How your work is valued, and the costing and pricing strategies used,

will depend on the art form you operate within as well as its location(s)

and audience(s). This guide introduces tools to help you consider the

value of your work in your particular context. The guide covers

Considering value

Income streams

Costing work

Costing your time and calculating a daily rate

This guide is accompanied by further information on our website

linking to specific rates of pay information and pricing strategies.

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In pricing work, you are aiming to balance what your clients /

audiences are prepared to pay, (the market value of your work), with

the costs of creating the work, (your outlay including materials and

time). The price should reflect the work’s value which you arrive at

through market research.

Introduction

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Adding up the costs will help to establish whether you will break

even, be in profit or require subsidy and investment. Ideally, the

market value will be greater than the costs, giving you a margin to

invest in you and your work.

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The value of your work is influenced by a number of factors:

• distinctiveness; how similar or unique the work is

• market price; if it fits a low or premium going rate

• adoption; how established the relationship with the audience is

and how quickly the work will be bought

Considering value

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These factors represent the context in which you present your

work, which helps your clients, customers and audience judge

value. For instance, in an established venue with a knowledgeable

audience, the work may be highly valued, considered worth a

premium price and sold quickly but elsewhere the same piece may

be under-valued and unable to command a low price.

Considering these factors can also help you explore the range of

income streams available to you.

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Depending on the range of your skills and activities, you may be able

to identify a number of potential, earned income streams for your work.

You could be selling a number of different ‘services’ or ‘products’.

For instance you may produce editions of work, have a regular gig slot,

do copywriting, reviewing, and deliver workshops which provide a

reliable, frequent income at a relatively low market income whilst

creating one-off, more expensive works.

These premium pieces may take time to sell and fetch their true value

but can help to raise your profile and establish your reputation and

relationship with clients and audiences.

Income streams

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You can consider the range and value of different income streams

by plotting the different aspects of your work against the first two

value factors; distinctiveness and market price.

Income streams are placed along the distinctiveness axis

according to availability, exclusivity, competition and the frequency

or quantity of production or delivery.

Income streams are placed along the market price axis according

to the customer’s perception of value, budget, affordability and

comparison to current market rates.

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Examples are given for:

• Visual arts, crafts and design

• Music

• Screen & digital media

• Literature

• Performance

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Visual art, craft & design income streams

corporate design fee

one off / bespoke commission

domestic design fee

gallery shop retail

workshops & classes

production pieces

licensing royalties

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Music income streams

new writing commission

headline tour

merchandise

regular gig slot

royalties

corporate gig

workshops & classes

downloads

session work

support slot

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Screen & digital media income streams

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Literature income streams

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Performance income streams

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Try plotting your own (potential) work and then overlaying the venues,

agents and / or spaces which you want to distribute and sell through.

• Is your work in the proximity of the work they usually present?

• Which matches your work’s profile best?

• Which could present your work now and in the future?

• Which work will you prioritise?

• How does your decision impact on your cash flow and the investment

required in your business?

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Exploring the third factor, adoption, might help you answer those

questions. Consider how new or established your work’s profile is with

clients and audiences you are trying to attract. Try split ting clients and

audiences into groups of people who seek out new work (innovators and

early adopters) and those who gravitate to more established work (late

majority and laggards).

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Adoption lifecycle

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List the types of venues, distributors and publishers who work with and

attract these types of audiences and highlight ones that fit with your work

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How much your work costs to make may vary from the amount at

which it is valued. Doing a costing exercise will establish any variation

and whether you break even. If creating the work means you are

making a loss, you need to consider:

Costing work

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• Presenting it in a different context so your work can increase its

value. This may mean working with a different audience or market,

or adding value to your presentation and reputation.

• How to make savings in the time or resources used to produce the

work.

• Subsidising the work through other profitable activity and outside

investment.

The key elements which make up the cost are:.

• direct costs; costs specific to the piece (e.g. materials, hires,

delivery and time)

• overheads; costs general to the business (e.g. rent, power, phone,

insurance)

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Direct costs should be easy to allocate to specific work and are often

itemised in an invoice or detailed in a project budget.

Overheads are usually allocated as a proportion of your annual

running costs equivalent to the time spent on work. They are often

presented within a daily rate.

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One of your key costs is your time. By adding your overheads, (the

costs of running your business), to your personal salary, (the cost of

running you), and dividing those by the days available to work, you

can calculate your daily rate.

Costing your time and calculating a daily rate

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Out of the days available to work, make an allowance for the time you

spend doing administration (e.g. invoicing, planning, marketing) so that this

becomes part of your rate. You should aim to spend 25 - 40% of your time

on administration:

any less and no one will know about your work and you won’t be in control

of your paperwork;

any more and it may not be financially viable (unless you have very low

overheads).

If you don’t allocate any time to admin you will be doing all the chores in

your own time for no pay.

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Overheads

plus

Salary

Days per

year Weekends Holidays

Contin

-gency Admin

Total

days

available

Daily Hourly

Rate Rate

no admin

time £27,000 365 104 30 5 0 226 £119 £15

admin at

25% £27,000 365 104 30 5 56 170 £159 £20

admin at

40% £27,000 365 104 30 5 90 136 £199 £25

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Once you have worked out all the costs associated with a piece of work

and its value to your clients and customers, you will be able to

established a price. Pricing structures for each creative industry vary;

and links to further information are given on our website.

Pricing

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The price and the number of sales or fees associated with that work will

form your income.

It is common practice to present predicted sales figures and funding

along with costs in the form of a budget so the balance of income and

expenditure can be viewed easily.

These figures can also be entered in a cash flow to see the impact of

outlay and income over time and establish a timescale for breaking

even.

Income

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Next steps

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For further information on this subject, please refer to the

following resources:

Budgets Guide

Cash Flow Guide

Costing Your Time and Daily Rate Calculator

Making Live Music Pay

Planning to Sell at Trade Events

Disclaimer: Cultural Enterprise Office is not responsible for any advice or information provided by any external

organisation referenced in this document.