There’s a lot of people trying to make money out of recording, producing or engineering and quite a lot of them are broke. In this article, I’m going to give you some practical advice on how to avoid the mistake that can lead there.
Yes, you can start criticizing the streaming services for the fact you make more out of your merchandise than your tracks. You can begin moaning that someone is willing to ‘produce’ a song for £11.77 (real number) on Fiverr, but for many freelancers, the problem is a lot closer to home. Many freelancers don’t know how to do the basic sums that help you work out the MINIMUM you need to charge if you want to make a real living from doing what you love. So here are the maths, to get to the minimum. The numbers are examples, use the ones that you need to live on, for some it will be less and for others more.
The Maths Of Setting A Day Rate
It all starts with what you need to live on, it’s what people with a regular job call their take-home pay.
So the first thing you need to work out is what that number is, let’s assume it’s £3000 per month.
The next thing you need to do is add a sum of money to that to account for your taxes and other government insurances. Remember employees have had this deducted at source, so that’s dealt with without them normally having to worry about it. I suggest, as my accountant does, to add 30% onto the sum you came up with as your minimum monthly amount for home expenses.
Now the number we have is £3900 per month.
Take that number and divide it by 4, which are the average weeks in a month. Some months longer, but treat them as a bonus or vacation. Now we have a number of £975 per week.
You need to divide that number by 3, few work 5 billable days a week, if you do then you are lucky, and you can enjoy the extra income, but for now let’s work on 3 days, that’s £325 per day. If you discount that down to £250 a day, then you need to work 4 billable days a week.
Remember these numbers don’t cover business costs such as rent, rates, utility costs, gear costs and a host of other things you’ll need to spend money on.
So you can see that if you bill at £10 per hour, then you are not going to come close to the £3900 per month you need. You will in fact end up on something like 10 x 8 =£80, 80 x 3 = £240, 4 x £240 = £960. £960 is less than the amount you need to earn a week, so as you can see, there’s no way you’ll be paying your home bills, not even close.
"Here’s the point, you can’t match that rate because if you do, then you’ll not be able to meet your own personal expenses, let alone build a business."
But Someone Else Is Cheaper!
Now, this is the point when someone thinks as they read this ‘but there’s a guy online who charges £10 an hour, so that’s the market rate!’ Nope, that’s not the market rate, that’s someone who either has low overheads or even more likely who hasn’t done the maths we’ve just done and who hopes to get rich quick by devaluing the audio profession.
Here’s the point, you can’t match that rate because if you do, then you’ll not be able to meet your own personal expenses, let alone build a business.
As engineer Steve Genewick said about these numbers when I shared them earlier this week, ‘Your worth is not always measured by the amount of time it takes to complete a project. As my friend Niko Bolas always says, “it’s taken me 30 years to be able to mix a song in two or three hours”. You’re paying for the 30 years, not the 2-3 hours.’ This is why at the start of this article I said these numbers show the MINIMUM you should be charging for your services.
So let me grab you by both shoulders and look you in the eyes to say the next thing. When we allow people to compare us with other people simply based on the function of our job, we are missing the point. Steve is right, professionals are not paid for the tools they use because anyone can buy them. Professionals are paid for the decisions we make based on the experience we have built up often decades worth. The more years you’ve been doing this and the more credits you have, the more you can charge, not because you are a superstar or have worked with them, but because you can be trusted to get it right, it’s because you don’t only know what gear to use but why.
"There will always be someone willing to do it cheaper and claim to be able to offer the same thing, it’s rarely true. But as long as we all continue to sign up to websites where the lowest price wins, then we continue to perpetuate the lie."
Not All Freelancers Are Equal
Not all producers are the same, not all engineers are the same, not all mixers are the same. Of course, some projects require Abbey Road and a team of top producers and other projects need nothing more than a laptop and someone with less experience. I’m not suggesting otherwise. Each project will have a different budget - but let’s not allow unreasonable and unrealistic budgets to destroy our industry when people compare apples with oranges.
There will always be someone willing to do it cheaper and claim to be able to offer the same thing, it’s rarely true. But as long as we all continue to sign up to websites where the lowest price wins, then we continue to perpetuate the lie.
Set Your Rate Before You Go Broke
So if you are serious about making a living out of audio and providing for your family, then the first thing you need to do is sit down and do the maths shown in this article.
If after doing the maths, you find it’s not possible to make the money you need, you might need to consider a second job or a different profession.
The worst thing you can do is try and compete with people who want to charge less than you need and then hope it will work out in the long run. It won’t, all you will do is get further into debt, and the consequences could be devastating.
The reason a lot of audio freelancers are broke is they haven’t done the maths. Do them now and take control of your business before it takes control of you.