LET’S TALK ABOUT MONEY
I blogged this a while ago, but it's as relevant today as it was back then, both for my customers and also other photographers that struggle with the pricing dilemma.
Some people are powered by the almighty dollar, some couldn’t give a shit what they earn so long as it covers expenses.
Everyone is different. So I am just going to talk about me and my circumstances, and without giving too much away hopefully work out for you all what we should be charging. Realistically.
I've included some random photos because... well because I can and its what I do! 4
STOLEN FROM A WEBSITE
I apologize to the original author for not crediting them but I can't remember where the original article wasw that this piece was inspired by... but over the last few weeks I have been talking and reading a lot about this from both sides of the argument. Photographer & client!
To estimate how much you will earn in a year based on an hourly rate, simply double the hourly rate and move three decimal places.
For example $40 per hour is approximately $80,000 per year.
($40 per hour x 8 hours per day x 5 days per week x 50 weeks per year = $70,000)
Wait! I can hear you scream “there’s 52 weeks in a year dickhead!” I know but you want some time off right?
THE TAX INVOICE DOES NOT EQUAL WHAT I EARN.
There is a lot of stuff that has to get accounted for out of that figure at the bottom of the tax invoice.
Most professionals (lawyers, doctors, accountants etc.) bill their clients at a minimum two to three times their take home pay rate. Eg a lawyer earns $60 per hour – they would typically bill at least $120 to $180 per hour – and please I have just made those numbers up as an example!!!
HOW MUCH ARE YOU WORTH
There is nothing wrong with working for free, if you are a hobbyist that loves photography, fine do it for free. And do everyone a favour and keep doing it for free, and keep your “amateur” status. Don’t charge sometimes because all that will end happening, is you doing it for not enough money, and pissing off those of us that are trying to make a living.
As a full time photographer, I work backwards from what I need to earn in a year to support my family and my lifestyle & then add on a bit for my “slush fund.”
Using the method above $50k / year = $25 /hour $70k / year = $35 /hour $100k / year = $50 /hour
NON PHOTOGRAPHIC HOURS
For a photographer, this is a significant amount of time.
Think about everything you do on a daily basis that is related to your photography business, but does not directly earn income.
Travelling to and fro, email, answering the phone, quotes, social media, promotions, your website, blogging, and personal projects…the list is almost endless, and I haven’t mentioned editing.
Over half my time is spent on non-photographic portions of the business, so that means now I need to at least double my hourly rate for actual photography, to earn the same amount of money. I.e. to earn $60k /year goal, I would have to bill $60 per hour, not $30 per hour.
INCOME PROTECTION, HEALTH CARE & INSURANCE
As a small business we want to be profitable for as much of the time as we can.
We need to be healthy, and actually able to work. Thus we need a health plan, & that may include health insurance, gym membership or other “healthy” activity.
We also need to be covered for those horrible things that can and will happen – Accidents, personal injury, & of course public liability.
For the purpose of this exercise let’s say that these have an actual cost of $150/month that equals approximately $1/hour (if we are billing 38hrs/week)
Saving for your retirement is not a luxury or an option – you must build it into your photography business plan and in Australia the superannuation guarantee paid by employers is 9%, but let’s assume you want a little more when you retire your super & we’ll add 15% on.
Australians typically get 4 weeks annual leave when employed.
I have allowed 2 weeks because if you’re not working you’re not earning… and 2 weeks is the equivalent of 4%
Camera Upgrades – new body and maybe a lens, and some lighting gear every three years – roughly $2400 per year, or $200 per month. That’s getting some quality gear though!
Computer Equipment – every three years too – roughly $650 per year or $55/month
Home Maintenance or Rent – $200 per month would cover a home studio more if you have a dedicated shopfront.
Software – upgrades, Photoshop CC etc. – $50 per month.
Professional subscriptions - $500/year - $10/month
Mobile & Internet – I pay around $150 / month.
Advertising and Web Hosting –$100 / month with change
Transportation –but easily $600 / month (think loan payments + fuel + rego + insurance)
Business Insurance – say $100 per month.
That adds up to $1,465 / month or $9.40 / hour (billing 38 hours remember)
ADD IT ALL UP
Expenses $9.40 / Hr insurances $1/hr I want an $80k income so that’s $80/hr using the formula above. Total so far = $90.40 / hr Retirement 15% = $13.50 /hr Holidays 4% = $3.60 /hr Tax 15% = $16.13/hr Subtotal again $123.63 GST 10% = $12.36 Grand total = $135.99
So in order for me to earn $40/hour or $80k/year I need to bill $135.99 / hour or nearly $5200 / week. As you can see that’s just over 3 times the base hourly rate, and $80k is not a huge income.
This of course assumes that I will be working a 38 hour work week…