Pricing video editing

Never charge using a flat fee. That way lies madness. Always establish an hourly rate.

You can use other folks in your area as a guide, but the first step is to calculate what it is costing YOU to edit, then build from there to include the profit. What some OTHER guy charges may have little to do with his OR your reality, so blindly copying another guy's rate is a mistake.

If you are editing on your own gear, figure the cost of buying, maintaining, upgrading that gear, software, expendables, blank stock, insurance, tax witholding, all your costs of doing business. Put your weekly salary down as a cost. Also put in a percentage that goes into the bank to save up. Total all the costs. Divide the costs into the number of working days you want to be working in the year, that tells you how much per day, per week, per month, per year you must make to break even or make a profit. Your rate is that figure, plus whatever markup the local situation enables you to tack on. Aim for a figure that meets your etsablished calculated personal minimums, but sits in the middle of the range of your competitors. But always defer to the floor you calculated, even if it makes you more expensive than anybody else in your area.

The reason the other guys are charging less may be they didn't do the same homework as you, and are low-balling the rates at a level they cannot sustain. They may be setting a rate that barely keeps the gear out of hock, but doesn't allow for upgrades or improvements. They may be limited in what they can offer with that rate in areas like graphics, music, audio sweetening, etc. They may have a second and third job that's underwriting the video business. They may be taking a page from Gates and just trying to starve out all competitors, then raise the rate once they are the sole survivor. They may just be really BAD, and need the lowball rate because they only ever see a customer once. Hopefully, you want to build repeat business, and you do that on reputation, not on price. The quality of your product and the integrity of your dealings is the number one advertisement for this kind of business.

No matter what, NEVER, EVER, believe the phrase: "give us a price break on this first one, and we'll give you more business in the future, it will be good for your portfolio". For me, these "magic words" mean these folks are crooks and liars, best referred to your worst rival. You are an editor, not a bank. Still, if they ask for this, and you would walk thru fire for the chance to work with the particular client, turn the phrase around and say: "I'll give you a terrific break on the third one, let's see real money at the real rate for the first one". If they balk, walk away. Best thing you can do. They may even come back, after they've burned someone else, or tried a lowball player and been dissatisfied. Once you set a lowball rate, it is VERY VERY hard to raise it. Our markets are an incredibly small circle, word of mouth and reputation will make or break you.

I don't recommend setting a pure simple "hourly rate". I'd set a day rate (up to ten hours) a half day rate (for those times you work between 1 minute and 4 hours on a project during a day) and an "overtime" hourly rate (the overtime rate should be well above your daily rate divided by 10, I'd say at least double).

This keeps you from losing full days of work because you booked a project that only took 90 minutes. I book a minimum half day for any project. There are a number of reasons for doing so, including:

*It keeps clients from "underestimating" the time it takes to edit something.

*It help keep you from working with "grinders" who only want to pay for a couple of hours of work, even though booking the edit session with them blows away the time you could have booked for a larger job.

*In my opinion, that 11th or 12th hour you spend doing "one more thing before we wrap up and you go home" is worth more than any of the hours during your "expected normal" working hours. It gives everyone a reason to wrap the project up in a timely manner rather than keep going that same day. (There's not as much incentive if you are "already here anyway and it will only add a couple of hours to the finished cost".)