How to Price Your Photo Biz for Profit

To make a living from photography, your business must be profitable. The foundation of a successful business is rooted in knowing and understanding how to price your services to ensure that you are profiting each and every time you show up to a shoot. We asked photographer Bryan Caporicci, who recently hosted a webinar with ShootDotEdit and WPPI, to simplify the pricing process for photographers. Here are some basics to get you started. (Go here for the full presentation.)

1. Your Pricing Must Be Profitable
Let’s talk about the most basic element of pricing: it must ensure that you make money. To set it up so that you and your business make a profit, you must understand the numbers. How much income does your business need to generate each year? How many shoots do you need to do each year, and how much do you need to make on each shoot?

Note: Pricing for profit is not gouging your clients or being unreasonable, overly expensive, pushy and sales-y, bait-and-switch-y, charging more so you can do less, raising your prices for no reason, or artificially inflating your prices. Instead, it is being reasonable, sustainable, enjoying long-term success, having happy clients, putting in an honest day’s work for an honest day’s pay, charging what you’re worth and giving great value in return, knowing why you charge what you charge and making smart, strategic and calculated decisions.

2. Calculate Costs for Time and Services
Start by looking at your time and costs on a per-shoot basis. Write down each and every time-investment you make when fulfilling a shoot. Take a portrait session, for example. Perhaps you spend a total of 385 minutes on a portrait session, which can include the time to book it, draw up a contract and invoice, prep gear, drive to and from the location, shoot the session, do post production and proofing, and meet with the client.

Multiply the total time by your per-minute wage ($.50 per minute based off of $60,000 a year—read on to see how we arrived at this amount), which gives you a total of $192.50. This means that your labor costs for a 1-hour portrait session to pay yourself $60,000 per year is $192.50.

Next, add in your material costs. Let’s say that for every portrait client you have, you give them a $10 gift card to Starbucks, spend $2 in gas and $2 in refreshments when you have them over for their meet-and-greet. If those are your actual expenses for your material costs, your total is $14. When you add your labor and material costs, you get a total of $206.50. That is what it will cost you to actually do that 1-hour portrait session. If you charge anything less than this, you will actually be losing money!

3. Determine the Variables
Now that you know how much each shoot costs in time and materials, we need to look at how much you want to make. There is a proven calculated formula called “The Cost of Goods” method, which means you look at everything that goes into a particular product or service, break it down and mark it up by an appropriate amount. The markup I suggest is 2.85. (This is based off a 35 percent Cost of Sales model, recommended by the PPA in its Benchmark survey.)

Let’s consider that we are employees of our own businesses, and we want to make $60,000 a year ($.50 per minute). We can calculate our per-minute wage divided by 52 weeks in a year, divided by 40 hours in a week, divided by 60 minutes in the hour. If you want to make $60,000 per year, do the calculations with that in mind. Before you plan the route, you must know the destination. You can always adjust as you go, but the best place to start is by determining how much you want to make.

4. Set Your Price
We’re almost there! The final calculation is to multiply the total cost you determined ($206.50 per hour) by the markup you determined (2.85), which leaves you with a suggested price of $588.52 for a 1-hour portrait session.

Is this what you should actually be charging? That’s completely up to you. Perhaps you now want to adjust the price to account for your local market, your experience level, and so on.

Understanding the basics behind how much your services cost you and how to determine a starting point for pricing is key. Once you adjust and find the perfect price, you can have confidence that you created pricing that will keep your business profitable.