BOSTON CHILDREN'S PHOTOGRAPHER, BOSTON FAMILY PHOTOGRAPHER, BOSTON NEWBORN PHOTOGRAPHER

I have received so many messages from people as a result of my “The Cost of Doing Business” article. Overall, the response has been overwhelmingly thankful and people have generally been appreciative of the information. Based on some of the questions I received, I wanted to provide a deeper explanation of some of my closing points. Even though numbers don’t lie, I understand that there will be question and debate. That to me, is AWESOME because it means that you are thinking about it. If something gives you agida, take a minute to think “Why does this bother me?” I find that when this happens to me, it’s because it’s an area of my work/life/etc. that I have been uncomfortable with and someone else might be articulating it in a way that makes me question myself. Usually it moves me towards a point of change.

I am going to reiterate some of the points I made in the prior article.

• The Numbers Do Not Lie. If spend money, you need to understand that what you earn as revenue, counts against that. It’s basic P&L (profit and loss). You might operate at a loss early on, but you should at least be aware of that.

• I am NOT saying that you have to be “expensive” to be in business. I described a “break even” analysis to tell you how you determine the costs you need to cover to not LOSE money. You can apply it to a number of different pricing scenarios.

• Everybody starts somewhere. $300 for “everything” while you are portfolio building may or may not be the right thing to do. I am not advocating that someone who is just starting out set the same prices as me, or anyone else.

• You can certainly charge $300 for your services, but offer what makes sense for that price so that you are not operating in the negative – make it fee based or add on a la carte as your client wants more product and services.

Let’s move onto one of the less measurable points which arise out of comments like “my clients wouldn’t pay you that much” or “I live in rural XYZ, my clients don’t have that kind of money” or even “I won’t ever have a studio, I work light, I like to shoot & burn, I don’t have a lot of expenses. I don’t want to charge a lot, ” and “I wish my clients understood this.”

It all boils down to this:

Pricing to cover your time & costs is NOT the same as pricing for your BRAND. It does not tell you how to arrive at your final pricing.  It just tells you how to not lose money.

Your pricing should be a sum of:

(1) expense allocation + (2) COGs + (3) your time = breakeven price

PLUS    PLUS    PLUS    PLUS

(4) the value of your work, skill and output

(5) the market you live in vs. shoot in

(6) your target client base

(7) your offerings

(8) your brand

We’ve already belabored the first three items on the list. Now let’s talk about the rest.

4. THE VALUE OF YOUR WORK, SKILL & OUTPUT. Everyone does have to start somewhere. I’ve written two lengthy articles about my thought process about going into business (viewable here). This is how I approached it, it might not be right for you. No matter how you slice it, you need objective evaluations of your work because you need a benchmark of your skill.

Producing quality sessions takes time. A LOT OF IT. It’s a growing process. You DO reach a point where you are in between developing your skills and developing your business. There is a vague time when you aren’t sure what to do. Dr Suess calls it “The Waiting Place.” You need to charge something, but you also need to be very forthright and say “I am not charging full price, but you might not be getting full service.” There is nothing wrong with charging a nominal amount to cover your time and expenses, with the understanding that the client is getting a bargain because you are developing your portfolio, working out kinks, and finalizing your brand. There are people that will take a gamble, the session will suck and they’ll think “well, I got what I paid for.” And there are people that will take the gamble, you’ll shoot the session of a lifetime, and they’ll be your clients for life.

Don’t confuse The Waiting Place with “Yesterday I photographed my kids, today I am running a business.”   Spending time in The Waiting Place is invaluable, jumping two feet into full fledged business when you aren’t ready is disastrous.

If you are in The Waiting Place, it’s actually the BEST time to figure out the Cost Analysis because you know you aren’t making a profit. You know that you are just getting your feet wet, so what a perfect time to understand how much you have to earn just to begin to perfect this craft of yours.

That said, as you improve, and you can consistently produce galleries that offer a diversity and range in composition and expression, and you feel like you are really producing something of value, well, at that time you begin to carefully asses points 5-8 and build a business model. Over time, as your work evolves and you produce better and better work, and a more refined brand, you can adjust your pricing as you need to (i.e. I haven’t raised my pricing in 3 years, but I’ve adjusted packages and offerings).

5. THE MARKET YOU LIVE IN VERSUS THE MARKET YOU SHOOT IN. I can find a photographer priced like me in every single market. I can find one that is priced higher and priced lower. Within each and every market, I can find a client that is willing to spend $300 – $4,000. Refute it if you like, but they are all there. That said, the quantity of each may vary. There may be one, there may be 50. Higher Cost of Living (CoL) areas are conducive to a greater quantity of both, and vice versa. To figure out where you want to be priced in relation to your market, you have to define your market parameters. How far are you willing to go, and where do you want your clients to come from? I have a studio here in my town, but 50% of my clients come from either the city of Boston, or Metro-West. These two areas are between 25-45 minutes from me, without traffic. And between here and there, the average home price probably varies from $400K – $1.1M. The amount of disposable income varies as well.

