Pardon me for saying this, but not a good deal of photographers quite know how to price themselves. They either overshot, asking for more money than what is reasonable, losing clients in the process or worse, undercharge, thereby losing a good deal of money. Either way, they lose money every time they meet clients or work on assignments.
The fact is even before you make that first cold call or send out that $5 Starbucks gift card to your prospect with a note, think about this – “Do I have a pricelist for my services that I can quote to my clients?” It can save you a lot of heartburns later on.
There is never a second chance to make a first impression. So why take a chance? As soon as you are decided that you are going to charge clients for your services take a pen and a paper and start making your calculations.
The most basic mistake that photographers make is that they concentrate on the photography part of the business, thinking that they can defer the accounting side of things, like pricing for example for later. It should be the other way round.
Hands down, if your marketing efforts are honest enough, you will get that first paid assignment. It’s just a matter of time. The toughest thing from there on is to keep things rolling. What you wouldn’t want to do though, is over or under charging.
If you over-charge you stand to lose one client. If you undercharge and that client decides to continue working with you, you will lose money on every assignment that you do for that client from thereon. It is not easy to renegotiate prices with existing clients once you get on board with them.
So, we come to the realization that pricing is an important aspect of your photography business. As a matter of fact for all businesses. But what is more important is effective pricing. To do that you will need to have a good idea of what constitutes your business expenses.
These would be your fixed costs –rent, salary of assistants (photographers), salary of office staff (non-photographers), maintenance charges etc.
Variable costs –
These make up the variable component of your business expenses – utilities related to office, entertainment, traveling, consumables, hire charges of models, power, telephone, and internet. Variable expenses vary depending on the volume of business that you do. So, fuel charges, power, telephone etc. will all vary. Even salaries can go up or down as you hire more people or let go of some.
Agreed there are a whole lot of other expenses, but this is just a rough and ready guide, just so that you can get the drift. Once you have been able to figure out the amount that you will have to spend under each head you can then make an assessment of the amount of money you need to make in a year.
To all these add your personal expenses. If this is going to be a full-time thing for you then you need to add your personal expenses as well. Things like mortgage of your home, any credit card payments outstanding, loans, and of course the day to day costs of running your household should all be charged. Add to that the savings for your retirement.
Now, the key to everything is the magic number. That magic number is the sum total of all your personal expenses + your business expenses for a year. Once you arrive at that number, say it is $150,000, divide that by the number of days that you would be working.
Don’t forget to deduct the weeks you would be on vacation. Also, keep at least two weeks in hand as contingency. Your variable costs for those four weeks will change slightly. So, while your power, telephone and other direct expenses will drop significantly, some costs will still be applicable.
So that comes down to 11 months in which you have to make 150,000. Divide that by 44 weeks and that’s about how much you need to make every week in terms revenue to cover everything. Now you know whatyour price is for a week, you can calculate the same for a day or even for an hour.
So, next time when you meet a client, just calculate the number of hours that you need to put in to complete the job and you will figure out how much you need to charge. You can even quote an accurate amount for the extra hours that you put in.