flickr: Unhindered by Talent
There’s been a lot of discussion lately (as there always is) about how much creative professionals should charge.
Here’s a post from Monday on A Photo Editor discussing how much photographers should ask for their work.
There are some web services that will help you discover what other people charge for the same thing, it turns out, and then there’s the whole “divide your desired salary by your desired number of hours worked” factoring in expenses etc to get your hourly rate.
That doesn’t necessarily work in the real world. Paul Downs, who makes custom cabinets and furniture, wrote recently about the challenge of setting prices where each product is different (much like, we assume, a photo shoot, an article, or a press kitit’s not like you’re cranking out widgets here).
When I first started out, I had no particular system. I would literally make up a number that seemed reasonable. This may sound incredible, but that’s what happens when you are young, dumb, and have no access to information on competitor prices and no system for tabulating costs. After a few years I settled on a different but still dysfunctional system. I would check to see what my competitors were charging for items similar to ours and try to sell for 10 to 15 percent less. I had been in business for 10 years before I started tracking the number of hours it took us to make our products, and another 10 before I even tried to figure out what the material costs would be for each project.
To make matters worse, he says, his employees worked at different rates, his raw material (the wood) was sometimes inconsistent, andagaineach product was different.
Finally, his company settled on a system which he admits is far from perfect (emphasis ours):
We wrote spreadsheets that took into account factors like estimated design time, size, number of top segments, woods used, number of base pedestals, type of finish, and special hardware requirements. We used factors to make predictions of the number of hours allocated to building, finishing, and packing the table. The amount of materials used was estimated by a formula that assumed certain waste factors, and we could easily choose among different types of wood.
We mark up the estimated materials by 48 percent, and the labor hours get charged at a shop rate of $80 per hour and then marked up an additional 9 percent. And if it’s a rush job, or I suspect we can get the client to pay more than the estimate asks for, we mark it up some more. How much extra is a straight judgment call that I make.
This is still a system worlds better than just pulling a number out of the air, and while his shop has underestimated the amount of time some projects would take, the company is still in the black.
How do you decide what to charge?
For editorial work (copyediting, writing, etc) the EFA has a rate chart. Photographers can consult the resources linked above at A Photo Editor. How else do you set prices?