If you are an aspiring photographers or a seasoned photographer, you need to make sure you are avoiding these 5 Mistakes All Photographers Make.
Each year I host a FREE Photography Business Tune Up as my way of giving back to the photography community. During the live zoom meeting I walk everyone through my fail proof system of figuring out exactly how much they need to make off of each client they photograph. This year I am hosting a meeting on August 15th. You can sign up here, only 10 spots remain.
#1. You Don’t Know Your Expenses
This is the first question I ask every photographer I mentor, “What are your yearly expenses?” I am baffled by the number of people who have been in business for years that can not answer this question. I always ask them to dive into their business and figure out what their expenses are for an entire year, and then I check over their expenses with them.
Here are some of the most common expenses that people forget to account for when creating a budget for their business:
Liability Insurance, Equipment Hosting, Web Hosting, Professional Membership Dues, Education, Internet, Phone, Studio or Meeting Space Rent, Advertising, Equipment/Gear, Professional Services (attorney/accountant), Client Management Program, Online Back Up, Image Delivery, Marketing Materials, etc.
If you are unsure what your yearly expenses are for your photography business, go back through your bank account for the last year to make sure you don’t miss any of those pesky “once a year” or “once a month” payments. Don’t forget to account for things that you should have as an expense when you are setting up your budget for the upcoming year, for example if you don’t currently have insurance *big hint here, you NEED to have insurance..this is no optional if you have a business* than you need to call and get some quotes and go ahead and include that number in your budget going forward…the same thing goes with things such as advertising, to grow your business you will need to invest in advertising, so go ahead and set aside some money for this in your budget.
#2. You Don’t Know Your COGS
COGS. This is a big one. It stands for Cost of Goods Sold. If you are a new photographer, or you have been in the industry for years, it is so important to know how much every product you sell costs (don’t forget about the shipping you pay to get it to you, that is a cost too). I have fallen into the trap of not checking in on pricing at least once a year, and all of the sudden I realize that an album I was selling went up $50, and I hadn’t adjusted my price accordingly, so my profit margin went down.
Make sure when you account for your COGS for prints, wall art, or albums, you include all of the options just like you will sell the item to your clients. Often times when digging into pricing with photographers, I find that they just included the cost of the print without mounting or finishing options when they set their prices, and they are stuck scratching their head wondering why they are not making money. Don’t forget things like mounting, finishes, hanging hardware, framing fees, album design fees, and even shipping from your print lab to you.
In the photography industry people often ask the question “How much should I mark up my prints?” If you ask this question to 100 photographers you will get 100 different opinions but most answers will range from 5%-25% with most people falling in the 10%-15% range. I could go into a whole lot of detail about this, and explain to you just where every penny from a sale of $100 goes in your business, but I will save that one for another blog.
#3. You Don’t Realize How Much Time It Takes
You know that feeling when you are just starting your business, and you slap an ad on Facebook saying 60 minute photo session for $100? You think to yourself “This is AMAZING, I can make $100 in 60 minutes just snapping a few pictures!”
WRONG.
I hope that if you are reading this you are past that point…but if not let me break some things down for you.
Let me tell you how many hours of work go into a 90 minute session for me.
2 Hours of Prep Time: Sending Contracts/Client Communication/Getting Equipment Ready
3 Hours of Driving to the Session & Home
30 Minutes Uploading Memory Cards/Backing Up Files
1 Hour Culling
2 Hours Editing
2 Hours Image Reveal
1 Hour Blogging & Scheduling Social Media Posts
2-3 Hours Finalizing Edits & Ordering Purchased Images
30 Minutes Prepping Web Images & Uploading/Sending Out
Y’all. That 90 Minute Session just became around 15 hours of work….not to mention the other work that my business takes to run that is not directly related to each individual client.
If I was charging $100 for that session I would have made around $6 an hour for my work…if I didn’t account for all of my expenses…but if I accounted for my expenses, that $100 is already gone and out the door and I would have actually lost money on the session.
Know your how much time each session takes you so that you are not undercutting yourself, or selling yourself short. This is a valuable lesson to learn as a business owner.
A wise friend once told me, “If I wanted to make minimum wage and not have any stress or have to work 24/7 than I would get a job at McDonalds….I refuse to work this hard and make minimum wage…and you should too.”
#4. You Forget About TAXES
Have you ever gotten to the end of the year and wondered where all of your profit went as you scurried to find the money to pay your tax bill? Well, hopefully you don’t make this dreadful mistake and forget to account for taxes so all of your profit ends up going straight to the government. Depending on where you live taxes could go up to 30% (or maybe even more, I am not a tax expert by any means). I always recommend talking to your accountant to see what your “tax rate” should be…but there is one fail proof method to make sure you never end up in a bad position come tax season. This is a tip I learned from a fellow photographer early on in my business, set 30% of your business’s income aside for taxes in a separate bank account that you don’t touch. At the end of the year, you know you have plenty of money set aside for taxes, and if you owe less than you put aside, you get a nice little yearly bonus!
#5. You Are Paying For Services You Don’t Use
This is a big one, as it seems like more and more things are switching to monthly service fees as opposed to one big up front fee. As you go through and figure out your expenses, take a dive into every business transactions you had from the last year and hi-light the recurring expenses. If you do not actively use the service then make sure you cancel that service.
Another exercise that I found really helpful from book “Profit First” is to go through all of your business expenses and ask yourself, “Does this make me money?” If the answer is no, then cut out that expense.
Don’t forget to sign up for our annual FREE Pricing Tune Up on August 15th.
I offer a limited amount of 1on1 Mentoring each month with photographers that includes a 1on1 phone call, and access to me via Voxer to ask any questions/bounce ideas off of me as you implement the things we talk about during our 1on1 call.
If you have questions or anything you want to add to this post feel free to leave a comment and I will answer your questions.
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