school project, starting your own business. Help...

[Jeepinmomma]

How does one come up with packaging prices? Obviously they are paying for the photos, taxes, sitting fee what else is there to charge for? I have to do this for a school project, to basically make my own business, what prices i'd charge etc, my professor said that i wasn't being realistic, and that basically i'd be way to cheap and would lose the business lol. I must be missing something!

 

[LearnMyShot]

Professors are not working in the real world, have him call me

 

[JenR]

Not sure what all you have factored into your prices....

There is $$ for studio space, many $$$$$ for equipment, $$$ for your time/expertise, $$$ for training, $$$$ for office supplies/business overhead stuff, $$$ for marketing, $$$ for prints/albums, etc

These are all just a few costs of the top of my head. I am sure that there are many more real costs involved in running a business.

What did you already give to your professor?

 

[KmH]

How does one come up with packaging prices? Obviously they are paying for the photos, taxes, sitting fee what else is there to charge for? I have to do this for a school project, to basically make my own business, what prices i'd charge etc, my professor said that i wasn't being realistic, and that basically i'd be way to cheap and would lose the business lol. I must be missing something!

You only missed a couple of things. Getting paid for your time and talent is always nice (your salary).

It would be a good idea to have a retirement fund, some health insurance, business liablity insurance, employment insurance, vehicle and photography equipment insurance,
and get re-imbursed for: phone costs, Internet access, computers, software, utilities, vehicle expenses, office supplies, photography supplies, wear and tear on you cameras and lenses, postage and shipping costs, advertising and promotion costs, web site and blog, legal and accounting services, professional development, and that's only a partial list.

If you desire personal income of $40,000/yr, figure at least an additional $60,000/yr to run a one person studio, so total needed business revenue per year is $100,000.

That's $8333.33 per month, or $1925 per week assuming you your all 52 weeks of the year.In reality, figure only working 46-48 weeks of the year.
If you shoot 3 days a week, and use 3 days a week for managing the business (developing your marketing plans, preparing the 2011 New Years promotion, editing, ordering client products, cleaning the toilet in the studio bathroom, sweeping the floors, dusting, etc, etc, etc) that only gives you 138-144 shooting days a year.

$100,000/138 shooting days = $725 you must have as your average incoming revenue every shooting day.

All of the above is what it takes for the business to just break even, and doesn't actually include a profit, nor reimbursement for cost-of-goods-sold.

Oh, and the way I set that up, you'll be working 6 day weeks.

The reality for retail photographers today is that to have a healthy, full time business, your average sale needs to be right about at $1000.

 

[Jeepinmomma]

Well we just had to do basics, like session fee i put 35 dollars for an hour session.
Then we had to do 3 packages
A:
1 8x10
2 5x7
4 4x6
8 wallets = 65.85 with my session fee and taxes and shipping from mpix

B:
1 8x10
4 5x7
8 4x6
16 wallets= 76.82 with my session fee and taxes and shipping from mpix

C:
2 8x10
6 5x7
12 4x6
24 wallets= 87.80 with my session fee and taxes and shipping from mpix

I said that i would run the studio out of my household, which would raise my house insurance to cover my business, if some one got hurt, and my equipment. Also that family portraits include 4 persons its 10$ extra for each additional. Also if i have to travel up to 30 min away from studio i would charge a 20$ travel fee. He just basically said that my business would flop, and to check out my competition here in crossville, i found one. They charge 150 for an hours session and 40 of that would be put to the photos of their choice, and that is also for an half hour session, how do people afford that, especially in my area (at least thats what i'm thinking). What do you think, my goal is to one day open my own business but if its going to flop at these prices then i need to change something!