Photographers Need To Stay On Budget

Be ready for changes

Often after you have booked a client there will be some possible changes. Just because you quoted a price does not mean you have to keep that price if the client makes changes to the scope of the project.

"I will be more than pleased to make it happen for you. Since this is a change to what we agreed on I need your approval for the changes before we proceed," is important to say to the client. You can phrase it however you want, but you need to communicate a few things.

1. You want them to get what they want.
2. With changes to the original estimate there are changes to the contract.
1. Price
2. What is delivered
3. Deadline
4. Possible new expenses
3. They must approve of the changes in writing for you to proceed.

Willingness to serve

Don't respond with no to a client unless they are asking you to do more for the same amount of money. Just tell them you need just a minute to revise the estimate to give them an idea what they will cost and any other changes they need to know.

This is why you want to estimate on a project and not give day rates. The only thing you can do on a day rate is if you have additional expenses to meet their request, otherwise when you have the time to do more for them you must.

Give yourself time to respond

It is quite common that a client might catch you off guard and don't feel bad about asking for a moment to consider their request.  

Sometimes the request may mean not just price difference, but to meet their request something else must come off the project due to time constraints. 

Sometimes I have to point out while we are running ahead of schedule for right now, but I will not know until the end of the project if I have time to add on this request. I will ask if they mind waiting to see if we have time. If they push then I let them know one of the situations we have scheduled might not get done.  I then give them the quote for the price change and wait to see if they want to proceed.

Bait and Switch

If you have given them a written estimate you do not have to worry about them feeling like you have them over a barrel when you give them the increased price quote. There are some people who are actually trying to get more out of you than you estimated. This makes them feel like they got their money's worth. 

You don't need to feel the pressure to give in to them, you just tell them the price difference and let them decide.

What happens if you forget to communicate a price difference?

You will most likely eat the cost, because you failed to communicate.

It is professional to communicate price changes before doing the work. I have watched too many freelancers turn in invoices that were higher than the quote and the relationship with the client is tarnished at best and destroyed at the worst. 

Take care of the paper work as much as you do the creative and you will have customers who will hire you again and again.

Pricing depends: Full-time or Part-time

On a regular basis I get a variation of the question, "How much should I charge?"

Every year I teach a class where we have a few assignments to help walk the students through pricing a project.  I have noticed that many of the students would rather copy each others work than put in the effort to figure out the numbers for themselves.

I think to many people are making assumptions that are costly mistakes to their success.

Myth #1

Everyone's situation is the same. While people may say this isn't true their actions say otherwise. If you have researched the prices of other photographers and then charged similar price you might just be proving me right.

Many people who shoot weddings all charge similar amounts in a market.  A new photographer comes along and sees that everyone is charging $2,500 to shoot a wedding.  Upon further investigation that photographer finds out what is typically being offered with a $2,500 wedding package and after looking at how much it costs to make prints, burn a DVD of images and create a book sees that they can charge the $2,500 and still make a lot of money, so they offer the same package.

It really takes some time before someone will discover if this pricing will work.

Myth #2

Pricing is relative to the quality of work. Most photographers believe that a highly skilled photographer should be the most successful photographer. This is a very common mistake with any profession. Businesses fail everyday because people believe that it is all about the quality of the product.

The "Return On Investment" formula:

You really need to understand the "Return On Investment"so that you will know why quality alone will not equate success.

One of the best examples I have first hand experience in is with shooting sports. Most teams that use photography are using it to help promote the team.  High schools and colleges need photos of their athletes for their websites and maybe a media guide.  For the most part if they have an image they can use verses a Sports Illustrated quality image, the organization will not benefit monetarily from the better photograph.

Even on the professional level the great photograph of an athlete rarely translates into profits for the team.

I can say with confidence that if you have a great action photograph of the MVP of the league player you will see a difference in sales. Now if the photograph is equally good of a high school player who is an average player you will not see more sales. Why? The thing driving the sales is more about the performance of the player, rather than the quality of the photo.

The bottom line is that you must produce good photography to have someone pay you for it, but there are many other factors influencing the purchase rather than the quality alone.

Myth #3

How long you have been making photographs determines your pricing. The number one group I hear this from is college students who think that because they are a student they must charge less for their work.

A customer is looking for a photographer. They see a couple of photographers work on their websites.  They like the photographs of one photographer.  They basically will then check and see if they can afford that photographer to do the work.

The only time a customer is factoring in if someone is in school is when it comes to price. A customer needs some photography and they realize that they can save some money by going after a different photographer.  The number one place most of these customers look is to students.

What matters the most to customers when hiring a photographer, is that the quality of work matches the examples shown by the photographer.

