Photography has long been one of those industries where costs and pricing vary wildly and has many misconceptions.
Digital photography has seen the photography in general boom, where now most people have the equipment, be it a phone or camera, that is capable of producing decent images.
With businesses engaging in social media more and more, it is not unusual to see requests for photography services, and indeed the very nature of social media creates the need for more photographic services.
When quoting for photography, it is important not to sell yourself short, you still have expenses, you still have to earn a living. You need to take account of everything that will affect you making a profit, not just the equipment you purchase to do your job, time is not free nor is fuel for your vehicle, the insurance you have needs to be paid for and is an overhead to your income.
Your burden rate is perhaps the most important cost, which is how much an hour of your time actually costs.
Things to consider:
Overhead Costs per Year
- Cost of equipment, photographic, computer, including maintenance and servicing
Example: If a camera cost you £3000 and you expect it to last you 3 years, that is a cost of £1000 per year.
- Rental, Mortgage – Home, Premises, Equipment
- Gas, Electricity, Telephone, Broadband
- Software, Professional Body Subscriptions
- Website and Marketing costs.
- Banking costs
For this exercise, let us assume you have totaled the above costs for the year and have reached a total of £20,000 costs for the year. In reality, it will more than likely be more than this and you should allow for a realistic amount.
Be realistic for your available hours, while you may well work 15 hours a day, you should not have to (unless you really want to), So say 40 working hours a week (including any travel). And 48 weeks a year, allowing for time off. The total hours available are 1,920.
Our Example Burden Rate
£20,000 costs divided by 1920 available hours = Burden Rate of £10.41ph
This tells us that for every hour you work you would need to charge £10.41ph just to cover your costs, you would not make a profit at this rate. You have living expenses and you have to live your life.
Selling Rate / Margins
We are selling your time and expertise, you may well have thousands of pounds and many years of investment to get where you are.
A 30% margin would make our selling rate per hour £14.87 with your burden cost of £10.41 our profit would be £4.46.So while a 30% margin may seem a lot, it would only make you £4.46 for one hour’s work.
The calculation to work out your margin is shown below.
( Sale – Cost ) / Sale = Margin
Calculate your time
It is important to allow for and include all your time when pricing, often the actual photoshoot is the smallest element of the job. Time to consider:
- Administration to price and quote
- Travel time
- Actual photo shoot time
- Associated materials handling time
Materials and Other Costs
We also need to consider all other costs, things to consider:
- Items purchased specifically for the job
- Printing costs
Missing any costs of your job will erode your margin.
Once you have completed your pricing, you always have the option to increase or decrease your margin depending on what the market and conditions present.
There are many factors that can affect how we gauge the final price, e.g. complexity of job, unsocial hours, distance.
A loss leader is where a service / product is sold for less than your ideal selling price, this could be as an introductory offer to a new client, or maybe to get a tie-in from a client for future work.
We should not use ‘loss leading’ to win a job where there is no benefit to ourselves. Offering your services for free or with little profit for yourself, devalues your own work, and even as a loss leader when your next job comes along from that client and you price it as it should be, you may well find they are not prepared to pay., and they balk at the increased cost from the previous time.
Where a client has an unrealistic budget that is below your own expectation either decline and move on or offer a reduced service to fall within that budget.
Sometimes there may be occasions when you could work for little or no cost, e.g. benefit in kind, in exchange of goods, where you receive goods or services in return for your services. The important thing to remember is, it must be beneficial to yourself.
To help with pricing I have created a spreadsheet complete with formulas to show you your pricing and margin options. Adding all your cost elements and ensuring you make the correct margin on each element
Listing all your costs makes it easier to ensure you have not missed anything and help ensure you make enough money on each of them. Saving each sheet will allow you to reference it when quoting similar jobs.
An additional benefit in pricing your jobs in this way is that your quotations appear stable to the client, with no wild swings from cheap to expensive, and if challenged on your pricing will allow you to easily revisit and make adjustments if need be while always ensuring you make a profit.
Now I could offer this spreadsheet for free, but that would go against all I have said above, so I have made this available to purchase and use and modify for the paltry sum of just £2.50
The spreadsheet can also be uploaded and used with Google sheets.
*Note, the spreadsheet is sold as a template only and it is up to the user to ensure the correct details and base costs are entered. No liability is accepted on its use.