If you have a new “photography business” and have begun charging clients for your work, you are taking the first step in setting your business up for success. Congratulations! As someone who transitioned my hobby into a profit-making entity a few years ago, I know what a big leap of faith this can be both financially and emotionally. Starting any kind of new business is no easy feat.
But I want to talk about profit vs. income in this article. Why? Because I think that many professional photographers (many, not all – this may not be you) don’t charge enough for what they do and have absolutely no idea if they are turning a profit.
Profit vs. Income
I have many friends and acquaintances that are in different stages of their photography business and what I know about how most of them charge their clients is that it is an incredibly emotional decision. Here’s what I mean. Have you ever said to yourself: “How can I possibly justify charging $X for an 8×10 when Walmart prints them for $Y?” or “I won’t get any business if I charge $X for my sessions because there are other photographers in my market who are charging less.”
Sound familiar? While it’s certainly important to know your market and what it can sustain (for instance, a photographer in New York can charge far more than someone in, say, Biloxi, MS – no offense to Biloxi), it’s also important to understand what is a profit-making pricing structure for the way you do business. No two photographers are alike.
When I first started out in my photography business, I pretty much leapt-in feet first, probably like many of you. I had a background in marketing and business and thought I would just feel my way around for a year or two while I continued my full-time job. Even with my business savvy, I was a little naïve.
Three years and a ton of expenditures later, my eyes are wide open. You see, I anticipated many costs, like new camera equipment, lenses, workshops and courses – basically, the fun stuff – but I had little idea about what lay ahead of me as I continued to try and grow my client base.
Branding, websites, computer software, computer hardware, offline storage, online storage, marketing pieces, samples, props, gas, advertising, site fees… these are just some of the less sexy expenses that my brain didn’t connect with when I started Memories by Michelle.. Partly because I wasn’t sure I would need to worry about them if I fell flat on my face and partly because I was so wrapped up in enjoying all the fun stuff. To be honest, I didn’t want to think about them.
Now, when I look around at the thousands of photographers in what appears to be a fairly oversaturated marketplace, I often find myself shaking my head when I see their pricing. How the heck are they turning a profit? How are they paying their bills? I honestly don’t think many of them are.
Are You Covering Your Costs?
To explain why in real numbers, let’s do some basic calculations using some typical annual photography expenses for an on-location, portrait photography business based upon my own experience. You may pay less or more than this in some categories, but this will give us a baseline to work with.
Example annual expenses for a portrait photography business
|Online/offline back-up and storage
For all those terabytes of digital images you don’t want to lose in a power cut.
|Website and/or proofing site Hosting Fees||$600|
|Equipment repair and servicing
Sensor cleanings and other such services to keep your images tack-sharp
|Equipment and liability insurance
In case you fall into the lake while getting that killer shot of a toddler and wreck your camera or accidentally trip granny, resulting in an E.R. visit. Don’t have this? You should!
That new lens, a new flash, an updated camera. This is an adjusted/conservative average, taking into account that you probably don’t buy thousands of dollars of equipment every year but probably every few years. Remember, good DSLRs are usually $1,000+ and same for lenses.
|Professional education and memberships
PPA memberships and workshops/courses to keep you on-top of your game. Again, like the equipment, an adjusted average.
|Advertising, Marketing and Promotion
How are you getting your name out there? Your circle of friends can’t sustain you forever. This includes promotional cards, business cards, work samples, online and print ads, and any promotions you might do to bring in new clients.
A new camera bag, parking fees at that state park, gas, office supplies, tax filing fees, etc.
Alright, that looks fairly manageable, right? Now let’s take a look at some pricing scenarios to see what it would take for you to just cover those costs with session fees alone.
If you charge:
$50 per session = 150 sessions a year or 12 a month
$100 per session = 74 sessions a year or 6 a month
$150 per session = 50 sessions a year or 4 a month
$200 per session = 37 sessions a year or 3 a month
As a new photographer, I’m guessing you’re probably averaging 2-3 sessions a month, hopefully more but, again, I’m being conservative. So, you’ll need to be charging somewhere between $150 and $200 a session to cover just your hard costs, recognizing we still haven’t covered paying YOU yet (i.e., profit).
Will your market sustain that number? What are other, established photographers charging in your market? Many clients are wary of paying a large session fee, especially if they’re new clients; they’re not entirely sure they’re going to love you or the images.
Are You Paying Yourself? Yes, You Are Valuable
But let’s talk about paying YOU right now. And bear with me, I know this is a lot of numbers and you’re a creative soul at heart, but you can’t ignore this stuff forever, right?
A recent article on msnbc.com said that the average rent for a two-bedroom apartment in the U.S. is $771 per month, with many cities being significantly more and some being less. Assuming you are in an average market and of modest means and ambitions, you still need to make another $28,000 a year (3x your rent, which is what most landlords require) in order to get a roof over your head. (Take into account also that $28k is only $13 an hour for a 40-hour work week.)
So, at this point, you have three choices:
- Do more sessions, working harder.
- Charge for prints or digital negatives.
- Find another source of income.
I’m not knocking hard work, but I’m guessing most of you would prefer not to squeeze in another 12+ sessions a month just to make ends meet in your two-bedroom apartment.
Of course, you could have another job to pay the bills or be supported by a partner, but I’m going to eliminate this option and here’s why: it doesn’t matter what you earn elsewhere. Your business needs to be self-sustaining. If you cannot pay yourself, the sole employee of your business, enough money to get-by from your photography income, you don’t have much of a business model.
Which just leaves #2.
Many photographers are giving a full CD of all images included in their session price,. I see some in my own market doing this for $50 a session. This may be you and, if it is, I’m not going to knock your business model. That’s not the purpose of this article. The point of all this is to illustrate that you need to be paid.
So, how much do you think your time is worth? Do you really want to be scraping by in that two-bedroom apartment? The notion of the “starving artist” is romantic until you’re living it.
Treat your passion for photography like any other business. Because…
The bottom line is this: if you want to have a profitable business, a business that enables you to pay your bills and increase your income by doing quality work (just as you would hope to be able to if you were an employee of any other company), you need to be charging your client appropriately for sessions, print products AND digital negatives.
And you can lament all day about how your clients won’t pay that kind of money… how you’ll get no business if you don’t give away everything and the kitchen sink for almost nothing. The harsh realities are:
- If you don’t place a high value on your own expertise, artistry, and TIME, neither will the people hiring you.
- If your work really is good, if you’re really studying your craft and producing quality services and images for your clients, you should be able to earn a living at it. There are many photographers out there who are living proof of that. If you can’t earn a real living as a professional photographer, then maybe you need to take a step back and re-evaluate.
But, you scream, “I love photography! If I want to charge $50 for a 90-minute session, plus my editing time, plus all the digital negatives, who are YOU to tell me I should not?”
I’m not saying you can’t. I’m not promoting a specific pricing model here, just prompting you to think of your business as just that – a business. But you don’t have to listen to me at all. In fact, I suspect many of you will disagree with me passionately; however, before you rush to argue with me in the comments section, I want you to think about this: if every photographer out there was really committed to providing quality products and services to their clients; really valued their expertise, artistry, and time; and charged appropriately for it, which member of your competition, exactly, would your clients be going to that would offer them everything for virtually nothing?
What are you charging for your services right now?
Have you done a business analysis to determine if your pricing is realistic given your market, the services you provide, and your financial goals? I’d love to hear your take.