One of the biggest hurdles to starting a photography business is figuring out how you will price your photo shoots. Some photographers (myself included) may delay starting a photography business because thinking about pricing paralyzes them. Don’t let this happen to you! There are many ideas as to the best way to price your work, but we will go over a simple formula that will help you determine a good starting point. Then we will discuss when and how to adjust that rate over time. The most important point to remember that it is better to have a price than nothing at all. You can adjust the price over time as your circumstances change.
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The basic formula for how it costs you to do work is materials + labor + overhead = total cost. This means that you’ll have to document the amount you spend on photography equipment, as well as track the amount of time spent on each photography session. This includes time spent on the photo shoot prepping the equipment, time traveling to and from the photo shoot, and the time spent on location. The time spent editing photos in Adobe Lightroom during post-production should also be accounted for. Finally, the overhead needs to be estimated. Overhead costs include but is not limited to: internet, website, virtual assistant, advertising, rent, utilities, supplies, insurance, and accounting services. It also includes production cost and shipping charges for photo albums.
Once you have calculated the total cost of a photo shoot, then you can multiply that base number by your desired profit. For example, if your total cost for a 2-hour photo shoot is $150 and your desired profit is 20%, then you’d simply multiply 150 x 1.2. The total comes out to be $180, which is what you’d charge your client. Although doing formulas and tracking expenses is never fun for anyone, it is very important to get in the habit to do so. Especially as a business owner, tracking how your money goes out is a crucial skill. Tracking income is much easier and by default, we all do it already.
The biggest advantage of pricing based on cost is that you’ll never undercut yourself and charge less than your actual costs. This is a huge problem that many new professional photographers make. It also creates a market that is unsustainable because then other photographers will charge less and less to compete with photographers who don’t charge enough. It’s one thing to trade work or work for free to expand your portfolio, but it’s another to charge $50 for senior portraits. The problem is that the people will start to think that the normal price is for senior portraits is $50, so they won’t pay anything more for it. But for $50, they’ll only be getting subpar photography from someone inexperienced. The moral of the story is to always start with your actual cost and then add more, that way you’ll never be losing money or working for free.
Of course, you will need to do some market research to see what others around you are charging. If the majority of photographers are will take senior portraits for $200 or less, then you can’t start out charging $400 a session. Market research should be done both online and by calling or talking to other photographers directly. When talking to other photographers, you will be able to ask them why they charge a certain amount. Understanding the reasons for different pricing structures can help you to determine what is best for you.
There is no magic formula that works for everyone. As your photography business progresses, you’ll find that your prices will also change over time to account for changes in your own business and in the market around you. For example, you will likely be investing some of your profits back into photography equipment. New equipment isn’t cheap, and it all adds up. So remember to continue tracking this extra cost and account for it in your overhead costs. After a certain point, you may want to increase your prices in order to account for higher costs of maintaining your business. As your experience goes up, you should also increase your profit margin to reflect that.