Pricing is a tough issue in the creative industry. The amount of money you should charge for commissions is a very common question, especially among new artists. This article provides simple and well researched guidelines to setting the right rates for your work.
1. What is your Work Worth?
To be paid well, one of the first things you need to know is how much your work is worth. Knowledge of the market value of your services and experience are required for setting the right rates. If you’re unsure of what the going rate in your industry is, you can check with other artists.
We recently conducted a survey on the creative industry and it revealed that most upcoming creatives Nigeria charge between N100,000- N200,000 per commission. So please don’t charge less, but feel free to charge above this range.
Understand that your price quote is a sales document. You need to be able to sell your rates to your clients by setting out to them what you’re offering and why it’s worth that price. A little explainer while communicating your rate will do the trick.
Lastly, ensure that both you and your client agree on the exact specifics of your services which should then be reduced to a simple contract. If possible, share this with a lawyer to ensure both parties are clear on the terms, particularly with respect to terms like the number of revisions, who holds the intellectual property, etc.
2. Keep your Pricing Subjective
Recall the backlash on Instagram vendors who say, “DM for price”? Well, you should not worry about that. That (well deserved) backlash is solely for vendors of goods who fail to state their prices. As a service provider, you should make your rates subjective.
The rule is this: The more exposure your work receives, the greater the value of your intellectual property and this should reflect in the way you charge.
For example, you could quote less for small businesses and higher for bigger companies. This is because your work will most likely be reproduced or viewed many more times in a bigger company than for smaller companies.
Instead of thinking of the amount of time spent creating your work, think of what the company will do with the work you create. At all times, think of the value to your client, essentially, the usage, and set your rates accordingly.
Remember that the client isn’t paying for the time you spend on the work but for what they can do with your work.
3. Pay Attention to Technicalities
As an artist who takes themselves seriously, building a sustainable business should be important to you.
Building a sustainable business means paying attention to the technical aspect of your practice. When you pay attention, you find out that many technical aspects of your business affect what rates you should charge.
For example, there are several taxes and returns which individuals and companies making money in Nigeria are liable to pay. From Value Added Tax, to Personal Income Tax or Companies’ Income Tax, etc. Remember, you’re building a sustainable business, hence, you need to be tax compliant.
Bear these taxes in mind when setting your rates and pad them up accordingly.
As a creative with a registered company, charging your client ₦200k would result in less than ₦125k take home for you, because you will pay 30% of your rates (₦60k) in Companies Income Tax, and a further 7.5% of your rates (₦15k) in value added tax, excluding your overhead costs and more. Take note of this.
Finally, when giving discounts to clients, remember to show the discount as an item in your invoice. This would keep your client grateful AND prevent them from subsequently insisting that you should provide your services to them at the discounted rate.
One Final Note
Remember to routinely review your rates.
Otherwise, after many years of practice, updated skills and money spent on buying the newest gadgets relevant to your practice, you may find out that you’re earning less now than you were earning when you first started your arts practice as a result of inflation and other economic factors.
It may interest you to know, that from our survey, most Nigerian creatives review their rates periodically (quarterly and annually), when they buy a new work device (including software), or when they gain increased visibility. You should do the same.
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