How Much to Charge?

[Koshua]

Most new retail businesses fail because the business owner doesn't have business, marketing, and salesmanship skills.

A lot of the business owners that have a business that fails DO have business, marketing, and salesmanship skills. So the key is actually having very good business, marketing, and salesmanship skills. A fair amount of luck is also involved.

I'm definitely not looking to go full-blown brick and mortar, but I assumed since more than a few people are inquiring about me for photos, it would be a good way to make some side income and also get needed experience. Thanks for the advice! I'm just going to plunge head first into this and if I only make a few grand around senior photo time each year, that's fine by me.

I'm also really passionate about learning how to make good images, so as I advance my skillset and take advantage of social media, I feel like that would naturally garner me more clients. With that on top of good advertising at specific times of the year (thanks to good family ties), my gut tells me I'll do ok.

 

[table1349]

Walk into any restaurant and ask the manager/owner what any item on the menus costs to make and if they are successful they can tell you off the top of their head. They can tell you the profit margin they need to survive and thrive.

Restaurants that fail usually fail for one of two reasons. First, poor product. Second and quite commonly, lack of business sense. They don't know their true costs and don't know how to price their food accordingly. Sound familiar?

 

[Koshua]

Walk into any restaurant and ask the manager/owner what any item on the menus costs to make and if they are successful they can tell you off the top of their head. They can tell you the profit margin they need to survive and thrive.

Restaurants that fail usually fail for one of two reasons. First, poor product. Second and quite commonly, lack of business sense. They don't know their true costs and don't know how to price their food accordingly. Sound familiar?

It's not costing me a terrible amount apart from time to make the product. I came here looking for a ballpark range of numbers based on my experience level, and ended up getting some pretty good information. Even if I just get to photograph the people that have already asked me without getting new customers, I'll be more than happy. They'll get better photos than they've previously had, I'll get experience, and I'll get some money to pay back student loans. If I ever start thinking long-term, brick and mortar, strict business sense, I'll be sure to consult the experts.

 

[tirediron]

...It's not costing me a terrible amount apart from time to make the product.

Arrgghhhh! Every time I hear this I want to beat my head against a wall! It's costing you a lot more than you think. First and foremost your time is not free. The time you spend doing this project is time that could be spent on another. Or buying a winning lottery ticket. Or interviewing for a Fortune 500 job. Or... Moving on... there's the cost of dealing with the client. Is your telephone free? How about transportation? There's gasoline and maintenance for your car, insurance, parking. If you ride a bicycle, that's still wear & tear and maintenance. Oh... wait, you're going to walk? Okay, so that's exercise which means you're going to eat a bigger lunch... There's the cost of electricity to charge batteries and run lights. Every single click of your shutter is one click closer to needing a new camera... These represent just a few of the costs involved in doing anything. Now, if you make a conscious decision to absorb those costs, that's fine, but if you're not informed you can't make that decision. Sure that all sounds like small potatoes... maybe what, a couple of dollars? Multiply that by say 100 shoots over the course of a year. That's >$200... it adds up.

 

[Koshua]

...It's not costing me a terrible amount apart from time to make the product.

Arrgghhhh! Every time I hear this I want to beat my head against a wall! It's costing you a lot more than you think. First and foremost your time is not free. The time you spend doing this project is time that could be spent on another. Or buying a winning lottery ticket. Or interviewing for a Fortune 500 job. Or... Moving on... there's the cost of dealing with the client. Is your telephone free? How about transportation? There's gasoline and maintenance for your car, insurance, parking. If you ride a bicycle, that's still wear & tear and maintenance. Oh... wait, you're going to walk? Okay, so that's exercise which means you're going to eat a bigger lunch... There's the cost of electricity to charge batteries and run lights. Every single click of your shutter is one click closer to needing a new camera... These represent just a few of the costs involved in doing anything. Now, if you make a conscious decision to absorb those costs, that's fine, but if you're not informed you can't make that decision. Sure that all sounds like small potatoes... maybe what, a couple of dollars? Multiply that by say 100 shoots over the course of a year. That's >$200... it adds up.

Hahaha, I've taken the small potatoes into account! I didn't just come up with a number willynilly, but I came here to find what you guys consider a reasonable price range for the project described in relation to my experience level. I've been doing research and have used competitors' costs as a benchmark, taken into account my experience level and how my photos look compared to theirs, and have generally taken into account the small stuff. I would rather profit less and spend my time getting good experience than not profit at all because the price for the quality of images I output is too high. Is this approach reasonable?

