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Thinking of going into business: Pricing

Pricing your photography can be a bit tricky as it’s going to vary for every market and every business type. Decide first what kind of business you want to be – boutique/high end, or high volume? Are you going to have very simple packaging, or something a bit more decorative? Are you going to spend hours on editing, or do a quick edit in LR for your selected photos?

Let’s do some math – (please note this is NOT a comprehensive list at all).
Time – it will take you a few hours before each client to prep & communicate – let’s say 3.

Then you’re going to drive and work with the client – let’s say another 3 hours with drive time & the shoot itself.

Then you have to come home, download, and edit the photos. I’m going to say you’re someone that edits in an average amount of time – let’s say 4 hours total to download, edit, and prep the images for viewing.

Then the client will place their order, and you’ll have to prep the order and package it. Then you’ll have to ship or deliver. Let’s say this takes 1 hour, though for some it may be longer.

So you’re looking around at *least* 11 hours, and that doesn’t include the random time spent on your business – updating your website, answering client calls, writing new policies.

Now let’s say that you want 3-4 clients/month. We’ll say 40 for the whole year. So that’s at least 440 hours a year just on clients – and let’s face it, you’ll probably spend at least 5 hours/week on additional tasks – such as marketing, networking, designing, updating your site, talking to clients, etc. That’s another 250 hours (I base it on 50 weeks – that gives you a 2 week vacation.) A minimum of 690 hours.

Let’s include your costs – gas for 40 clients. I’ll say $5/client ($200 which is likely a gross understatement of the truth). Packaging and other costs – depending on their order – we’ll say $10-$20/client on COGS – that’s if they have an average small print order, or get a DVD. ($400-$800).

What kind of equipment do you have? Let’s say you have $3000 worth of equipment (though keep in mind as a working pro, I have easily over $12k of equipment that I take with me on a shoot)- I’m going to make this really simple and say you’ll have it 3 years before needing to service it or needing to buy new equipment. And let’s face it, most of us want or need new equipment. So $1000/year is quite low, but it will do the job for this scenario.

What about websites, cellphones, marketing costs, etc? A website on average will run $200 on the lower end. Cell phone let’s say $500/year. What about business cards, marketing materials, etc? Probably another $300/year at least.

So far we’re at $2700-$3100/year in our costs – and that’s not even taking into consideration taxes yet!

Now, let’s say that you want to make $20/hour on average after taxes. That’s a respectable wage if you’re doing this part time, and nothing to scoff at! Many photographers aspire to make more do this as a full time profession, but we’ll say you just want to be a middle of the road part time photographer. We have $3100 in expenses (at minimum!) and 690 hours/year (many spend much more than this!) based on 40 clients/year.

So 690×20 = $13800 is your yearly wage per hour
+ $3100
= $16900.

But you can’t stop there, since taxes are taken out! We’ll say that your taxes are taken out AFTER your business expenses. So if you have 30% tax rate, you’re looking at needing to make $21814 per year.

$22814 – $3100
= $19714
- 30% in taxes
= $13800.

Now divide $22814 by your 40 clients – and you’re looking at needing to make an average of $570.35 PER CLIENT.

And let me tell you – this is a BEST CASE scenario. Most small businesses don’t turn ANY profit for the first two years or so. This makes a $150 DVD not look so attractive anymore, does it? Not when it means you’re paying money to work for them – or making less than minimum wage!

*Please note that only a fraction of actual costs are listed here. This is truly a BEST CASE scenario. Many other sites will tell you to take what you want to make and TRIPLE it to include all of those costs you forget about and never expect to have when you’re starting out.*

And sure – you may just enjoy it. And you may say that you don’t mind working for pennies because you don’t need the income. And while I can’t argue with that – I do have to say it’s disappointing that someone would devalue the market and lessen someone else’s paycheck because they didn’t need it themselves. Why not work with a photographers’ charity or donate the money you don’t need? You’d feel great about it, and you wouldn’t have to worry about undercutting the photographer whose livelihood depends on it! Ultimately this is a free market – but I encourage you to charge what you’re worth and not what you *think* you’re worth. Now of course when you’re building your portfolio, you’re not going to be charging the same rates as the person next door who has been in business longer and has a solid portfolio. But what I personally recommend doing – work up your rates and what you’d like to be charging as a full-fledged photographer, and then discount it and let people know that it’s discounted. That way – you’ll be telling your clients that you won’t be working at this rate forever, and you won’t condition people to expect work for super cheap. They’ll know that in a year or so you’ll be charging market rates for your work.

Please note that I think there are places in this world for many different business types & pricing structures. This post is merely a breakdown to get you thinking and to help give you ideas of how to breakdown your prices for your individual situation. :)