Thursday, 31 December 2015

Why Photographers Charge What They Do

Today I almost got into an online argument with a friend's friend on Facebook.

It went something like this:

Friend of a friend : I want to get some professional photos done but can't find anyone with decent prices - any recommendations?

And the photographer in me answered "don't pay decent prices = don't get decent photos!"

Which prompted the response : Not true.  I've had some amazing ones from a friend and she did them for free for me, but even so, she usually only charges £45 for all photos on disc.  1 hour taking the photos, plus 1 hour sorting photos for £45 = not bad at all.  I'm sure many people wished they got paid £20 an hour"

Which is when I had to sit on my hands, bite my virtual tongue and step away from the keyboard!

But really, I have to thank that lady because it got me to thinking about how photography clients may not be aware of just what it takes in financial terms after the initial investment in a camera body and a few lenses, for a photographer to run a successful and profitable business. As opposed to just running a very expensive hobby.

Clients might not realise that running a photography business is not just owning a decent camera and taking some photos and can include the following 

1) Business Insurance

As soon as a photographer begins to charge members of the public money for their services, they will need to have public liability insurance in place.

Why do they need public liability?

Public liability insurance covers the cost of claims made by members of the public for incidents that occur in connection with business activities.  Public liability insurance also covers the cost of compensation for personal injuries, loss of or damage to property.

They will also need to insure their camera, lenses, studio lighting, props, premises etc against theft, damage or breaking down.

Inurance costs can start from £20 upwards per month, dependent on policy requirements.

2) Website Costs

Any photographer who wants an online presence needs a website to showcase their portfolio, which means registering and buying a domain name and paying for web hosting, either monthly or as an annual cost.

As a photographer's business grows, free or low cost websites become too limiting and restrictive and don't offer the services a photographer needs on their website, such as password protected galleries, a responsive design to look good on all devices, ecommerce for product orders etc.

Monthly costs for a decent website can start at £20 per month upwards for a generic off-the-shelf design, or can run into hundreds of pounds for a custom website.

3) Travel Expenses

Does the photographer travel to their client's homes to take their photos?  If so, they will have additional car insurance in place for using their car for business purposes, as well as having to take into consideration wear and tear to their vehicle travelling to sessions, all of which affects the resale value of the car.  

They also have to factor in petrol expenses.

4) Studio Costs

If they're not mobile, are they shooting in their own home?  If so, this means they will have to pay for separate insurance to their personal house insurance and notify their local authority that they are using part of their home for business purposes.

The alternative is to work out of a proper photography studio which incurs a variety of expenses such as rent, business rates, insurance, heating and water costs.

5) Marketing Costs

There is only so much qualified business that can be generated from free marketing such as Facebook and word of mouth.  To sustain a successful business, a photographer needs to rely on regularly filling their diary with bookings and may need to invest financially in advertising, PR, printing costs, and display products to showcase what products they offer to their clients.

6) Admin and Time

For every booking received, a photographer can expect to need to spend time from start to finish
  • emailing / speaking with their client booking the session in the diary
  • emailing / speaking with their client giving guidance and managing expectations about what to expect from the photoshoot
  • preparing the shooting space for the photoshoot
  • the photoshoot itself
  • tidying up after the photoshoot
  • washing any soiled props
  • reviewing and editing all images taken
  • showing the client the images / delivering the images via disk or USB
  • processing client product orders
  • delivering client product orders

To generate new bookings, a photography studio can expect to spend admin time :
  • updating website / blog / social media
  • networking with other local businesses to establish a referral programme
  • answering email / telephone enquiries that may not convert to bookings

Not to mention general day-to-day admin and expenses that any business has to undertake :
  • paying suppliers
  • invoicing clients
  • reconciling accounts
  • SEO maintenance
  • Internet costs 
  • Electricity to heat and operate their work environment
  • Telephone costs

These are the very basic ongoing costs a photography business can expect to have.  

This does not include additional expenses photographers have, such as
  • Training to develop skills
  • Studio equipment such as lighting, display products
  • editing programmes such as Photoshop and Lightroom
  • Computer to edit with, usually with several external drives to store images
  • Online cloud backup of client files
  • Props and backdrops for session setups
  • Animoto, album design software
  • Maintaining and updating camera and lenses (which is not cheap!)

Now I'm not saying that £40 for all images on disk as a business model is bad, or equates to an unsucessful photography business, as everyone has their price point and what someone wants to earn as a salary differs from person to person.

I also appreciate that all photographers, no matter how long they have been in business, need to start somewhere and their low price may reflect their need to build and develop their portfolio.

However, using the "all images for £40 on disk" argument means a photographer has to take a lot of bookings to cover all of the costs outlined above before they can expect to receive a wage.

When writing this article, I asked in my private facebook group for thoughts from established photographers and received some interesting responses :

"I outlay approx £400 a month in insurances, as well as things like photoshop subscriptions and my rent etc, That's before I buy the ever important props that clients expect"  

Using this as an example, a photographer would have to take 10 x £40 bookings a month before receiving any kind of profit. 

Other photographers told me

"I spend £300 a month on marketing alone"

"I outsource my book-keeping and SEO, and just those 2 things cost me £460 a month .... which equates to one session / sale based on the prices I charge just to cover those costs"

"When I first started, not that long ago, I was £40 for everything. I produced decent images, had them queuing round the block, and was booked up 6 months in advance. All my business came by word of mouth, and I had no advertising, no marketing, no outgoing costs apart from Photoshop, electricity, props & discs. Thing that I failed at was time, I literally didn't have time to shower! BIG failure, having lots of bookings did not make me successful but did get my name out there & built the foundation of a business."

"I spend roughly £850 a month before I start to make any profit"

"I spend money on an accountant, PR, mentor, insurance, website etc - the list is massive. So no, I would go out of business fast at £50 a shoot because I don't want to work like a dog to get that £50. That's before I've added in equipment, heating, lighting, rent etc"

"My expenses are £365 a month before I factor in props, goods, wear and tear on equipment. In prints and p&p alone I spend an average of £20, then there's marketing, business cards, packaging for products..."

"My outgoings are roughly £700 a month"

"I need to clear 1.5k a month before I make a profit"

So next time you see someone claiming that professional photographers are greedy, charge too much, are too expensive, all to "just take nice photos", or that their friend can do it for free, perhaps link them to this article!

Suggested further reading : The True Cost of Running a Newborn Photography Business, BANPAS

The Customer Is Not Always Right, Beyond The Camera

I would love to know your thoughts ... please comment below