How to Set Your Rate: Defining Your Value as a Music Freelancer

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Am I charging enough? Can I charge more? And what do they charge?

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These are the questions that keep music freelancers like you and I up at night.

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Last year I more than doubled my income from engineering and mixing, and I want

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to help you do the same by giving you a set of tools to help

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you understand how to value your time. This episode is not about getting more

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clients. It's about being confident about the value of your time and

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translating that to your rates. So if you're new to the show, my name is

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Travis Ference. I've been working as a recording engineer and mixer in Los Angeles for

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almost 20 years. I bounce back and forth between being on staff

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at studios and freelancing, and for the last seven years I've been fully

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freelance. And it's only been like the last half of that time that I've

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really felt that I understood rates and value. So let's get right into

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the question that we are all asking ourselves. What should my

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rate be now? I should warn you that I'm not going to give you a

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specific one rate fits all answer here. It's going to be different for everybody

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and it's going to change throughout your life. And that's the key point. Your rate

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has to change. What I'm going to do is I'm going to give you philosophies

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and ideas that have helped me answer these questions for myself. The first

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step to determining your rate is to understand the current value of your time.

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Not what you believe your time should be worth, but what you're actually making per

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hour of time worked at this moment. About ten years ago, I was on

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staff as an engineer at Capital Studios in Hollywood. I was making around

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$35 an hour, which felt substantial compared to the $10 I started at

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when I first moved to LA. But the real money was in the freelance mixing

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I was doing on the side. Or at least so I thought I was doing

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mixes for at best, $500 a song. $500. That

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was a lot of money at the time. An eight hour day at Capital was

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only getting me 280 before I paid the tax man, so this was

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way better, right? I assumed it was until I

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counted the hours that it was taking me to deliver a mix. That's when I

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realized that I was actually making more per hour at my engineering gig. I had

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fallen for the illusion that many of us are tricked by the illusion that a

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project fee is making us more money than working an hourly job.

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But many of us don't take into account the amount of time it takes to

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do that job, we just get excited about putting a bigger number at the bottom

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of the invoice. I was pretty shocked when I did the math and learned my

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hourly gig was paying me more. So I started tracking every project I

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did that wasn't through capital. Everything from engineering day rate gigs

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to mixed projects. It all went into a spreadsheet. There's a version of

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that spreadsheet available for free in the description below. Download it if you want to

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check it out and get nerdy and so by doing this, I was able to

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start understanding what kind of jobs took how long, and then in

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turn how to create project quotes that would fit the artist budgets and still pay

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me a reasonable wage. This might seem a little overkill, but I found that

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knowing what your average hourly rate is helps you understand if you're actually making more

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money as a freelancer. We all have ups and downs, right? Maybe you made

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$50,000 from music one year and 60,000 the next year. That's

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an increase year over year, right? Well, what if that

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$60,000 year was actually made up of more projects that were lower

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paying gigs than the year prior? If that's the case, then it's likely that your

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hourly that year would have actually gone down, so you technically

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made less money for your time. This is why I think as a freelancer, your

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hourly wage better dictates how much you're making than a yearly gross

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total does. Another reason to be aware of your current hourly is to make sure

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you're even making a livable wage. If you're making, say, $20 an hour

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working at a local restaurant and you're only making $8 an hour from your music

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side work, then you should not be rushing to quit that job just

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yet. Wait until you see that you're making at least the same. Then you know

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that you'll be covering your expenses and maintaining your standard of living.

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Which brings us to our next point. You've got to understand how much

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money you need to live. So now that you know how much money you're making

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from your music, the next step to determining your ideal rate is to understand

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your expenses. Begin by listing out your core living expenses.

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What is your rent? How much do you spend on food and transportation? What are

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your monthly business expenses? Do you have subscriptions or studio rentals? And

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don't forget about debt, loans, mortgage, car payments, all of that.

