There are endless resources on the internet for figuring out how much you should charge for whatever job, so I encourage you to read many sources to gain a full picture. This is my particular advice, based on 10 years of experience dealing with clients in the VFX and Games industries.
With the approach below, you'll be able to fully adapt your rate to all situations and even be able to do what I did many years ago where I charged over 4 times my normal rate for a job!
Be aware that we're talking about how you should price your time for commercialized art. What do I mean by that? Well, as a VFX Artist you are selling your time to recreate the idea/vision of someone else, not your own. In that respect you are more of a technician than an artist so, as you read on, remember we're mostly talking about how to price your time. Another way of explaining this is: if someone wants to buy the art you created from your own original idea, then that is a very different conversation.
In the same way that art tutorials and guides can't replace practice, no amount of research and calculation will replace actual experience in pricing your time. So get out there are just give it a go, try various approaches and see what responses you get! What's the worst that can happen?
Lump Sum or Hourly/Daily Pricing?
It's my opinion that you should be charging for your time and not lump sum as often as you can. This is because when you start a project it can be very difficult to understand the client's full vision. Here's an example:
We want a matte painting of distant mountains against a sunrise and in the foreground we want rolling hills and a peaceful river snaking into the distance with trees on either side.
There are so many unknowns in the above example and we have to ask so many more follow-up questions before we can truly understand the needs of the client:
- What resolution is the image?
- What's the delivery format?
- What kind of distance mountains?
Sharp and Spikey? Snowy? Trees or not?
- What angle should the sun be?
This is a major component because it heavily informs the content you use
- Character of the rolling hills?
- Direction of the river?
- What kind of trees?
I could think of another 10 questions to ask here but the point is that there's never really an end to how specific you get. So based on this, how can you accurately estimate the total cost of a job in a lump sum? *Spoiler Alert* You can't!
Lump Sum Pricing
Unfortunately, when you're starting out, clients will often want to lock down a total cost. This is where you simply have to negotiate the best rate you can and stick to your guns when a client tries to low-ball you, but we'll come back to this a little later. An advantage of a lump sum is that you have not revealed an hourly rate.
Once you have revealed an hourly rate it is hard to increase it - except slowly and incrementally.
Finally, with lump sum you can probably close the deal more easily. Where the person you are negotiating with needs approval from higher up, a known amount is better than an open-ended commitment.
Working out Lump Sum Pricing
One way of estimating your lump sum is to work out your hourly/daily rate (which we'll do later), multiply that number by however long you think the job will take and then add 20% or so. You need to add this extra because you have almost definitely underestimated the time! After all, in big VFX studios, "bidding", as it's called, is an artform of its own and is often done with the input of multiple supervisors.
I won't go into the nuances of the back and forth negotiations with clients because that's such an individual process; it depends heavily on your style, the personality of the client and your history with them. This is where your practice and experience comes in. I will say that the art industry is full of friendly, helpful people, so you should find someone to whom you can ask for advice.
Once you've established that you're in the right price range for the client's project, you need to come to an agreement on what happens if you go over time. Here once again you'll find experience carries weight. When you're starting out you will often have no power to seek extra pay when the job goes over, but it's worth asking about and trying to negotiate. At least it'll give you more experience.
Payment is the final key when it comes to a lump sum job. You'll need to work out what works for you but here are some guidelines:
Small Jobs (up to a few days)
Likely you will just ask for payment on delivery, or prior to delivery. You should never send the final image assets to a client until you are confident you'll be paid. What level of "confidence" you need to reach is up to you but generally, if you've done past work for a client, you can be confident they'll pay you and therefore just send them the final work! If they're new, maybe only send them half-res versions of the work until they've sent you payment.
You'll notice the general theme of this whole article revolves around negotiation and psychology. Ultimately, you are dealing with people, so Psychology is a large part of the game!
Medium Jobs (1-2 weeks)
Here you could ask for 50% up front and 50% upon completion. This ensures that you're compensated for the time you will spend on the work in some way and also ensures you know the client is serious (there are places that scam artists).
In a way, this approach also protects the client a little because they're not paying the entire amount up front which, albeit a rare thing, could burn their budget if they ended up unhappy with the work.
