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Author Topic: Cost of doing business  (Read 23758 times)

Derryck

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Cost of doing business
« on: August 06, 2013, 10:15:47 PM »

I thought Vincent Laforet's recent blog post about the cost of doing business is worth reposting here as well - http://blog.vincentlaforet.com/2013/08/01/how-to-succeed-as-a-creative-long-term-know-your-c-o-d-b/
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Schewe

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Re: Cost of doing business
« Reply #1 on: August 06, 2013, 10:36:21 PM »

While the numbers mentioned are a bit weird ($500/yr for promotion?) the thought is there...you really must know what your cost of doing biz is to be able to intelligently charge for your services...far too many photogs don't have a clue and thus struggle with making any money. The other thing photogs often have a hard time saying is "no, thank you very much". Taking a job where the income falls below the actual costs is a sure road to failure...in those cases you are better off simply saying no and explaining that you can't afford to lose money shooting a job–which you would only know if you knew what your cost of doing biz actually is.
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leeonmaui

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Re: Cost of doing business
« Reply #2 on: August 11, 2013, 10:10:02 PM »

Anyone that is a sole proprietor that makes 70k and is paying 33% in taxes has the wrong accountant.
anyone that plans on spending 10,000 per year on a new camera and lenses, bought the wrong camera.

The average salary for a photographer is 26,000 dollars.

Anyone that thinks as a small business starting out its Ok to work 150-200 days a year, is not going to get real far...

The cost of doing business can be measured more accurately by using blood as the currency and faith as the sustenance.
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Craig Lamson

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Re: Cost of doing business
« Reply #3 on: August 12, 2013, 06:55:55 AM »



Anyone that thinks as a small business starting out its Ok to work 150-200 days a year, is not going to get real far...



I do just fine on 100 shooting days a year...ymmv

Unless you have a lot of help, 100 shooting days pretty much fills up a year.
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Colorado David

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Re: Cost of doing business
« Reply #4 on: August 12, 2013, 08:09:57 AM »

100 shooting days works out to more than 200 working days.

Craig Lamson

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Re: Cost of doing business
« Reply #5 on: August 12, 2013, 05:36:44 PM »

100 shooting days works out to more than 200 working days.

That's kind of what I said, in a round about way.
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JoeKitchen

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Re: Cost of doing business
« Reply #6 on: August 13, 2013, 02:14:07 PM »

Anyone that is a sole proprietor that makes 70k and is paying 33% in taxes has the wrong accountant.
anyone that plans on spending 10,000 per year on a new camera and lenses, bought the wrong camera.

The average salary for a photographer is 26,000 dollars.

I do not quite understand what you are saying here?  Is 33% too low or too high in your opinion?  Personally I think it is too low of an assumption, for the USA at least.  Self employed people pay social security twice, that's 15%, $70k will probably get you 22% of federal income tax, than throw in state and local.  40% would be my assumption. 

Also, $10K a year on camera/lenses is not that unheard of.  A single lens for a medium format system can easily run $5K.
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Joe Kitchen
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Craig Lamson

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Re: Cost of doing business
« Reply #7 on: August 14, 2013, 03:05:20 PM »

.. if you where to charge for 'your time' here.

However, if you were to charge for the use of your images instead, then the end result could be very different, depending on what Rights you agreed too.



No, the client is still only willing to spend a thousand bucks.  For three days of shooting.   Even if bill based on the charge for the use of your images, its still only a thousand bucks.
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Colorado David

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Re: Cost of doing business
« Reply #8 on: August 14, 2013, 05:18:24 PM »

What should you do if you have the choice between making the $1,000 or sitting in the office waiting for the phone to ring?  I know how I'd answer this question, but I know others who will not let a job walk over price. Personally I think you've locked yourself into being the low cost provider, but opinions try.

Rob C

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Re: Cost of doing business
« Reply #9 on: August 15, 2013, 04:07:13 AM »

I'm not really convinced that modern cameras and supposed ease of making great images is the problem.

It was always possible for the non-pro to make good pictures, simply by farming out the processing/printing, which is only a tiny portion of the total cost of a shoot, unless the client is into buying bulk print runs, of course... many people have a 'good enough' eye for framing a shot, and bad lighting was then and is still now, bad lighting, so that hasn't changed.

