Costing & Pricing
A Cultural Enterprise Office guide to considering the value and expense of your work
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. It
is accompanied by further information on our website linking to specific rates of pay
information and pricing strategies.
Introduction
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. 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.
Considering Value
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
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Cultural Enterprise Office, 2009 – 2012 www.culturalenterpriseoffice.co.uk T: 0333 999 7989
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.
Income streams
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.
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. An example of Visual Arts income streams is given here. For further
examples from different sectors, please refer to our online guide.
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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Cultural Enterprise Office, 2009 – 2012 www.culturalenterpriseoffice.co.uk T: 0333 999 7989
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?
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 splitting 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).
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
Costing Work
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:

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)
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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Cultural Enterprise Office, 2009 – 2012 www.culturalenterpriseoffice.co.uk T: 0333 999 7989
Costing your time and calculating a daily rate
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.
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Cultural Enterprise Office, 2009 – 2012 www.culturalenterpriseoffice.co.uk T: 0333 999 7989
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.
Pricing
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 establish a price. Pricing structures for
each creative industry vary and links to further information are given on our website.
Income
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.
Next steps
For further information on this subject, please refer to the following resources;
Costing Your Time and Daily Rate Calculator
Budgets Guide
Cash Flow Guide
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.
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 Cultural Enterprise Office, 2009 - 2012 www.culturalenterpriseoffice.co.uk T: 0333 999 7989