Wreck This Journey Week 2 - Four Letter Words

That's right, the vlog is back -- and this time, I'm actually starting to understand editing!

Be sure to leave your suggestions for ways to improve our videos in the comments below, or tell us about your experience with Wreck This Journal. Don't forget -- we want to see your blogs too -- just email them to theartabyss@gmail.com, and we'll post them up here on the blog and on our YouTube channel.

Until next time, happy scribbling, and make sure to check out my second-ever vlog attempt - and goofy frozen face - below:

Back To Reality - It's Budget Time!

Epic Leap of Faith Is Epic

Did you watch yesterday's video from Shane Pearlman? Because hot damn, I want that life. Not only has he been able to grow his business to the point that he's actually turning down legitimate clients (not just the crazy ones, actual clients that he would like to work for but just doesn't have the time!), but his business allows him time to surf, a beautiful house, time with his family, and a life he loves. Hard life, right?

In all seriousness, it does seem difficult - even unimaginable sometimes - to reach that point where your art is fully supporting you. And Shane doesn't talk about how his wallet was able to handle those first steps out into the big scary world of freelancing. He says it took time, and it took learning how to sell his services. But what do you do in the meantime, when you're still that baby freelancer with minimal experience and no nationwide network to draw on?

Kids, it's time to make a budget. Let's start with figuring out where your income's coming from:

Pack a Parachute

When I quit my 9 to 5 back in January, I had a couple regular side jobs that helped cushion the fall in income. When Kadie was starting her photography business, she was also working part-time. Freelancing -- whether you're working commercially or in a fine art field -- is choosing to go without the protection that working for a company provides. Having that alternate gig is a good way to make sure that when things get slow in your freelance life, you still have some cashflow - especially if you're trying to leave the days of renting a closet and existing on Ramen back in college where they belong. Just make sure that you're also leaving enough time to work on your business, and enough time to take care of your mental and physical health.
Feel like you're juggling too much now? Just wait!

What should I charge with Shane Pearlman

I stumbled upon this really great video by Shane Pearlman creator of Modern Tribe, the other day and thought that this would be the perfect time to share it with you guys.  Not only is this video super duper easy to understand and relate to, Shane actually uses real numbers from his own personal life to talk about how he has evolved his pricing structure to go from charging $25 per hour to about $250 per hour in just ten years.  It's honest, up front and ridiculously helpful.  Enjoy!

 

reblogged from Shane's blog: http://tri.be/what-should-i-charge/

Pricing 101 (AKA Kadie's Pricing Exposé)

When I first started my photography company back in the day I just pulled some random numbers out of the air to charge people because they sounded  reasonable.  The problem was that there was nothing behind those numbers except hot air.

Years went by and I kept making up numbers, some of which were even based off of peer pricing rates I saw in my local area.  The problem with just basing my pricing solely off of what other people around me were charging was that I still didn't know what was behind those numbers or if my peers had even put any thought into what was behind THEIR numbers to begin with.

It's like going along with some craze diet plan because a bunch of other people you know are doing it so it must be ok.  You have to check into the facts, the nutrition and the science behind what you are doing for yourself because you can't take it for granted that your friends already have.

After years of just going with the flow I decided one day to really dig down deep and examine my pricing.  It wasn't fun, I'm an art student not a math genius so spending that much time with my calculator wasn't exactly my idea of the ideal day.  However, at the end of my examination I found out that after everything was said and done I was making a little under minimum wage for all my hard work!  I was shocked.  I mean I wasn't charging peanuts by any means, how could I be making minimum wage!?  The reason was simple, those numbers had never been based off of me, they were made for someone else with different work hours and product expenses and overhead.  Pricing isn't one size fits all, it has to be tailored to the individual.

Yesterday Kate gave you guys some great ideas to help you reexamine your price sheets through a fresh pair of eyes, today I'm going to give you a few more things you might want to think about while refining your pricing that I learned over the 7 years I ran my photography studio.

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Start by being honest about your skill level

We all want to make the big bucks, but we have to be honest about how our skill level compares with the market average.   Things like a college degree in our area of expertise typically give an individual the right to charge a bit more for their services.  While yes we are in the arts and there are people just born with innate skills and a college degree is by no means required to work in many of the arts, it does still add value to your services as do attending workshops and seminars.

Experience really does count for a lot

Again, I know we think we are amazing sometimes and that our work is kick butt and that everyone should want to hire us and pay us gobs of money, but we need to remember that even if we've got the skills, we may not have the experience we need to charge the big bucks yet.  While yes two artists may be at the same level skill wise, the artist with the greater amount of experience is entitled to charge a bit more.

Just how much are you working anyway?

Most people have no clue just how many hours they end up putting into a project.  However, this is vital information for figuring out our pricing.  Next time you start a project keep a written time log of ALL your working hours, client meetings, emails, phone calls, running to the store to pick up materials, all that time counts on top of your official "I'm making art now" time.   You will probably be surprised just how many hours you log.

Don't forget about expenses and overhead

When we take on a project we need to make sure that we are charging our client enough to not only cover the hours we are working but also the costs we are going to incur along the way.  We need to cover the cost of gas we spend to drive to meetings, for materials, for software, for products, for licensing, for office rent, business insurance payments, for the lunch we buy our clients at our meetings… etc.  If we have to spend money out of our pocket in anyway toward a project, the project should be making enough money to pay us back for it.  The easiest way to figure this out is to simply keep all your receipts.

