Paid Yourself Lately?

We are moving along to part 4 of our 5 part ‘Getting Down to Business’ series by our guest blogger (and new ‘team milky way member), Erin Brule.  If you missed last week’s “Sales is NOT a dirty word,” you can read it here.

Show me the money!

When you read that, did you suddenly envision Cuba Gooding Junior, walking around his house half-naked. in Jerry McGuire?  If so, you are welcome 🙂

But, this isn’t a movie post, we’re talking about profits.

Do you have any?

If you don’t immediately know the answer to this question, it might be time to get your book-keeping in order.

I’m not talking about doing the ‘quick math’….”Yes..I had 5 sessions last month and earned $2,000…so I have profits”

Quick math is easy…that’s why it is quick!

But, you need to be sure you are pricing your sessions (AND PRODUCTS!) so it is worth your TIME to do the sessions, and sell the products! (and not become a burned out, whiny photographer along the way)

Now, I’m assuming you are running a photography business. If you aren’t, and you just really enjoy taking photos and covering your costs, you can skip this article.

However, if this is your livelihood, or you would LIKE it become your livelihood, let’s chat!

Quickly jot the following down (and then keep that paper handy to refer to it throughout the year!)

  • How much would you like to earn in a year?
  • How many hours/week do you want to work?
  • How many sessions would you like to shoot each week?
  • How many months/year do you want to have sessions?
  • Outside of actual “sessions” – how many hours/week do you want to work?
  • Do you want to have employees or outsource some of your work to contractors?
  • Do you want to work from home or have a separate studio space?  Or, do you want to be on location only? (this will factor into ‘fixed costs’)

Now…to be more realistic than the ‘quick math’ method, figure out the following equation*

Fixed Costs (anything you are paying for regardless of the number of sessions you book – ie: studio costs, equipment<camera, computer, memory cards>, software, website, business license, studio samples, office equipment, props, eduction, templates, actions, forum fees, etc)
+ Desired Salary (what do you want to earn in a year)
= Net Sales

(*this equations doesn’t cover everything either…but it get’s you close!)

Now, you can figure out what you should be aiming for your average sale.

Net Sales / # of shoots per year = Average Sale

(keep in mind, this is average ‘net’ sale…so if your packages include canvases, albums or prints, be sure to add the Costs of Goods sold to your ‘average sale’ figure).

Ok…so now you have some numbers in front of you.

Do they surprise you?  Scare you?

Your job is to now figure out HOW to ensure your average sale is reaching this target.  Do you like to sell packages up front?  Or do you thrive on post-session sales?

A question I often hear is, “What should I charge for a 5×7?”  There is no ‘right answer”  Sorry.  It depends on your sales strategy.

Just keep this in mind – you are NOT in the business of selling photographic paper.  You are selling the IMAGES that are the paper.  It doesn’t matter if Walmart charges $.99 for a 5×7 print.  Your IMAGE is what holds the value.  Not the paper.

And also keep this in mind, you have NO IDEA what the goal is of the photographer down the street.  Just because they are charging $10 for a 5×7 doesn’t mean you have to (or should).

(edited with Milk & Honey’s Dreamy BW action)

If you are offering albums, you MUST know how much time you spend on each album and price it accordingly.  Again, I hear people saying, “well..the album only costs me $75, how can I charge them more than triple that price?”  Well…the cost of the paper and binding is $75.  Then, there is the value of your IMAGES that are going in the album.  Plus your talent and time in putting the design together.  So what is all THAT worth…on top of the ‘cost of goods sold?’

As frustrating as it might be to hear, there really ARE no right or wrong answers when it comes to setting your pricing.  And, there is no ONE way to do it.

It needs to feel and BE right for you and your goals.  Just don’t give away the farm!  VALUE yourself, your time and your talent.

And really ask yourself, “Have I paid myself lately?”

Next week, we’ll wrap up the series with a quick chat about your website…what has it done for you lately?

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