Big Jobs (2+ weeks)
For jobs longer than 2 weeks, you should ask for 30% up front, 40% in the middle and 30% upon delivery. This is a great way to spread the cost out for you and the client but it’s also rather fiddly and can be pain for a big studio, so be open to flexibility here.
A note on big studios: If you are contacted by a studio like DNEG, Technicolor, or similar, you can be much more flexible with how you're paid because you can be confident they have structures and procedures in place around how contractors are paid.
The only exception here would be that for a job longer than 4 weeks or so I'd be asking for more regular payments - in other words, try to steer the client towards a daily or weekly rate instead and have them pay on a regular basis.
I won't cover this in quite as much detail as the Lump Sum section as, logically, where Lump Sum pricing isn't suitable or desirable, an hourly/daily rate is the choice. Understanding when to charge a lump sum, and when not to, will inform you of where to use an hourly/daily rate.
In a little bit, we're going to look at two ways you can work out what you should charge. Just keep in mind that, depending on the size of the job, you'll charge hourly, daily, or even a weekly price.
Generally speaking, you should work out your daily rate based on an 8 hour day. So let's say your hourly rate is $40/hour, your daily rate would be $320 per day. Now, for clients who ask for a weekly rate you can give them a small discount, maybe 10%, this is up to you. If the client wants an hourly rate, then you might want to increase your rate a little, maybe up to $50/hour.
So... how do we know what our hourly rate is?
Working Out Your Rate
Now it's time to actually work out how much you're going to charge per hour of your time! This will be the hourly rate we use for your Daily rate, and you should increase it if you're asked to work a short job on an hourly pricing.
To work it out there are two approaches: Bottom-Up and Top-Down.
Bottom Up Approach
This is the easier of the two approaches and the one I recommend you choose when starting. Basically what you need to work out is:
How much do I NEED to be paid in order to survive?
With this thinking, you're trying to figure out what your "minimum viable rate" is. Answer this question by figuring out what your monthly expenses are and then divide that by the number of working hours in month: 20 days times 8 hours = 160 hours.
Example: Let's say our monthly costs are $2500: $1500 for rental and living and $1000 for groceries and other. $2500/160hrs = $15.6/hour.
Now, we're only halfway here because as a freelancer you can't expect to be working every week of the year, there will be times when you are searching for work. A great rule of thumb here is to expect to only work 6 months of the year. This means we have to double our hourly rate from above:
$15.6 x 2 = $31.2 per hour
Great! So now there is one last step involved in figuring out our "minimum viable rate" and that is to add in all the extra benefits you don't get as a freelance artist. A few of these are: Annual Leave, Pension pay, Sick leave, Maternity Leave, etc.
As a freelancer, you don't get any of these. if you take time off you don't get paid, so you need to build this into your hourly rate! Another rule of thumb I learnt many years ago was to add 10-20% to your rate. We'll go with 10%:
$31.2 x 1.1 = $34.3
Let's round it up to $35!
Remember this will be calculated for your Daily rate, so now we know the minimum rate to charge in order to be able to survive over the long run. Now your various rates should look something like this:
- Hourly Rate = $45/Hour
- Daily Rate = $280/Day
- Weekly Rate = $1200/Week
Notice I've added around 30% to our number in order to work out the hourly rate and I've applied a ~15% discount to the weekly rate.
Congratulations! You now know what your minimum rate should be and can move forward with conversations with clients with much more confidence!
As you gain experience, you can increase this rate (there's a little more on that below), but this is a great starting point which gives you confidence that it's the LOWEST amount you should start charging at.
Top Down Approach
Once again, I won't cover this approach in quite as much depth as by the time you're in a position to quote projects in this way, you'll have a good grip on how to charge for your time.
A top down approach focuses on how much the client is expecting or willing to pay. Take concept artist, Raphael Lacoste, as an example. His work is unmistakable, he has very recognizable style and always produces phenomenal work. If the producers on a film or game were determined to have him create the concept art, they would have a high "willingness to pay" and so Raphael could charge a higher rate than normal.
