Pricing Your Photography Sessions
When you start your photography business, you need to have a pricing plan in place so you don’t lose money.
And believe me, losing money is easy to do if you don’t factor in all your costs and the numbers of hours it takes for client consulting, shoot planning and execution, plus culling, editing and delivering your final images.
By following the steps below, you can come up with a pricing formula to keep out of the red…and successfully grow your business!
Step #1 - Calculate Your Cost of Doing Business
If you’re not familiar with the phrase, “cost of doing business,” it is a calculation of all the expenses needed to produce and sell your goods and/or services. Just starting out, you need to estimate this number to the best of your ability.
After your first year in business, you’ll have a better idea of your expenses, and can make adjustments to this number if needed.
To calculate your cost of doing business, estimate a total for these questions.
- How much is equipment upkeep? For a photographer, this might include subscriptions to editing software, taking your camera in to have its sensor cleaned, zoom lens calibration (note: you can calibrate your own prime lenses), etc.
- How much investment do you need to put aside for new equipment? Remember, you can always rent photography equipment until you save up enough for upgrades and replacements. Rule of thumb: If you use a piece of photography equipment more than 20 times per year, then it makes sense to buy it. If you don’t use it more than 20 times annually, then rent it and pass on the cost to your customers.
- How many images will you provide for each session? Think about putting together some packages ahead of time that spell out exactly how many images your customer will receive. That way, there is no room for argument later.
- How long will your sessions be? To figure this out, you need to think about what kind of photography you’ll specialize in. Obviously shooting a wedding takes a lot more time than taking headshots does.
- How much do you need to pay yourself as a salary to not just break even, but to be able to save and live well?
- How many hours do you need to edit your sessions? Many new photographers make the mistake of not considering editing time in their quotes. Often, editing takes longer than the shoot itself does!
- How much do you need to put aside for advertising expenses? (It’s recommended that your advertising budget should be a minimum of 10% of your total budget ).
- What kind of prints/product will you offer? Or will you only offer digital images?
- How much will you put aside for unexpected expenses or investments?.
- How much is your insurance per year? You should have errors and omissions insurance, plus insurance to cover your equipment & studio space. You may want to also consider disability insurance, in case you become ill or injured and can’t work.
- How much do you need for bookkeeping, accounting and taxes? Does your state require sales tax on general services or digital products?
- How much per year do you need to invest into legal contracts, website design, brand upkeep?
- How much is your website host costing you each month?
- What percentage of taxes will you need to withhold for your state/local business taxes?
- Do you have a studio? Calculate your rent and utilities.
- How much do you need to reinvest back into your business every year for new equipment and travel costs?
- How much for training expenses like workshops, both online and offline?
- How much will you need to hold out for federal taxes at the end of the year?
Once you come up with the rough total of the items listed above, add everything together. This sum is your cost of doing business each year.
Step #2 - Think About How Many Sessions You Can Shoot Each Year
Put some time into this question. You need to be realistic in this goal.
For example, if you’re a wedding photographer, you won’t be shooting a wedding every day. Consider slow seasons as well.
But maybe it’s feasible for you to do one or more headshot sessions daily.
Coming up with a realistic number for your annual number of sessions depends a lot on your specialties.
Next, divide the total of your cost of doing business by the number of sessions you feel is a realistic goal. Then you’ll have an idea of what you should charge per session to run a profitable business.
For example: If you calculate your cost of doing business at $100,000 and you can manage 50 sessions in a year that would be: 100,000 ÷ 50 = $2,000 per session.
From here, you can break that number down to get your hourly rate.
Step #3 - Calculate Your Hourly Rate
To figure out your hourly “rate” divide the cost of each session by the total number of hours it will take to complete the session.
For example, a 1 hour client session can easily take 5 hours total when you consider the initial consultation, planning, shoot, client proofing, delivery of final images, and the ordering of prints/products.
To calculate your hourly rate, divide your projected yearly sessions by the number of hours needed from initial client contact to product delivery. This is your hourly rate.
For example: $1,000 session ÷ 5 hours = $200 per hour
Now that you’ve arrived at your hourly rate, it will be much easier to know what to charge for other sessions (family mini sessions, engagement, events, etc.)
(Note: This calculation does not include costs of prints, albums, etc.)
And that’s a wrap!
I hope you found this pricing guide helpful.
You’ll need to review your calculations yearly because you may fall short or even exceed your estimated number of annual sessions, expenses vary from year to year, and state and federal taxes change as well.
By keeping on top of your numbers, you’ll know when you need to increase your number of sessions and/or pricing.
And that’s a big part of running a successful and profitable photography business!
Another crucial part of running a photography business is time management.
If editing always takes longer than you think it should, then join me for a FREE editing presentation, “The 5 Step Editing Recipe.”
Click on the image below to claim your training time: