First of all… HAPPY FREAKIN MONDAY. Do you feel like I do about Mondays too? UGH. I figured I would start the morning off right with kicking off Build your Biz MONDAYS again! I’ve got September 2013 Monday’s all planned out JUST for you… we are going to be hitting up a new Photoshop series called “Rock YOUR Photoshop Skills”. We will be touching on subjects such as the liquify tool (including videos!!! woot!), BATCHING, actions, and more! Are you totally stoked? Cause I AM TOO!
But first we start off with today’s post… How to Price your Photo Biz. Effectively. Tactfully. and with actual PROFIT in mind.
Today’s scenario is only a scenario. It may be VERY real to you- and if it is… then awesome! Use this model! If you strive for higher or even lower… to each is own, folks. Just remember this- You are in business for a reason. You are NOT in business to be a starving artist (unless you truly WANT to be a starving artist, which seems to be a trend here in Seattle). YOU ARE THE ONLY ONE who make your business model happen. Not your mom. Not your business partner. Not your clients or potential clients. YOU and YOU ALONE.
On that note… here we go…
You need to factor in your overhead costs. Overhead costs are what it costs to run and maintain your business
- rent on a studio
- bills to run the studio (phone, internet, power, cable, water, trash)
- LIABILITY INSURANCE (dude… if you don’t have insurance, get it. The PPA has some very affordable insurance)
- Equipment Insurance
- Insurance for your studio
- Business Licensing
- Lawyer fees
- New Equipment
- Equipment Maintenance
- Client Gifts
- WAYYYY more….
are you having a slight heart attack yet? Bet you thought it was easy just to pick up a camera and call yourself a photographer at one time (and if this is that time… I would love to see how pale you are right now reading just the OVERHEAD for a legit business owner)
Next you need to figure out your desired salary. How much do YOU want to make? Be realistic here too… don’t think to yourself- dude, I am going to make 250k in SALARY this year as a photographer. Think of the following to give yourself a base salary-
- how much are my living expenses?
- how much do I want to put away in savings?
- how much do I want to put in retirement?
- how much are MY HEALTHCARE premiums (yes… us self employed folk really get kicked in the gut because we are small guys when it comes to big fish in the healthcare pond)
- how much vacation time do I want each year? YES- PLEASE PLEASE PLEASE give yourself a vacation or two. Why work your tail off to miss out on the fun things in life? And as photographers… we tend to PHOTOGRAPH those fun things in life for our clients, but not our own.
Ok- do ya get my drift here? Be realistic.
SESSIONS PER MONTH/DAYS WORKED PER MONTH
Next, you need to figure out how many days a year you want to work (which truly falls under your vacay time). Then you need to set a limit on HOW MANY SESSIONS you want to photograph a MONTH. Again.. be realistic folks! Y’all know you can’t photograph 50 sessions a month without just DYING of exhaustion. Plus, what kind of customer service would you personally be giving your clients? I like to keep things simple on my end- no more than 5 clients a WEEK. My MINIMUM is 12 clients a month, specially depending on what I am photographing. Birth… I can’t imagine shooting 12 births in one month. I would die. Newborns and Babies- yes, I could photograph one every day, but I am also being realistic with my expectations as well.
OK… so now I’m going to show you my formula.
Lets say my overhead is 50k a year and I want to make 75k a year for myself. I want to give myself 2 consecutive days off a week (even if its not the weekend cause we all know us photogs shoot on the weekends often) and I want 2 weeks off for vacation and 10 sick days per year. That means I would generally be working 245 days a year.
So here is my formula for you.
- OVERHEAD (50k) X SALARY (75k) = 125k
- 125K / 245 DAYS= $510.20 NEED TO EARN EACH DAY WORKING
- Take your daily earnings and times them by how many days per month you will work, just to check that your on the right track- 510.20 x 245 days = 124,999.00 (yes… I am off by a penny. Give me a break)
- Divide 125k / 12 months = 10417.00 a month that needs to be earned.
- Now take that 10417.00 and divide it by the number of sessions you want MINIMUM per month- 10417.00 / 12 = 868.05. That’s your gold number folks.
- 868.05 PER CLIENT is what you NEED to make to achieve the financial goals per this situation.
What does that mean for you? It means that’s what you NEED to make from each client per month, based on 12 clients per month. Whether you choose to go digital or session fee and print requirements, that’s totally up to you. And remember- this is based on a full time photographer with a studio. Clearly a super small studio, considering Econ 101 for Business owners is 200k a year in profit… but that’s a WHOLE other series to write about! And I will, if you want! You just let me know.
I hope this helped in some sort of a fragment for you! Please ask any questions!