There is a common perception that a photography bid is merely a set of numbers that are hopefully close to what the client wants to spend on their commission. That’s only a small part of the story. In its entirety, bidding is an art form that relies on finesse and experience, not unlike the art of photography. The more practiced you become at creating a bid, the more sophisticated your bids will become, and the greater the profit you’ll realize as a result.
Like any art form, effective bids start with base knowledge of the medium, then it evolves from there. Which is why you shouldn’t have high expectations for your first few bids. Think of them as education and not indications of your ability.
Also, it’s easy to get intimidated when you’re called upon to produce one of your first bids. The intimidation can quickly turn into paralysis as you search a million contradicting opinions on the internet about the right numbers to use. There are no right numbers. Each bid will be different, and each bid, like great art, relies on your intelligence and your gut. Once you know the structure of a bid, you’ll be shocked at how quickly you’ll become adept at bidding. Think of it this way; photography requires light, a lens, and the knowledge of a few fundamental rules of physics to effectively capture an image onto the recording media. Beyond that, the art form is wide open. Bidding is similar. There are a few expectations that art producers will have for your bids in terms of the information that you convey about your shoot, but beyond that, how you execute the shoot— which is what is reflected in the bid—is up to you.
Now that I have imbued you with some confidence, it’s time to convey a fair warning. As you get more experienced at bidding, you’ll try to be more clever and hide profit for yourself through clever markups. You may even find that you’ll get away with it a few time. But, don’t ever delude yourself into thinking that you can outsmart an art producer. All they do all day long is crunch numbers. They know down to the penny what things cost to produce a shoot. If you’ve successfully padded a few items it’s because they know that you have a mortgage to pay, kids to feed, and an upcoming middle aged crisis to fund. Rather than think of the art producers as an adversary that you have to out maneuver, think of them as your omniscient ally on the other side for the field. A diplomat of sorts. They’re working folk too, and they get it. As long as you know that they know, that you know, then everything will be cool.
The Bid vs Estimate
There is some confusion in this industry about the the terms Bid and Estimate. Both get thrown around interchangeably. To some people the terms are synonymous. Others differentiate the terms according to their technical meanings.
A BID is a list of fees and expenses with a final price at the bottom indicating the client’s cost to have a job produced. When you and your client agree on a final number, that number is set in stone. It is now your responsibility to produce the agreed upon work for the agreed upon price.
Bids offer the most potential for profit beyond your fees. They also require the least amount of paper work, because you don’t have to support the numbers with actual receipts. For example, if I agree to shoot a jeans ad for $30,000.00 and the fees I’m going to make on the job are $12,000.00, that leaves me $18,000.00 to produce the shoot. Typically, the numbers categorized as expenses (these line items are called below the line line items) are going to be fairly accurate. It’s when you actually start producing the shoot that you can get creative.
Every sub contractor you hire, like hair, make up, set designers etc., have negotiable fees. Ask the person their price to work on your job before you blab what you have in the budget for their department. If they come in under what you anticipated in the bid, you’ve just made a few bucks. Well, kind of.
For example, if you have $8,000.00 allocated to sets and backgrounds in your budget, and the set building company’s bid comes in at $6,000.00, then you have an extra $2000.00 in that line item. Hooray. However, it only becomes profit when the job wraps. During the job, it’s known as oh-shit money, or a line item surplus. The surplus can and probably will be pulled to cover another line item that’s gone over budget.
The sooner that you accept that a photo production never goes according to plan, the less astounded you will be when your photo production doesn’t go according to plan. That’s what production budget management is. Line item surpluses are CYA (cover your ass) cash. Fair game to be appropriated to keep the job on budget until the deliverables are given to the client.
That said, if you keep your gig tight, and you, or your producer, manages to bring in the bid under budget, the amount you come in under is pure profit. It’s because the amount to produce the job is set. The client is contracted to give you that amount. Which is awesome until you blow your budget.
