Well what a month we have just had. I had a few weddings to shoot this past month and I have to say that the amount of time I spend on shooting for a wedding and the amount of time that I spend editing and delivering images to my client can be quite exhausting, and needless to say very time consuming.
This made me think about the expense that actually goes into costing a particular shoot for a client. Yes, I know we have Blinkbid and a few other tools, I use Quickbooks online to get all my invoicing and banking sorted out. But no matter which application you use it always boils down to how much are you willing to charge your customer so that you can get the job, yet at the same time make enough money to pay for your bills, feed the family, have enough for insurance, buy new equipment, fix old equipment, transport, mortgage, rent, etc... and the list goes on and on.
Now you look at the market place and the guy down the street is charging $59.95 to do a family portrait shoot. What are you going to do? How can you compete with people that are charging such a small amount to get clients? How do you compete in this type of market.
Well, I am talking from experience here when I say this; I am sure you are also gong to be going through similar torments and agony about how to charge your customers. "I cannot survive charging only $59.95 for a portrait session!"
Now take a deep breath and now breath out. You cannot survive in this industry if you try and compete with every single person that is trying to under-cut everyone else in the market. Before you know it you have more expenses than income and you are out of business. This is what I did in the beginning thinking that I could get quite a few clients quickly and make lots of money. It worked for a time but the sad thing was that now I was thought of in the market place as the cheap person and I found myself losing money at every turn.
I had to change my way of thinking. I had to work smarter and charge more to make my business work for me. I am not saying it will work for everyone, but I make a small profit on every client and I can pay for all my expenses that are generated from a photograph session and I have a little profit over to invest back into my business and save for a rainy day. This is what I did.
Firstly, know what it costs to run your business! I used NPPA calculator to give me a rough idea about what my costs are per year and the amount of shoots that I actually do or would like to do make a living. Here you punch in your expenses for all the tools that you actually use in your business and the amount of days that you have available to shoot or get clients and it gives you
- Your total annual expenses
- Your weekly cost of doing business
- Your overhead cost for each assignment
Number 3 is what I use the most. Just to shoot a 1 hour portrait session tells you the minimum amount you need to charge just to get out of bed.
As an example, I punched in all my data and as a portrait and wedding photographer I wanted to be booked for 10 months of the year. 2 Months for holidays and vacation off with the family etc.. and then I used 5 days a week for weddings and booking portrait sessions. I think that is fair, but you can change your requirements based on how busy or how little you want to work. At 4 weeks per month and 5 days a week that gives me about 200 days of work.
Now I used generic figures in the calculator so these are just examples. Remember to put your actual figures to get a more realistic number. So as you can see I have an overhead cost for each day of approximately $448.50 just to break even.
Now if you take that figure and make your bookings based on these figures you can see that you might need to do 10 1/2 sessions @ $44.50 or you need one big paying client @ $448.50 to cover all your cost of sales. The point here is to actually see the amount of money that is required just to cover your waking up in the morning money.
So for me that would be 2 weddings a month and then quite a few portrait shoots, headshots and any other photography sessions tat I can book.
Well now that you know what your expenses are you can make a more informed decision about how much you need to charge your clients for their sessions.
Here is a quick example. Know what your daily expenses are, would you say that you may be able to realistically do only (5) 1 hour sessions a day? That leaves you with a cost overhead for each session of $89. Therefore the guy down the road running the $59.95 dollar deal has to make sure that he gets at least 10 clients a day just to make a living and make $15.45 profit.
Now, he has not done any editing yet and I can vouch that he has not costed this into his schedule. So he is working at least 10hrs a day making only $154.50 profit. Do you think this is sustainable. What about editing time, time spent with family, sleeping etc.. I can say that sooner rather than later he is going to be going out of business. I tried this people and it is not sustainable. It sounds good on paper, but when life throws kids, shopping runs, cooking, school and just relaxing time in your path you soon realize that there is not enough time in the day to do everything. So you are going to have to work smarter rather than harder.
How about trying this. Charge $159.95, offer your clients more rather than less. What am I trying to say here. For $59.95 I am sure the client still has to buy their own prints and then they have to pay for shipping and packaging. I realized this early in the game. When clients get more value for money they tend to spend more.
So instead of discounting how about charging more, $159.95, you still have your $44.50 cost but now you add in some prints. I give them 5x7's, two 8x10's a wallet and maybe a (4) 4x6's. This additional cost is approximately $24. Out of this the customer pays for shipping and boutique packaging. (Now I look really professional when I deliver my photographs) so the cost to me is $12.
Let's break it down:
- $159.95 1-hour session
- -$44.50 (cost of doing business)
- -$12 - additional incentives for charging more
You now land up with a profit of $103.45 for each session. You now have to do just 4.338 sessions per day and you still get your cost covered. This is what I call working smarter. You are offering the client better value for the money that they are spending. You are delivering a better quality product and most importantly you are making an impression building great customer relations.
Yes, it all sounds so easy, but it is not. It took me two years to get to a point where people knew me in my neighborhood. I did my marketing at my kids school, advertising on my car, a sign outside my house and most importantly, word-of-mouth. I use all the free social media methods and I am constantly talking about my business. Remember the examples above are just that, examples. You have to build a business model that works for you based on your numbers. The business months cover the lean months, like this month and the weddings did for me. I have two months of vacation in December and January when the snow is thick up here in the North East so that has to be taken into consideration.
So in closing I would just like to say. Get a plan in action and don't worry to much about the guy down the street trying to under-cut everyone. Work your plan and your numbers. Stay profitable for every shoot and you will be able to survive in this business.
As always, if you have any questions or want additional information about what I did then please leave a comment below and I will definitely get back to you.
As we go into the holiday season I wish you all the success and profitability that you deserve.
Denzil
