Don’t make pricing harder than it is and don’t undervalue yourself! Easier said than done for some, but hopefully I can get you pointed in the right direction and the resources listed below can help your really define yourself and prices.
The easiest way to figure out your pricing is to work backwards, first by figuring out how much you want (or need) to make. Remember just because you are a ‘small business owner’ that doesn’t mean you can only make 25k a year. If you want to make 50k a year then set yourself up to make that amount.
For this scenario we’re going to say that you’ve made the decision that this is your business you’re in it full time and you want to make $100,000 a year… good for you… now how do you do that? Take into consideration that you’ll be paying taxes to Uncle Sam, right around 30-35%, so we’ll estimate a little high *Tip: If you set money aside for your taxes put it in a savings account and estimate high, then when it comes time to pay you’ve got yourself a ‘tax refund’ that was earning interest or you’ll have enough to cover any little surprises* So 35% of our 100k is 35k, now we need to make 135k and we haven’t even added in our expenses yet.
Yes, you need to add in your expenses and my advice to you is don’t just guess actually sit down and figure out what it costs your business to run. Office supplies, printer ink, phone, website, mileage/gas, education, meals on the road, props, equipment, software, print samples, business insurance, memberships to forums or PPA or other groups…. it adds up fast and you might be surprised to find out what this number is. For this we’ll just say expenses are another 35k a year. So now we’re up to having to bring in 170k a year just to make 100k.
But how do we do this?? Well first lets figure out how much you’ll be working:
There are 52 weeks in a year but will you really be working all of them? Family vacations, holidays and other events can interrupt your perfectly laid plans for how often you’ll work so for this scenario we’ll say that you are going to work 47 weeks. Okay so your 170k divided by 170 weeks = $3617 a week.
Okay and we’re going to do 5 sessions a week so we need $723 per session… but what if you don’t get that many sessions? In my opinion it’s always better to error on the side of caution (especially when it comes to putting food on your table) so if this was my situation I would tell myself that I need to make $1000 per session that way if I’m short a session or two throughout the month I’m still pulling in the necessary amount.
If this figure seems crazy high to you then it’s probably time to do a reality check. If you truly feel like your market will not support these prices or you really aren’t good enough then you need to figure out how to bring that per session amount to something you can deal with. Do you really need to make 100k your first year in business? How much do you need to survive – will 20k do? Do you need to upgrade from photoshop CS4 to CS5? I think you might find though, that if you finally start charging what you’re worth (and have the skill set and business know how to back up your prices) you’ll find more than enough people that will pay the prices you want to charge.
What I have just provided is a very basic breakdown of something that all photographers (or business owners for that matter) should know. There are other excellent resources and photographers that go over pricing in great detail, provide you with their own pricing and offer up a lot of information.
Easy As Pie: I can almost guarantee that by the time you’ve made it through this guide you’ll have said “I can’t charge that much!” at least three times, it is a great guide for making you take a long hard look at what really goes into your business and how much you deserve to make. Don’t forget to purchase the Pantry as well so you can get a first hand look at Alicia’s pricing as her business evolved.
Clickin Moms: If you’ve got the time to search it this forum has the answer for you. There are thousands of posts by over 4,000 members and a whole collection of great vendors that offer member only specials all the time.
On the Free Downloads page there’s a spreadsheet you can use to figure out your pricing for products.
And finally here’s a free download called “The Single Greatest Guide to Wedding Photography Pricing That Ever Was and Ever Will Be.”
Have fun!
