Hello guys! In this video, I
will continue the pricing topic. As money is a big mystery subject for many
artists, I want to uncover these pieces with you. Hi guys, welcome back to the channel. If you're
new here my name's Aga, and I'm a CG artist. On this channel, we explore the techniques and
tools that will help you become a better artist. Today, I will show you how the basic calculation
for the simple project may look like. But before we start, make sure to subscribe to
the channel so you won't miss future tutorials ;)
There are different types
of pricing, for instance: Time-based pricing where you can charge
based on hours spent on the project Or you can charge based on the project Another method called value-based pricing, when
you charged based on created value for the client. I think project based pricing is the most common
one so I will focus on this one today. Ok, well it is a flat-fee offer, so this
basically means that for instance somebody asks you how much a visualization
costs, you estimate and tell them the price. So you think about similar projects you have done
before and based on this you calculate the price. Let me show you an example of the calculating
process....Let’s say the client came to us and after the conversation we know that
he needs: 2 visualizations of interior and 1 additional vignette that includes the
same space shown in one of the other views, plus one exterior. Not a complicated or complex
project that involves lots of working hours. Ok, so now let me open the Google Sheets template.
Here we go. As you can see, we have the Production first,
so here I will put all the information we have so we know that we will need 2
visualizations, so the quantity will be 2, then 1 vignette image and 1 exterior. Now,
we need to estimate the price per each image. How can we do this? If you have never worked
on the project before and you have no idea how much to charge per image, you can help yourself
by using hourly calculation so you have better understanding what price it could be. So
now I’ll go to the Pre-calculation section. When working on the project we have production
costs which change depending on the project but we also have some Fixed expenses
so the ones that don’t really change. For instance, renting, monthly bills and so on..
It all influences a price. For instance, the rent. If we work from home, and let’s say this
is our case here, we put 0. We don’t have space to invite the client and talk with
him so it's a different kind of service, different experience for the client. As a result
our service is cheaper. But if we have such expenses, we should put the average cost here.
Now, average billings per month (so electricity, gas, internet, phone.. All of your
billings related to the business in total). Of course, if you work from home, you
shouldn’t put the cost of the whole family, just this what relates to your business expenses.
Let’s assume, it will be 400$ in total. Than hardware for instance - this is quite
tricky as we need to estimate it somehow. Let’s say that the average cost of the professional
computer set will be $5000 and we can use it for 3-4 years effectively. Then, we will change it
or maybe we will need to repair some things, update whatever… If we divide
this amount per 3 years, we'll get something around 150$ per month..
It should be quite relevant. And lastly, the cost of the
software in total - let’s make it $300 for the purpose for this project. Ok, so you can see that we have the
total fixed expenses $850 per month. We can of course add some other things here if we
have anything else but this is here to show you the idea how it works. Ok, so the average
number of working days is 20/21 per month, so we can assume that the one
working day will cost us around $40. Now, we can go to the costs of the production.
Let’s calculate the standard interior image. I would say, we can work 3 days
in total on the interior shot. Let’s say artist hourly rate is 40$. These costs are hypothetical as we are from
different countries and we have different rates/expenses, different
national markets and so on… but I want to give you an idea how to do it and
you can use your rates to calculate your costs. So here we have the cost of the
production. Let’s say that in this price we have rendering time
included to make it all easier. By the way, if we have the situation that the
client needs to re-render something (you should also calculate the rendering time in your costs as
this is the time you cannot work on the machine). But anyway, let’s go back to our calculations. I would advise always adding the buffer for
mistakes, some unpredicted problems. 10% will be fine. Ok, so this price here is the sum of production costs and the fixed costs according to
their consumption during the project. We can round it to $1200 to
make our calculation easier. The process is similar for others but
I won’t go through this process again. We can estimate that the vignette is less
work so we can assume 75% of the price of the interior as the space is included in the previous
rendering, so it will be something around 900$. And the exterior, let’s say it’s 1500$.
Ok, so we have the total production costs done. By the way, if you would like to
learn more not only about pricing, but about managing the arch-viz business in
general, check out our Business training that consists of 12 modules, more than 100 videos in
total! I’ll put the link in the corner. Important topics that most artists unfortunately ignore…
Anyway, let’s come back to our calculations. But this is not everything.
We also have management costs so for instance let's say project management like emails,
contacting clients, managing feedback and so on..I will say it can take 5 hours, let’s keep it simple and let’s put 40$/per
hour and 2 hours for creative direction - the same rate. It’s an easy project
so we don’t really need more here. Then, we can estimate some additional
costs, for instance five 3d models. The average price for each will be 20$. We could add some additional things
if required in the project as well. And finally, the profit margin - which is
actually our profit as a company. We can set 15%. And now, we have the total price.
We’ll round it up to 6000$. It’s because we want to make it look as a
project-based quote not as an hourly pricing. Even if we helped ourselves by using this
method. It always needs to look professional. Now, this is really important to remember. The profit margin is what you actually
earn when you have a business. I’m sure you can easily see that if you do all
of this by yourself, you can earn more when working alone. And it’s true - basically
you earn as an employee and as an owner. However, it also has some limitations.
Let's talk about it a bit. For instance: If you are for instance on holidays you don’t
earn money, do you don’t work, you don’t earn. Another thing is that you cannot
scale your business as you have limited time you can use per day.
There is a quick limit to your earnings, which is connected with the limited time.
And you have less time for everything, that includes your personal life..
As you need to work for a few people. It can of course work great for you, but
it requires deeper analysis plus you should be aware of the limitations. Anyway, you have
the idea now how you can quote in the future. Ok, I hope this video is helpful for
you and makes it easier for you with future calculations. Let me know in
the comments if you liked this topic, if you enjoyed the video and if you
feel more confident thanks to this now. Finally, I would like to invite you to
check out our Business Training where you will learn not only about pricing but also about
managing projects, communicating with clients, social media, marketing, selling, building a team
and much, much more… Click here to check it out!
