I was chatting with a good friend of mine the other day about pricing. That is still, for me, an overwhelming topic and I’ve been doing this for a number of years now… Actually, my Sister who has been a hair-stylist and make-up artist for 10+ years, was just a mile up the road talking to our mother about the same exact thing… pricing. Anyone who works in the service industry feels like they are always caught between two rocks and a hard place. One boulder is labeled “Expenses”, the other boulder is labeled “Consumers” and you are the one in the middle trying to keep these two rocks from crushing your business into sand. If you let your expenses drive your pricing, then you feel the consumers start to roll in on you like a heavy weight. Then, because clients feel you are too expensive, you strive to compete and drop your price. Immediately, you feel the heavy weight of delivering a quality product without the income to make it happen. It’s a stressful existence and it sucks. A good friend of mine, who runs a successful spa business, taught me something that has been her success for 20 years and that is ***numbers don’t lie***.This may seem obvious but it wasn’t obvious to me. I thought I knew what my costs were. Seriously… Sit down with a real sheet of paper and a calculator and record every single thing it takes to run it. Every thing. Realistically tally it all up ***including your time***. I think that is one of the biggest mistakes photographers make when starting out. They don’t consider their time as an actual expense, but that is your biggest expense. When I first started in the photography business I didn’t think I had many expenses. I mean, I got the camera as a gift and I got some business cards on Vista Print etc… but my husband (who is a banker) started pointing it all out to me. When I went back and started looking at the things I was paying for there was actually a LOT and I was in the hole. What I was charging was not anywhere near the amount I needed to get me out of that hole.
Let me ask you – Did you just invest 4 grand into a new camera and lens? Did you just invest 100.00 in a workshop or CreativeLive course? Are you paying 10.00/month for Photoshop and Lightroom? Have you purchased props and wardrobe and made backdrops in the last few months so you can do a shoot? Then don’t even think about charging 35.00 mini-sessions. It would take you 115 mini-sessions just to make enough money to pay for the camera. If you do one shoot a day that is over three months of working with no profit and that doesn’t even figure in the other expenses you have, such as location fees, hair and make-up artists, shooting wardrobe, gas and travel expenses and the rest of the stuff on this list… 75.00 for a CD? Really? Crunch those numbers! Let’s just pick some numbers. Say you want your salary at 30K and your expenses are 10K – That means you will have to do 533 shoots. Ask yourself… is that physically possible? That is working every single day doing one and most of the time two shoots a day with no time off for a year. Do you have that many clients you can do that? Once you figure all that in, you may very well work an entire year and never see one dime of profit. It was at this point where my spa owner friend was able to beat her competition and why she has been successful for over 20 years. Numbers. Don’t. Lie. Step OUT of your emotional brain and into your logical brain. The IRS doesn’t look too kindly upon business owners who don’t show a profit year after year after year. After three years you will be red flagged and put on their audit list. Trust me. It has happened to a good photographer friend of mine. Sit down and crunch the numbers or you will end up with nothing but a very expensive hobby.
I saw this graphic this morning and decided to share it forward. But this graphic isn’t for my clients. This is for my fellow photographers. The buck stops with us. Here is a short list of things you must take into consideration… and actually there are a few not on this list – I am sure you will find a few missing yourself once you sit down and start to figure this out…
This is not an easy thing to do but every successful business owner has to do this number crunching. It is vital to your success. Want to make 40K a year? Figure that into the cost of running your business. Want to be able to afford family insurance? Figure that into the cost… I could go on and on but you get the picture.
I know the next question coming because I have thought the same thing… “But if I charged what I need to make enough, I will be more expensive than the other photographers in the area and nobody will hire me?” First of all – the other photographers will be out of business in six months and secondly – Have you ever been to those hair salons that give you a peppermint scalp massage? Gosh, I love those salons. I would look forward to my trip just for that service. THAT little gem right there is a value added service. This is where it gets fun. You can open the door and let your creative brain back in now. Go back and read my post on “Knowing Your Competition”. Find out what these successful businesses are doing to attract clients. Do they have a luxurious spaces? Do they have complimentary digital albums for their client’s smart phones? Do they offer buy one photo package get another one 1/2 off for families?
All these things can be figured out AFTER you run the numbers but I wanted to touch on this fear for a minute so you wouldn’t get mired up in it. Right now you just worry about the numbers. We can figure out the fun stuff later. 🙂
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