One message I consistently get from students and followers surrounds the theme of pricing photography packages. This question is an important one. Generally when growing a business there are three things that will give you a leg-up: a strong network, a solid marketing strategy, and well-priced services. But pricing photography packages isn’t always as easy as it seems.
In fact, mispriced services are like putting your business in a hole. One that is super difficult to get out of. So, I want to make sure that when it comes to pricing photography packages, you can feel confident in what you are doing. Read on for things to consider, calculate, and tips to make sure your photography business is profitable.
You can call it competition based pricing or not, but knowing what other people in your area are charing is super important to use as a benchmark or baseline. For example, a wedding photographer in D.C. has an average going rate of $8,500. But, if you are based in a small town in the middle of nowhere midwest, and you try to charge that people might faint.
If you don’t do the research to figure out what others are charging, you will either hear “you’re to expensive” lead after lead… or you might even hear no response at all.
Everyone starts somewhere so please don’t feel ashamed for being a newbie. But if you just launched your business, there is no way you can charge the same amount as the photographer down the street who has been doing this for 10 years. Your experience, whether you like it or not does influence the rates you can charge. This is why it’s important to revisit your pricing annually at the very least, and every 6 or so weddings at most.
Next, I want you to figure out how much time you will be spending both shooting, and editing. Time is our most valuable resource. When we say yes to something we are always saying no to something else. Perhaps it’s time with your kids, or spouse. Those things must be considered when you are deciding how to price your services that will take 10 hours away from your family on a Saturday.
This is an area that a lot of photographers like to overlook. Your rates should not only cover the time it takes you to render the services, but the cost of doing business as well. Every business has set costs and variable costs.
Set costs are expenses that you know are coming each and every year. Things like:
Next, you should consider your variable costs. These costs are things that can fluctuate based on various things that may or may not occur. For example:
Start tracking these expenses if you don’t already and after 12 months, add up all your costs for the year and then divide it up monthly and know that number is how much you must earn just to break even. Then, consider how many sessions that would take at various price points to earn that much. And make sure that you are pricing your services and taking on enough sessions to cover your costs.
Don’t forget about taxes. While everyone’s tax rate is going to be different based on the location they live, the important thing is to know that when you own your business, you are responsible for paying all of your own taxes (state, federal, and self-employment) and that comes from the amount you are charging for your services.
I recommend working with a CPA to calculate how much you should be setting aside for taxes. Knowing this number will help you see that (as an example) for every $1,000 you invoice, you need to set aside $300 of it for taxes. Once you know that number, you are in a better position to price your services adequately.
Last but not least, consider how much you want to be paid. And I do recommend that all photographers have a set schedule of when they pay themselves. For example, every Friday, a designated amount is automatically transferred from my business account to my personal account. This requires you to set up a separate banking account for your business but I seriously cannot tell you enough how this is one of the best things you can do for yourself.
When it comes to how much you actually pay yourself, that will depend on how much you need to pay your personal bills and still be able to save for the future. Some people have childcare to cover, student loans, or want to save up for a house. Therefore, one should carefully consider their own wants and needs before pricing photography packages.
Once you crunch the numbers enough to where you have a clear picture about your personal financial needs, then use that information for pricing photography packages. I generally write out in advance what I would like to make this year for a good year, better year, and best year. Then, I divide the lowest number by 52 (for the weeks in the year) and that’s how much I pay myself weekly. In addition to this, I sit down and figure up how many sessions it will take to get there.