Create Your Production Invoice Template for Production Effortlessly

Production invoice template for Production

a lot of people struggle with pricing because they either charge too much which scares clients away or they charge too little which simply means that there's not enough profit at the end of the year to grow their business and at the end of this video I'm going to walk you through how we set up an invoice or a quote for a company so that you can copy and paste that template for your own business too and know exactly what we charge and why we charge it but to kick things off here are five things I want you to be thinking about throughout this whole video number one is you need to determine the amount of time and effort the video project is going to take if you don't know that it makes it very hard to price up your project two you should consider the level of experience and expertise from you and your team number three is to do your research and see what other companies are charging for similar Services number four you're going to need to factor in any additional costs such as equipment rental or travel expenses things like that and number five is you're going to need to set a price that is fair and profitable for both you and your client that's a win-win strategy that makes them want to go with you opposed to anyone else now when it comes to pricing Video Production Services it's an absolute Minefield and people price things so differently if you're starting out or on this journey you're going to be asking yourself what is the most effective for winning the projects and how can I make the most amount of money let's be fair we all want to make more money we all think we're worth uh you know higher amounts and the question is how do we get our clients to see that value the reason it's hard to know how to price Your Video Production Services is because everyone does it differently you'll speak to one person that says value-based pricing is the best thing you'll speak to someone else that says something completely different and it's hard to know so I'm going to cover a few of the key strategies that you should use and I'm going to tell you what we used in order to grow our business to multiple six figures a year now there's five key ways to price up projects the first is cost based pricing where you simply see how much the project is going to cost you and you make a markup on top of that it's very very simple the second is competitive pricing where you look at what your competitors are charging and you then either Set Your Service pricing above that or a little bit below that to stay competitive you've got price skimming which is where you set your price high and you lower it over time you have penetration pricing which is when you go into a competitive market with a low price and you raise it over time and finally you have value-based pricing which is where your prices are based on what your customer thinks it's worth so the two that I'm going to focus on today is competition based pricing because that's going to help a lot of people out there who are just starting out on their Journey I'm also going to talk about value-based pricing because it's the most common thing that I have members of my Academy talk to me about that really confuses them and they don't really know how best to charge their services and like I said at the end of the video I'm going to show you how we price our services which is a bit of a hybrid of a few of these options so competition based pricing is is the one that I suggest people focus on the most if they're very new in their journey and just starting out and have literally no idea how to price their services and there's three main advantages to competition based pricing the first is that your prices are Dynamic so they grow and they increase as your quality of work gets better the second is that it's simple to execute because you have a good understanding that well these companies are already charging this amount for their videos and my videos look the same as that so I should in theory be able to get exactly the same as what they're charging and the third Advantage is that this strategy can be combined with some of the other strategies and I'll share that with you at the very end of this video now there are obviously some disadvantages with competition based pricing and the first is that it generally ignores customer demand and you can become very stagnant in that way of thinking so for instance we generally use day rate so we will charge a day rate for editing and a day rate for filmmaking if we're basing that on what our competition are charging as a kind of an estimate and we only focus on what our competition are doing when we grow and we become better sometimes our prices won't reflect that but also what happens is you're just aiming to be your competition and you're not starting to move on your own road now when you're starting out that's not really a problem and you can focus on people around you but it's not the best mindset to put your business in just to copy your competitors the second disadvantage is that it can rely on an unbiased view of your own business we all like to think our work is perhaps sometimes better than is reflected in a customer's eyes so when you're looking at your competition you need to take in a lot of various factors and some of you won't know so for instance if your competition is charging four thousand dollars for a video and you think that their work is in line with yours you don't know how many other expenses they have and how much profit they actually make out of that video if you're comparing your team of three people to a one-man band who's charging four thousand dollars even if your work looks similar they might only need to do one project a month so for you you're going to need to fluctuate your prices more and think about that in order to create a good and healthy profit you might have heard the saying before that if you base your services on price then it's just going to be a race to the bottom because everyone's going to want to be competitive they're going to want to undercut each other and provide the best value for money and that's something that you need to be very aware of with a competition based pricing structure that you don't fall into