07 Nov 5 Pricing Policies that Artists can’t Survive Without
What pricing policies do you have in place for your art business? The way you answer the following question will determine if you treat your business like a business or if it’s just a hobby: When someone asks you “how much will it cost for me to commission you to ___________ (you fill in the blank), do you say:
- 1.) Ummmm, I’m not sure, let me see, ummm, how about $xx.xx?
- 2. ) Here’s my price sheet
- 3.) Let me find out more about the project, and then I’ll crunch some numbers and get you a quote.
If you answered #1, there are two things to consider:
1.) You aren’t that different from most freelance artists, who still haven’t figured out how best to price their work, and;
2.) You’ll shortchange yourself everytime. In other words, you’ll undercharge and either break even or lose money on a deal. Also, you’ll lose the confidence of your customer, when they see you don’t have it figured out yet.
Years ago Drew and I struggled greatly to create a winning business. We were having a tough time, and so we met with our accountant for guidance. He looked at our profit/loss reports for the year and said, “You know, the IRS doesn’t tolerate writing off a hobby.” I said, angrily, “this isn’t a hobby, it’s our business!” That’s when my accountant said the following quotable phrase: “When you’re making a profit, you have a business. If you aren’t making a profit, you have a hobby.” OUCH! And then we got real serious about our pricing policies.
Five (5) Pricing Policies that an Arist’s Business cannot survive without:
1.) HAVE A PRICE SHEET: Make a price sheet for your services, post it in your studio, e-mail it to potential clients. This does two things: 1 – It tells your client that you are a professional, you’ve done this before, and it provides them with a level of confidence in your work; and 2 – It helps keep people from wanting to negotiate. When there’s a price sheet, it lends credibility to what you’re charging.
Don’t worry about coming up with the perfect price sheet – ours are constantly changing as we discover new challenges, things to consider, and as material costs go up. Just start somewhere, and perfect it over time.
2.) ALWAYS GET A DEPOSIT: Never start work on a project without a deposit. A DEPOSIT SAYS THE CLIENT IS COMMITTED. We typically don’t even have Drew talk to a client until I’ve received a deposit – I don’t want him to waste his time unless they’ve committed. We require 1/2 down, but the norm in art is 1/3 down and the balance upon completion. Without the committment, we don’t want to invest time into it. If someone does not want to pay a deposit, they aren’t committed, and therefore, they probably won’t ever pay you. The deposit weeds out the serious buyers from the not-so-serious buyers!
3.) CHARGE APPROPRIATELY: KILL FEES, EXTRA SKETCH FEES, ETC. When we give a proposal, we indicate that the price includes up to 2 sets of changes to the sketch. That way, if a customer is extra picky and requires many sketches, we’ll charge more for the extra time involved. Also, the “KILL FEE” is for those projects in which the customer changes his mind after you’ve already put time in. In our case, since we get 50% down at the start, we’ve never had anyone “kill” a project. They are quite committed when they pay that much up front.
4.) TAKE CARE OF YOUR CUSTOMERS: Offer Discounts for RETURN Customers! We offer 10% off most paintings and projects for customers who come back again and again. Often we’ll do something extra special for them, like include a free framed print or something nice for their kids or their wife.
5.) ACCEPT VARIOUS FORMS OF PAYMENT: Make sure you are set up to accept MC/Visa and even Paypal. This makes it easier for your customer to give you the deposit that you require. It’s faster, too, than waiting for a check to arrive and then clear the bank. Be sure to work the MC/Visa processing fees into your pricing (typically 3 – 4%). I’ll often give a customer a 3% discount if they pay by check or cash.
Now I hear your questions: HOW do I come up with a price sheet? HOW do I write up a proposal? What can I expect the customer to pay? What are other artists charging?
The BIBLE for pricing guidelines for artists, graphic artists, photographers, is THE GRAPHIC ARTISTS GUILD HANDBOOK: PRICING AND ETHICAL GUIDELINES. If you don’t have this book, I’m not sure how you’ve lived without it. I refer to it constantly. GET IT!
I also recommend that artists keep in touch with other artists, exchange pricing information, help each other get pricing up to a higher level. Don’t keep information to yourself – share it! When you help other artists, you make the art industry better for everyone.
I want to see you make a profit! If you have any questions on this post, or if there’s anything you want to see covered in this column, please e-mail below.
Maria “Spunk” Brophy (Follow me on Twitter!)
Was this post helpul to you? Then SHARE IT with others! Click below!