YOU decide what your physical market will be, and where you will target, based on where YOU want to work. I had someone 30 minutes outside of small but wealthy market (and low CoL) tell me that there was no money in her area, and everyone was priced similar to her (averaging a sale about $500). That’s because she decided to define her market as her town + 3-4 surrounding towns. If she had expanded her reach to include the metro area + suburbs about 30 minutes away, she would have found a plethora of talented and expensive photographers and residents who work for one of the highest grossing companies in the Fortune 500 (closer to 100, actually).

Deciding on where your market will be rolls into deciding on who your target client will be. And it’s your choice how you define that.

Keep in mind, a higher CoL means that everything is more expensive, but that people are also used to paying a lot more for things (if they can afford them), and that YOU need to make more money because YOUR life costs more money.

I do agree that there is a valid argument for pricing yourself on the less expensive side of the business if you live in a rural, low CoL area (and vice versa).  However, you can easily scale your offerings so that you are still profitable, and you can structure your pricing so that you are not capping yourself out, or selling yourself short. Don’t sell yourself short because you believe that people won’t pay more – make it scalable.

6. YOUR TARGET CLIENT BASE. Too many times I hear people complain that their clients just don’t understand their pricing and are always bargaining and price shopping. Either your client doesn’t value the work you are producing or you are targeting the wrong client base for you. Identifying your target clients is critical. And it depends a lot on how you build your brand. Who do you want to target? What volume of work do you want to take on? How much would you like for your average sale? And what products will you sell to meet that objective? Reaching your target client base can be a challenge, but it’s even MORE challenging if you don’t understand really who it is or you haven’t really defined your brand. If you are consistently achieving a lower than desired sale, or you have people price shopping you and comparing you to your competitors [lower] prices, or if they just don’t like your style, you are not reaching your target market.

I have competitors within the same exact target market as me, but we appeal to different clients within that market. Their clients would be disappointed with my work if they hired me and vice versa. So not only do you need to know where your targets markets are, but also WHO they are.

There are some personal challenges that come with defining your market that might make you uncomfortable. But if you don’t work through them, you won’t have a lot of success. So ask the tough questions. Are you your own target market? Are your friends? Is your town? Are you comfortable within your target market? Can you hang out and be where your target market congregates? Do you personally know and interact with anyone in your target market? You need to really think through these answers and come up with a strategy that sits right for you, and makes you feel good at the end of the day. It might mean walking away from business you previously thought you wanted (on both the higher and lower end of the scale). It might mean having a scalable price list so that you please as many people as you can.

7. YOUR OFFERINGS. What are you selling? Is it easy or time intensive? Are you soft proofing and only closely editing at special request? Are you allowing your DVD prints to be 5X7 or 16X20? Are you sizing for canvases? Are you designing albums? Are you creating samples? Are you printing then reviewing and re-editing reference prints or just handing over a DVD? There are no right or wrong ways to do this, but you should be selling offerings that your client base wants, and that make YOU happy to sell. And again, no one can tell you what makes YOU happy, but you should understand that different offerings have different time and cost constraints and that as you grow your business, clients may want different things and you need to be able to evolve your pricing so that it meets those client needs and fits within your brand. You may have to go back and re-evaluate how much time you spend per client if you find that you are moving from easy volume to boutique or vice versa.

Some of this equates into your COGs, some of it is TIME, and some of it is intangible.

8. YOUR BRAND. Brand comes down to WHO YOU ARE. Your brand is authentically and completely you. If you try to pass it off as anything else, it will fail. I don’t own that statement, it was graciously handed down to me by people who mentored me as I was figuring all this out. But everything you do has to line up with who you are, what you want to sell, how you shoot, and how you feel and see the world. So before you even really get deep into your own business, you should have a sense of this, how that translates into an image, what story it tells… and then line up your processing, your products, your pricing and your target market to enhance that.

I can’t express it enough about how your brand must align with your life. If you create a brand and then market to clients who do not “get you” (though they may be in your assumed target market), you are going to be gravely dissatisfied because they are not going to book you, be happy at their shoot, or order what you want them to.  They will pick your prices and your images apart, and you will feel unhappy and you will burn out.

Landing the plane.

HOW SHOULD YOU BE PRICED?

Once you know how much you need to cover your costs, you need to decide your volume, you desired average sale, the number of hours you need/want to work, whether you want to price “local” or another targeted area. You need to consider whether you like short sessions or long, or a hybrid and whether you think your time on the weekends is more or less valuable than weekdays. Do you want a “all in one price” or a minimum purchase? A la carte or packages? And what products? Do you want those products to appear accessible or exclusive? And only you can really figure this out, based on how YOU want to run your business. And if you have thought through all of this, and have a firm understanding of why you made the choices you did with respect to pricing, then you just have to be firm with your beliefs and stick with them.

I will give one final parting word though… if you are hearing a lot of critique from a lot of people, there is a chance that maybe you overlooked an important component. Maybe not, but it’s worth listening to and perhaps considering what you are hearing. I find that my best business changes typically come from my harshest critiques, but again, that’s just me.