We have another great Q&A email in from Evelyn this evening:
I have some questions for you. How do you come up with wedding packages and pricing? How much do you pay yourself? How do you know what to charge the bride/groom? Are there any good sources out there that talk about this, like books? Also, if this is not too much to ask, I was wondering if I could shadow you on one of your sessions. Please don’t feel obligated to do this. I know that you are a busy person and if I am not able to shadow you I completely understand.
Thanks for the email! I actually get a LOT of questions like this so this is why I’m going to answer on the blog Q&A so others can benefit from the same information. Let’s take it one question at a time.
#1 How do you come up with wedding packages and pricing? How do you know what to charge the bride/groom?
I actually JUST got done giving a webinar on this (literally, this was the first email I checked after I got done with the webinar tonight!). Pricing is a very complex topic because its deeply personal and depends on every business owner’s unique financial position, lifestyle, needs, market, expenses (Overhead, Assets & Cost of Sales), brand, and demand. The webinar is about 1 hr 40 minutes and gives a basic overview of how to start. If you want the full in-depth look at this and the tools to do so, my Profit Center DVDs are 4 hours, 10 lessons, and includes the Number Cruncher that gets you to the place that will allow you to price right based on fact, not guesses. Check out the webinar – it’s only $47 from Marathon Press and then go from there. It’s the same info they teach at PPA, Harvard, and other accredited MBA colleges.
#2 How much do you pay yourself?
I average making about 25-38 cents out of every dollar in sales. So if someone pays me $3000-4000 for photographing their wedding, I usually get a $1,000 paycheck (minus taxes) from this booking. PPA recommends in their Studio Financial Benchmark Surveys that Professional Photographers make about 35 cents out of every dollar, but their research shows that the average photographer makes less (19-25 cents in their 2005 study!) The average wedding and portrait photographer makes less than a school teacher!!
If you want to forecast what type of income you SHOULD try to make, you’ll need to work out a Personal Salary Budget – the backwards way! You simply add up all of your personal expenses like rent/mortgage, utilities, food, gas, car payment, debt and savings, health care, taxes, tithing, etc. Then you subtract out the salary of anyone else who contributes to your household.You will get an idea from this budget what salary you need to bring home in order to put food on the table and cover your necessities! We created a spreadsheet that’s super easy to use to do this, it’s included in and the first step of the Number Cruncher.
# 3: Are there any good sources out there that talk about this, like books?
Of course! But not a ton pertaining to specifics of the photography industry, which is why I created the Profit Center DVD, Number Cruncher, KISS Merchandising, and why I teach this on webinars, at conventions, and why it’s the focus of Photo Biz Boot Camp.
Colleges take semesters after semesters to teach managerial accounting and finance, market research, brand development, entrepreneurship (which are the foundations of pricing profitably) so learning in a single book is not a very comprehensive approach. There ARE however quite a few books I’d recommend on my book list here. Be constantly reading and learning on these topics and running a small business gets a LOT easier!
Also, check out PPA’s new 2008 Studio Financial Benchmark Survey! It’s free if you register and log into PPA.com. I go into a lot of this information on the webinar and it’s the basis of the industry standards! You need to understand these industry standards in order to be able to measure your own progress and see if you’re on the right track with pricing and budgets for your business.
Right now I am the only working pro wedding photographer to teach managerial accounting and finance (based on the principals taught at PPA, Harvard, and other institutions) in a small group hands-on environment. You can also check out PPA’s SMS classes which have multiple teachers (most are portrait photographers) and is a more traditional classroom environment. But they teach the same great information and you get a one-on-one consult too. In our Boot Camp class is like a continuous one-on-one consult and an average of 8 studio owners attend. Also, Anne Monteith teaches her own marketing classes and I’d highly recommend learning from her! Be wary however of others who are teaching pricing and don’t teach about overhead, cost of sales, break-even analysis, etc.
#4: Also, if this is not too much to ask, I was wondering if I could shadow you on one of your sessions. Please don’t feel obligated to do this. I know that you are a busy person and if I am not able to shadow you I completely understand.
Of course! If time and schedules allow, and I know I can trust a photographer to benefit the session vs distract from it, I’m always welcoming others to shadow/shoot with us. I trust you and would love you to come along. I have two sessions on Friday so I’ll shoot you an email about them. Then we’re off to Australia and SE Asia next week for teaching and shooting until March!