Experience cuts two ways in photography. Many customers are looking for a fresh eye and often see experience old style. Where too little experience can hurt you is when a client always goes for the safe and secure photographer.  This is rare, but does exist.

Your Situation

You must know your situation and what you are trying to do with photography to know how to price.

Hobbyist 

You enjoy photography, but have no plans to do this professionally.  You are very happy in your profession and love what you do, but also like taking pictures as a hobby.

There are basically two types of hobbyist I see shooting today.

The first group is financially capable of buying their gear they need.  They may even have enough money to make prints and give these away to their friends as gifts.  I find a number of these photographers enjoy traveling and some enjoy shooting sports.  To gain better access to things they like to photograph they offer to give their photographs to the groups they photograph.

They know that to get better photographs they need to be closer. So to move from the stands to the sidelines of their kids games they give their photos to the team so they can get better access.

The second group of hobbyist are those who need to help fund their hobby.  They need to offset their equipment purchases.  This group will price their work so they have enough income to offset their gear purchases.

Part-time photographers

One of the classic examples I see a lot of is a bi-vocational photographer.  I have seen many school teachers who like to shoot weddings.  Since most brides get married in the spring and summer months this works well with teachers schedules.

I have seen many professionals who also like doing editorial work of their profession. Many of the National Geographic Photographers have been biologists, anthropologists and other professions where they were experts in the field. Their photography and their profession go hand in hand.

Full-time photographers

Well I really don't have to go into the details here, but this group earns their living by photography alone.

Which photographer are you?

You really need to know which category you fit into and own it. If you are in any category other than full-time photographer and want to become a full-time photographer then you need to really understand pricing.

As long as you need another job to pay your bills because photography isn't generating enough income you cannot make the switch.

How to make the switch to Full-time Photographer

First you must take the time and know what your needs and wants are financially.  If you have Microsoft Excel there is a great tool that comes with this to help you.  There is a template in the personal section for "Household Budget."  If you don't have this you can use the "free" Kiplinger online form to help you.  (http://www.kiplinger.com/tools/budget/)

Second you need to know all the expenses related to the daily operation of the business.  NPPA has a "free" online form for you to help. http://www.nppa.org/professional_development/business_practices/cdb/calculator.cfm

Third you will have to get a good idea of what you will offer and how many times a year people will hire you. This is like putting your finger in the wind if you have no idea. The best way to know this is to have been getting small jobs on the side of your full-time job.  It is easier to get a feel for this by starting as a hobbyist and part-time photographer than just graduating from school or quitting your job and starting from scratch.

Once you know these three figures it is much easier to know how much you need to charge to do this full-time.

Myth #4

I can do that later. After seeing what you need to do to figure out your prices you decide that you are not ready to do all that work. You instead decide that you will work on your photography and when you get to that point where you think you are ready to go full-time is when you will work on that business stuff.

We all put off working on unpleasant or tedious tasks from time to time. I understand that completely, but procrastination is the surest way to failure.  If you want to go full-time and remain full-time you need to take the steps I outlined to make the switch right away.

Let me tell you a little dirty secret about many of the full-time photographers. Most of them produce mediocre work. So how do they stay in business. They know what they need to charge and have no problems at all telling people their prices. They can say with complete confidence this is their price. They know that if they lower their price they are in essence then paying the customer to work rather than they being paid.

When you have done the math, you know the point at which you are making or loosing money.

How much should I charge?

FotoQuote is my #1 resource to calculate usage fees

I get the question from former students, colleagues and newbies all the time—“What should I charge?”

There are a few parts to that question. I am going to address the usage part here. You need to know how much you need to break even. We call this the “Cost of doing business.”

It has stock prices, assignment pricing, magazine pricing and quote packs

To figure the cost of doing business you take your living expenses of home and combine them with your overhead costs for running your business and estimate the average price you need to charge to cover this.

For jobs where folks are not buying prints to put on their walls at home you need to know how they plan to use the photos. We call this usage.  This is what I want to address, because this is where you have room to negotiate.  Your cost of doing business figure you have to charge that much or you are loosing money. 

Quote packs are great for helping a client get more usage and for calculating the value of the package

The way someone uses your photos can vary the price you charge. One of the best comparisons is the music industry. If you buy a CD of a pop group you can play this on your own device all you like, but if you have a business and you play it over the intercom system you legally should be paying the artist more money to do that.

A company on Wall Street cannot use the music on the CEO’s personal CD for the advertising campaign.

I love the coach feature.  It helps you know how to negotiate with a client.

This is also true for photography. The photographer maintains those rights to use the photos and can regulate how the images will be used. The client who hires the photographer can negotiate for some or all rights.

How do you know what this is worth? I use FotoQuote to help me get some idea of the rates I could charge. My recommendation is to buy the software and use it to help you know how to negotiate and get a fair market price for the use of your work.