The issue of pricing photography services is a hot button in today’s digital world.
A lot of beginner or emerging photographers have no idea what to charge for their work. They often look for strategies and formulas.
There are some standards out there, and factors such as where you live can influence your prices. But the one number you need to know before you can create a photography pricing strategy is your Cost of Doing Business, or CODB.
Read on to find out more about the cost of doing business as a photographer.
Consider Costs When Pricing Your Photography
The advent of digital has made the barrier to entry into the photographic industry low. It was once the domain of highly trained shooters. Now many amateur and self-taught photographers can start charging for their services.
Many beginners have no idea what they should charge for their photography. They often end up pricing their work too low.
There is a perception among consumers that photographers are only button pushers. And that anyone can take a good picture.
It’s true that digital technology has made learning photography easier. But it hasn’t become any less expensive to run a photography business. We may not be paying for film anymore. But there are other costs such as various software and apps required to run a photography business along with the traditional costs of lighting, gear, and insurance. These make it just as expensive as ever to run a photography business.
This is something that is often not considered by the public. A lot of photographers don’t think about it either when they’re starting out.
The truth is, running a photography business is incredibly expensive. In fact, the more established a photographer you become, the higher your cost of doing business becomes.
What Is the Cost of Doing Business?
The cost of doing business, also known as CODB, is the sum total of how much it costs you to run your business. It’s your monthly and annual business expenses averaged out.
Your cost of doing business brings you to zero. Anything you make over that amount is your profit.
When you start out in shooting professionally at any level, you must know how much it will cost you to run your business. Otherwise, you won’t be able to charge appropriately for photography services.
Too many photographers are focused on what their competitors are charging. They try to figure out the going rates in their marketplace based on that. And they don’t crunch the numbers to see how much money they need to run their photography businesses.
Photography is not like a lot of other solo freelance businesses. For some, all you need is an Internet connection and a laptop.
For photography, you need to pay for a lot of stuff, even when you do your best to keep your expenses low.
So sit down and write out all the expenses you need to pay for in your photography business.
The list might look like something like this:
- liability insurance
- worker’s compensation insurance
- health or disability insurance
- web hosting
- backup drives
- memory cards
- lens filters
- lens hoods
- lens cleaner
- grey card
- colour checker
- colour calibrator
- Creative Cloud software
- contract signature software or CRM
- accounting software
- accounting services
- print portfolios
Notice this list doesn’t include gear. Presumably, you already have some gear, but you will need more.
In fact, you’ll find that as you increase your business, your need for gear will grow. A lot of photographers are fond of saying that it’s not about the gear, but the skill of the person taking the picture. This is true to some extent, but not having the proper gear can hold you back in your career.
So the question is how much is all this going to cost you, and how much money will you need to make to pay for it and turn a profit?
Doing this exercise can bring the point home. Can you sustain a business with these kinds of expenses by charging a few hundred dollars for a photo shoot? It’s not likely.
It will mean that you have to work incredibly hard to just get by.
A good example to illustrate the CODB is the restaurant business.
When you go to your favourite pub and pay $16 for a burger, the restaurant is not making a $12 profit on $4 worth of food. All the costs of doing business are factored in. Everything from rent to insurance to staff and the accountant are paid for before the restaurant can make a profit.
These slim kinds of profit margins are why restaurants go out of business all the time.
Note that your cost of doing business may look very different from that of another photographer. A natural light family portrait shooter will not have the same expenses as an advertising photographer with a studio.
Determine Your Rates to Meet Income Goals
When you’re setting up your income goals and determining your pricing, you also need to consider your living expenses as well as your cost of doing business. Plus, you’ll need some savings to take you through the lulls in business. There may be many in the first few years of your business.
In the beginning, you may not be able to justify very high rates. But you still need numbers that reflect your value and don’t undercut everyone else.
Also, a lot of your business could end up coming from regular clients. It can be difficult to make significant increases to your prices. You risk alienating regular, repeat business.
Some pricing models suggest that you determine how much you want or need to make each year, how many weeks you want to work in a year, and how many shoots you want to do in a month to come up with a number for what to charge per shoot.
This can give you an idea, but the fact is you may not have a choice about how many clients you’ll be able to get.
Yes, how many shoots you want to do in a month is a projection. But the reality is that it might take you a long time before you’re shooting for clients every week.
Some genres of photography (like food photography) demand a lot of pre-production and post-production. Shooting more than once a week may not even be feasible. Also, don’t forget that there will be many moving parts to running your photography business that will take up a lot of your time.
The bottom line is, you need to price yourself high enough to pay your overhead and living expenses, turn a profit, and put some aside for a rainy day or to upgrade your gear.
Before you can price your services, you need to know your cost of doing business. Until you know that, all the photography pricing strategies in the world will be irrelevant.
Now that you’ve worked out your cost of doing business, check out our post on marketing for photographers next!