I went through a little cocky phase when my career had a growth spurt. I had hit the sweet spot on like eight bids in a row. I produced the jobs myself, and walked away with some extra cash that were above and beyond the fees that I had charged. I floated down the streets of Los Angeles a legend in my own mind, a veritable numbers savant. That is until I bid a job that needed a wet asphalt for the image. I forgot to include a water truck (with driver) in the bid. A huge chunk of my photography fees went to cover my omission. My profit and ego both evaporated on that job. The painful experience spurred me to start using producers.
Producers live in a constant state of hyper reality. They supply the practical brains for cocky, creative idiots like me. They know that you can’t ask the crew, the models, and the agency folk to drop their pants and pee on a hot stretch of highway to make it look wet, you need a water truck (with driver.)
There was this phone call I got. A friend named Mia had a boyfriend who was in deep shit. His web design firm had a lucrative account with AOL. The project they were working on required talent (actor/models) to be depicted in different scenarios according to a storyboard. A lot of different scenarios. About 30 of them.
The firm was paying a hundred twenty-five bucks a shot plus expenses. The photographer they brought in had gotten in over his head trying to produce 30 different locations around Los Angeles. They ate up a week to get 10 images that were only just mediocre. The schedule was way too ambitious. The final straw was when the production got shut down on a location because of the lack of a location permit. The photographer was fired. Now, before you judge the poor guy, keep in mind that forgetting to acquire permits and insurance are among the most common of rookie mistakes. You never really learn it until you get exposed to it through a shutdown, or a chat with a police officer when you’ve got your tripod on a sidewalk impeding pedestrian traffic.
The design firm had seven days left to get the images. After hearing the details on a conference call, I declined. The money was too little for the scope of what they wanted to accomplish.
“What would it take for you to do the job?” Came the question.
I said that I needed to know what the total photo budget was for the project and then maybe I could work with it. The designer had to get approval to release that information, because, not surprisingly, they were hoping to produce the photography line item on their bid under budget to make a little profit for themselves.
When they came through with the details, I contacted an epic producer named Emily Barclay who is a close friend and was a frequent collaborator at the time. We crunched the numbers and told the firm that we would take the entirety of what was left of the budget (less what was spent by the fired photographer) and deliver what they wanted.
There was disbelief. They had run their own numbers and they felt that there was no way, given that I’d be starting from scratch on all 30 shots. The number of locations that were required for the scenarios was daunting in and of itself. They wanted to know how I was going to pull it off. My producer Emily and I had agreed before hand that we would only reveal our strategy if they agreed to the terms of the deal. They did, and we told them that we were only going to do two company moves for the shoot.
A company move on a production is when you take your base camp—the producer, the production office crew, the craft services, the bathrooms etc.—and move locations. The idea, as the vernacular implies, is that you set up base camp some place central and send the camera crew and talent out to shoot nearby. Then everyone comes back to base camp to reset, and then goes out again to another nearby location. The design firm had estimated ten to twelve company moves around Los Angeles. But we had a different idea.
It was summer and Loyola Marymount University was between the end of its summer session and the beginning of fall, so there were hardly any students around. When we contacted their film permit office, the price to shoot on the campus for three days was a quarter of the price of running around to 12 different locations in the city. And the school included a locked, and patrolled building for all of our gear. The campus offered a vast myriad of locations that we, after a scout, found could cover 26 of the the thirty shots. Being in one location saved us, cumulatively speaking, days of travel time and expenses to get around Los Angeles as was indicated in the original production schedule of the other photographer (think grip truck rentals, parking for talent and crew, logistics etc.).
Since the money to be made on this gig had to do with the efficiency of the execution, we reached out to the absolute best crew people we knew and paid them slightly above their normal rate. This incentivized them to crew up with us in the middle of the busy photo season, and also incentivized them to come up with their own ideas for efficiency. We also incentivized the producer’s job with profit sharing. Any money left over after my fees and the producer’s fees were paid would be split 60/40 between myself (60%) and Emily(40%). The incentive got Emily to get even more creative with the budget management. We did pretty well.
