One thing that's important to keep in mind in this whole process of dealing with estimating and bidding is that people are not vending machines. A vending machine is black and white. If it's a $1.50 for a bag of chips and I put in less than a $1.50, I don't get the chips. If I put in more than a $1. 50 I get the chips and I get my change back. It's exactly a $1. 50. It's black and white. But with people, it's not exactly the case because we're dealing with human beings.
With communication, we’re dealing with psychology and the human brain. There are all kinds of things at play. We know when we go into a store like Target or a restaurant or coffee shop, the prices are listed and that seems kind of black and white but it's not always the case. If there's a sale, a coupon, a small mom-and-pop shop and you're short a nickel and they just let you go because you're a good customer. It's a little gray. When in an antique store I'll pick up items to look at them and the owner will say “that’s ten bucks but I'll give it to you for eight.” Okay. So in negotiating, we need to keep in mind that people aren't vending machines.
Hourly Rate
A client calls, they've got an eight-hour event they want you to tape. That’s pretty cut and dry. Eight hours, you need at least an hour up front to get there get set up and an hour after to transfer your footage to whatever hard drive they give you. So we’ve got a ten-hour gig, one person times ten times your hourly rate. So now the question is do you know what your hourly rate?
Knowing your hourly rate is important but how do you figure it out? You want to find out what are the going rates in your area. If a client calls three different cameraman or videographers or editors or whatever it is that you do, what are the rates they’re going to get? How do you find out? You pretty much have to meet, talk to and ask other people in your local industry or ask other producers who have worked local jobs to find out the standard rates they are normally charged for this type of work.
Let's say you’ve asked a few people what the going rate is in your area as a videographer and it seems to average out to 85 dollars an hour. But I’ve found that it’s actually more of a range with a high and a low end and here’s why. I get a corporate enterprise-level client with a big sales event going on with multiple cameras. I'm going to be charging on the high end of my range because of the nature and intent of this job. A huge sales event like this has a high expected return on investment (ROI) and is a demanding project. They need the event to work and they want the best people and the best equipment. They want everything handled and it's kind of what you are expected to bring to.
On the other end of the spectrum of rates may be a gig for a non-profit. I'm not going to charge my high rates for them I'm going to charge you on the low end because I know they can't afford it. They have to raise their operating budget every year and this might even be their fundraiser that I'm going to film or a video I'm helping create for them to help them raise funds. In this case, for a company like that, I'm making a choice to do what I feel is right and charge them on the low end of my rate.
Are Favors Really Free?
Now what if they ask you to do them a favor and work for free, pro bono? There are people who are adamant; don't do work for free. But I have to be honest, it's kind of unrealistic and here's why. Nothing really is free. Back when I worked as a key a key grip in the 90s my rate was $500 for 12 hrs but sometimes I was asked to work for $50 for 12 hrs on independent film or short because I was doing a favor for somebody. For example, there was a first AC who was working at making the jump to being a DP. Of course, I'm going to do the favor for him because if he ends up becoming a DP, shooting commercials, music videos and features I wanted to be his go-to key grip. So I'm doing a favor in order to get a favor. There's sort of a transaction there. It's not really free.
Non-Profits
It could be a non-profit that you want to help out, that’s a cause you believe in. Spuds wanted us to produce a video for his son’s elementary school, a fundraiser for to help the school buy news chairs for the students. We did it and though it was completely 100% altruistic (our branding appeared at the end and we were listed as a sponsor) it was a good feeling to know we were using our skills for a cause that we believed in.
Another example is you may need something for your reel like a demo video and you want to get in good with the startup that doesn't quite have enough funding yet but they need a demo video. If they get more funding they'll have the money to do more videos so you get in good with them now. Note that they have do need to pay for any equipment rental, actors, craft service or other out of pocket expenses. So in trade for your time and equipment, you get something for your reel and a connection that could grow.
Creating the Estimate
Let's go back to that client gig. We’re at 10 hours and let's say our rate is $75 an hour. I go into this formula in more detail on our video on creating budget forms. Basically, it’s how many people or units times the unit of time desired (hours, days, or flat rate) times the rate for that unit of time. For our estimate, it’s one person, the videographer, for 10 hours times $75 an hour rate, for $750. What if the client needs a second videographer for that day. You call up a buddy and say hey look this is the rate I'm doing it for, are you okay with that rate and they say yes. Let's see their rate’s normally $85/hr but they're not working that day and haven’t worked with you yet. This is part of that give and take at times. You're putting money in their pocket, they're creating a relationship with you and doing you a favor they may take you up on later. We now have two people times our unit of time ten hours times $75/hr for a total of $1500.
Note some people will only work for a day rate and maybe a half day rate. A client may call with a four or five-hour gig but the issue, especially for anyone who has to work on location like a videographer, is that they can’t split up their day. They’re not able to take two half day gigs in one day, especially given travel time to and from each location.
We've had clients who’ve only needed us to come in for an hour or two hours to shoot a short interview. Now, in that case, there's no way I'm going to charge them a full day rate. There are people who will not get out of bed for less than their full day rate and that's good on them that they have enough work and enough clients to do that but for us a little bit more going on. We're a small boutique video company and not just a freelance camera guy or editor. If I go to a client’s office and shoot for two hours I may also be editing that job or another when I get back to my office. I've got billable hours to fill my time so it's actually to my advantage when I can bill just the hours I'm working with a client vs a full-day rate. They're going to hire me more often because I'm reasonable and working with them. This makes us a little bit more competitive.
Charging for equipment
What do you charge a client for your gear? I’ve found it’s best to base it on what the going rates are in your area from other videographers that you're competing with. Realize that you're not competing with borrowed lenses or your local camera rental house. Those are all going to be more affordable than a freelance videographer. You're going to be a little bit higher because you or the client don’t have to deal with checking equipment out and testing it. Time the client would need to pay you for. You're bringing equipment that you already use and maintain. You're bringing them the value of a full package that's ready to go without any issues for the client to deal with.
How do you find out what the rates are locally? Much the same as determining your day rate, by talking to people in your local industry. It may be a little easier because there are videographers and grip/electric truck owners who post their equipment rental rates on their site. If you opened a diner a few blocks from another one but all your prices were 50% higher than theirs, you’re going to have some problems. You got to know what the lay of the land is regarding what is charged for a service or a rental, as clients may be calling multiple people.
Video Credits
Music & Audio
Life Is Sweet
Silent Partner
https://www.youtube.com/audiolibrary/music
The Big Score (Music bed)
https://www.youtube.com/audiolibrary/music
Opening Audio
Cartoon UFO Sound
By Chilljeremy
https://www.freesound.org/people/Chilljeremy/sounds/395574/
Credits
Playing the Client who needed "big" lens:
L. Jeffrey Moore
https://www.youtube.com/channel/UCT0P8zpXW16TDXCJo6sJMdw
@ljeffreymoore
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