STEP BY STEP (Chapter lV) CREATE AN ESTIMATE
A. Filling out the Estimate Worksheet.
While the client is still on the phone you want to have a list of specifications agreed to because you want to be estimating to the same parameters as the other photographers. Fax this to them and say are these the parameters we have agreed to. The client might get back to you and say, "No we've decided we need five days not six, and we need to change the location." Go through the list again and redo the numbers. Once you have agreed to the final parameters of the estimate tell the client you will get back to them with your price.
B. Work the numbers. You want to fill out the numbers and feel confident you can do the job. One little mistake in math can ruin your whole bid or estimate. The client is likely to change the parameters of the job at least once, (adding or removing talent, location, extra equipment...)
C. Don't underbid. In doing our research we found out that some photographers are chronic under bidders. They do this in order to get the assignment and inevitably run out of money before the shoot is over. Or they realize when the shoot is over that they didn't make a profit. You want to get paid fairly for your services so be sure and take into account all your expenses including overhead (rent, insurance, taxes, office and camera equipment, utilities, salaries etc.) when you quote a price.
D. Educate your client. It will be up to you to help your client understand the fees you are charging them. Tell them you don't make a "day rate" everyday of the year and have only a certain number of billable days a year. The day rate is just a small part of the total costs. Using the term "creative fee" is a better idea. Unlike a day rate, which only takes into account your time, the creative fee takes into account your overhead, time, experience, value added factors etc. The creative fee covers your overhead and the usage is your profit. This system encourages you to strongly resist lowering your creative fee because you will not have enough money to pay your bills if you do, and to get as much from each usage as you can because you can see it as profit.