Back when it happened the AOL job was an anomaly to be sure. But these days clients are regularly asking for photo library shoots. And jobs like the one I describe above are a norm for the photo industry. The AOL job is a solid illustration of how to think about your gigs as more than just a step by step process that you put on paper next to a slew of numbers. Also, it highlights how you must take care of your people. Even though you’re the boss, you are nothing without your crew.
An ESTIMATE is a list of fees and expenses with a final price at the bottom indicating what you think the job will cost to produce. It is different from a bid in that the final invoice total of the job may vary from the estimated total. Whereas with a bid you quote a number and the client pays you that amount, a job that you estimate for $15,000.00 may only cost $12,000 to produce. You will then only bill your client for the $12,000.00. Or if you find that the shoot goes over budget—or in our example over 15,000.00—you’ll need to get signatures for the overages.
Also, when you produce a job in the estimate format, you typically have to provide the actual receipts or backup (also called support in some circles) along with your invoice to prove that you spent the money you say you spent. Do yourself a favor, unless the agency or design firm specifically asks you for the backup, don’t volunteer it. It is a pain in the butt. But just in case you do need to provide the actuals for your invoice, keep every single receipt that you get during the job safe and organized.
As I mentioned previously, the terms bid and estimate get used interchangeably and often incorrectly. So you’ll have to get a feel for what your client wants. Most of the ad agencies will want an estimate and expect to be billed for the actual invoice amount. Some design firms, just want to know what the bottom line of the shoot is going to cost and are willing to pay that price without getting too huffy about the particulars. Keep in mind that your shoot is a line item on the ad agency’s invoice to their client. It’s just business.
Now that you know the difference, you’ll know what to be on the lookout for. It’s not a bad thing to ask what the expectation is of the client, nor is it a bad idea to lead them in the direction that you want them to go. The most important thing is to be clear about the expectations before you close the deal. Also, don’t go trying to snobbishly educate your client if they’re not using the proper photo industry terms. No one likes a show off. Just be cool and use phrases like, “I just want to clarify that your responsibility is to pay the amount that I’ve indicated in the bid….”
The primary mission of this article, above everything else, is to get you into the habit of “covering your ass” (CYA). You can only do this one way. Have exceptionally clear language defining each document you send in addition to getting into the habit of using an estimate and/or invoice document with every shoot that you do. Even if it’s a favor for your friend. This is an example of the terms you should include with your estimate.
Estimate is valid for 15 days from the date of issue. Fees and expenses quoted are for the original job description and layouts only, and for the usage specified. Actual amounts are subject to a normal trade variance of 10%. A purchase order or signed estimate, and 50% of the estimate total is due upon booking. Job cancellation within 48 hours = 50% of fees, plus all incurred expenses; 24 hours = 100% of fees, plus all incurred expenses. All rights not specifically granted in writing, including copyright, remain the exclusive property of Lou Lesko.
Let go over the paragraph point by point;
There are a lot of well intentioned people in the world who will get excited about the prospect of hiring you for a shoot. Problem is that occasionally the timing of their hiring you is out of sync with the timing of their cash flow, so shoots get delayed, sometimes for many months. During that time you will have had more experience from other jobs which raises your value as a photographer. Also the market prices of production elements required to produce the shoot may have shifted. The “Estimate is valid for 15 days from the date of issue,” phrase protects your choice to re-bid the job at a higher rate if you feel it appropriate. Personally, I’ve only had to exercise this option a few times. It is a balancing act of keeping the client happy and getting the job.
“Fees and expenses quoted are for the original job description and layouts only, and for the usage specified.” This is the most important phrase in the paragraph. When bidding a job you are doing so for a very specific set of images to be used for a very specific usage. If your client decides that the scope of the shoot has changed, you need to re-bid the job with the changes incorporated into the price. Conversely, if you’re shooting a library of images for the client, you need to be very clear in your job description of what library means. Is it 200 photos of various angles of Orwellian farm animals pulling a heist, or is it 25 different looks (or setups, or scenarios) of a man and woman using a Visa card? What are those scenarios? At the wharf, at the airport, at a lounge? Define all the scenarios and then get the client to sign off on the bid.
