Pricing is a tough topic for many new family photographers. One of the first big decisions when starting your business is “what should I charge?” It’s an important step in setting up your business for success and it’s one of the places many photographers can make mistakes that will damage their bottom line: their profit. Where you set your pricing will determine how profitable you are, directly affect how many clients you book and ultimately how successful and sustainable your business is. But no pressure, right?
To be clear: Pricing is absolutely an art with no right or wrong answer!
However there are a few key pricing mistakes you should avoid that will crush your profit. Let’s talk about them today.
Mistake #1: Not knowing your numbers.
Not too many photographers get into this business for the numbers and backend parts of running a business. However when it comes to pricing, it’s important to dive in and get clarity on your numbers BEFORE you set your pricing. If you set your pricing too low, you will not be able to cover your expenses, taxes and compensation and your business will lose money. To put it simply: you won’t be profitable.
So what does this mean? Take the time to sit down and establish your cost of doing business. This means writing down all of the costs you see on a monthly or annual basis for your business. In order to be profitable, you have to make enough money to cover these costs or else there is no point in being in business. It sounds simple, but it’s a step that many business owners skip over.
Then take it one step further. Once you look at the expenses for your business, you need to take into consideration the taxes you’ll be paying. No matter where you are, you will be taxed on the money you bring into your business. A good rule of thumb is to start by assuming 30% of what your money will go to taxes.
When you look at the bare bones of your business, you need to cover both taxes and expenses with your prices in order to be profitable. Therefore, you have to make sure that wherever you set your pricing, you are covering both your taxes and expenses. If you don’t know your numbers, your profits will suffer.
I highly recommend reading “Profit First” by Michael Michaelowicz for more tips on how to set yourself up for success!
Mistake #2: Losing control of your expenses.
Photography is a business that requires very little overhead, assuming you don’t have a studio or props to maintain. The expenses to run a business are minimal, for the most part. However, it can be easy (and negligent) to lose sight of the end goal which is profitability and overspend. Your expenses are directly tied to the success and profitability of your business.
Have you ever heard of “Shiny Object Syndrome”? It basically means getting distracted by the next gadget or system that promises you big things and investing in them. That’s one of the fastest ways to lose your hard earned money and profit.
Stay focused in your business and invest wisely in things that help you to create a profitable business. Fun apps, trendy new gadgets, or new tools can be appealing but if they don’t help you run your business better or improve what you offer, skip the expense. Stay focused on investing in things that create value in what you do.
Every dollar spent is one less dollar in your pocket at the end. Don’t allow yourself to be dis-illusioned that the money is “coming from the business”. As a solo entrepreneur, the money is coming from you. Treat it that way.
Mistake #3: Not upselling your sessions.
Your clients invest with you because you are the best photographer for them and they trust you. Part of offering a high quality experience is also helping your clients maximize their investment by getting the images off their computer and into their homes.
This does not mean you have to embrace a full in-person sales model for your business. Although if interested, this path will certainly lead to a higher conversion of product sales. But it’s not necessary. Instead, many gallery services offer amazing self-serve options for photographers! Pic-Time, for instance, is an amazing gallery delivery system that prioritizes the client experience in helping them visualize and choose prints and products from their gallery. (PS. Try out Pic-Time with my code “5L8RLE” and get a month free!)
Once you set up your system and workflow to incorporate the sales process, it’s a way to upsell your sessions and maximize your profit. If you don’t do this, you are essentially leaving money and opportunity on the table.
Pricing yourself and making a profit in your business is about being strategic and intentional with every dollar you bring into the bank. Remember that as a small business owner, the bottom line doesn’t just impact some CEO somewhere – it impacts you. By taking the time to think through your expenses, taxes, and ways to increase your revenue without much work, you’ll be able to run a more profitable business in no time!
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When Should You Raise Your Prices?
Thank you,Danielle, very helpful.