This may be oversimplified

#181979
AvatarEarlC
Member

This may be oversimplified daxalain but essentially you have to do the following:

LOG all costs, payments, expenses, insurances, licenses, permit fees … ANYTHING that you spend money on in order to produce video commercially.

THIS INCLUDES lunches, fuel, pens, pencils, software, hardware, office space rent, utilities, phones (cell AND land, either dedicated to business or your CPA figures on the percentage used for business), dinner, client samples, demos, paper, inks.

THIS INCLUDES a percentage you’d set aside for investment and maintenance of your equipment, the SALARY you pay yourself … ANYTHING and EVERYTHING you spend in connection with doing video as a business.

THAT total, divided by the total hours, on average, you plan to work video … say 40 hours a week x 50 weeks a year = 2,000 hours. So if your TOTAL expenses, ALL of them, came to $30K per year, realistically you’d want to earn $15 per hour.

THEN you need to ask yourself if you need to make MORE than $30K a year (provided THAT figure covers EVERYTHING … costs, salary, investment, maintenance, essentials and more: probably NOT) You must be realistic about your salary and expenses, equipment investment, maintenance and repairs.

SO, let’s say you come up with $60K a year, so you’d need to bill a minimum of $30 per hour.

ALSO, you need to realize that you’ll not always be making money EVERY hour of that 40 hours a week 2,000 a year. Feast and famine, my friend. You’d probably WANT your average to be higher to make up for the hours you AREN’T generating income. So, you should probably DOUBLE the figure to $60 per hour.

THEN I’d check area competition’s websites and rates and adjust up or down as necessary to be in the ballpark, but it isn’t necessary to be CHEAPER than everyone else … you cannot compete on PRICE ALONE. Set yourself apart by specializing, emphasizing and marketing your strengths, and charge accordingly.

Realistically, you probably cannot charge $200 per hour if everybody else within your service/marketing area is at $60 or less, but you COULD possibly justify charging $70 to $80 per hour. If business falls off entirely, adjust down but if you manage to generate business and make money on a fairly consistent basis, then charge $70 or more.

Confirm your expenses, including your salary and operating expenses.

Average out your expenses divided by the number of hours you’ll work.

Compare to your area’s economic levels and competition price guides.

Adjust accordingly.

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