I think what has changed is the fact that so many more people now seem to have the desire and the time to try to be snappers. When I was dreaming about it in the 50s, it was an almost hidden career: who the hell knew a professional photographer other than a high street jockey, membership of which club was mine for about two years before the great moment of Damascus?

And with greater supply come dramatic falls in charges. If clients don't know and/or can't tell the difference, then there either isn't one or they are the wrong clients. It was always so. But I do believe that an elite will remain - both elite clients and photographers.

The trick is being one and meeting the other. It always was.

Rob C
« Last Edit: August 15, 2013, 04:10:11 AM by Rob C »
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Craig Lamson

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Re: Cost of doing business
« Reply #10 on: August 15, 2013, 09:26:05 AM »

Yes - but only if you are asking the client to pay you for 'three days of shooting' - even though it's probably not what the client actually asked you for, in the first place.





Regardless of how you cut it, the job as spec'ed by the client pays a thousand bucks.  Do it in one day or a half day or even three days days plus an edit and revisions and the end result is still the same...a thousand bucks.

Bill it as usage and its STILL a thousand bucks.

Unless your CODB is extremely low, chances are this is a money loser.  Which was the entire point. 

The usage model will never change this.
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Craig Lamson

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Re: Cost of doing business
« Reply #11 on: August 15, 2013, 02:43:44 PM »

Yes, if it was a 'job'.
However, if the client had just asked you to produce & then provide them with a set number of images for them to use, then the question is: For $1000, how many images do they get and what is the agreed Media use, Period of use & Territory of use here ?

Because if for example, a $1000 is for 10 images for 1 years use only in 2 media in 1 region, then should the client want more images or to use your images for longer than that or in more media or in other regions, then naturally they would need to pay more - right !!

So if the client's current budget is only $1000 here, then the unanswered question here is: What would they get for that amount ?

Because the answer isn't '3 days of your time' unless you are agreeing to do 'Work Made For Hire' or something like that.

For example, a few months ago I had a client tell me before the shoot, that his budget was only £2000.
So for that amount, I agreed to produce & then provide him with 5 images for him to use for 2 years web use only - which he agreed to.
I spent 2 days working with a team of people and produced 7 images in total.
In other words, it cost me more than $2000 to produce those images.

However, after seeing the final results, the client then said he wanted to use all 7 images for 5 years use in Multiple media.
Big difference... and as a result, the amount that he agreed to paid - afterwards - was very different too.

So knowing what it costs you or knowing how much you would like to make, is all very well - but knowing what your images are worth to others, is a totally different thing altogether.

Based on the wording...its a MOTION project, not stills.

And what your images are really worth is not up to you, its up to the client.  The actual value of anything is the amount someone is willing to pay for it.

In your case, you made out ok.  But suppose you spent more that that $2000 fee and the client only decided he wanted $2000 worth of licensing.  You lose money.  Clearly you are willing to gamble.  That's all well and good. If it works for you, great! 

The point here, again, is that you must know your CODB if you plan on making intelligent choices.   
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Rob C

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Re: Cost of doing business
« Reply #12 on: August 16, 2013, 04:32:13 AM »

Maybe the bottom line is that photograhy, for many people, isn't really a business in the accepted sense of the word. If it is, perhaps showbiz is the closest in type, and we all seem aware of the cost of following that path to paradise.

In both endeavours, some flourish and ripen where others wither on the vine and meet desperate ends. Seems no middle way survives long in the arts.

Rob C

Craig Lamson

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Re: Cost of doing business
« Reply #13 on: August 16, 2013, 09:17:49 AM »



Yes, what your images are worth, rather than what your time is worth.

So instead of saying 100 days / year at $1,289.40 per day equals what you need to earn - a better way to look at it would be to say: 100 images / year at $1,289.40 each equals your base rate or starting point, when it comes to negotiating the fee for the use of your images.

So if you produce some images that others want to use for say 10 years in multiple media, rather than just 1 year in 1 or 2 media, then you should be able to see how you could possibly retire some day.