Yes, you will inevitably shoot more than what is required. Yes, other opportunities for scenario variances will pop up. Can you sell the extra images to the client? If you’re in a bid type job and you’re running under budget, is there currency in giving the client the extra shots for good will to get another gig. These are judgement calls for the time when they pop up. These decisions never get easier to make, and you will occasionally make the wrong one. Don’t panic, do the best you can, and let experience guide you forward.
“Actual amounts are subject to a normal trade variance of 10%.” A trade variance applies to an estimate type of a job. What it means is that you and the client agree that you can go over the estimated price of the job by ten percent without written approval. Sadly there aren’t a lot of opportunities to use trade variances, things are pretty tight these days, but no one will fault you for trying.
“A purchase order or signed estimate and 50% of the estimate total is due upon booking.” A purchase order PO is a document from an agency that indicates that they have agreed to pay your estimated or bid price for the job—and that the job has indeed been awarded to you. If your client does not use purchase orders, then you need to get a signature on the bottom of your bid which will solidify your agreement.
Advances before starting the job are standard in this industry. Unfortunately, the amount of the advance is not. I always try to get fifty percent of the total job up front. But, as you’ll see, each client will have a different policy. Some agencies are only willing to extend 50% of your hard costs (below the line items) up front. Some will give you all your hard costs up front. Get what you can before starting the job. And never, ever start a job without a signed agreement or purchase order, and an advance check. The only exception to not getting an advance check is when you have a solid relationship with a recurring client who pays your entire invoice on the day of the shoot. These clients are rare but they do exist, and I love them with all my heart and wallet.
I have had more than one occasion when an advance check was promised to me on the day of the shoot, but the check never materialized because of some random excuse. Situations like these require delicate judgement calls. Regular clients I’m familiar with get the benefit of the doubt. Typically they’ll have a check messengered to the location by lunch time. There were a few rare occasions where I’ve had to threaten to “walk off the set” because the check or PO wasn’t in place. Those clients knew what they were doing when they didn’t provide the advance. It wasn’t necessarily nefarious as much as it was political jockeying. They wanted to see what my boundaries were. This business is full of stuff like that. Keep your eye out, and like I said, these are always judgement calls. Large agencies aren’t known for any problems, but smaller design firms with small working budgets may be suspect. Go with your gut. Inevitably things won’t go according to plan a couple of times in your career, but typically it all works out in the end and becomes water under the bridge after the check clears.
“Job cancellation within 48 hours = 50% of fees, plus all incurred expenses; 24 hours = 100% of fees, plus all incurred expenses.” This is pretty straight forward. If your client cancels a shoot, you need to get paid. In my experience, postponements happen more often than cancellations. Cancellations typically occur after you’ve been told that you’ve been awarded the job and then the job “goes away”. It’s disheartening, but usually happens before any pre-production starts. When the clause becomes necessary is when you’re working with a client that’s not used to working with professional photographers and they cancel a shoot for a frivolous reason. Additionally, I’ve had a few jobs that were officially awarded to me, and then the client asked for a “kill fee.” Which translates to we’re not going to do the shoot, and we’d like to negotiate a deal out of our commitment.
“All rights not specifically granted in writing, including copyright, remain the exclusive property of Lou Lesko.” Do not give up the rights to the out-takes of your shoot. Your usage license will only cover a specific number of images to be displayed in specific media in specific geographic locations. You are the copyright holder to every other image from the shoot. Although it may seem wrong to assume this, and some art producers/directors will try to make you believe otherwise—don’t give in. The additional images from the shoot could be worth more money.
