In the gig economy, clients and customers have unprecedented access to performers and service providers. Just a few years ago, an event planner would need relationships or a friend in the business to find an entertainer for their event. Now, hundreds of options are just a click away. Quoting the right price is crucial to landing lucrative gigs and being able to make a great living.
1. Know your competitors
In the crowded gig market, you need to know what the other providers in your sphere are charging. A common practice in real estate, for example, is to look at “comps,” comparable properties and prices in the neighborhood. Good agents always know what a property can reasonably expect. Take the time to research what comparable acts and companies are charging for their services. The two most critical mistakes any business can make is to either underestimate or overestimate your value.
Pro tip: Don’t request bids for fake events or ask clients for a dollar amount of their other bids. This is frowned upon and violates the community of entertainers, providers, and performers who are trying to make a living doing what they love.
Instead of being sneaky about choosing your price point, use more upfront tactics instead:
- Ask your colleagues, mentors, or friends what they charge in order to get a reasonable sense of what your services are worth.
- Ask clients questions like “What is your budget?” or “What are you expecting to pay?”
- Take time to research online in forums and Facebook groups.
2. Determine your costs
Be the master of what it takes for you to provide your service. Create a list of every conceivable cost to your company and factor everything in when creating the bid.
Simply put, if you don’t know your own costs, you won’t know what to charge and you will lose money, period.
A vital aspect of this is the soft costs that could easily be overlooked. Don’t forget things like:
- Vendor or site insurance. Your booking agreement needs to clarify who will pay this.
- Transportation fees. Establish a per-mile fee that you can easily explain or share with the client.
- Ongoing business expenses. Rent, utilities, extra hires, extra equipment you may need to rent are all costs that eat into your profits.
As you master your own budget, you become aware of additional expenses that you may be able to streamline or even eliminate to lower your overhead and increase your profits.
3. Name your price
Once you establish the market and strengthen your grasp of expenses, set the price. It’s a dynamic dance between profit goals, market, and expenses. It may take a few trials to get this dialed in, but the most successful pros know these numbers by heart.
Providers should choose a price that is competitive but fair. Factor in all variables including experience, talent, effort to make the event happen, and other intangibles. Your initial price quote needs to reflect the amount you need to make to feel positive and excited about the event.
Offering multiple options and price points helps potential clients feel like they have a voice in the process and gives them the power to make choices they will feel positive about.
Another idea that often comes at this point is the idea of doing gigs for cost or donation of services. Doing gigs for charities or non-profits feels good and generates a lot of good will, but only if you feel positive about the experience and you are committed to offering your services. Check out this post about doing charity gigs.
Be very careful before you agree to provide any service for low or no cost “for exposure.” It’s a bad idea to devalue your own product and undercut the market for your colleagues.
4. Learn how to negotiate
Once you offer the first price, be ready and willing to negotiate. Don’t be afraid to price just high enough so that if you need to come down, you are still comfortable with your profits.
If the client rejects your first bid:
- Ask the questions from earlier like “What is your budget?” or “What were you expecting to pay?”
- Kindly and graciously educate them on the cost of doing business.
- Be patient with them as they learn the market.
- Offer scaled-down or more cost-effective options if you are able to do so.
- If they can’t pay the full amount, ask for permission to sell merch or other products to recoup the costs. For example, if you’re a band playing a corporate event, set up a table for product sales.
You are responsible for your profits and expenses. By owning the information and taking control of the process, you can do what you love and make money doing it!