The Value Conundrum — What's your worth in dollars?

Valuing one's work is often tricky.

When talking about this subject, my go to analogy is as follows:

"The pricing of the creative industry is akin to the hair salon industry. For a basic haircut, one can get this service on a wide spectrum of costs from less than $10 to over $100. At the end of the day, we all receive the same type of service, but all these hair stylists can justify the different value they provide."

P.S. You can swap hair salons with chicken rice stalls and the analogy still holds.

This analogy invites an argument - if the same type of service can be priced differently, then what is a ‘market price’ and should one adhere to it? For my line of work, which is categorised under the media/creative services, this question forces creative freelancers into the often uncomfortable process of valuing our work in dollars.

It is a process that is subjective and fluid, potentially triggering on a personal level. (Those who suffer from imposter syndrome are at a disadvantage here) It is a process that is relative in nature, taking into considerations prevailing market forces, cost of operations, and most personally, how one values him/herself.

The easiest (but not necessarily right) path is cost-based pricing. In terms of videography, one can extrapolate the cost of operations by way of calculating the cost of equipment, rental, software and crew. These costs are multiplied by the number of days they are used, and a mark-up would then make the project worthwhile.

But one can start to see how this equation quickly breaks down. What if one is tasked to produce an urgent project that is important to the client? The number of days is immediately reduced, implied that the project value has reduced as well. But this is certainly not the case - quite the opposite actually as fewer than most would be able to deliver a satisfactory video under tighter deadlines.

This is why there are those that advocate for value based pricing, which entails pegging a project value to the grander scheme of things. This is what I advocate as well, but with a limited experience of only a few years, I do understand the conundrum of fellow creatives when one decides to price their services based on value.

"Where do you start?" - is the immediate question. How did a hair stylist come to the price of $200 for a haircut when the neighbourhood barber can provide the same type of service for $12. Surely most people would perceive that sum of money for a haircut to be ridiculous. And yet there are those who would procure a $200 haircut, enough for several of these hair salons to exist and thrive.

This is why I reject the notion of a true market rate. I do not think that there is a universal equation to this question because the types of variables are ever changing. But I have made some peace with it by providing myself with some steps that perhaps you may find worthwhile to incorporate.

1.Setting a price floor with cost-based pricing

Fundamentally, a business can only be sustainable if the revenue generated can cover its cost. The equation for this is simple, though different variations do exist. The calculation of this allows one to set the price floor and know what is the line that deems a project even worthy of consideration.

2. Making peace with your own value

This is probably the step which requires a lot of self reflection and calculation. A friend once recommended that there are two ways to manifest one's own value in dollars.

• Base it on how much you want to make

This equation requires one to find the cost of one's need (i.e. current and future expenses) and one's want (i.e. the pleasures of life). It becomes easier to find out how much you want to make when you figure out how much you want to spend, both for yourself and for others you care about. Just remember, money to be made is meant for money to be spent, just a matter of what and when.

• Base it on how often you want to work

In the freelancer path, one has the eventual empowerment of choosing how often to work. At the beginning, this is non-existent as the inflow of jobs is less than what is desired. But with hard work, perseverance and luck, this rather unique factor of a freelancer's life will be one of our greatest assets. Our work schedule is not pegged on weekends and public holidays, we determine those for ourselves. And deciding how long you want to work for money is essential as time off work can be utilised for activities such as recuperation, mastery of skills and family time.

3. Finding your place in the industry and the world

Increasingly, one has to respond appropriately to not just what local competitors offer but all eligible competitors. I recently had a chance to work in Singapore for a company based in Germany. And back in 2018, I was flown to Norway to work on a commissioned piece of a global nonprofit based in Oslo. It just goes to show how interconnected the world has become.

In this third and final step, one will have to get comfortable in making mistakes - lose jobs for being perceived as being too expensive, be awarded jobs but ultimately feeling you were underpaid. These are teachable moments on the path to understanding one's own value and place in the world.

This journey is never-ending. Like it or not, valuing one's work in dollars is part of the game of our society. You have chosen to be a freelancer rather than the other career paths. So, game on.