Pricing best practice
The anatomy of a profitable quote.
Four sections, in order: pre-production, production, post-production, and the production company fee. Every quote you send should have all four. Most video businesses are missing at least one, and it's usually worth about 15% of the job.
The principle 01
The single most common profitability leak in a video business isn't the day rate. It's the structure of the quote. Work that took real hours never makes it onto the page, so the client never pays for it, so the business absorbs it.
The fix is structural, and you only have to make it once. Build every quote from four sections, in this order:
The rule that sorts every cost: if it's a person working scoped hours or days, it's a line item in one of the first three sections. If it's the connective tissue around the job (insurance, kit you own, booking, coordination, overheads), it lives in the fee. Never let one masquerade as the other.
Section one 02
This is where most of the money gets left behind. Pre-production is real, scoped labour, and it belongs on the quote with day rates against names, exactly like shoot days do.
The test: if you can name the person and count their hours, it's pre-production and it gets a line. "We'll sort that in week one" isn't a price. Week one is where quotes go to die.
Section two 03
The section most people already get right, because the costs are obvious: fees per person and equipment, per shoot day.
Expenses are line items too. Anything you buy in for the job (crew, kit hire, travel) goes on the quote at its charged rate, not silently absorbed inside a bundle. Pass-through costs with no visible line are margin you're donating.
Section three 04
Price the finish line properly. Post is where scope creeps, so the quote names each stage and what it includes.
Section four 05
The line most video businesses are missing entirely. It isn't a markup. It prices the work and overheads that were always there and never made it onto the invoice. Solo operators absorb all of it personally.
The numbers
A tiny fee looks optional and invites the objection. Introduce at 15%, move toward 20% as your default. A deliberate relationship rate of 12% is the floor, framed openly as held lower for an anchor client.
Contingency is a separate lever: 10% of the production element, as its own line, before the fee.
Base of calculation: the fee is a percentage of the production cost (subtotal plus contingency), not a number pulled from the air.
"The production fee is a percentage on top of the line items. The line items are the hard costs of the shoot days. The fee covers everything around them that makes the job run: booking and managing crew, coordination, call sheets, licensing, insurance and legal admin, the time spent scoping and quoting, plus the overheads of running a production company and the basic kit we don't itemise. Industry standard is 15 to 30 per cent."
Clients accept this, because they carry the same costs in their own businesses. The pushback you're bracing for almost never comes.
The worked example 06
This is a real quote from a real job: a promo Den produced for Zeiss in the UK in 2014. Costs are in pounds sterling. Three shoot days (two internal, one exterior location), full crew, BTS package. Every section is visible, the contingency is its own line, and the fee sits at the bottom at a deliberate 12% relationship rate.
The structure still stands today, unchanged. Den has been charging this way since then, and it's the same anatomy this document teaches. The rates have moved in a decade; the four sections and the fee at the bottom haven't needed to.
| Role | Day rate | Days | Amount |
|---|---|---|---|
| Producer | 650 | 6 | 3,900 |
| Director (prep) | 650 | 3 | 1,950 |
| Storyboard | 200 | 150 | |
| Pre-production subtotal | 6,000 | ||
| Item | 2-day internal | 1-day location |
|---|---|---|
| Director | 2,500 | 1,250 |
| DP | 2,500 | 1,250 |
| Model | 500 | 250 |
| Camera assistant | 500 | |
| Stylist / production design | 700 | |
| Hair and make-up | 750 | |
| BTS stills and video | 1,300 | 650 |
| Transport and travel | 400 | 500 |
| BTS camera package | 700 | |
| Locations | 3,000 | |
| 1st AD | 500 | |
| Catering | 800 | |
| Insurance | 800 | |
| Lighting | 1,200 | |
| Grip | 600 | |
| Props | 800 | |
| Production subtotal | 17,550 | 3,900 |
| Production total | 21,450 | |
| Item | Rate | Days | Amount |
|---|---|---|---|
| Offline edit | 650 | 3 | 1,950 |
| Online | 200 | 4 | 800 |
| Music and sound mix | 1,800 | ||
| Grade | 1,600 | ||
| BTS edit (offline) | 650 | 1 | 650 |
| BTS grade | 600 | ||
| BTS music and sound mix | 600 | ||
| Post-production subtotal | 8,000 | ||
| Pre-production | 6,000 |
| Production | 21,450 |
| Post-production | 8,000 |
| Subtotal | 35,450 |
| Contingency (10%) | 3,545 |
| Production cost | 40,995 |
| Production company fee (12%, relationship rate) | 4,919.40 |
| Total (GBP) | £45,914.40 |
Note the mechanics: contingency is 10% of the subtotal, and the fee calculates on the production cost (subtotal plus contingency). Nothing is hidden, nothing is bundled, and the client signed it.
The leaks 07
The word "admin" invites the objection. Clients resent paying for admin. Nobody blinks at a production fee at the foot of a budget; it's how the industry has priced work for decades.
The quick win 08
What it's worth: on a typical quote missing the fee line, restructuring recovers around 15% per job. On $250K of annual project revenue, that's roughly $37,500 a year for one template change.
Proof, not theory
This was the first thing Andrew Fowler at Lux Films in London implemented when he joined the VBA. That one change added six figures to his annual profit, and it's part of how he repaid his first year's investment within the first month. Read the full story.
