it is a 15k project, but there's no reason why you shouldn't try. So production fees are.

In a nutshell, a percentage of the overall budget. That covers things that are not line itemized in the budget. Even if you are a one man band or a one person shooter.

What would it cost you to hire someone to do that for you?

So go and think, look at your.

Local market pricing and go, well, I should have be 350 a day. So put your cost 350 in the cost column and add 20% in the margin column. So you're actually going to go out for 20% to 4, 410 a day to the client for that shooter. So you're making 70 bucks a day on that one line item and every single line item has margin on it. So you're making margin on every single line item of equipment and personnel. But then you add. And look, if you, if you end up being the shooter, then great, you're making more money. But I want to encourage you to do quotes based on you not being the shooter. So you're pricing accordingly to market rate and not simply, well, we've got the gear and I'm free, so I'll do it for this.

And then if you add a production company fee, you might find there's no pushback. The number of people who've added a production company fee and never had any pushbacks. Remarkable. But in the book, the budgets and quotes book, which is in the training, I actually list out a whole chapter on justifying a production company fee. And a production company fee covers things like, you know, office expenses, light power, Internet and bank charges, you know, desks, chairs Things that are an integral part of our pre production and post production process that we don't charge for. You know, we might charge for the edit suite and the editor per day, but we have to, you know, all the power that comes to building the heating, the lighting, the ac.

So they're like admin fees. But that admin fee ends up stacking up over a year. If you think about what you made last year and you were able to add somewhere between 10 and 15% on top, that is just going to be profit.

And it's one of the easiest ways to make more money on production is to add a production company fee. The only real rule is, from a pure business perspective is your moral obligation as a business owner, as the business leader, is to provide a return for the investor. That is the core reason to exist in a business is to return profit for the investor, which means being lean on your expenses, pushing your profit margin to test how far the market will go. And you push that price until you hit resistance and then you optimize expenses. And we're not one for culling expenses too much. You need the tools to run your business. But if you optimize your expenses and you push your profit as high as you can and deliver an amazing service, that's a given, right? I mean, this is about providing an excellent service, being fully moral in your approach to business, giving clients and a great service and charging appropriately for it. So you know, you've got to be able to fund, you know, desks and offices and power and you shouldn't be having to just absorb that because you're doing a shoulder. So the production company fee is like the admin fee, which is just a percentage of every project, which covers the overhead of running the business. And I've never had anyone push back on that because it's like, how can you. It's like I had Zeiss. That in the quote in the book is from a Zeiss project we did. And they were questioning the production company if he so explained it. And they went, and I've actually quoted the email sequence we had in the question, him asking what is this for me? Explaining it. And coming back on, totally get that we have those expenses too. So it becomes this very logical thing. I think what happens as filmmakers is because we love the process of making the films, we largely see video production as the shoot and the edit and then we don't account for all of the bits in between. Just thinking like, you know, let's say you buy a laptop, right, and it's five grand, because you're fully specked. But then if you look at the number of things you buy from Amazon to connect that laptop to everything, the standard laptop sits on the OWC breakout box thing. All of the cables that you buy, the sounds, the speakers, the desk, the monitor, the second screen, the logic keyboard, all this other stuff really adds up. It really adds up. It could be like a thousand bucks a month over the year. You just don't notice it because you're buying on Amazon. It's so easy to buy.

That is.

Something that really stacks up. And then you've got filmmakers who are just addicted to buying shit. Okay, so there's like. There's way more shit you buy than you need, right? Guilty as charged. I've got two fucking Rodecasters sitting here, three sets of speakers, five monitors. Like it's fucking not have any cameras and lenses. It's just. It's a disease, right? Let's just. It's a disease. I have the disease.

But that's gonna be paid for somewhere. So why not process a percentage of that on every project and then you can keep your habit fueled.

So I hope you found that helpful. Now, if you'd like to get involved and maybe come and be part of this free community, you can do so by clicking the link below. It's completely free to join, or if you want to, you can watch our free training.

You've been listening to the Video Business Accelerator podcast with your host, Dan 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.

Sam.