That said, when you’re shooting an image library, things are not as specific. You don’t want to give up everything, but covering a scenario versus covering a specific shot are two different things with different numbers of images. I am often lambasted by the older guards of photography for not caring too much about outtakes from a library shoot. But to me, it is yet again, a judgment call. A library of images of a celebrity give each individual image more value than one from the Visa shoot I referenced earlier. You get my meaning.
It is absolutely critical to associate each image that you release to anyone, for whatever reason, with a usage license. This is a paragraph that defines, exactly, the allowed use of the image or images.
Think of the first season of The Game of Thrones. Now think about how that first season was released on DVD and then syndicated to foreign markets. Every time a deal was made to show that first season somewhere, money was made for the writers, producers, and the actors, which they receive in the form of a residual payment.
Photography is similar. Maintaining control of the rights of your work can yield future revenue. The tool for controlling these rights is the Usage License.
Here’s an example of a usage license:
This license is strictly limited to the terms and conditions below, and governed by the Copyright laws of the United States, as specified in Title 17 of the United States Code: Licensee: The Groovy Agency Licensor: Lou Lesko Photo Date: 2/13/2015 Duration: 2 years Region: Worldwide Exclusivity: Exclusive Media: Advertising All Print Publications, Internet E-mail campaign, Internet Home/Landing Page Quantity Rights: ≤ 500 Credit: Lou Lesko Photo
Lets go over the paragraph point by point;
the licensee is your client the licensor is you, the copyright holder the date that license starts the duration of the license, which means the license to use the images expires the regional, national, worldwide, specific to a state, the geographic places that images can appear. most situations will call for an exclusive license, meaning you can’t do anything with the images while the usage license is active, but occasionally you may do a non-exclusive license for a stock photo, the idea is that the client pays a little less and you can license the same image to other clients. the type of media that the images can appear in quantity rights is only applicable if your licensing your image to something like a tshirt company, this item limits how many reproductions they can make of your image—so in the example above it’s moot, but I wanted to point it out anyway Most ads do not have a credit line associated with them, but if for some reason the image does, I want to be sure that everyone knows what name should go with the image.
Get the Balance Right
Usage licenses are to protect your copyright. A usage license, in large part, is how you monetize your talent and maintain control of your images that may have a second or third life beyond there initially intended purpose. Conversely, your usage license can not be so bogged down with rhetoric and condition that it sends your client searching elsewhere. You must balance copyright with accessibility. Even if the license grants the client a license for unlimited use for an unlimited time.
There is a quiet undercurrent in the advertising photography industry. Clients are looking for unlimited use of the imagery for an unlimited time. To understand this we need to look at the situation from the client’s perspective.
As soon as they put one of your photos online, the region of that usage license has to be worldwide. If it’s not, the client is liable to you. If you are a car client with 25 photo shoots of your cars occurring around the world in the same week, that’s thousands of images. Managing what gets seen where is impractical. So the default from the client’s perspective is to have no restrictions on use.
From the photographers perspective, this sucks. There’s no control of the copyright to potentially get additional income from extending the usage license for a client. This isn’t across the board yet, but it is a reality that is steadily seeping into our business model. You should be aware of it and start thinking about trying to get as much money as you can up front for your work.
Whatever the usage license is that gets agreed upon, it must appear on every document that is sent to the client. This includes the bid/estimate and all the revisions as well as the final invoice. Whoever your potential clients are going to be, they must know from the very start that you are savvy enough to manage the rights of your work. Do not compromise this point ever.
If you’re shooting a job as a favor for a friend, give them an invoice that has a total of zero or the words No Charge, just so you can have a signed document with a usage license printed on it. Even if you plan to sign over all the rights for an unlimited time for your friend, make up a usage license indicating that. It is a smart business practice, it gets you in the habit of assigning value to your work.
