September 1, 2018
When I first started this business, I didn’t plan. I didn’t educate myself. I jumped in with both feet with no understanding of my pricing – it was just a number I pulled out of the air that was high enough it seemed like it was worth my time but low enough I wasn’t really competing with seasoned photographers because I really had like ZERO knowledge of what I was doing.
I knew how to take the pictures, and when I say that, I mean I could barely shoot in manual mode. And I really understood very little beyond that. I had no idea that I was pouring my heart and soul (and tears from lack of sleep) into basically a failing business that was losing a ton of money.
Yep. I started this business as a means of additional income because my young and broke family was scraping by and I actually, unknowingly, made our financial situation worse. I had no idea how much money it would cost me to run my business.
First thing’s first. You need to know what you need to break even. It was a hard thing for me to grasp at first but my photo sessions were costing me more than my time. I was spending money on gas to get there, software to process photos, buying more memory cards, and so many other things I never accounted for.
So how do we find that magic number that lets us know what we need to cover expenses? It’s actually super simple. You start by adding up every single thing you will be paying for. Some of the obvious things are your camera and lenses, but what else are you needing to cover? If you’ve already established your business, you have a pretty good idea of where your money is going but if you’re brand new, you need to ask yourself a few questions.
This may seem like an obvious answer since Photoshop and Lightroom have been the standard for so long, but they aren’t your only options. Once you decide which program(s) you want to use, you’ll need to look into pricing.
Adobe offers Photoshop and Lightroom for $10/month and when they release updates, you receive a link to download those. This is my favorite option because you aren’t wasting money on software that will be outdated when the next version is released.
When I first started, I put the photos on a disc and either mailed or drove to the client’s home to deliver. This was honestly a huge pain, a waste of gas, and cut into my family time. Not to mention, discs are so outdated since and new computers don’t even come standard with a disc drive anymore.
Since then I’ve tried out a few client gallery providers and eventually settled on Cloudspot. Most gallery hosts have free or super cheap options that are great when you’re just starting out, but know you’ll reach the storage limits pretty quickly. You’ll likely need to upgrade to a paid subscription but trust me, it’s MORE than worth it!
I’m currently with my 4th website host and I wish I could tell you how to know which one will work for you. What I can say is Showit was pretty easy to set up, has gorgeous templates or you can opt for a custom design and is the easiest to update out of any platform I’ve used. I pay only $29/month and that includes my domain name, which looks much more professional than SoAndSoPhotography.sitename.com. My website used to be photographybynikkimartin.weebly.com and I hated how cheap it looked and that Weebly was getting free advertising on my business cards and Facebook page.
If you have children, what are your childcare options? This one is going to be completely different for each person. I’m super lucky that between my husband and my daughter’s grandparents, we pretty much have this childcare thing covered. BUT because everyone’s schedules change, I assume that I will need to pay for childcare every time I walk out the door. This ensures childcare is always in the budget.
Other things that are absolutely mandatory for running a business (trust me here, I didn’t start out “legit” and it was nothing but a big headache later!)
Once you gather the information for your cost of doing business, write down the numbers.
Add up everything you’ve written down. Some things are a one-time-purchase, others will be a monthly expense. For the things you pay monthly, multiply those entries by 12 before adding them to your total.
So your formula should look something like (All monthly expenses x 12) + one time expenses = big scary total
Got it? That is how much money your business needs to bring in JUST TO BREAK EVEN. Yep, that’s just what it costs you to keep your doors open. Can ya see how I was able to get myself into so much trouble when I started out? I like to figure my yearly cost rather than a monthly cost because wedding and senior photography are both super seasonal and I don’t want to 1. get too excited when I have large profits in certain months because they may need to cover some shortcomings in other months and 2. I don’t want to put unnecessary pressure on myself to bring in a lot of money in the offseason. That is just a personal preference though – set your financial goals within whatever timeline works best for you.
No, of course not! I LOVE my job but it’s still a ton of work! This is the cool and scary part about being a business owner. You can make a lot of money or you can go broke but it really is 100% dependant on you. I have a number that I want to make each year but everyone has to decide that number for themselves.
If your goal is to match your corporate salary before you go full time in your business, this is really easy for you. If you’re just looking to add another income to your household or you’re an entrepreneur from the beginning, you may have to do a little more work with your personal budget to set your financial goals.
The trickiest part of this is accounting for taxes. No pun intended. I’m not a CPA and I highly recommend you consult one – but a general rule of thumb is to put away 30% of your income for taxes. You may not end up owing quite that much, you may end up owing a little more, but having 30% of everything you bring in deposited into a separate savings account will make your life MUCH easier come tax time!
So this is how you would determine the amount you need to bring in each month
Monthly CODB + (Desired salary + 30% for taxes) = the minimum you should bring in each month
Still with me? Great.
Well if you are strictly a portrait photographer, this is really easy. You determine how many sessions you want to do each month. This is will be different for each photographer too. For some, 2 sessions a week is plenty. Others will do 5 sessions each week and that’s fine too. Take the minimum you need to bring in each month and divide that by the number of sessions you want to take each month. That is how much you should be charging for each session.
amount you need to bring in / x number of sessions = $ you charge
Things get a little tricky when you’re like me and offer sessions, weddings, and products. Then, it’s not as easy as dividing your minimum by the number of units sold because the units are variable.
Here’s where you need to know your market. I know one of the number one rules in business is not to base your price on your competitors but it is helpful to know what other photographers at my skill level are charging and what brides are paying.
I currently offer one wedding package and an a la carte menu so that my couples can customize their experience if they want to. I use my package with no add-ons as my baseline and I know that I want to shoot 15-20 weddings per year. This is where you have to be really honest with yourself; if you can’t book 15 weddings a year, don’t put added stress on yourself by making that your number.
So I take my minimum number I need to bring in and I divide that by 15 weddings.
But what happens when your numbers tell you that you need to be charging $10,000 per wedding and you’re not in a place where you can demand that type of price tag?
My heart is truly with wedding and senior photography, but that doesn’t mean that I never shoot anything else. I love working with my wedding couples as their lives progress and sometimes that means photographing maternity sessions, lifestyle sessions, and family photos. There are tons of ways to supplement your income, so if [insert specialty here] isn’t getting you there alone, start looking into ways you can add different income streams.