Has anyone else struggled with.....

[mattley23]

...Pricing your services correctly?

Its the one things I've struggled with since starting my business towards the back end of last year. I specialise in video production, photography and PR work and taken single projects from customers. Things like promo videos, pr campaigns and photoshoots (corporate, events etc)

I had worked out an hourly rate which incorporated all my overheads and my required wages but soon realised that didnt work due to jobs being partial days and not your normal 9-5 and my hourly rate was worked out on a 40hour week basis. Obviously im not always working 9-5 as projects generally cover partial days anot not full days.

The i started pricing per job but also found that hit and miss die to some jobs taking longer than anticipated at quoting phase.

Is there anyone media veterans out there who may have experienced the same problems when starting out that could advise me or help with best ways to structure fees etc?

Thanks in advance

 

[pentel]

Hi

As with most things the market price is what someone is willing to pay.

For some markets £50 a day will be expensive and for others £5000 a day will be cheap..

It all depends on your market.

When pricing per job make sure you are covered. Your increased experience of doing jobs will enable you to get a better handle on how long jobs take.

I have 2 customers who have a similar job done. One of them sends in an order, lets us get on with the job and collects it when it is done.

The other spends for every making his mind up, supplies information in dribs and drabs and we always end up against a too tight deadline due to lack of information. Neadless to say they pay very different prices.



In my experience if you are getting every job you quote you are too cheap... it is all a matter of trial and error.

Good luck

 

[Findermonkey]

My suggestion would be to read Dan Kennedy's No B.S Pricing Strategy book. Its awesome and it helps you understand that the cost of what you do has nothing to do with what you charge. You need to look at the value of what you do and the impact of that on your customer.

 

[ITsoldUK]

My suggestion would be to read Dan Kennedy's No B.S Pricing Strategy book. Its awesome and it helps you understand that the cost of what you do has nothing to do with what you charge. You need to look at the value of what you do and the impact of that on your customer.

Seconded....aimed at the US but translated well to me.

 

[VLAHAKISA]

I agree that experience massively helps with pricing - as you find out how long each task tends to take.

Even if you get it a bit wrong when a job takes an unexpected turn and takes longer than you thought, as long as this evens out against the jobs that turn out to be quicker than anticipated it should be fine still. That's how it tends to work for me anyway.

And yes, if you have regulars, you can easily start to assess who is a time drain and who is not and price accordingly!

Amanda
Logo Design. Print Design. Web Design.
www.trulyace.com

 

[Husac]

It could help to ask your clients (before sending them a quote) what budget they allocate for their project.

 

[ITsoldUK]

It could help to ask your clients (before sending them a quote) what budget they allocate for their project.

Negative captain in my experience.

This opens the door for them to whack you with a daft price and pop your sales process onto an uphill slope before you begin.

Fix your prices before hand, state your prices clearly then they will contact you if they think your service is of value v the price.

Does half the work for you following this route in my experience.

 

[Husac]

Negative captain in my experience.

This opens the door for them to whack you with a daft price and pop your sales process onto an uphill slope before you begin.

Fix your prices before hand, state your prices clearly then they will contact you if they think your service is of value v the price.

Does half the work for you following this route in my experience.

ITsoldUK - you are right, but nowadays clients are pretty informed when it comes to prices.
Asking them for a budget is like trying to get them into a conversation, you have their attention and if they really like your work you can close a deal.

If you are a beginner I think it's a good way to start, you can create your portfolio working with real clients and get some cash for that.

If you are more experienced and know the value of your work then it's better to come up with fixed prices.

Try both stategies and see which one fits you best!

Good luck!

 

[Nazaam]

Hi mattley23,

Considering your required wage, overheads and materials is good and added to that you should consider how many hours you will be able to spend on actual fee earning (number of working hours per year/month/week minus holidays, sickness, admin and marketing etc). This will help you establish a realistic hourly rate since although you may have 40 hours that you can work, some of that will be spent on non billable activities such as travelling, sales and admin (unless you hire someone to do that for you and then this will increase your overhead anyway so will need to be factored in).

The numbers you end up with should then be your sales target. For example:

You need £1000 per week to cover your salary, overheads and materials. You can only actually work 20 hours per week because 20 hours are spent on travel, admin and marketing so you will need to charge £50/hour and generate at least 20 hours of work for the week. If you have a long term financial plan, then you may consider that if you only do 10 hours of fee paying work in week 1, then in week 2 you need to try for 30 hours and reduce some of your admin/work overtime, or 5 extra hours in week 2 and 5 in week 3 etc.

That's a very simplistic explanation and I'm sure the book suggested by the other members will provide more detail. You could also do a google search for consulting fee models and that might help.

Michelle

 

[Cybertaff]

I had the same problem when I first started. What I should have done at the start was to look at the competition and see what they were pricing but in my haste I totally avoided this and ended up pricing too low which didn't cover overheads. I would never say ask the client as they will always tell you a low price gets business whereas if you go in too low clients will think your job quality will also be low (you can't have quality and low price apparently).

 

[Claire Dymond]

I started my own business in the same industry as mattley in 1986 and have seen huge changes in pricing.

Gone are the days of the two man camera crew going out for £650 a day like we did 20 years ago, you'll be lucky to be able to charge £350 a day now because of the explosion of cheap technology and well trained young people who at times are quite willing to work for nothing to get their foot in the door.

I base my charges now on about £400 per day plus VAT away from the studio which seems to be reasonably easy to achieve and about £1000-£1200 for a studio job with HD camera, greenscreen and autocue which is difficult to achieve!

The biggest problem with the video and photography industry is the perception that as everyone has a stills and video camera (usually in their pocket) paying someone to do it should be cheap.

I wish you luck mattley and I think you are quite right to offer something a bit more than just the video and photography by offering PR as well.

 

[Christine Hough]

Prices do need to be set with regard to the market, the competition, your clients' abilities to pay, service given, how you want to pitch (4* service or budget) and your own ethos etc.

However you set your prices though, you also need to know how much you NEED to make for each job to contribute to fixed costs, your resources to live, and specific costs incurred ( such as travel)

If for example you need 400 for this job, and it is only competitively priced at 300 you have to take a judgement as to whether you can take the hit. It is too easy to keep taking orders under the line saying to yourself that you might as well, and each time the deficit mounts up and suddenly you find you are well under what you need.

I think you really need 2 base line figures,
-one which says you are not earning enough from this job, but it is still contributing towards fixed costs even if not its full share, which you may then take if nothing better is on the horizon,
-and another figure which says below this it will cost to do the job and under no circumstances do you go below that.


If on the other hand you need 400 and competitive price is 500 you can go in confidently knowing you can afford to take the job.

 

[KeithP]

As we also are a service-based industry, this is an issue we also had to wrestle with. Our solution was to simply create 'packaged' services.

As an example, we used to provide a bespoke web design service and we never advertised prices; we'd take a brief from each Client and quote according to their specific needs. However, we found that some potential Clients were put off by not knowing the specific cost of our services.

So what we did was to create two services; 'Bespoke' and 'Package Deals'.

Our Bespoke service was ideal for Clients with more complex requirements and 'Package Deals' were fixed-priced for Clients who wanted something more simplistic.

Without knowing too much about your industry, you could provide a set of packaged deals for certain services whilst still offering a bespoke services for those Clients with more specific needs (and a suitable budget).

This way you have the best of both worlds.

 

[JacobCook715]

Im going to price just below competitors prices, undercutting