As a photographer who happens to also have a Finance degree, I am wildly passionate about the business side of running a photography business. As much as I love each and every session with a precious brand new baby, I ALSO love crunching numbers, setting goals and making financial projections for my business and family.
I know, I know… SO NERDY. But guys, I can’t help it. Numbers have always been my love language, and as photographers, it’s so important that we embrace the business side of things and truly understand what we are spending, and what’s coming in so that we price ourselves accordingly!
Even with a background in finance, figuring out my pricing was one of the hardest things I had to do as a business owner, and honestly, I REALLY messed it up in the beginning.
When I first set pricing for my sessions and offerings, I used all sorts of non-mathematic methods to do so. Comparison, guessing, numbers that “sounded good” at the time. Eeeek. I literally came up with pricing out of thin air, and it really hurt me in those early days.
I hadn’t factored in the basic costs of running a business when I set those prices in the early days. Things like liability insurance, taxes (hand to face!), local and state business licenses and fees, software, education, equipment investments and repairs, oh and my most valuable asset of all… my time. I spent almost everything I made to grow my business in the first year, and barely made a living wage going into the second. I knew something needed to change.
There’s some weird thing that happens to creatives, I think, that doesn’t happen in most other businesses. There’s this strange sensation as a photographer of “guilt” over charging a certain amount for our services. I think photographers have a tough go, because “fancy cameras” and easy access to an iPhone camera can make “going pro” as a photographer intimidating. It’s a crowded market, and it can be tough to really break into it. It can make determining prices really tough, when some enter the market operating non-legal businesses and offering sessions for practically pennies. Unfortunately there is just no way this is sustainable, and it’s really important to go out of the gate with a solid pricing structure, or implement one as soon as possible.
The truth is that being a photographer is so much more that the gear and photos. It’s about how you can evoke emotion and connection with your subject. Your clients are not hiring your gear – they’re hiring YOU! They want your unique perspective, your session experience, and your personality to help their family come together and capture them at their best. You have a gift and talent, and that is worth more than any iPhone photo can ever capture!
So how in the heck do you figure out how to put a price tag on that value?
First, let me tell you how NOT to do it! Your pricing should not be an emotional decision, or based on what others are charging in your area. Sure, you need to understand your market and your ideal clientele, but looking at the pricing of your competitors and basing it off of that is not the way to go. You have no idea what their business costs are, what their circumstances are, or whether or not they’re bringing home a living wage from what they charge, so don’t look to the competition to set a price.
The truth is that pricing is actually really simple. It’s a matter of understanding your cost of doing business and calculating what you’d like to take home, or NEED to take home from there. You are a business owner, and you must charge enough to cover your costs and your time to make that business keep on keepin’ on. You also have a very unique skill that only YOU can offer, and there is so much value in that that needs to be worked into your pricing.
If you understand your expenses, and you understand what you need to make to support your lifestyle, you have a simple, no-nonsense framework for pricing yourself accordingly.
CODB + What You Want/Need to Take Home = Price
When I changed my pricing in the middle of 2018 after doing this worksheet, I’ll admit – I was scared. It was a big jump for me. They were numbers that felt “big” and I worried as to whether anyone would still want to hire me.
But the truth is that I knew my value was finally represented in these prices. I wasn’t comfortable with hustling so hard at my current pricing, and bringing home so little for my time, energy, and all the hours spent away from my daughter and family. I was sacrificing my own family time for the benefit of my clients, and I couldn’t continue like that at what I was currently charging, which after taxes and expenses, came out to around minimum wage.
When I realized I was taking home around minimum wage for my work, I became much more confident in my new pricing structure. I knew that I could now pour my heart and talent into each and every client, while also knowing that this time away from my family was going to be so worth it for us.
Once I finally priced myself to profit, it was a game-changer. I booked a little less, because yes, I was officially out of the budget range for some, BUT I took home more all while spending less time away from my family. I felt renewed in my work, and I felt like I could invest more time and heart with each of my clients. I was finally making a profit in my business, and paying myself what I deserved for my time and talent.
Because I know numbers don’t always come easy, I wanted to share a simple worksheet with you that will help you have a better understanding of this simple formula. The All-Inclusive Photographer Pricing Worksheet will help you understand what your expenses are, and allow you to compare them to what you’re currently charging, as well as project what a price increase would do to your profitability.
You can plug in different types of sessions you offer, how many you’d like to do in a given year, the price you are currently charging, and it will tell you what you are taking home after expenses from each session on average. You can then copy the worksheet, and create a “forecast” of what it would look like if you adjusted your pricing for those sessions.
This tool has been incredibly helpful for me as a business owner. It helped me take the emotion out of pricing, and price myself like any functional, profitable business. I hope it helps you understand your pricing structure, and make a confident decision on any changes you might need to make!
There are a lot of really great ways to structure a photography business. This worksheet was made with “all-inclusive photographers” in mind! This means that your session fee includes the session and digital files in a flat fee. At this stage in life (a mom of toddler plus a baby on the way + full time photographer), this is the business model that makes the most sense and works for me. This worksheet won’t work for you if you are offering IPS (In-Person Sales) or a package model, however the principals of cost + profit = price are the same! You simply must know your costs in order to set your price.
It’s also important that you factor in ALL your business related expenses. Things like insurance on your equipment, liability insurance, local, state and federal taxes, business licenses. Even things like investments in education that are ultimately for the benefit of your client are business expenses that should be worked into your pricing. Be sure you list each and every expense, and also consider if you have any per session fixed expenses that you need to add to your total.
Please note I am not a financial professional, and this is not to be taken as professional financial advice. I’m simply sharing a tool that helped me understand how my expenses affect my bottom line. I hope you find it to be a really useful tool in your business, and it helps you understand where you fall, and where you need to be to compensate your self for your hard work and dedication to your business!
Want to get a better understanding of your expenses and how it affects your bottom line? Enter your details below, and I’ll send it right over!