Terms & Conditions
Equally as important as the usage license and the bid terms, is the Terms and Conditions, often referred to as the T&C. This is a long winded document that spells out all the terms and conditions that go along with with hiring you as an independent photographer. While this document may be long and arduous, it can be a life saver if you ever have to go to court for any reason whatsoever. This document usually gets presented when you’ve been awarded the job and you’re finalizing all the paperwork and agreements so you can get the job started.
Here’s a brief glimpse at some of the topics that are covered in the T&C: Definitions – what is an image defined as, what is meant by “transmit” the work etc.
Fees, Charges and Advances – this reinforces your trade variance, if you do the job under the estimate format that the client is responsible for the actual expenses.
Postponements & Cancellations – tells your client that they have to get written consent to kill a job without paying the fees we discussed in the bid/estimate terms.
Force Majeure – covers weather delays acts of God etc.
Client Approval – the client needs to have someone on the set to authorize the each phase of the shot. For example if you are set up to shoot, the client needs to “sign off” on the test image before you can continue.
Overtime – what is overtime and when does it come into play for your crew. Sorry you don’t get overtime.
Redoing Services – what defines the conditions for a re-shoot and who pays for it?
Limitation of Liability – if someone decides to sue your client because of the image you shot, this clause holds you not liable because you were just executing the clients request.
Rights Licensed – reinforces your usage license.
Return of Images – Technically the images belong to you once the usage license expires. This defines the protocol for getting them back to you. Honestly though this isn’t all that relevant in a digital world.
Loss or Damage to the Images – who does the responsibility lie with at the various phases of production. Payment and Collection Terms – reinforces your invoice terms.
Releases – who’s responsible for the model and property release – both acquiring and storing.
It’s a lot of stuff and seemingly useless, until the shit hits the fan. As I mentioned above, this is typically used with advertising and corporate clients. Editorial clients have their own contracts that they will give you to sign which spells out what the magazines rights of usage are for your images. Because the magazines don’t pay a lot, they usually buy “one time publishing rights” with a clause that lets them use your image in the context of the magazine layout to advertise the magazine itself. Think about the subscription cards that fall out on your legs when you’re sitting on the toilette with your latest copy of Field & Stream. Notice how the subscription cards have a picture of a past issue of the magazine on it? If you shot the cover photo for that past issue, you typically have to give up the right to let the publication use it in that subscription card context forever.
Structure Of A Bid
Here’s a universal truth. Art buyers and clients do not care how pretty your bids are. They care about the numbers. They want to know what they’re getting, for how much money. They want to see this represented in a clear, easy to read document. There are absolutely no points given for having a more artistic representation of your bid than a competitor. In fact the opposite is true, the easier your numbers are to read, the more the art buyer will like you. Always keep in mind that your numbers go into their budgeting system as soon as you submit, so clear and readable is cool.
Absolutely every bid you submit should have a description of the “usage license” as well as a very clear description of the work to be performed. I don’t care if you’re shooting a wedding for your mother’s third cousin. Having a document that very clearly spells out what you’re going to shoot on every job avoids the dreadful post shoot “he said, she said” arguments. It also protects you from getting intimidated or manipulated into giving away more rights than you are getting paid.
When you put expectations in writing for a favor it saves a lot misunderstanding. You’ll be amazed how greedy people can be when they get your services for free.
In an estimate or bid there are two types of charges, “above the line” and “below the line”, more commonly known as “fees” and “expenses.” Fees include things like how much you’re getting paid to shoot the image and the usage fees the client has to pay for the privilege of using the shot. Remember that according to the law, if you create it, you own it. Other cool fees include getting paid for your time on an airplane or getting paid if there is bad weather. The fees portion of the invoice is most important to your rep or agent, because this is where they make their money. They get a percentage of the fees, or the above-the-line.
Below the line, in the expenses portion of the bid, it’s where you put the production expenses for the shoot. If it is a thing or person (besides you) that is essential to executing the images it goes below the line.
There is some debate about where to put post production and digital processing fees in the bid if you are the one doing the post and processing. The way to look at it is this:
If post production effects or retouching is a speciality of yours, and that talent is called upon specifically to realize a vision for the image, that is a fee that goes above the line. However, if you happen to be doing the digital processing and post production, like minor retouching, but you could easily hire that out, that should be a below the line item.