that trap and that you still value your services at a particular level sometimes it's not always advantageous to be the cheapest in the market but sometimes to be the middle of the ground or the more expensive now value-based pricing gets a lot of hype around it because people think that because it's value based you can charge however much you want my videos are you know worth ten thousand dollars because it has so much value driven towards the client but that depends on what the client sees and there's a huge gray area with value-based pricing because your prices are always different so they're always fluctuating and there's some things that you really need to think about with this however it can be a great strategy for earning good amounts of profit margins but that's not always the case so value-based pricing structures are used by businesses to set a price for a service in your case video production that you think your client is willing to pay and at the end of this section I'll give you some common questions that I know members of ours use to draw out the information from the client to base their value around now of course there are a load of advantages when it comes to value-based pricing and the first being that higher markups are possible so unlike some of the other pricing structures where you might look at your costs and make a percentage on top of that or you might look at your competitors and see what they're charging and charge something in line with what they're doing it enables you to look directly at your client and find out about what try it kind of problem they're looking to solve within their business and what value your services your video is going to provide because if your video is going to help them increase sales by a million dollars for argument's sake then your video is worth in essence a lot more than potentially a thousand dollars that you were going to charge in line with your competitors your video should be worth at least 10 if not 50 if not a hundred thousand dollars if they're going to make a million dollars in sales out of your video now of course there's a lot of factors around that and I have to keep mentioning that because I think it's very easy for people to be drawn to the value based pricing structure of being able to make a lot of money very quickly and that's why our hybrid method that I'll teach you at the end will help a lot now the other Advantage is that your own perceived value can increase once you've done a project even if you're starting out if you've done a project for a thousand dollars you know you're now worth a thousand dollars you then up your prices to fifteen hundred dollars and you get some clients at fifteen hundred dollars you know you're worth that and so on and so forth so then you become it very quickly you can enter a market and with value-based pricing you can be working on projects that are five thousand ten thousand fifty thousand dollars and then it makes it easier to have conversations with other clients knowing that hey you're Pro Your solution to another client's problem got them back this return on investment or you have some kind of track record or case study so that you can now talk to your new client and you know that it's going to be about fifty thousand dollars etc etc now don't forget you might be sitting there thinking my fifty thousand dollars is obviously a lot of money with a fifty thousand dollar production you're gonna need a whole team of people you're going to need to enlist the help of lots of other experts so there are a lot of costs associated with that too and ultimately in business everyone shouts about big turnover numbers but you really need to be focused on what is your profit at the end of the day now looking into some cons of value-based pricing and I think this is where a lot of members in my Academy get caught up on and certainly when I talk to them about pricing we go back with our hybrid option that I'll show you in a minute and that's because it can be very hard to know what your price is it can be hard to set your price in the first place and it becomes down to your negotiation skills and actually being very good in that sales setting to ask those right questions and a few questions that I would urge you to ask is what is the value of the problem that you're looking to solve so if you're having that conversation with a client perhaps again they're an e-commerce brand and they're looking to have a video to boost their sales you could ask them well what percentage are you looking to increase your sales by and what value does that have and the client might say well we're looking to increase our sales by 10 which would give us an extra ten thousand dollars profit then you can say to them okay so what value do you think our video is going to have on that because if that's the only way they're looking to increase their sales is by implementing video then you should be able to take a good percentage of that profit because you're the sole reason they're going to be able to get that result you see so there's a lot of value all of a sudden your video has gone from just being a price thing to be in something that's very valuable to help them get that however it does rely on your um experience and your sales expertise to show them that perceived value and it is perceived value so they might just be asking you for a course if they're speaking to one production company that says it's 1200 pound and they're asking you and you're asking all of these millions of questions even though they're good questions to ask they might look at you and just think well how is your video ten thousand you know how how comes your video is five thousand dollars and their video is twelve hundred dollars despite the fact that on paper your work looks identical and comparable now potentially they're not the type of clients that you want to be working with and that's completely fair but that's where you might miss out on a lot of projects and also it leads to another disadvantage which is you've done some work for this client you value-based uh priced uh their projects and let's say it comes out at five thousand dollars and they then go and tell their friend oh you should work with these guys they're great the last project cost me five thousand dollars and you go