I aim to help you understand how you should charge clients, particularly if you're pursuing freelance work or starting your own production company. With about 8 to 10 years in the industry and having worked with some of the biggest brand names, I've gained some insights that I'm going to share with you. Let's break it down simply and quickly, discussing both production companies and freelancers.
Point #1: What's the Budget?
The first and most important rule is always ask: what is your budget? Most of the time, the client will present you with the scope of the project, the deadline, and the budget. Your job is to write a treatment within that budget, determining the scope of work that can be achieved within the given budget. This could be for a music video or a commercial. Sometimes, clients already have the creative brief, but they want to see your vision.
Now, if a client approaches you without stating their budget, and they want you to shoot a project, it's crucial to understand their requirements before discussing any financial figures. The budget for their project is typically higher than what you're anticipating. This is why you want the client to speak first on what their budget is. If the budget doesn't meet your standards, you can politely decline, stating that you don't work with budgets that small.
When starting out, filmmakers often undervalue their work because they want the job, which is totally fine. It's about building a reel, learning how to make good videos, persuasive treatments, and pitch decks to send to prospective clients. All these help in landing bigger jobs.
Point #2: The Case for Productions
After sorting out the budget and creative for the project, it's time to sort out the clear and precise details in either an invoice or a contract, or both. The invoice should detail the scope of the work and the payment terms.
Typically, for a production company, the payment terms are 75% due upfront as the deposit on the project, and the remaining 25% due on the backend. Most companies and production companies I work with, do 75/25 or 80/20. So, 75% due upfront, you do the project, and then once the project is finalized and ready to go, the last 25% is due. And then once you're paid in full, you send off the video file and complete the job.
Point #3: The Case for Freelancers
Freelance work is a bit different. You may be hired to shoot a video or to direct. In this case, you would have a day rate. Your day rate covers your work for the entire day, including preparation, meetings, scouts, etc. If you need to bring some of your gear along, it is included in the rate.
Payment terms vary. Typically, you are paid either on a net 15 or a net 30 basis, although sometimes you may be paid on the day itself. It all depends on who you are working with and the amount of money involved.
Point #4: DON’Ts
There are absolute don'ts of charging clients. One is no video packages unless you’re making social media content like podcasts, or TikToks. Video production is a very bespoke tailored service and you have to be very flexible to meet your client’s needs for every single commercial.
The second don't is no edit by the hour. There's no way for the client to track it, and you should always just come up with a flat agreed upon rate. If the client wants to keep adding on extra edits, extra notes, you just charge a flat rate for a revision.
And lastly, keep it simple, clean, and just not confusing. If your day rate is a thousand dollars to shoot, that's it. Don't try to add on things like, "Oh, it's extra $400 for my assistant, and $100 for my gas." You should already include all those numbers in your day rate if that’s something you will need to get the job done.
Recap
To recap, always ask what the client’s budget is. If you run a production company, determine what the project would look like, and then present them with a budget. For freelance work, figure out your flat day rate.
Remember, you can always start smaller, get a bunch of jobs under your belt, build a reel, and then start to charge more so that you get that work. Always keep it simple, clean, and non-confusing.
So, there you have it! The best ways to charge clients, whether you’re a production or a freelancer. If you have any questions or something was unclear, feel free to comment below. I hope this guide was helpful!
