What do I charge for my photography? How do you set photography pricing so that you will succeed?
When I started out as a photographer, I struggled with this topic over and over. Was I charging too much? Was I charging too little?
I spent hours researching what other photographers were charging because I thought it made sense to charge whatever the ‘industry standard’ was at the time.
But I was wrong.
Don’t get obsessed with what other photographers pricing. It’s important to know where you are in your market as far as pricing, but you shouldn’t just blindly copy what some other photographer’s prices. What other photographers charge actually has very little to do with what you’re going to charge. Why? Because every photographer has a different situation.
So here are the 5 easy steps to set your photography pricing:
Step 1. Calculate your ‘cost of living’
These are the essential expenses. You will probably hear a lot about what people charge in different ‘markets’ and this is where that comes in to play the most, because your cost of living is one of your biggest expenses and this is where you will calculate those expenses.
Create three columns of ‘living expenses’: MUST HAVE, SHOULD HAVE, and WANT.
The ‘must have’ list are things you HAVE to pay for, including, but not limited to:
- Insurance (health, life, car, home, etc.)
- Studio/meeting space rental
- Travel/vehicle expenses
- Advertising expenses
- Loan payments/credit card payments
- Retirement savings (seriously don’t put this in the ‘should’ category if photography is your sole source of income, you will regret it later on down the line)
When you get to the ‘should’ category, this is where you will put things like emergency savings (you never know when you might need it), maybe a new vehicle (you have to have dependable transportation). You SHOULD take at least one vacation or do something nice for yourself to unwind, otherwise you’re asking to burn out
When you get to the ‘want’ category, this is where you you add things like a saving for a vacation home, pets (you’d be surprised how those costs add up), maybe you like to travel A LOT, etc
Keep in mind whether there is any other household income (yours or a partners) that will offset your ‘must’ expenses so that your photography income can be focused more on the ‘should’ and ‘want’ categories.
This total number, when you’re done adding it up, is also called your target net income (what you want to make after business expenses and taxes).
Step 2. Calculate your annual ‘cost of doing business’ expenses
This is all of the costs that add up to running your business, including:
- Marketing and promotional materials
- Website hosting
- Business insurance
- Studio/meeting space rental
- Business Travel/vehicle expenses
- Advertising expenses
- Networking expenses
- Membership fees
- Office supplies
- Professional services (business filings, tax preparation, etc.)
- Studio staff, etc.
Break these expenses into three columns like you did for living expenses. I usually take my expenses from the previous year as a guide. If this is your first year, you’ll just have to estimate (plus do some research).
Your ‘should’ list might include upgraded equipment (especially if your current equipment is getting older or outdated), perhaps a new outlet for advertising or just increasing your advertising and marketing budget overall.
As far as ‘wants’, maybe there’s a workshop you’ve always wanted to attend, or some piece of equipment that you don’t absolutely need but have always wanted (I’d suggest renting it and trying it out before buying anyway)
Step 3. Add up your per shoot expenses
Some expenses only occur when you have a shoot.
- Second shooter/assistant for wedding
- USB drives/online gallery fee
- Print costs
- Travel fee (do you include a set distance you will travel – how much will it cost you to travel within that area?)
- Studio rental for portraits if you rent by the shoot
- Equipment rentals
Write it all down.
You should include any expenses you regularly pay in conjunction with your shoots. Keep this number separate from your living and annual business expenses for the moment. If you do different types of work (wedding and portraits, for example) keep a separate list for each type of shoot.
Step 4. What is your workload?
Now it is time to get really honest with yourself. How many shoots can you do each year?
Remember to keep in mind the factors that might limit the number of shoots you can do each year, such as blocking out time to go on vacation, holidays, seasonal nature of work, etc
Also, if you have another job (part or full-time), figure out how much time you can realistically spend doing photography. You don’t want to burn out or over commit yourself.
Hold on to this number and keep it until the end.
Step 5. Do some quick math and you have your pricing!
Okay, now that you’ve added all of that together, you have to do some math. It won’t be too difficult and I will show you some examples afterwards.
Accounting for your taxes…
Take your ‘cost of living’ and divide by 1 minus your tax rate. Remember to include both Federal and State/Local taxes if you’re in the United States. AND be sure to get an accurate tax rate. Don’t guess. You can end up owing a lot of money if you guess.
For example, if your cost of living adds up to 30,000 and you have a total tax rate of 25%:
30,000/(1 – 0.25) = 40,000
You might be saying, “Why not just multiply 30,000 by 0.25 to get the tax figure?” That would give you an inaccurate number because you get taxed on the entire amount. You’d end up around 2500 short. And that’s not a nice surprise come tax time. I always over compensate for taxes. Just in case
Setting your price…
Once you have your target net income with your tax rate added in, add your annual business expenses to that and you’ll get your target gross income.
Divide your target gross income by the number of shoots you determined as your workload. Then add your per shoot expenses to that number and you have your starting pricing!
I’ve listed a couple of examples below…
Example 1: Full Time Wedding Photographer
Target net income of 60,000 with a total tax rate of 30% = 85,714 (rounded off)
Annual business expenses: 18,500
Total gross income: 104,214
Workload of 30 weddings per year = 3474 + 450/per wedding expense = 3934/price per wedding
Example 2: Full Time Wedding & Portrait Photographer
This adds another layer in that you have to determine what percentage of your income you want to make from each type of photography. For the purposes of this example, I’m going to say 75% comes from weddings and 25% from portraits.
Target net income of 50,000 with a total tax rate of 25% = 66,667 (rounded up)
Annual business expenses: 12, 800
Total gross income: 79,167
Workload of 20 weddings per year and 40 portrait sessions per year.
Wedding photography pricing: 79,167 * 0.75 = 59,375 divided by 20 = 2969 + 400/per wedding expense = 3369/price per wedding
Portrait photography pricing: 79,167 * 0.25 = 19,792 divided by 40 = 495 + 50/per portrait session expense = 545/price per portrait session
Considering your market…
When it comes to pricing, the market you are in plays a part in your pricing as far as where it places you with other photographers. This is not to say that your price should be SOLELY determined by your market, but keep in mind the ideal client you are trying to attract.
If you’re looking for mid-range budget couples for weddings, and your pricing comes out in the higher end for your particular market, you have some considerations to make.
Do you reconsider the number of weddings you can do? Are there places you can cut your per wedding expenses or create a lower price starting option so that you can still appeal to those couples?
Do you consider starting to market to higher end couples?
Let’s talk about value…
Value can be a difficult subject to wrap your head around, but it doesn’t have to be. I will go more into value later on, but for now it is important to at least glance at it.
The simplest way to think about value is to really dive into what has meaning to the people who are hiring you. This can have a big effect on what your prospective clients are willing to pay for your services. The more value you add to your clients, the more problems you solve for them, the more of an emotional connection they will have with you. And once someone is hooked emotionally, the more they are willing to spend.
Think about where you can add value to your work and how that will impact pricing.
You are a business person!
Listen, it can be difficult to look at your prices without being emotional. You ARE your business, so it is natural to be personally invested. However, you need to disconnect from that emotion and really look at the numbers. Otherwise, you’ll end up beating yourself up in the long run (or the short run if you’re unable to keep your business going just because you’re not making enough money).
Share this post with your photographer friends, leave a comment telling me your thoughts or any questions. And be sure to subscribe to the podcast where I will be discussing pricing in depth (including how to add value to your work).