I’m ready to price my photography business, but where to start?
You are not alone. Pricing any business is a difficult task. All of your expenses and taxes must be taken into account. Then, you need to make sure you make enough profit. Your prices cannot be based on what other comparable photographers are charging. Unfortunately, this is what many beginner photographers do. Let me explain this using beginner photographer, Judy, as an example:
Judy wanted to turn her hobby as a photographer into a business. When it came time to price her business, she researched what other photographers in her market were charging. Judy assumed that since she was just starting out her business and these other photographers were experienced with solid portfolios, her prices should be significantly lower. To her surprise, she soon started booking sessions and filling up her schedule! Judy was extremely busy photographing clients and running her business. However, the credit card bill kept climbing, and there wasn’t much money in her savings account. All of this work was certainly not paying off. Judy finally crunched her numbers and included all her income, expenses, taxes, and time. She discovered she made less than minimum wage. Judy felt stuck. She has to raise her prices, but if she does, she risks loosing all of her clients.
Judy finds herself in a difficult situation that unfortunately many other photographers have also experienced. In order to avoid a situation like Judy’s, here are 4 tips to avoid common pitfalls of pricing your photography business.
#1 – Don’t price based on your level of experience or quality of your work.
Newbie photographers, especially females, do not have the confidence in their business to price themselves at a reasonable price. They don’t think their work is good enough, or that they are experienced enough. There are okay photographers charging top dollar for their photos and people will pay it (for reasons I will describe in #2). Rather than charging based on your experience and quality of work…
Do determine how much money you want to make.
Instead of picking a number out of thin air that sounds good, you need to price your business based on how much profit you want/need. In one of my business classes in college, I learned something simple, but very important: A successful business is a profitable one. If you are consistently not making a profit, your business will eventually fail. All expenses and taxes must be taken into account when you are pricing your photography business. How do you make sure you are always making a profit? My Photography Pricing Workbooks are a foolproof and easy way to set your prices based on how much you want to make. It factors in your expenses, income taxes, sales taxes, cost of goods sold, and credit card fees when you are determining your session and wedding fees.
#2 – Don’t compete on price.
A big mistake for any business is to plan to build a client base with their prices. Judy thought it was a great idea to price low and gain clients. However, she was unprepared for the workload that came with it. And, what happens when another comparable photographer decides to come in an undercut her prices? Who do you think her clients are going to flock to now?
Let me give another example: Target and Walmart. Everyone knows that you can get the lowest price on most items at Walmart. Like many people, they will continue to shop at Target, even though they know they can get low prices. Why? I know I personally love how I feel when I walk into Target. The floors are white and clean. The ceilings and the lights are bright. Target is selling an experience, and that is the reason people choose to shop there over Walmart. How can Walmart get away with charging low prices? They don’t have all the frills and extras Target offers, and they can handle a high volume of clients in their stores to off-set their low prices. So, don’t think that you are automatically going to get business just because you are priced lower. AND, be prepared to work twice as much to make as same as someone who is not only selling quality photos, but an experience.
Do determine your workload.
Not only is it important to figure out how much money you want to make, but it is equally important to set your workload. Do you want an average of 2 sessions a week? 5? Less than 1? Let’s say you want to make a profit of $25,000 a year. If you want to do only 1 session a week on average, you will have to charge more than if you were to do more than 1 session per week in order to reach your profit goal of $25,000. By the way, if you wanted to easily determine your workload, it is included in the calculations in the Photography Pricing Workbooks. 🙂
#3 – Don’t price low and then plan to raise significantly.
It seems like a good plan. Price low, and then once your portfolio is stronger and you have more experience, raise your prices. The only problem is, after raising your prices, your client base will probably not pay your new prices. When you decide to raise your prices, you have inadvertently jumped from one customer type to another, therefore loosing a good percentage of your client base.
Do determine your ideal client for your business.
This is vital to setting your photography prices. If you haven’t had a chance to review my blog post on Identifying the 5 Customer Types, read it before you finalize your pricing. If you raise your prices and inadvertently switch to another customer type, your photography business will be forced to build your base again for that new customer type.
Once you have your prices finalized, all you have to do is run specials, deals, and promotions to attract people to your business. That way people will not get the shock of a significant price raise when you no longer offer those discounts, since they saw your full pricing right from the start.
#4 – Don’t forget to include your time into your prices.
This one is unfortunately commonly left out of photographer’s pricing. Beginners make the mistake of thinking that their time spent on a session is driving to the location, shooting, driving back, and some editing. In actuality, so much more goes into your sessions AND your business. What about the time it takes for you to correspond with clients? Delivery of the product? Daily business tasks? Maintaining a blog? Social media? Preparing taxes? The list goes on and on. There is a common misconception that photographers spend a majority of their time shooting. In actuality, the time spent on taking photos is a small percentage of the entire time spent on their business.
Do determine the amount of time you want to spend on your business.
This all comes down to how much time you want to personally spend on taking photos, editing, delivering the product, etc. Some photographers choose to keep it simple and spend the minimum amount of time on business tasks, and then pass that savings onto the customers. Others will spend much more time on taking photos (2-3 hour sessions), editing photos, and delivering the products. The Target and Walmart example will also work to help explain this. Target probably spends more time than Walmart to keep their store clean and to sell their shopping experience. Walmart keeps it simple, and therefore can pass those savings to the customers. Whichever direction you decide to take your business, make sure you include that time into your pricing.
Putting it all together!
By avoiding these 4 pricing mistakes, you will be way ahead of the game of many beginner photographers. It is important to avoid these pitfalls from the start, otherwise you risk working too much for too little money. You risk needing to adjust your prices, thus having to rebuild your client base all over again. You risk burning out. Avoid these pitfalls, and you will avoid Judy’s situation.