(light music)
- Hey everybody, it's Adam Forgione,
and I'm gonna share my pricing formula for video production.
It's much better than full day rate and half day rate
and we do this for everything,
corporate, commercial, weddings, you name it.
So here's how we do it.
First thing you gotta ask yourself is this.
What is your full day rate?
If you don't know your full day rate,
you're gonna have to start thinking about it.
But most people know what their full day rate is.
The next thing is what kinda crew size
are we talking about?
For me, we generally use two person and three person crews.
That's very common for us.
Yes, we do smaller and larger,
but for the sake of this example,
I'm gonna use these two sizes.
Let's start with a two person crew.
So, my full day rate for a two person crew,
I already know the answer to this.
It's $3700.
Don't ask me how I got that number, it's just my number.
Now, we take that number and we know that that's 10 hours.
Now, we go backwards and we say,
"What is it worth it for me to show up with gear
"and do nothing?
"Or what is it worth for my crew to show up and do nothing?"
Then go home.
For me, ballpark, 1,000 bucks.
Ya know, so the crew shows up, they go home,
they get $1,000.
The crew shows up, they work 10 hours,
they get $3700.
Now we're talking here, right?
Now, you take your 3700 or your full day rate
and you minus it by your minimum, you will show up.
My example, it's $1,000.
We have approximately $2700 left, approximately.
If you do the math, you'll start to realize
not exactly, but about the amount of money
it cost me to show up is about 25% of the total fee.
Then the remainder 75% approximately
is what gets split up to create my hourly rate.
So the idea is base plus hourly rate.
Base, for us, now that we did our math
and we did our formula, our base for a
two-person crew is 950 to show up.
Our hourly rate is 275.
How did we get that?
Well, we took our full day rate and we minused
the minimum we'd show up, which is $2700,
and we divided that by 10.
And that 270 is our hourly rate.
We roughly rounded it down to 275 an hour
and it's a 950 base rate.
So, 950 to show up and for one hour of work,
we get 275.
You add those two numbers up.
What is that? 1225.
So, we know that for one hour of work,
we're gonna get 1225.
The numbers just keep going up.
So the formula for us is actually 25% to show up
and then 75% divided by 10, which is our hourly rate,
and we count how many hours we're there.
From portal to portal, from entrance to exit.
Now, after 10 hours, we do charge time and a half
and that's up to you as well.
That's how we do our pricing formula.
For a three camera shoot, here's our formula.
1300 base rate and 375 an hour.
If you add it up to 10 hours, a full day rate
is $5,050 and that's our full day rate
for a three person crew.
That's our formula.
The formula is simple.
That's production.
What do you do about editing?
Editing post production.
For us, our studio is very reasonable.
It's $100 an hour.
So, we usually look at the scope of the work
and we estimate how much time.
We give a range.
This is going to take 20 to 30 hours to edit.
Well, we know our $100 an hour, we let the client know that,
so they know it's gonna cost about 2,000 to 3,000 dollars
to edit this piece.
They also know we're there for five hours.
So, we take the five hours with a two person crew
and we know that that's $2,325.
Another one, pre production, right?
This is everything that happens before the shoot
even takes place, or sometimes, before the edit takes place.
Pre production, it's not editing and it's not shooting.
What is our hourly rate?
Our hourly rate is $100 an hour, just like post production.
That could be script writing, that could be planning
and logistics, that could be casting actors,
or casting voiceover talent or brainstorming
for storytelling, whatever that may be.
Everything that's going on before the actual shoot
or before the actual edit is pre production
and it's billed at $100 an hour.
The client knows this and again, we do give a guesstimation,
a range of it's gonna take this many hours
to that many hours to do that kinda work.
So they know that and that goes in the invoice.
So, when I give quotes, they're very fast,
they're very efficient and the best part is this.
I'm not working extra time.
Neither is my crew.
We're getting paid for the work we do.
The client is not paying extra.
Let's say they had us for eight hours and they
got charged a full day rate.
They don't like this and they will be onto you eventually.
So, if you charge the client exactly what they're getting,
you'll be happy, they'll be happy,
continued work, long term relationships.
This is really big.
Now, how do you figure out what your number is?
Well, I shared my number.
But that's because I believe that we're worth that.
That's what I value our work at.
You have to figure it out for yourself.
What do you value your work at?
If you don't think your work is up to par
with another studio who's charging a certain amount
or you know the going rate in your market
is a certain amount and you think you're not
up to par with it,
well what do you do?
Ya gotta get better.
Just learn.
Education, practice, get your game up.
Once you get your game up,
you charge what you think you're worth.
If you're not worth what that is,
you have to charge less.
But be honest with yourself and make what you're worth.
Value your work and understand that.
I can't tell you how many times I've heard great feedback
from the clients, the potential clients
when we give em pricing right away.
First phone call, "Hey, we need a video.
"It's got this, it's got that."
I gather some information and I'm able to figure out
how many hours am I gonna be there,
how big is the crew size?
About how many hours are we gonna edit?
Maybe it's a range, 10 to 20 hours,
20 to 30 hours, but I can give em a ballpark number
right on that first phone call.
It sets me apart from everyone else
and they usually compliment me and say,
"Man, this is really easy to understand.
"I get it."
Not only that, it puts them in control.
If they wanna dial the budget down,
they have full control.
If they wanna dial the budget up, they have full control.
It's great.
You're always getting what you're worth.
Anyway, that's my formula.
It's awesome.
We've been doing it for about a year and a half this way.
And I hope you guys were able to pick up some
gold nuggets from that and apply that to the way
you guys price.
Anyway.
Did I just do the thumbs up?
Wait a minute, I can't do that.
(upbeat music)