In the same way, once you gain some experience and reputation you will be begin to understand and find opportunities where you are able to charge a lot more for your time than just an hourly rate. If a client is set on your art style, then you're able to charge a higher rate! In this circumstance you could consider going for a lump sum.
Understanding how much more you're able to charge also comes with experience. Certain types of projects have higher budgets and your experience will teach you where to be conservative and where to test new heights.
Which brings us to...
You're Not Charging Enough!
As you continue through your years of experience, you need to be increasing your rate, but how do you know when to increase and, by how much?
Well one of the most invaluable pieces of advice I can give you is:
If you get all the jobs you quote for, you're not charging enough.
I remember first-hand the disappointment of not getting a job I quoted on. It's not a fun experience (unless you're inundated with work). However, if you're constantly adjusting your prices - which you should be! - there's a silver lining here. There are only a few ways you can know how much you should charge and one is by increasing your rate until you have some clients saying "sorry, but we found someone cheaper". When you're at this point, you know you're charging the right amount!
When to lower your rate...
Let's say you're contacted by a studio that wants you to do 5 days work, but they can't afford your rate of $280/day. You don't have any other work on at the moment and you're not going on holidays so, in this circumstance, drop your rate!
You can drop it as far as you like, but I wouldn't recommend any more than 40% and remember to start small and drop further if you have to. You might offer to work for $240 per day to start. In the end, if you get the job, even for $180 per day, that's money in your account which you wouldn't otherwise have received and it's not taking you away from anything else! This also is where a lump sum option can be better as there is no record of you working for a ‘bargain’ rate.
This is a basic lesson in Opportunity Cost. This is the lost opportunity - that is, what you forgo - if you take on this job. In the case above, we have nothing else planned, so accepting the work at a lower rate has a very low opportunity cost! Perhaps the opportunity cost is forgoing a day at the beach, or a bike ride. ✔
In other words: If you have spare time on your hands the opportunity cost of your time is zero.
...and when to raise it!
This approach works both ways and is how I managed to earn 4 times my daily rate many years ago!
Let's say you are currently working on a project from Monday to Friday and have no more time for another job but you are contacted by someone for another project. Well this is where you can increase your rate bigtime! You should be open with the client and explain that you're currently very busy and, as such, your rate is higher than normal. After all, you're going to have to work extra hours and probably the weekend in order to make this work, so why shouldn't you be paid extra?
In this way, I remember a time several years ago when I was required to do THREE jobs in one weekend, I ended up earning 4 times my normal daily rate because it was so important for the client to get the work done in that time frame. To get it all done, I hired a friend for $20/hr to do a few of the easier tasks!
A Few Other Things:
✔ Don't be afraid to take on jobs you don't know how to do
When starting out, you have to take on projects you're not sure how to do. You'll never grow fast enough if you don't. You have to challenge yourself. When you're worried just ask yourself:
what's the worst that can happen?
The answer to this is that you might have to tell the client you can't do the job and pay them back whatever they have paid you. It's not that bad really.
✔ Get help
You'll be surprised how many people are happy to help artists who are stuck on a project, and this is a fantastic way of building relationships in the industry. We all have our fortes in art and we all run into roadblocks. Reach out to those around you and ask for help when you're stuck!
✔ Be Genuine if you're unsure
When dealing with clients, I've found fantastic success in genuine, raw honesty. I remember being 2/3 of the way through a project and I wasn't happy with my output. I offered to the client that I would only charge for 1/3 of the job and I would stop work. Their email reply said "no, absolutely charge for your time worked and please continue, these are great!"
Be a human, be genuine with your clients and you'll be often gratified by how well they respond!
Side note: if they don't react well, they may be good clients!
Freelancing is a tough gig. You're competing with people all around the world who are at different skill levels. There's room for the talented and the smart. So with both, you're well equipped to excel in the field!
I think this article puts to paper the main advice I would give as a mentor, but so much of this needs to be applied to your specific circumstances. I believe you are equipped with everything you need to come up with your best approach.
This isn't a promo-piece, which is why you won't see any links to my mentoring in this rest of this article but if you find yourself wanting 1-on-1 advice, I do provide a limited number of sessions each week for $60/hour.
You can book one here (although I hope you don't need to!)
Conrad W Allan