The Fees section of your bid, also known as the “above the line” section, is where you charge your client for you. Your time, your thoughts anything that you do that contributes to the successful execution of the project. It is also the section where you charge for the usage of the work. Technically you own the rights to any image you shoot, the client is only leasing the image from you for their purposes. This is why the Usage License that we talked about earlier is so important. It defines exactly what rights the client has in terms of using your work.
The most important line item in the Fees section of the bid is the one where you list how much you’re going to charge the client for your services and for the rights or lease of your images. There are two schools of thought on how best to do this.
School of thought “A” – Combine the “Creative Fees” and “Usage Fees”
The first, which is the way that I have always done business, prescribes that you have a single line item called the Photographers Fee. This fee includes your charges for your time for shooting the job as well as the charges for the usage of the produced imagery. So if I charge $4,000.00 to do the shoot and $6,000.00 for the usage for two years my bid is only going to have one line item called Photographers Fee for $10,000.
The advantage to presenting your fees this way is; if your client comes back to you to extend the terms of the usage license, you calculate those fees as a percentage of the original usage fees charged. So because you are combining the two fees into one so you have a larger base amount to start your negotiation for additional usage fees.
In talking to a few art producers about the matter, they all agreed that they like the combined format as well. It makes it easier for them to explain the usage to their client. And since they’re the ones paying everyone’s salary, I always find it wise to make things as simple for the money grip as possible.
School of thought “B” – Separate Your “Creative Fee” From Your “Usage Fees”
The second school of thought is to list your Creative Fees separate from your Usage Fees. The advantage to presenting your fees this way is that it adds value to you as a photographer, and aides in educating the client to the process involved in producing a shoot. It also has the added benefit of reinforcing the concept of the usage license. One thing to keep in mind is that while you and I both know that having the experience and talent to execute a shoot is worth its weight in gold—some people get weird about paying someone a separate Creative Fee and a Usage Fee. Personally, and this is subjective, I’ve always found creative fee to be a bit hoity-toity versus a photographer’s fee which sounds solid. I know I’m gonna get some emails about this, but what ya gonna do.
Other Fees You May Not Have Known About
While getting paid to shoot and license your images is the primary revenue of any job, there are other fees that your should consider when putting together your bid. As we talk about the following fees, it is important to make a distinction here. This is the Fees or above the line section of your bid. Everything we talk about up here has nothing whatsoever to do with the Production Expenses or below the line section of the bid. I mention this because some of the terms we mention here will be similar to some of the terms used below the line. Keep this in mind as you read on.
Weather Delays are negotiated up front as a contingency should the shoot get cancelled or postponed due to weather. It is also a fee that tends to come into and out of vogue depending on how the economy is doing.
Weather Delay fees are calculated as a percentage of your primary fees. That is your Photographers Fee or your Creative Fee, depending on which way you bid the job (see above). The rationale goes that you can’t help the weather, so you should still get some bucks for showing up ready to shoot. The understanding of this fee needs to be crystal clear to your client before you start shooting. Because if you actually do get delayed because of to the weather, you have to be sure that your client understands that they owe you some money.
The Weather Delay fee does not have anything to with paying your crew or your other per-day expenses. These expenses are assumed by your client no matter what. Depending on how much additional money is needed to cover the expenses for the lost weather days, will dictate if you need to petition for overages. For example, remember how we talked about the 10% variance before? If the expenses for the weather delay fall within that 10% variance, then you don’t need to get an overage document signed—but if your expenses extend beyond that variance, then you better start getting signatures from the art director and account executive. I usually like to pursue getting those signatures about two drinks into cocktail hour.