 

[KmH]

I doubt it.
Someone with exceptional business skills might pull it off, but someone with no business skills has chances of close to nil and none.

The common mistake made using what competitors charge is that you don't know what their CODB and COGS is.

 

[tirediron]

That's absolutely reasonable and a very practical approach, BUT... a couple of things to keep in mind: Your customers aren't going to see the improvement in your work over time, but they will see the increase in prices. It's very difficult to make a substantial price increase and not lose an established customer base ("I paid $100 last year, why is it $250 this year?"), what I recommend doing is setting your prices much closer to where they should be assuming you were "there" and then discounting them. In other words: You feel that charging $100 is appropriate for job 'X', but most people are charging $175; you set your price at say, $150, but offer a 30% discount for new customers, or repeat customers, or... that way when you do ask for more money, and they say, "Why?" you explain that the previous job was done at a discount which isn't currently on offer, but no fear, there will other sales/discounts, etc.

My entire published pricing structure is built around the premise that I will offer almost everyone a 10-15% for some reason. I find it to be a great hook and since it's already built in, it doesn't cost me anything, in fact occasionally I make a 10-15% bonus!

 

[Koshua]

That's absolutely reasonable and a very practical approach, BUT... a couple of things to keep in mind: Your customers aren't going to see the improvement in your work over time, but they will see the increase in prices. It's very difficult to make a substantial price increase and not lose an established customer base ("I paid $100 last year, why is it $250 this year?"), what I recommend doing is setting your prices much closer to where they should be assuming you were "there" and then discounting them. In other words: You feel that charging $100 is appropriate for job 'X', but most people are charging $175; you set your price at say, $150, but offer a 30% discount for new customers, or repeat customers, or... that way when you do ask for more money, and they say, "Why?" you explain that the previous job was done at a discount which isn't currently on offer, but no fear, there will other sales/discounts, etc.

My entire published pricing structure is built around the premise that I will offer almost everyone a 10-15% for some reason. I find it to be a great hook and since it's already built in, it doesn't cost me anything, in fact occasionally I make a 10-15% bonus!

I was planning on using the discount method! I already told the girl my discounted price and was planning on doing that for senior photos. I'm also going to be moving next summer, so I was just figuring I would keep the same price point as long as I'm here anyways, and once I have more experience brought to the new location, I can reestablish a different price while having (hopefully) great feedback from past customers on pricing vs quality.

 

[Koshua]

I doubt it.
Someone with exceptional business skills might pull it off, but someone with no business skills has chances of close to nil and none.

The common mistake made using what competitors charge is that you don't know what their CODB and COGS is.

You're too realistic for me, haha.

 

[table1349]

No one can tell you what to charge. We can tell you how to figure out what you should charge and many have done so. If you don't feel inclined to make the effort to actually figure it out that is on you not us.

As for being realistic, welcome to the real world. Success or failure falls squarely on your shoulders no matter what you choose to do. There are no do-overs or extra credit assignments and no incomplete's to be finished later.

 

[Koshua]

No one can tell you what to charge. We can tell you how to figure out what you should charge and many have done so. If you don't feel inclined to make the effort to actually figure it out that is on you not us.

As for being realistic, welcome to the real world. Success or failure falls squarely on your shoulders no matter what you choose to do. There are no do-overs or extra credit assignments and no incomplete's to be finished later.

I've already come to my price. I've just been describing my "business" ideology for the past how many messages. My previous realistic statement was humor, I understand what life in the real world takes haha. I appreciate the relationship between your last sentence and my current studentship, but there's no do-overs, extra credit, or late assignments at my point of schooling anyways. I appreciate the kind advice!

I also appreciate all the people taking time to help me determine aspects of CODB vs product price! Very helpful stuff.

 

[vintagesnaps]

Try this John... Gryph have you been watching Bar Rescue?? or one of those restaurant shows? Sometimes it's just been circumstances, the owner developed health problems or passed away and the family's trying to continue after years of a bad economy, etc. but most of the time - the owner is clueless or won't listen to suggestions or isn't willing to make changes, etc. and that's why the bar or restaurant is losing thousands every month.