Don't forget Uncle Sam

One other factor we need to keep in mind while we are examining our pricing is taxes.  Yes a lot of us pretend this doesn't exist but that is a very dangerous game and sooner or later you are hopefully going to be making enough money that Unlce Sam is going to take notice and not be so happy about what he sees.  Sooooo…. better to start good habits as early as possible.  Every state is different so I highly recommend going to talk to your local business bureau and a reputable accountant on the subject to see what you need to be doing.  Once you figure that out make sure you are including those costs into your pricing structure.  For me the best thing to do once I got paid from a gig was to take out the money I knew needed to go toward taxes and put that into a separate account I set up specifically for that purpose.  That way I never had to worry that the money wasn't going to be there when I needed to pay big brother.

Try working backwards*

We have all these numbers, now what the hell do we do with them?  I know it can feel totally overwhelming to break all this stuff down, but trust me now that we have collected all the data the rest is super easy, all we have to do is work backwards.

To start off we need to decide how much we want to be making per hour. This rate should reflect our skill level and our experience. For this example we'll use a recent college grad so good skill level but still low on experience about $15 per hour.

Next we take that number and multiply it by the number of hours we put into our project, for example this project takes us roughly 40 hours of total work time. 

(40 hours x $15 per hour = $600 total) 

After we figure that out we need to add on the overhead we are going to incur over the course of our work on this project, let's say that number is roughly $300. 

($600 hourly + $300 overhead = $900 total) 

Lastly we add on however much taxes are going to cost us for this sale. Let's say $50. 

($600 hourly + $300 overheard + $50 taxes = $950 total)

So for this pretend project I would be charging my client $950, simple right?

*I just want to note that this is just one way of pricing yourself. When you are just starting out I find it to be the simplest and easiest way to get your pricing in the ballpark of what you should be charging and ensure that you're not undercutting yourself.  There are many other ways of pricing yourself, and sometimes hourly rates don't properly reflect what you need to be charging for some services but in any case it's a good place to start at least.  :)

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After I examined my pricing and saw I was making minimum wage I knew I had to raise my prices but I was scared to.  I was already uncomfortable talking money with my clients, feeling like the amounts were so high already that raising them even more seemed ludicrous.

However, the first meeting I had after raising my prices was the very first time I was able to talk confidently and easily about numbers.  I wasn't worried they would see through me, to think I wasn't worth it because I knew those numbers inside and out.  I knew where every penny was going and could account for the reason it needed to go there.  I KNEW I was worth what I was asking and I wasn't afraid of them asking me to tell them about why I charged what I did.

Now go and attack those price sheets because you're worth it, aren't you?

Challenge #15: The Price Is Right. Right?

What do you charge for your work? How did you choose that number?

If you ever want to make things awkward when meeting another artist, ask them how they price their work.

Of course, some artists can talk freely about how they price their products/services/etc., but for many creative professionals, this remains a topic rife with embarrassment and confusion, and therefore sits hulking at the edge of the discussion, a shade that no one really wants to address, yet is desperately in need of frank and open acknowledgement.

This week, we're going to attempt to do just that.

To start us off, we're issuing the following 5-step challenge to the Art Abyss community:


Step 1) Examine your price list.

What are you charging for your work? Do you even have a price list? If not - make one, then come back. (*Note: Making a price list can feel quite daunting. I like to start by just throwing numbers out there based on how long I feel it takes me to complete work, plus the cost of materials. Don't stress too much about this first draft.)


Step 2) Do the math.

When you calculate it out, how does the amount you charge compare with the amount of time you spend making your work? What is your effective hourly wage? Is that the amount you want to be making?


Step 3) Reflect your surroundings.

Now that you have an idea of what you're currently paying yourself, take another look at that price list. Modify your prices to reflect the hourly wage you want/need to live at the level you find acceptable. At the same time, research other people's rates in your industry. This may be a little tricky (remember how many artists don't like divulging their pricing practices?), but it's worth looking around. Two reasons:

1. By determining industry norms for your field, you can avoid undercharging, and
2. You avoid depreciating values in your field and pissing off your fellow creative professionals.

I remember my glee when I discovered the easily-accessible price list of Imaginary Jane, a graphic and web design company. Not only did seeing what they charge help me modify my design company's prices to reflect industry norms, but I know that as a consumer, I would be far more interested in hiring them thanks to their up-front approach to pricing. (More on that later.)


Step 4) Learn the script.

When you're talking to a future customer, there's a chance they will want to know just why you're charging the prices you charge. What are you going to say? You might remember the concept of the elevator pitch -- this explanation of prices needs to be just as polished. Think, unique value, personal relationship, etc. What do they get for their money that makes you worth it?


Step 5) Make it public.

Now that you've done your research, it's time to publish that price list! Remember the awesome Imaginary Jane pricing page? (Note: if you just clicked that link, it took you to their Facebook page, where, BAM, yet again they have their prices prominently linked to. Hmmm, maybe they're on to something . . .) Consumers -- whether business or individuals -- really do like to know what they're being asked to invest up front.

I know I'm flying against some traditionalists when I say this, but even fine artists benefit from being up front with their prices. As the internet explodes the old model of curators, publishers, and production companies being the only connection between the creators and the consumers, we as creators have a chance to set a price that we are comfortable with and stop playing games with the middleman. Call me an idealist, but that sounds pretty damn good.

The best part of "going public" with your prices is that it allows you to winnow your potential customer list right from the get-go. People who can't afford your work generally won't call you. This helps to make sure you receive fair payment for the work you do, and don't spend your time responding to people who aren't going to be able to pay you. And if you find that you're not receiving much customer interest, having a public price list makes it that much easier to assess whether it's your marketing strategies, the prices themselves, or both, that need work.


We'll be sticking with the pricing theme all week. Why don't you stick around and join in? Don't forget to snag your swanky challenge badge -- I sense a whole lot of future fun happening with this font.