through the same process with them trying to work out the perceived value of your work and uh the perceived value comes out to be less than that or more than that that becomes quite a difficult conversation when they are really good friends and they chat about how good you are and one of them says yeah I only paid a thousand dollars and he says well I paid five thousand dollars it becomes difficult and can even though you can kind of try and justify that it becomes a sticky situation when you're charging different prices with different clients for essentially the same sort of video and that's where again it comes back to your experience asking the right questions where you know every video is different but you need to be able to very quickly justify those factors with value-based pricing and keep in mind that it doesn't always lead to higher profit margins and that I think can be something that's a huge gray area value-based pricing is the gray area of the sales industry so to wrap up value-based pricing you want to ask the right questions find out how valuable your products and services are you need to do a good job of showcasing and getting across that value at the start you almost don't even want to be talking about pricing for the first couple of meetings you just want to be focused on all the value that you're bringing and it might work out that you make a lot more money from it but that's not not always the case and it can rely on your analysis of the client and their problems but also how much they value you and deem your product to be the solution for their business so it's really important for you to know those two key areas because for the beginners you're going to want to focus probably more on competition for the more experienced people you're going to want to move more towards a value-based pricing but it's quite difficult to know that when you're first starting out or you can use our hybrid solution which consists of cost pricing penetration pricing and competitive pricing so I'm going to dive into that now I'm going to screen share with you how I would price up an invoice and this is the strategy we use to help grow our business from zero to hundreds of thousands in Revenue each year okay so the first thing I would look at is how long is the project going to take me to film or actually firstly is there any pre-production needed when I was starting out we hardly did any pre-production so I'm going to leave that but you're looking at time factors here so let's say this is going to take a day of filming so one day filming okay and how long is it going to take me to edit okay it's going to probably take me two days of editing Edison then what other costs are associated with that so we're looking at Travel costs um we're also looking at Maybe music licensing potentially equipment higher costs or things like that Okay so we've got those listed down and the reason I focused on this is because we're looking at the cost based pricing to begin with and then we're going to start to develop our hybrid method so one day of filming is around about eight hours for us so uh let's say we're gonna do uh we wouldn't do this hourly but let's say how much are you charging your at yourself out at so in terms of the cost to the business and this is where if you're starting out you need to see the business as one entity and you as another so what are your wages for that day so let's say keep numbers nice and simple you charge ten dollars or ten pound an hour it's going to cost uh that's your wages so um we're going to be looking at a unit price of 80 pounds okay so this is what the cost is to the business so 80 pound uh for uh that we're gonna do quantity is one and we'll do quantity as two here because it's two days editing uh we can ignore the vat uh at the moment um because for the purposes of doing this and depending on where you are in the country or in the world as well you'll have different tax structures so then we're looking at travel so we might charge a travel fee for mileage or fuel or something like that so same sort of thing here um how much does that cost your business so let's say it costs your business 40 pounds or forty dollars or whatever it is okay um the same thing we'll just do notified for the time being music licensing so uh music licensing again let's say that just costs you um uh I don't know maybe it costs you twenty dollars and Equipment high now equipment higher I personally think you can run into some problems here because you'll get clients that will say to you well Ross do I need an A7 S3 or do I need a red camera they won't know what the difference is so we generally include that in our filming rate because we own our equipment but I'm going to put it in here for the purposes of of this um however we would just include it as part of our cost of sale because we already own the equipment so let's say equipment higher costs you a hundred dollars or whatever it is okay so now in order for you to complete this project for a client you're looking at a total of 400 or 400 pounds so you would then make a markup on this because that's the the cost to your business so your business needs to make some money right so you might want to charge anywhere between 20 and 60 markup on something like this so you would simply go through and change each one of these items to add uh 20 on top of that or whatever your figure is and that will give you your project total if you keep that percentage the same on your markup how much you're charging in addition to the costs then you're gonna have a pretty set pricing structure that's going to be quite similar for a lot of businesses which will help when you're talking about prices and being able to think of them on the spot so I said this was going to be a hybrid and this is where we bring in the competition based pricing or competitor based pricing so we look at other people in our industry and as well as I suggest people who are just starting out do this as well talk to people find out what kind of prices they're charging for their services and how are they comparable to you now doing this in a competitor analysis way is a really nice way of doing this jotting it down on a bit of paper rank them versus their price versus the quality of their work and you'll start to work out