If you want to know the going rate in your area, I would do what apparently you already did, look at the range of pricing by established pro photographers in your area (not the people with cameras on facebook/craigslist). You should be in that price range, maybe on the lower end but still in range. Get on American Society of Media Photographers or PPA and look up info. on how to determine your pricing. It seems to be a poor choice to underprice so low and then try to bring your pricing up later to a competitive level. But your photography needs to become professional quality which I don't see yet, you could get there but it will take some time.

It seems like your prospective clients now want cheap/free and presumably why they want you to do it which hardly sounds like a good long term plan. Why not just get a part time job to make some money and work on developing this into a business instead of trying some half assed idea of working cheap since your skill level is low? Is that the attitude you have about your work you intend to do with your degree??

I think if you want to be successful it'll take time to bring up your skill level with your photography and to learn what to do to develop this into any sort of business, even part time. It seems like you want money short term and I don't think photography is the best option, a summer job might be. Maybe your friends/acquaintances/followers/contacts will pay for some portraits and student level work is sufficient for what they need, so that may be a fine short term project; and then you'll need to do your 'homework' to develop this further.

 

[table1349]

Try this John... Gryph have you been watching Bar Rescue?? or one of those restaurant shows? Sometimes it's just been circumstances, the owner developed health problems or passed away and the family's trying to continue after years of a bad economy, etc. but most of the time - the owner is clueless or won't listen to suggestions or isn't willing to make changes, etc. and that's why the bar or restaurant is losing thousands every month.

If you want to know the going rate in your area, I would do what apparently you already did, look at the range of pricing by established pro photographers in your area (not the people with cameras on facebook/craigslist). You should be in that price range, maybe on the lower end but still in range. Get on American Society of Media Photographers or PPA and look up info. on how to determine your pricing. It seems to be a poor choice to underprice so low and then try to bring your pricing up later to a competitive level. But your photography needs to become professional quality which I don't see yet, you could get there but it will take some time.

It seems like your prospective clients now want cheap/free and presumably why they want you to do it which hardly sounds like a good long term plan. Why not just get a part time job to make some money and work on developing this into a business instead of trying some half assed idea of working cheap since your skill level is low? Is that the attitude you have about your work you intend to do with your degree??

I think if you want to be successful it'll take time to bring up your skill level with your photography and to learn what to do to develop this into any sort of business, even part time. It seems like you want money short term and I don't think photography is the best option, a summer job might be. Maybe your friends/acquaintances/followers/contacts will pay for some portraits and student level work is sufficient for what they need, so that may be a fine short term project; and then you'll need to do your 'homework' to develop this further.

Oh God Yesss. Usually one of the first three questions out of Gordon Ramsey's mouth is what does it cost you to make this dish. Invariably they either don't know or they give the cost of the ingredients. They never add in the cost of the staff for the time it takes to prepare the dish and serve it, the cost of replacement equipment, dishes, gas, electric, water etc. Gordon just shakes his head as he should. My favorite was the show with the two brothers in New Orleans that aired a couple of weeks ago. I thought that Gordon was actually going to loose it entirely. Too damn funny.

 

[Koshua]

Try this John... Gryph have you been watching Bar Rescue?? or one of those restaurant shows? Sometimes it's just been circumstances, the owner developed health problems or passed away and the family's trying to continue after years of a bad economy, etc. but most of the time - the owner is clueless or won't listen to suggestions or isn't willing to make changes, etc. and that's why the bar or restaurant is losing thousands every month.

I've been using the useful information I've received in this thread and it lead to me declaring a price! HOORAY!

You should be in that price range, maybe on the lower end but still in range.

But your photography needs to become professional quality which I don't see yet, you could get there but it will take some time.

Yes and yes!

Why not just get a part time job to make some money and work on developing this into a business instead of trying some half assed idea of working cheap since your skill level is low? Is that the attitude you have about your work you intend to do with your degree??

I want to get the people I know nice photos before I move, get the experience, and make some side cash! No long-term business plans (yet). And no, the work surrounding my degree is going stupendous! If someone wanted a crappy site and I was an inexperienced developer, I think my same ideas (and your feedback) would apply though! I've actually made crappy cheap websites that I didn't charge much for, and now I have a plethora of clients (even from back then) with great price points. As for the part-time job, development and design are keeping me busy. I just would rather do "paid" photography time than unpaid.

Maybe your friends/acquaintances/followers/contacts will pay for some portraits and student level work is sufficient for what they need, so that may be a fine short term project; and then you'll need to do your 'homework' to develop this further.

Absolutely!