STRUCTURE YOUR RATES Photography … its your profession … its by monkey6

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STRUCTURE YOUR RATES Photography … its your profession … its

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									STRUCTURE YOUR RATES Photography … it’s your profession … it’s your business … so run it like a business!!! Photographers, by their own admission, are lousy businessmen. The mindset of “I’m an artist and not a businessman” is unacceptable and is ultimately having a detrimental impact upon the photography profession as a whole. Most photographers are sole proprietors and personal brand custodians – this is a business and should be run like a business. The purpose of this article is to encourage all photographers to cost their business properly and develop a sustainable business model to allow them to focus on what they do best, which is being creative and providing the best photography and service possible. The advent of the digital medium has dramatically impacted upon the way photographers traditionally cost and execute their business. With no unifying body guiding the industry through this volatile period of change, photographers have resorted to a mindset of self-determination, which has fragmented the industry and resulted in confusion and inconsistencies in the way that photographers structure their rates on each job. This has not only confused the photographers themselves – it has also confused their clients and is ultimately marginalizing the photography profession. (For example: Photographer A charges R250 per capture, B charges only R10, and C doesn’t charge for captures at all – this just confuses our client base!) As a profession, how do we go about structuring our rates according to a model which is similar for all photographers? The answer lies in photographers carefully costing their business and accounting for the hard costs that they need to recover. Furthermore, photographers must separate their private life from their business life and understand that a net salary is required to cover their personal expenses. Andrew Pittaway from The Pixel Foundry, in association with a number of Cape Town based photographers, recently consulted a qualified accountant to assist in developing a simple spreadsheet costing model for photographers. This model allows photographers to “load their business” into the spreadsheet to give an indication of the returns they need to make in order to run a sustainable and profitable business model. If you want a copy of this model emailed to you then please request via “andrew@pixelfoundry.co.za” The model clearly distinguishes between: 1. Capital Investment (purchase of camera, lighting and accessory equipment) and the required returns on this equipment 2. Monthly business overheads 3. The salary that you deserve as a professional Capital Investment – The cost of setting up and maintaining a professional operation is becoming prohibitively expensive. The model clearly identifies these costs and provides a good indication of the respective returns that are required. For the photographer who uses a bedside lamp I can understand why they don’t charge for lights. However, if the photographer has invested in a professional lighting kit, which can comfortably cost well in excess of R50000, this hard cost must be accounted for and charged to the client. The same goes for camera equipment, studios, assistant fee and other specialized costs. It always surprises me that photographers are happy to charge clients for outsourced costs (such as models or stylists) for which they incur no minimal financial risk, but are reluctant to charge for lights or equipment where they personally incur substantial risk. Monthly overheads and expenses – in reality businesses cost a fortune to run, even your small photography operation. Start by having the discipline to separate your business from your private life / personal expenses (remember your personal expenses should be covered by your

salary). Ensure that you account for ALL your monthly overheads and expenses (such as Bank Charges, Computer Expenses, Electricity & Water, Insurance, Rent etc…) and provide for those nasty annual or once-off expenses Salary – once you have accounted for the hard costs and monthly overheads and expenses, you must have sufficient profit left over in the pot to pay yourself a salary. Remember you are a professional and you need to be rewarded accordingly for your skills. In additional to all the above, your business should also make a reasonable profit. All successful businesses have a carefully thought out business plan – a key element within this business plan is to have a sustainable financial model. So, as professional photographers, how do we successfully structure our rates to account for both the hard costs and our professional photographic service fee? An industry recognized invoicing structure will do well to ensure that all photographers achieve recovery on their costs. Whether shooting on film or digitally, the hard costs are there for both mediums and must be accounted for. These hard costs must be separated from the professional fee which is sacrosanct to the photographer. Generally speaking there are two major components to a photographic shoot: 1. Professional Photography fee – this is time charged out by the photographer and is “negotiable” to the extent that a photographer has the right to determine his own market value for his professional skills, and the market in turn has the right to decide how much they are willing to pay. This is an area where it is not possible to achieve consensus on price as each job is brief dependent and therefore “negotiable”. It is further complicated by shoot classification – editorial shoots vs advertising shoots, with generally accepted price disparities being the norm. Advised that you work back to an acceptable hourly rate for your professional time relative to the brief / complexity of the shoot. Note that this pertains entirely to your time as a professional and has nothing to do with the hard costs that one incurs on a shoot 2. Hard Costs recoveries, such as data capture & processing (digital fee), studio hire, lights hire, assistant fee, etc. These are costs which need to be recovered irrespective of what your professional fee is pitched at, and are thus “non-negotiable” and should be kept separate from the photographer’s professional fee. (Note that this is a guideline and that each shoot is brief dependent and additional costs or discounts must be accommodated). The structure of the invoice to the client is therefore extremely important and must independently reflect all the different cost elements of the shoot. Photographers must move away from invoicing under a “single all-in fee” where hard costs are fused together with photographic fee as a single charge. This proposed model format, if adhered to by all photographers, should establish an “industry norm” and serve to provide our client base with clarity and understanding so that can do their planning and costings accordingly. Furthermore, it will enable photographers to run successful, profitable and sustainable businesses and ensure their future as a professional photographers.

A recommended Invoice Structure is as follows:


								
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