I have been asked by fellow musicians how I come up with pricing for the different things I am hired to do. This could be anything from performing live, recording for a client, teaching lessons, giving a clinic/masterclass or anything that requires your time and your skills or expertise. This month’s post will help you figure out how to set your prices so when someone asks you to work for them you aren’t caught out fumbling around for numbers.
The first things you need to figure out, before you give a price quote for your time and services are your expenses, and making sure they are covered. This can include gas, tolls, mileage (or other forms of transportation like: flights, trains, car service, etc.), taxes, meals, promotional materials (copies, flyers, etc.), phone calls, insurance, postage/mailing supplies, (and depending on where this event is taking place) rent or utilities. Anything that you would have to pay out of pocket for should be included in the fee you come up with. Now if you go to the IRS‘ website, you can figure out the standard rate for calculating mileage. For pretty much any of the other standard costs, a quick Google search should help you get those answers.
PRO-TIP: Don’t hesitate to use a contract so both you and the client are protected, and know exactly what to expect. Also, this allows you to request a deposit up front for your services (especially if you haven’t worked with the client before).
Next is how much time you will be needing to set aside. This is not only the time you will be performing/teaching/recording, but also the prep time in advance as well as the time at the end for breakdown/wrap up. Before the event, tasks that may need to be addressed could be (but not limited to): learning music, rehearsing, lesson planning, acquiring materials, filling out and drawing up paperwork, figuring out logistics (visiting a venue), unloading/moving gear. Some things that would be done during the event could be: performing, recording, or teaching that would take up considerable time. Even the waiting around on breaks or in a holding pattern would be considered “on the clock” if you are required to stay at the venue. And lastly, work to be done after the gig is over could be billing or filing an invoice, editing a recording, answering emails or questionnaires, loading up or moving gear. All three aspects (before the event, during the event, and after the event) need to be considered when putting together your pricing. Some of the pre and post event logistics may not be too time consuming so you don’t have to inflate the cost much to cover those.
PRO-TIP: You can always ask for less money, but it’s much harder to come up with a price quote and then go back and try to raise the price.
In addition to covering expenses and time requirements, other things to consider could be based off of the 5 W’s and 1 H.
Who-is playing with or hiring you?
-This is so you know who is on the gig
-Also, you may know what kind of budget the client has
What-gear is needed, music to be learned, etc.
-This is mainly for you to figure out the logistics of the event. The before, during and after the event requirements.
Where-is the gig/rehearsals
-This is so you can iron out transportation issues.
-How will you be getting there and who is footing the bill?
When-is the date, are you going to be paid
-So you know if you can do the event
-More importantly, so you know when you will get compensated for said event (in a timely manner)
Why-should you do it (compensation/exposure/other people involved)
-Are there musicians on the gig you want to work with?
-Is it for a charity you support?
-Will you gain exposure to help your career?
-Does it pay enough for you to make a profit and cover your expenses?
How-much is in the budget, much time is being needed of you, are you being paid, often is the music being used/performed
-This is so you can decide if it is worth while of your efforts
-Cash vs. Check vs. PayPal vs. Pesos, etc.
-Will there be royalties involved? (i.e. recording for TV/Radio)
-Is it a reoccurring event? (i.e. tour)
PRO-TIP: Don’t forget to try and add in a minimal profit margin whenever possible. A standard profit margin is usually between 10% and 30% of the subtotal. If you are working with an agency or management, they will have to be compensated as well. The standard rates are 10%-20% for each, depending on who is the manager/agent, etc.
Finally, you can ask around to other musicians, as well as service providers (plumbers, lawyers, tutors, etc.) to see what their rates are for various services. They may range from what service is being provided, how much experience/what credentials are possessed, how in-demand they are, if there is something they offer that no one else does, location of the country (Beverly Hills, CA will be a higher rate than rural Oklahoma), etc.
BONUS: What if my friends ask me for a discount? How you deal with that is up to you. You can review some of the aforementioned topics (i.e. exposure, charity, etc.) and decide if you want to do that, but a discount should not be expected. If you do offer a discount, it should be discreetly done. If you give a discount to one person and they go and tell someone else, what do you think that “friend” will also expect. And then it becomes useless to offer fixed prices. Also, because the arts are generally looked at as “fun”, done in a social setting and can be described as “playing”, “dancing” or other colorful terms; they may not be looked at as work and you need to use all of the factors I described above to present your case that what you are doing IS work and can also be argued that you are skilled in the science of creating sound. Friendship doesn’t mean an automatic discount. Just because you know the guy who pumps your gas, it doesn’t mean he’s sliding you a few extra gallons “on the house”.
In My Experience: For various events, the two things that should never be under-cut or skimped on are the food and the entertainment. No one remembers those fancy invitations or expensive napkins. HOWEVER, everyone remembers how good the band is, or what their favorite teacher taught them, or how great the meal was.