Travel Fees are fees that cover your time should you have to travel to location. Your time is valuable and if you are stuck on a plane all day, then you’re not back at the studio running your business. The Travel Fee compensates you for that. You should only consider the fee should getting to location take more than three to four hours. Living in Los Angeles, I shoot a lot in San Francisco. It only takes an hour to fly, so we don’t include the Travel Fees on short hops like that. This is also a highly negotiable fee, in that if you’re about to lose the gig because your client is squeaking about your travel fees, then dump it. The popularity of this fee is also dictated by the general health of the economy, but in these past few years it’s kind of waned altogether.
As with the Weather Delay fee, keep in mind that this is a Fee and has nothing to do with covering the expense of flying you to location. That is a hard cost which you find below the line in the travel section of the bid.
Below the line, in the Production Expenses portion of the bid, is where you categorize and list all the expenses associated with executing the shoot. This is also the section where you can markup some of your line items. Be smart, producers will often mark things up to provide a little padding to the budget for when things go awry. Markups are less helpful if you are supplying and estimate versus a bid, because with most estimated shoots you need to provide proof of expenses.
Post Production and Processing
As I explained above, this should normally appear in the expenses portion of the bid, even if you’re doing the work. Make sure to spell out exactly what you’re including for post-production. What you’re delivering and what format the deliverables will be in. The more seasoned the client, like an ad agency, the less of a concern this is, they’re often happy to take the raw files from the shoot and manage things from there. Other clients with less resources will have different expectations as to what deliverable means in terms of color correction and retouching. Spell it out, agree on it before hand, and pay yourself if you do the work.
The “Talent Fees” line item below the line in a bid is one that requires special consideration. Understandably, most clients like to see a complete bid because they want to know the bottom line of what the shoot is going to cost—including the talent fees.
From your end there is an incredible urge to want to show-off to the talent agency (for which you’ve only been shooting model tests) by sending them one of your studio checks for thousands of dollars for the talent that you just booked for a job. What the heck it’s not your money and it makes you look like you’ve arrived. Resist this urge!
You absolutely do not want the financial responsibility of thousands or tens of thousands of dollars of talent fees running through your studio. Like you, talent agencies are stone cold businesses. As soon as the job wraps, they start invoicing and calling for their money. And considering that it’s going to take you a 30 to 60 days to get the balance of your money from your client you absolutely do not want to jeopardize your relationship with the agency, nor do you want to jeopardize your cash flow should they get pissy about their money and force you into a position to pay them before you get paid by the client.
Also deducting large amounts of money like talent fees on your taxes will always raise an eyebrow. Not that talent fees aren’t perfectly legal and legitimate tax deduction, but no one wants to get the attention of the IRS. They’re bad dates.
To get avoid this potentially unpleasant situation always include the full subtotal of the job as well as line that reads “Sub Total, Less Talent Fees Paid Direct”, which, as you may have guessed is what your end of the job is going to cost.
Some of the jobs you’ll shoot in your career will have small budgets for talent. You will either book someone “direct” (a model that’s a friend may work for you without going through their agency) or you’ll “go to the street” (book real people). In situations like this, providing you are financially able carry the cost burden of paying your talent, it’s fine to run the talent fees through your business. Talent that are working on the cheap will always appreciate getting paid on their last day on the set. Budget so you can afford to do this, it will help give you good reputation in the industry so when you need to call in a favor and have someone work below their rate, you can. My producers like to paperclip an envelope with the talent’s check in it to their model release that they have to. It’s an effective method to remind the talent to sign the release before they leave. Chasing down signatures post gig is a pain, so get it done the day of that they are on set.
The Paper Trail
Once you start bidding a job, it is imperative that you keep track of all your bid revisions, as well as all your communications with the client. This industry is rife with misunderstandings, and when misunderstandings happen the photographer is always the one that takes the fall. Usually things can get sorted out with diplomacy, but, if the worst happens, you have to backup your position with hard evidence. So get into the habit of creating a folder, either physically, electronically or both, that you can throw every single shred of evidence …um… paper into. This is business of high drama and politics. Protect yourself.