How Much Are You Worth? AKA How Much Should I Charge Clients?
How much should I charge clients? It’s a question that comes up a lot in the classes I teach, especially from students excited about the possibilities of entering a new industry. For some it’s a newly discovered passion of photography, others graphic or web design. Inevitably, the money question comes up. What’s a fair rate? A valid question to be sure, but I encourage students to think about a good rate or an acceptable rate instead of dwelling on the moral dilema of fair or unfair. When pressed for hard numbers, I give students a basic formula, take your ideal salary, divide by 2080 and that equals your hourly rate. That means a rate of $15 per hour, equals about $31k in salary per year. That formula works well in putting money in perspective. Suddenly, charging $300 for a wedding event or $50 for a photo retouching project doesn’t seem like such a good idea even if that’s your passion. $300 a wedding would total about $15k assuming you worked one wedding every week for a year. In the context of additional income not so bad, but factor in travel costs, and any time spent processing images and that’s a pretty low rate. Likewise for the person that charged $50 for photo retouching. Every hour spent working on that retouch project reduces the profit received from the job.
Now, let me be clear, I’m not saying that what you do should be about money. Certainly, the happiest people are those that enjoy their work, and some may see revenue as secondary to doing the job. All I’m suggesting is that if you intend to make a living doing whatever, you need to understand the BUSINESS of that particular industry. Enjoying wedding photography is not the same as actually running a wedding photography boutique. Too many times I’ve seen students charge extremely low rates due to insecurity or lack of understanding & preparation only to become frustrated that their passion wasn’t profitable. You might think you’re doing well booking a wedding event every weekend until you realize your business costs are not being met by the income you’re generating.
So what happens when you do the research, talk to your peers, and decide on a rate? Another issue that comes up is customer’s perception of an acceptable rate. @Landailyn made a good point in her blog regarding photo restoration. A person commented on the validity of the work comparing it to the service offered by CVS. In Janine’s case, she’s battling customer’s perceptions of her industry. The average consumer thinks photo restoration is digital magic that you can simply pickup at a CVS, Costco or Walmart. Educating clients is just one of the steps Janine needs to take to receive just compensation for her work. @Mitzs also has a fair bit to say on her blog about educating consumers on this particular industry.
Janine is not alone. There are number of folks who don’t know what to charge or find themselves trying to justify their rates. For myself, I’ve had plenty of folks call on my company Media Cats for training only to balk when told the price of classes. Our rates are higher than your local community college, but priced competitively within our market. And just yesterday I discovered Best Buy charges $159 per hour for training through their Geek Squad division. (That’s significantly more than we charge). Now I can’t speak personally to the service, but knowing a bit about retail the level of expertise for Geek Squad representatives is sure to vary from store to store, region to region. In fact, I bet if you Google Geek Squad service, there will be a split number of good & bad reviews. So on one hand, potential customers tell me we’re too expensive, but that same customer will pay Best Buy a higher rate for less service.
In the end, as my good friend J. Schuh would say, “All you can do, is the best you can do.”
In summary, I encourage you to do your due diligence and research your industry if you are looking to make a living at it. Make an educated decision about your rates, and then you can appropriately market your services.