Avoid Favor Rates
Yes, it happens to all of us—we have a friend in the industry who wants something, and we, being a friend, agree to do it on the cheap.
Let me say this upfront: If you can avoid it, don't charge favor rates. It seems like it might be good for your friend, and good for you—and there’s that elusive “exposure” we're all seeking—but upon further examination, the exact opposite is true.
The big problem is that you're now introducing business into friendship, which can backfire quite quickly. Should you not deliver what your friend wants, that could hurt your relationship. Similarly, should your friend want something unrealistic, that could also strain your relationship.
If your friend really likes what you do, then you're also in a bind, because your rate won't be increasing, unless your friend decides to pay more. Most likely, you'll find yourself in a position where your friend walks away with a whole album’s worth of mixes having paid, quite literally, a song; as your business grows, you'll be stuck having to make unrealistic deadlines when both projects—the one that pays, and the one that doesn't—are due in the same timeframe.
Then there’s the psychology of the favor rate, which manifests in unexpected ways: As you begin to work in a devalued state, a certain sloppiness of mind can very well take hold, wherein your resentments at being paid less begin to show in your work. You start to take shortcuts; you enjoy the work less. This is not good for you or for your friend.
I get it though; we all have people we want to help. I must confess, I break this rule frequently, and no, it’s not always to my detriment. Sometimes it works out great: Say I master a buddy's record on the cheap. In return, I get him playing an instrument I can't play on my next project for cheap. Works out, right?
Five times out of ten, I do find myself fighting the resentment though; luckily there are tools for that. If I remember that I am doing a service for a friend, and focus on the service aspect, that’s one way out of the resentment hole.
One time out of ten, the project and friendship invariably dies. If you’re okay with that, then proceed. But as the saying goes, proceed with caution.
How to Receive Payment
Nobody ever taught me how to draw up an invoice, just as no one ever taught me how to do my own quarterly taxes. This isn’t the best venue to get into the nitty-gritty of accounting, but I will say this: Find a professional-looking invoice template and stick to it, clearly demarking every individual service you have performed, as well as the date it was rendered. Send this as soon as the client agrees to the terms of the work you're providing.
On the invoice there will be a spot to indicate payment date, and here you need to make a choice: are you an “all upfront” kind of person, a “half and half” kind of contractor, or do you trust people enough to take payment on the back end? Only you can make this call for yourself, but consider this:
If you're just starting out, you probably don't have the clout to demand all the payment up front. You might send a client running for the door in the very asking. It's reasonable to request for half up front, and half upon final delivery, but even so some clients will not agree. Everybody has been burned, so it’s understandable.
If you go for one of the latter two options, and it's a job involving file delivery, there are ways to protect yourself. For recording work, don't release recordings of a session until you've been paid. In delivering a mix, you don't need to be so draconian: You can send full-res files with a reasonable amount of protection by employing early fades, unexpected dropouts, and other annoyances that render the mix unusable. These are quite frustrating for clients, so make sure you explain what you’re doing ahead of time, and include a lossy version of the mix, too (MP3, AAC, etc) for a full, yet unusable, picture.
Sometimes you’ll have to sign a contract for a long-term project. If the contract sports more legalese than you can stand, you might want to consider folding your lawyer's fee into your rates. Be explicit about this—it seems like a hefty ask, but it might help you weed out unprofessional people. For if a client wants to hire you for a long-term project, but isn't willing to help you secure protection in assuring the contract, that’s your red flag right there.
So You've Just Been Burned
The above suggestions should go a long way in helping you figure out your rates. All that’s left is to cover this one last base, and then we can send you on your merry way. While I sincerely hope you never have to deal with a dodgy client, in all likelihood you’ll have to at some point. So before we wrap up, let’s get into the most common excuses you’ll hear, and the best ways to counter them.
“The check got lost in the mail,” is often what you hear before the client skips town, so it’s good to have a game plan in place. First, your initial correspondence with the client should be kind, never accusatory (because mistakes do happen), but also firm.
Something like the following would suffice: “Hi so-and-so! I got your check, though on the memo line was a note reading ‘final payment.’ While I thank you for the check, we had agreed to a different final payment, as shown here in your email to me, dated…”
In case things do go south, it’s also wise to familiarize yourself with the laws in your principality, so you know the dollar between small claims court and full-on lawsuit. The former is pretty easy to carry out yourself, so long as you have those detailed invoices I told you to make, as well as a record of all your correspondence.
And yes, you definitely want all business arrangements—even those you made on the phone, with a friend—corroborated in writing, for this express purpose.
If this seems worrisome, fret not: Usually these issues do tend to iron themselves out; if you’ve held to principles I’ve outline above by clearing tabulating your rates, sending over invoices promptly, saving your correspondences, and the like, you probably won’t have to go down this road, as the documentation will most likely keep everyone honest. But still, it’s always good to be prepared.
Figuring out what to charge is a practice both necessary and wrought with internal strife. It requires holding up a mirror to yourself—to the very way you define yourself—and putting a value judgment on it. Furthermore, it necessitates uttering that value judgment, out-loud, repeatedly, and to strangers. Some people take to the mercantile aspect of the trade easily, but if you don’t, that’s okay. You didn’t go to business school! You’re a right-brain person, and transactional emails, phone calls, and epistles might stress you out. I know that’s the case for me! Still, you need to be paid for what you do. You deserve to be paid.
With this breakdown, it is my sincere hope that figuring out your rates—and, just as importantly, knowing how to stick to them—is now a task made more manageable.