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List it all out. With that in mind, you can use the

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knowledge of your average hourly rate, along with how long it usually takes you to

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do a job to see how many jobs you need to do to pay those

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bills every month. Is it a realistic number? Do you need to do four gigs

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a month or 100 gigs a month? And how does that number stack up against

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the number of gigs you're currently doing? I'm not going to work through every

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scenario here because everybody watching this is going to be in a completely different

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financial equation. But just try different numbers in your equation, try

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different rates and see how things fit together. And again, you can do this on

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the downloadable worksheet that is linked in the description. But before we move on, I

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have to say, do not, please do not forget about the

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future. If you're trying to make music your full time job, then yes,

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worry about matching your income first. But if you're watching this and you

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already make most of your income from music production, then start

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thinking about saving. How much do you need to set yourself up for

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retirement or having a family or going on vacation? Now, I'm not the one to

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be giving proper financial advice, but I can say from 20 years in

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this business that many of the music production jobs that you're going to find out

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there only pay you when you're in the room doing the work. So will

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you want to be in the room doing the work at 70? Maybe? Hopefully,

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right? Because we all love this, but maybe not. You've got to

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think long term. Once you have the financial positioning to do so. And so

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along those lines, don't forget to give yourself a raise. Like I mentioned

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in the beginning, that's the best part of being a freelancer. You have the power

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to increase your rate at any time you choose, especially in the current world of

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high inflation. If you see the earning power of your dollar going down, then you

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have got to compensate in your business. And that brings us to the last

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part of this episode, how to raise your rates. And if you figured

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anything out from this episode so far, then you know I'm not going to give

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you a direct answer on this. I'm just going to give you a set of

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things to get you thinking. So first off, if you want to raise your rate,

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what's stopping you from just raising it? Why isn't the

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next quote you send someone double what the last one was? You just

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hopefully spent time understanding your hourly wage and your required

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expenses. You've got a number to look at, so look at it. Is that

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hourly wage what you believe your time is worth? It's that

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simple. When you see that number, are you pissed or are you feeling

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pretty good? If you're not satisfied, then what makes you feel

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compensated for your time? If you're making $10 an hour and you want

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20, why can't you double your rate? Ultimately, your worth comes down

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to what you want it to be. If you're letting others determine your worth,

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then you'll never have the control you want. An example of letting other people control

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your worth is taking every job for any amount. If you're starting

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conversations with what's your budget? Then you're essentially

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saying, I don't know what I'm worth and you are no longer in control. On

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the other hand, if you know how long it takes you to do a job

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and what your hourly is, you can say with confidence, I can do a

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job like that for about $1,000 and then wait. If they come

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back and say that they only have 800, then you can once again take your

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knowledge of what your time is worth and decide, is this project worth

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it to me to make less on? Maybe it's an artist that you could have

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a long term relationship with, or maybe you just love it and it makes

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your soul happy to be involved. That is totally valid. We are making art.

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Sometimes we got to do one for us. But at least you're aware

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that you've made that choice. You are still in control of your rate. Here's another

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angle. What if you've run all these numbers and you truly believe

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that you're maxed out? In your current market, maybe $400 for a mix

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is the most anybody in your town will pay. You can still raise

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your hourly and make more money if you can shave time off

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of a project. So think about ways you can spend less time but maintain

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the same quality work. Can you automate stem printing or mix prep with

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things like soundflow or keyboard maestro? Can you find a drum or vocal editor

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that you can outsource work to so that when you sit down at the

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mix, you do what earns you the most money and is the most

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fun. I've done all of the above, and I know hiring people can seem daunting

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at first, but once again, if you do the math, a lot of math in

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this episode, you can find a system that works. If you're averaging

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$50 an hour and you're paying an editor 15 and it shaves 3 hours

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off your work time, you just spent less than what you make in 1 hour

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to gain three, that's a big win. So I know we've

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spent this whole time talking about money, and it might be discouraging

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sometimes to look at what you're making or to think about what others might be

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making. But I really believe that being willing to do this math

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and look at these numbers is empowering. It was for me. It changed the way

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I thought about the jobs that I took. I think it also brings to light

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gaps that you might have, which is important. Those gaps reveal where

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you need to grow and improve. If you need to charge x amount and

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nobody's willing to pay that, then why is that? What is the gap that

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you need to close to make that rate a reality? Do you need more experience?

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Do you need to find a different client base? Is there a skill you can

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learn or a service you can add that would help? Maybe it's just your sales

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pitch. You'll learn a lot about yourself by just digging under the hood of your

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business. I definitely did. So don't forget to check out the downloadable worksheet below, and

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remember that this is all meant to give you the tools to recognize where you

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currently stand and plan where you want to go. And as a freelancer, it

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is your responsibility to decide the value of your time. Don't let

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anybody else tell you what you're worth.