How do you deal with new clients where you may have large out of pocket costs?

[Les C.]

I'm curious how others handle billing new client, especially if you might have large out of pocket costs such as equipment rentals?

1/3 down, 1/3 upon completion, 1/3 upon approval?

What makes sense economically - and keeps the clients happy?

In fact, I'd like any insights at all into pricing and billing.

Do you break it down by filming, post production, etc.

Do you flat rate, and then eat the inevitable 'but what if we did this differently' after-the-fact changes, or charge for change-orders?

BTW - I'll throw out something useful a friend in the music business told me.

Never give a customer more than 2-3 choices for post production.

You just overwhelm them, and it's probably better to just give them as close to 'one' choices as possible.

 

[Justin Marx]

No set thing for this in this biz.. Everyone does it differently.. You need to base it on your trust of the client and your financial situation.

 

[Paul Schneider]

I'm curious how others handle billing new client, especially if you might have large out of pocket costs such as equipment rentals?

1/3 down, 1/3 upon completion, 1/3 upon approval?

What makes sense economically - and keeps the clients happy?

In fact, I'd like any insights at all into pricing and billing.

Do you break it down by filming, post production, etc.

Do you flat rate, and then eat the inevitable 'but what if we did this differently' after-the-fact changes, or charge for change-orders?

BTW - I'll throw out something useful a friend in the music business told me.

Never give a customer more than 2-3 choices for post production.

You just overwhelm them, and it's probably better to just give them as close to 'one' choices as possible.

No hard or fast rules, but make sure you get at least 1/4-1/3 up front.
Generally the production and post production are two different things and should be billed as such. To that end, you'll want to have a cost for live action shooting and you'll get both startup costs at the beginning and then fees for it's completion BEFORE relinquishing the footage or moving to post production.

Post can then be run in a similar manner...with startup costs followed by completion fees.

Take great care to assess, predict and put into writing the production requirements as well as how any overages will be handled. This should be signed and agreed to by both parties before any work is done. Its often a painful experience to do this because you feel like you're potentially driving away work, but it'll ultimately make you look professional and save your bacon when the clients start changing things or you run into unforeseen circumstances.

 

[Rob Gardner]

It depends on many variables, particulary the size of the project and the liabilities. The biggest problem and danger is the large hold-back, the final payment. You should try to make that final payment as small as possible, and the upfront payment as large as possible, the stages in between depending on the scope and length of the project. But the relationship (or lack of relationship) with the client often determines the payment and cash-flow plan.

 

[Justin McAleece]

For a simple shoot we always do 1/2 up front to lock in the date and 1/2 when completed. We are a company not a one man band but this works very well for us. Clients do feel a sense of security knowing that they've put some money down and the transaction has begun. It lets them know you're not screwing around either. For more complicated things we'd break it down into phases but we'd still break that down into phases.

 

[Domenic Barbero]

For our clients, Especially musicians, We always do half down, half after delivery. Or a small discount if paid in full prior. A friend of mine does 1/3 down, 1/3 on first day of shooting, then final third after deliverable. It all depends. My thing is i dont want to spend tons of hours in pre production then have the client drop out at last minute. This at least covers all the pre costs and makes me feel much more comfortable about busting ass, because nobody wants to bail after already putting half down.

 

[Alexander Ibrahim]

Well, I bill hard costs + payroll up front.

So, my crew is 100% covered. After all they shouldn't get the shaft because I do. Also, I shouldn't be out of pocket on any project.

For my services, I do 1/2 up front for new clients, 1/4 at a milestone, 1/4 on final delivery. Basically this is the deal if I don't know you or I don't trust you.

For established clients, I do 1/3 up front, 1/3 at milestone, 1/3 at final delivery.

Milestones are whatever makes sense. On a grade I did, milestone was when I delivered my first complete grade.

For projects that are completely shooting ... say I'm hired as a lighting cameraman with gear and crew, I might break it up depending on length. For a week or longer, I do all rentals up front, but then payroll is 100% upfront for a week at a a time, with any unscheduled and overtime due before payday.

My contracts basically say I'll handle everything up until a set number of hours, then there is an hourly rate for further work and changes.

Its all negotiated of course ... but I won't string out my crew and I won't go out of pocket for a client. Those are my only hard and fast rules.

(I do both ... but only for things where the crew and I are invested in the results! Like if there is crew ownership of a films rights or something ... its all negotiable!)