By Kevin Elliott
We artsy video producer types sometimes get in trouble with budgets.
We are so anxious to win the project and start creating that we do a poor job calculating our total costs to execute the project. And one common cost that can (and will) bite you in the patootie is travel.
Your client will not care if you overrun your travel costs. Not their problem, take it out of your profit. On the other hand, they also won’t let you over-inflate travel costs. Travel costs must be accurate.
But how do you know how much stuff will cost in different cities across the country? In advance?
Start With Airfare
Calculating airfare is easy. There are only a few airlines and the flights cost what they cost. You can shop around and sometimes find deals (Southwest Airlines is usually cheapest), but a quick look through Google Flights is usually sufficient to compare prices.
Tip: Try to book flights at least a month out. Prices usually spike big time around two weeks from your trip.
Another tip: Don’t forget baggage costs. They range from free (Southwest) to $30 per bag (Delta).
What About Food and Hotel?
There are only a few airlines, but most cities have hundreds of hotels and thousands of restaurants. How can you predict and justify a budget to your client for food and lodging?
Per diem, dear reader. Per diem.
Each year, the federal government publishes rates that it will pay its employees and contractors for travel food and lodging in every locality in the U.S. They are called per diem, or “by the day,” rates.
Here’s the website: https://www.gsa.gov/travel/plan-book/per-diem-rates.
Type in the city to which you are traveling, click the “Find Rates” button, and the appropriate per diem pops out. The rates will be broken into two sections: lodging (hotel) and something called M&IE (see below).
Not All Months Cost the Same
When you run the costs, you’ll see lodging first. You’ll also notice some months are more expensive than others. This is because of tourism trends, holidays, and other events like if the World Series comes to town.
What is M&IE?
M&IE stands for meals and incidental expenses. You know what meals are. Incidentals are for when you forget your toothbrush, for instance.
Add lodging to M&IE and build it into your quote for the project.
First & Last Day of Travel
See that column at the far right of the M&IE chart that says First & Last Day of Travel? That cost is 75% of what a full day would cost. That is because the government assumes you will not work a full day when traveling. You’re just flying to or from the job.
You have a couple options for this, and it depends on your client. Some will hold you to first and last costs. I resist this because, in my experience, I always work and fly on travel days. In fact, travel days are typically 12-14 hours for me.
I explain to my client that it is better for their budget in the end that I charge full per diem on travel days instead of adding additional “soft” days to the schedule where I only travel. This usually works and the client agrees to pay 100% for all travel days.
The second option is to build in 100% per diem for every travel day and just go with it. Unless you have a government client, they usually don’t look that close, as long as you are using the government per diem rates.
Easy For You, Easy for Them
Using per diem is great for your clients because it is the standard for government travel, which is not extravagant. Your client can know that, if you are traveling on per diem rates, you are not gouging them.
It’s also great for you because you can predict what you should be reimbursed for travel. That’s unless you get all fancy and spend too much on swanky restaurants and posh hotels. Even if you do, though, your client only owes you per diem. If you choose to go over, you pay the extra.
Bonus: If you spend under per diem, you generally pocket the rest. Sometimes clients will want to pay only your exact costs and will only reimburse based on receipts. They pay just what is on the receipts, even if you come in under per diem. Try to resist this, but don’t lose a contract over it.
What About Rental Cars?
Same as flights. Get quotes from a few of the biggest companies and pick the cheapest. They are usually not that far apart in price anyway.
Travel Happy and Profitable
It is super frustrating to start a project and realize you don’t have enough money to travel to a shoot. Per diem is a life saver and an above board way to predict travel costs, for you and your client.
Now get out there and make magic!
P.S. – Here are some other articles on video project management: