Re: Artist's Profit
The point, though, is that you break down the total budget to get an idea of what it is possible to produce. It's not a question of cutting costs it's planning the work according to the available budget.
In my experience customers who's expectations are unrealistic compared to their budget should be avoided. As Ries says, if you want a sustainable business, you need to propose work which is appropriate to the budget available.
In general a client will want one of two things, either they have a very specific brief (eg a life size bronze bust) in which case you quote a price based on your calculations of costs etc OR they have a fixed budget and you propose something based on that.
To put it another way they tell you what they want and you tell them what it will cost or they tell you how much they want to spend and you tell them what that will get them.
In reality there is a certain amount of room for negotiation and one of the skills of this sort of work is teasing out what the client actually wants to achieve and if it is remotely realistic.
There are times when you might want to offer a discount on a project that is particularly interesting, will significantly enhance your portfolio or is likely to get you more work, but this needs to be the exception rather than the rule and you still need to cost it properly in the first place.
It doesn't really matter if you make your money as part of your own labour charges or as a percentage fee the main thing is that you charge enough to cover all your costs, both the direct costs of making the work and the costs of staying in business and manage to pay yourself at the end of it.