This is How Profitable Photographers Calculate Pricing

If you spend time in online photography forums you'll begin to see just how often the question of how to calculate pricing as a photographer shows up. In my local Facebook group here in Pittsburgh it's at least several times a week. Therefore, I wanted to create this article to explain exactly how to calculate pricing like a pro. In fact, if you use this method I promise that you'll never worry about being profitable.

How To Calculate Your Pricing

First, it doesn't matter what type of photographer you are. In fact, this method works not only for photographers but all small business owners. Not only that, but it doesn't matter where you are or what your expenses are. Ultimately, this pricing method is easy and works for everyone.

10 Things To Know Before Starting Your Photography Business

Calculating Photography Prices

First, you're going to figure out what you need to make in a year. Then calculate how many billable days you can do. This will be based on the market. In addition, you need to know how much time you need for non-billable days. These include, days when you're doing administrative tasks. Also, they include days off. In fact, you need to take those otherwise you will experience burnout.

Calculate Your Expenses

As a simple example let's say you calculate all your expenses and they add up to $120k.

Expenses include the following and more:

• Bills
• Insurance
• Retirement savings
• Emergency fund
• Equipment replacement
• Vacation fund

Remember, these add up to $120k (for simplicity). That means, on average, each month you need to make $10k to reach $120k in 12 months.

Billable Days Calculations

If you were doing weddings alone and you're somewhere temperate then you're unlikely doing many weddings in the winter. So maybe you can do:

• 1 in each of Jan and Feb (2 total)
• 2 in March (4)
• 4 each in April-Oct (28)
• 2 in Nov (30)
• 0 in Dec

As a result you can reliably do 30 weddings in total. Now, let's divide our expenses by our billable days.

Daily Price Calculation

To meet your goal of $120k you'd need to charge $4k/wedding. This is because, $120 divided by 30 is 4. So, $4k per wedding.

That said, if you already know you need to do 30 days at $4k/day you can extrapolate out to adjust that price. For example, you could try to do 60 weddings (or billable days) at $2k/day. Of course, if your local market is more a $3k a day type of place then you need to have 40 billable days per year.

Remember, you need to make $120/year to cover your expenses so this doesn't leave any room for error. In other words, this is your must meet number. Of course, if you've got room to trim your expenses you can fall short but it's good to try to exceed these numbers.

Billable Days Per Month

Assuming that you're uncomfortable with charging $4k/wedding. Or, assuming your local market really won't pay that amount. What do you do? First, you could try to add billable days. However, five billable days per month (60/year) might be tough to pull off unless you're in a big enough metro area.

That said, if you could average 2 weddings per month at 4k each then you only need 1 other job that month at $2k to make the month. Again, that's averaging weddings and not taking into account winter drop-off. Therefore, you could do some other types of photography for $2k/day or do 4 $500 jobs for example.

Calculating Package Prices

Once you've got that stuff figured out, you can calculate pricing for packages and more. Just remember, adjust for any cost that's part of the package. That is, if you didn't already figure them into your yearly budget. In other words, if you're doing a bunch of prints then your cost isn't going to be $4k, it's going to be $4k + the cost of those prints.

Three Tier Pricing

Once you've got your break even cost down then it makes sense to create three differently priced packages. Often called the Goldilocks Pricing Model, this method is a well researched and proven pricing strategy.

The highest priced of these is almost never going to sell and is there to make the middle one look reasonable.

The lower price one needs to be as close to or above your break-even ($4k) price because you will have some people choose it.

The middle priced shouldn't be a whole lot more than the lowest but should include more of what people want.

Sell The "Just Right" Middle Tier

As an example, don't include digital copies in the lowest priced package. Set that at $3,599. Then charge $999 to add the digital copies to that package. At the same time, do include digitals in the middle tier package for an amount that will make them say, "Well, we want those, we might as well pay for the $4k+ package where they're included since it cost more to add them to the cheaper one. Plus, we get more stuff in that package too!"

My Qualifications

If you were wondering what qualifications I have then this should help you understand where my authority to speak on this subject comes from. First, I teach photography. I help other photographers figure out their billing. So, for what it's worth this is the method I teach to all of my students who want to work as photographers. As a result, more than 2 dozen of my former students work in the industry.

In Conclusion

Calculating pricing doesn't need to be difficult. Additionally, your prices shouldn't be the same as everyone else in your market. After all, you probably don't have the same expenses. Therefore, use this method to calculate your pricing and you'll never need to worry about profitability ever.