There is no magic calculator that tells you how to set your prices. If only it were that easy! Pricing your work is dependent on many variables. When deciding to take on the role of CEO to your very own business you also must dedicate time to business planning. Here are a few things to consider when putting your pricing list together.
Competition: Your competition does not pay your bills, this means do not worry about their pricing. If your business expenses are not being met by your business income you will quickly be out of a job. This is very important to remember when trying to price match other local photographers.
Furthermore, your clients are not their clients. The clients you are trying to attract aren’t always the same as someone else offering a service. Choose your pricing with the following in mind, your business in mind and your success in mind will determine your pricing plan. Also, do not try to beat out your competition by being cheaper! You will only hurt your business by doing this and the possible friendships of other photographers in your area.
Collect the data!
TIME IS MONEY!
Client time: Not only do you spend time photographing but you also invest your time in communicating and planning sessions. This is an important thing to consider when putting your pricing plan together. Any time you spend away from your family should be paid for.
Editing time: When putting a price list together the one thing that is not considered often is how much time you put into editing a session. Not only are you losing money if you are spending obscene amounts of time editing, but you are also turning your passion into a job. Shortening your editing workflow is necessary when trying to make a profit. If you find your editing time is extensive find an online workshop that teaches you to use your software efficiently.
Travel time: Traveling is part of our business and this time should be a factor in your session price. I find it necessary to have a clause in my pricing that says that any traveling over a certain amount of miles has an extra charge. This isn’t because I want to nickel and dime my clients, it’s because time is money.
EXPENSES, EXPENSES, EXPENSES – OH MY!
Taxes: It is important to remember that when pricing out a session you need to consider that approximately 40% will go towards taxes. If you do not consider this first when putting a price plan together you will short change yourself. People often think that doing a mini session for $50 is great but when you are giving nearly half of that away to the government and then spending hours on editing you actually have a loss!
Marketing: Write down the amount of money you will spend each month on marketing your company. This cost should be absorbed back into your client pricing. Marketing is a necessary expense in business because you can not just rely on word of mouth. Great marketing ideas are advertising on Google, Facebook, local papers, local schools, and sending out postcards to those in your area.
Equipment: Our industry is not cheap if you want to be a professional photographer! It isn’t uncommon to spend thousands of dollars a month on new lenses, camera’s and gadgets. Remember when putting your pricing plan together that you must be able to pay yourself back for this equipment.
Misc charges: Running a business also has the daily expenses including a cell phone, photo gallery, website, hosting, business cards, etc.
Now put it all together!
What do I do with all this information so that I can ensure I am charging enough per session and actually making a profit? A little bit of math will put all of this together. Grab a sheet of paper and a pencil, this is going to take a bit of jotting down! Here is an example:
Monthly Business Cost List (example):
- Cell Phone: $59.00
- Equipment purchases: $500 (estimate)
- Photo gallery: $15
- Hosting: $6.99
- Marketing: $100 (estimate)
- Business cards: $10 (even if you don’t purchase monthly still add it in by figuring out how much you spend and how often, then divide up the months)
- Other charges:
Total: $699.99 (estimate)
Now give yourself a minimum amount of monthly sessions you would put towards this figure. For example if you start out saying you will do one session per week. Take $699.99 and divide that into 4 (total sessions per month) = $175 for each session.
Time Spent List (example):
- 30 minutes for consult and email reminders
- 30 for location scouting
- 1 hour for shooting
- 3 hours for editing
- 1 hour for gallery preview with client and ordering
- Other – list other things that you would do and the time it takes
Total: 6 hours per client (estimate)
How much do you feel you are worth per hour? Come up with an hourly pay you think you are worth. It’s important to remember that your time is money! For this example we will use $25 per hour.
Now put it all together to find out what you should price your work!
Put to work what you just learned
The oo-la-la formula:
Time x your hourly cost = total personal pay
Business cost per month / amount of monthly sessions = total business cost per session
= Total Session Price (not including prints)
6 hrs x $25.00 = $150
$699.99 business cost / 4 session minimum = $175
Total = $325 per session
Ta-da, you now have a starting point for your pricing! Of course you can adjust this a bit to include all the things I forgot to mention but this is the most effective way to put a price tag on your work. Remember, using your competitions numbers will not pay your bills! You are a business and you have to survive in this industry so do not cut yourself short because you want to get all the clients. You will over work yourself, take time away from your family and not make a profit if you are doing jobs for less than you are worth!
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