where you fit in that overall picture so if I know for instance our local production company is charging um 500 pound or 500 uh for a day of filming and a day of editing and their work is comparable with ours then this is where I would start to take that and I would say okay well the unit price is 500. and that's where we start to make those markups now for travel music licensing equipment higher I'm still going to be using that cost uh base price instructor where I'm making a percentage on top of that so if something costs me a music license cost me 20 dollars I'm going to be charging that out at something like probably closer to 30 so I can make a small markup on that because it's taken me to find that website to find the music Etc there's a bit of time element in with that so I'll make a markup a percentage on everything that I charge out the same as equipment hire if it's costing me a hundred dollars to hire a camera for a day I'll charge that to the client at probably about 150 or something like that and don't forget this also includes a little bit of value-based pricing not in the typical sense of what value does the client think that our video produces but in the sense of how much do I value myself because some people say the problem with this structure is it's similar to time-based pricing where you charge for just your time and I say well no because my time to the business is only 80 pound or eighty dollars but the value that I'm bringing for my experience and remember those questions that I asked you at the start of this video they're the things I'm thinking about my experience my team's experience our expertise what is that worth and what are other people charging with our in our industry and how do we compare to them then it gives us a good Benchmark so actually we're charging 420 dollars more um because of our value that we produce in our experience and our expertise so it's not just focused on time we've also focused on those elements of uh you know the bigger picture and remember this doesn't mean charging lower than your competition because that could be a race to the bottom like I mentioned earlier but you can also charge more it just gives you a benchmark to go by there's lots of other factors that will be unique to your business and they're the things that you need to take into account as well so that the customers or the potential clients aren't just comparing an apple with an apple they're starting to can see the differences between you and the other people in your industry as well so this pricing structure is something that we used for years to grow our business to multiple six figures and when we started this we actually didn't even include things like travel music or equipment hire like I said we just did it all under or including in our day rate for filming and our day rate for editing but we've recently reverted back to this structure of labeling out all of our Associated costs because then when a client says that excuse me um we actually don't have budget for that that project is you know sixteen hundred dollars or sixteen hundred pounds we only have budget for a thousand and I can come into here and I can say okay well why don't we get rid of this we can get rid of that we can get rid of this that and the other then the client feels like they're losing things which they don't like so then they say actually can we keep that but maybe scrap that and then you can say well yeah we can scrap that but that's really useful because of this and you can start to have those conversations where it means that actually you can get more out of the client than they were willing to spend but also you can do less for the money as well so it's not comparable it's not you the fact that you're over delivering and potentially in a value-based pricing structure this can be detrimental uh that can be detrimental because the client says well I only see the value being a thousand dollars obviously you don't have to accept it but doing it this way you can sit down with them and say well look if your budget's only a thousand dollars then we're gonna have to get rid of a day of editing and we can get rid of maybe the music licensing and use some free website which won't be as good then that brings it down but also saves you on your time and the effort it takes to go into that as well so there's some really good things to think about with this structure now we're actually a really interesting time with our business where we're starting to look more into the value-based pricing as we start to pitch for much much bigger projects but at the moment this is what we're using now the third element that I mentioned is that if you are just starting out it can be very confusing and you've probably seen people who sell courses who have tons of spreadsheets about how to price your structures and structure your day rates and all of these things I really just think keeping it simple is going to be the most valuable thing to you and using a penetration structure might be an easy thing to go by I generally say to people if you're just starting out charge something charge fifty dollars for a project charge a hundred dollars then up it a little bit more I have a member on the academy who actually very recently landed his first client for 500 others and then had a business call with another client the day after and said to them he panicked a bit and he said it's going to be a thousand dollars because he knew he'd already he landed a project for 500 easy so he knew he was a bit more and uh he's obviously just waiting to hear back but if he lands that then he knows he's worth a thousand dollars so he can start to up his prices as time goes on as well there's no wrong or right answer when it comes to pricing your services so go with the one that resonates with you the most and that is clear and concise because if you start having business meetings where you're unsure it's going to feel uncertain to your clients and it's going to make them not want to go with you if you want to know some easy tips and how we land clients on more than ten thousand dollar projects then watch this video right here it's got a few more strategies inside it that will showcase how we land those clients so take a look at that and I look forward to seeing you in the next video