Pro Studio Basics

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Pro Studio Basics

18. How Much Should I Charge?

The following advice is specific to Australia. Most Western countries have similar structures and the broad principles are similar. However, you should consult your own advisers for specific information. 

One of the most difficult issues for a photographer starting out is calculating how much to charge. Unfortunately there isn't a single answer that applies to everyone and even experienced photographers vary greatly in the way they determine their fees. Weddings, family portraiture, advertising work, editorial... every branch of photography has a different way of charging for their work, and sometimes photographers who work in several different branches will also have different ways of charging for their time.

However, it doesn't really matter how you structure your prices as long as you understand and take into account three important issues: your clients, your competition and the profit you want to make each year from being a photographer.

The Business Plan

Before you can determine how much you should charge for a job, you should have a basic understanding of the market you are working in (who are your clients and your competition) and what your own financial goals are.

Let's look at this with some extreme examples: you're unlikely to sell high-end family portraiture to people who live on a pension; it's going to be hard to sell a wedding package for $10,000 if everyone else in the area is charging $1000 for the same service; and if you want to earn $100,000 a year, charging $200 a day isn't going to get you there, even if you work every day of the year!

To work out how much you should charge for a job, first you must collect some information upon which you can base your calculations.

Your Clients

The first step is to define who your clients are likely to be. An architectural photographer might find a list of architects, civil engineers and builders. A wedding photographer might list couples who will be married at a venue within 20 kilometres of the studio.

How much should you charge these people? Knowing who they are won't answer this question. Architects may be able to afford your $10,000 a day fee, but they are not stupid and if they can hire experienced photographers for, say, $3000 a day, what chance have you got?

Knowing who your clients are may give you an idea of their capacity to pay the fees you want to charge, but it doesn't mean they will choose to do so.

Your Competition

For this reason, your next area of research should be your competition. Who are the other photographers in your area and how much do they charge?

If you're shooting family portraits and charging $1000 for a 20x24" wall portrait, but there are three other studios in the same area charging $500, you're likely to have a hard time when you start out.

Does this mean you can never charge $1000? Certainly not! In the market today there are already photographers charging two, three and even ten times more than their competition. They can charge more because of what their clients perceive they are buying. Compare the cost of a Holden and a Rolls Royce. For a client who only wants a car to get them from one place to another, Rolls Royce will never make a sale. But for the client who has everything and a need to travel in style, Rolls Royce is in with a chance, even though its car might cost twenty times that of a Holden. Could Holden charge the same for one of its cars? No. Over the years, Rolls Royce has built both a product and a reputation that command a higher price, but this is not something that can be quickly or easily achieved by a photographer starting out.

New photography studios will find it difficult to charge more than their competition unless they can immediately show a difference in quality, service or some other aspect of their business.

So, how do you find out how much your competition is charging? If you ring up a photographer, tell them you're starting up in their area, so how much do they charge because you want to undercut them by ten percent, you're unlikely to receive a civil response. However, you could ask photographers who work in another state or area in a similar field and who will never be your competition.

Some photographers provide their prices on the internet, but often your research will accumulate slowly when your clients tell you you're too expensive or incredibly good value!

Your Profit

Once you have researched your market and your competitors' pricing, you have a good idea of what the market is currently paying. This doesn't mean you have to charge the same - although you can, you can also choose to charge more or less.

Some photographers think they can shoot more quickly, so they might choose to charge less but do more jobs than their competitors. Other photographers might prefer to drink more coffee, so they put their rates up hoping to get fewer clients, but at a higher fee.

Whatever you decide to do, only do it after you've made some simple calculations. And it can be very simple.

Look at your market and your competition. What is the going rate for an ‘average' job. For instance, what does your competition charge for a 24x30" print and a dozen loose prints, or an architectural shoot? Let's say it's $1000.

Now, how many of these average shoots will you do a week? Let's say you'll do four of these shoots. Assume you work 50 weeks of the year (just to make the calculations easy), this means that 50 weeks x 4 shoots x $500 = $100,000 a year income. (Note, this is your total income, not your profit. You still have to pay for your expenses.)

How does this income equate to your expected profit (including your salary and wages?). If you want to earn $50,000 a year, then this calculation might be achievable as long as you can keep your costs down to fifty percent.

On the other hand, if you want to earn $100,000 profit, you clearly aren't charging enough, or you're not doing enough jobs a year to get there. Assuming you can keep your costs to 50%, you would need to do 8 shoots a week, charge $1000 a print or shoot, or maybe sit somewhere in between (say 6 shoots a week for $750) if you wanted to earn $100,000 profit.

At least now you have an aim point. Can you charge this amount immediately? Possibly not.

Does It Make Sense?

To determine how much you should charge, you need to compare the profit you want to earn (based on your business plan) with what your clients are prepared to pay and what they are already paying your competition.

It may be that when you first start out, you can't charge enough to reach your goal, and that goal is probably best set for two, three or five years down the track. In the meantime, you might have to work for less as you build up your business. There are very few overnight successes and most of the profitable studios you see have been built up over many years.

However, knowing how much your average job needs to be and how many you need to shoot each week gives you a good foundation on which to base your calculations.

Finally, there's no doubt you will make mistakes. You will undercharge some clients and feel like a mug. You will quote too low for other jobs and not get them because clients think you're too cheap (they want a quality job). There is a great deal of experience in successful pricing, so the trick is to test what you do and keep a close eye on your business.

The information in this article is general in nature and should not replace personal advice given by your own legal and financial advisers.

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