LOL!  We live in different worlds.  With different clients with very different expectations. I shoot model year stuff, the photos have a 1 year shelf life.   

BTW, does it take TIME to produce images?  
« Last Edit: August 16, 2013, 09:20:36 AM by Craig Lamson »
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Craig Lamson

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Re: Cost of doing business
« Reply #14 on: August 16, 2013, 09:18:37 AM »

Maybe the bottom line is that photograhy, for many people, isn't really a business in the accepted sense of the word. If it is, perhaps showbiz is the closest in type, and we all seem aware of the cost of following that path to paradise.

In both endeavours, some flourish and ripen where others wither on the vine and meet desperate ends. Seems no middle way survives long in the arts.

Rob C

Does 35 years count?
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Rob C

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Re: Cost of doing business
« Reply #15 on: August 16, 2013, 04:16:19 PM »

Does 35 years count?


Depends what happens during their passage; I started in '60 and then went on my own in '66 and never had a boss again... even I can't tell you if it was a success, a sort-of, a disaster, or even the smartest/dumbest thing I ever did.

Some take a long time to die; some live like rockets. I just watched a DVD on the life of Norman Parkinson for the third or fourth time; during a sequence, a curator is asked about the Parkinson contribution, and he opines that the life of most photographers is about ten good years or less, and that Parks was remarkable in that he reinvented himself until he died in the saddle at age 76.

So in answer to your question - I honestly don't know.

Rob C

Craig Lamson

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Re: Cost of doing business
« Reply #16 on: August 17, 2013, 09:31:06 AM »

Yes - it even takes TIME to produce images (Art, Literature & Music too) which no one wants to use too - which is one of the many reasons why it's not about 'your time'.

Produce images (Art, Literature & Music too) which others want to use a lot, by using your time wisely, and charge for the use of your images (Art, Literature & Music too) is therefore what most of the professional associations around the world would recommend you do.

It's just a suggestion - because at the end of the day, it's totally up to you to run your business as you see fit.

The problem Ashley, is that no two photographic business models are the same.  One size does not fit all.

But one thing is certain, producing images, no matter how you choose to bill for them, requires TIME.

And despite your objections you DO sell your time, and the time of your crew.  Productions cost money.  You simply package those costs and bill them in a different manner.

So yes, its totally up to you to run your business as you see fit....

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Go Go

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Re: Cost of doing business
« Reply #17 on: August 17, 2013, 01:56:31 PM »

Hi All,

I have to second Yelsha here.

The only time I didn't do a license for a shoot was over 15 years ago. I worked for a relative charged a competitive rate and heard a lot of bi_ching and complaining about it before getting paid six months later.

The problem was that I didn't license the images as it was a relative. Guess what he used/uses and want to continue to use the photos for the packaging of his very successful ice cream product. I think I got scr_wed on that one. Totally. First and last time I ever shot Ice Cream too.

Live and learn...

Craig Lamson

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Re: Cost of doing business
« Reply #18 on: August 17, 2013, 07:09:43 PM »

Hi All,

I have to second Yelsha here.

The only time I didn't do a license for a shoot was over 15 years ago. I worked for a relative charged a competitive rate and heard a lot of bi_ching and complaining about it before getting paid six months later.

The problem was that I didn't license the images as it was a relative. Guess what he used/uses and want to continue to use the photos for the packaging of his very successful ice cream product. I think I got scr_wed on that one. Totally. First and last time I ever shot Ice Cream too.

Live and learn...

Again, very different client and business model.  If an image only has a shelf life of one yer ( its model year stuff, and all theimages are junk when the new models roll around, what good is a "license?
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Craig Lamson

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Re: Cost of doing business
« Reply #19 on: August 17, 2013, 07:15:06 PM »

You are right - obviously one needs to take one's basic production costs into account, before you begin to negotiate the fee for the use of your images.
But as you can see...


.. the only 'time' that they are being asking to pay for, is the time period or 'Period of use'.



It's semantics.  You are still billing for your production time, all wrapped up in the "period of use" verbage.

Or maybe you are losing your shirt when you over produce and the client does not buy enough "period of use".

You won't know unless you know the CODB, which includes TIME.


Which if you remember correctly was the entire point of the OP.







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