In a previous two posts a while back, I covered how to figure out your costs, basing what you charge on those figures, and what you are actually making. Today, we will cover this a little more. First, you need to know who your clients really are based on what they expect from you as a photographer. Second, you should be thinking about what you charge for images in certain terms and realize that different uses should get you paid more or less based on the use of the image or digital file. If you don’t think this way, you aren’t planning and you aren’t necessarilly making money as a photographer.
When you get established, you will find that people want a photographer to shoot something for them – family portraits, a wedding, boudoir, senior pictures, or just about anything that someone can imaging. You will notice I left out business type images as we will get to them in a minute. I receive between 10 and 20 calls a week from people who want to hire a photographer, pay them $50 (or less), shoot 8+ hours, and then just hand over the edited digital images for them to print. I am always told by these customers that such and such will shoot all day for a minescule amount, and then they edit all of them for them and give them to them on a DVD. Frequently, but not all the time, they will also add that they really like my images more than such and such, and they will give me lots of exposure to all their other friends. If you get a call like this from someone, I recommend you field a few of them to get the feel of the type of person and so you can also tell the people wanting a free lunch from those who are really customers.
As a business person, if you get a call like this you can try and educate them. I have found that getting them to meet with you is impossible and even if they do, they will still go with whomever is cheapest. So, I politely tell them that I can’t shoot the images they want for them at the price they want and won’t give them digital images from what ever I shoot. I further explain that I can’t pay my bills as a photographer at those rates, and expecting anyone who is a full-time professional photographer to be paid this rate is really an insult. They hang up at this point or keep talking. If they keep talking, they are only going to waste your time.
I bring this up because you should know what you have to make to keep your business viable and pay yourself to make your bills to live (eat, taxes, and general lifestyle). This is important. You never want to base your rate you charge on what someone else charges unless you know your costs and know that you aren’t sending yourself to the poor house by undercutting what you need to live. Just because someone else is willing to shoot something at an under cut rate, it doesn’t mean you have to do the same and kill yourself in the process. Most of the people charging a low amount have no experience as a photographer, probably just purchased an SLR, don’t have quality equipment, don’t pay their taxes on the money they earn (no business license, either), don’t have a studio, don’t have insurance, etc. If you have all these things, how are you going to compete against them at their rate? You are just digging yourself into the ground. You can’t.
Let me mention that I received a lot of comments from people who do “spec” work as fine art photographers. They are people who invest in shooting something as an image (or collection of images) and then work to get that concept published (at their expense) or get their images shown in a gallery or similar venue to be sold. This is really a different business model (risky if you are just starting out doing this) and not the kind of thing I am talking about when you hear “I have a different model for my business”.
So, how do you figure how your fees should be allocated for the prices you charge? When you are hired to work, there are two ways you will be paid: work for hire or as photographer with their own business. Work for hire is just making you the employee and anything you create belongs to your clients. You are often paid an hourly rate, and issued a 1099 or W2 at the end of the year. If you are paid as your own business, the rights to the images belong to you (unless you give them away) and there are three main fees: a) materials fees (expenses) or things that cost you to create the print or image itself usually as dictated by your client; b) license/usage fees or costs to pay for the use of the image by the client; c) creative fees or what your own overhead and markup is worth. The costs to create an image include both fixed and variable costs to you as a photographer, and must be met or your business will only drain you of money and you will be out of business. License and usage fees are something that most clients don’t ever think about. If someone only wants a wall portrait for their wall, you charge a fee. If someone wants just the high-res digital file, shouldn’t it cost more than the wall portrait? On the other hand, say someone pays you $600 for that same image to be used on a cover of a local magazine? That is more than what someone pays for the medium sized wall portrait. Does this mean if you get that same image used on a nationwide magazine that they should also pay you $600? How about if that image is used on anything and everything that a company prints making millions from your one image- is this still the same $600 image? Each of these are different uses and each is different that your client should pay. If your client makes more money from your image, then you should also make more money from that same image. When you start setting your prices and talking about your work to clients, think in these terms.
This post covers two things of concern for any photographer wanting to survive as a business: who are your clients and a way for thinking about your fees to survive. This should give you a framework to plan and make a sustainable business. In a future blog, I will take this even further explaining a little more. There is a lot here, so feel free to ask questions if it isn’t quite clear.