Assignment Photography: How to charge and price up assignments – part two
photo credit: Lili Vieira de Carvalho
Part One of this mini tutorial showed (by way of a rather spliffy video) the way not to go about pricing up an assignment. Poor old Mark Focus (great name eh?) decided that making it up as he went along was the best policy. And with disastrous results. He ended up pitching so low that he not only lost the job – he lost all the respect of his potential client as well.
So where do we start pricing up an assignment? What is the basis of our calculations?
How much do you need to earn?
Yes indeed this is and should be the base of all your calculations. As every business knows, it cannot spend more than it earns else it shall go bankrupt or insolvent in a very short period of time.
The whole basis of business in a capitalist economy is that you charge more than you spend in order to make a profit.
…and in order to do that first you must know how much you need to earn.
Note (and this is really important): need not want.
How do we calculate your base expenditure so we can see what you need to earn?
Remember when you got your first job. You got paid a salary. You took the job based on that salary and for a while you were happy. Then you looked around for another job because you wanted to earn more money.
Capture that feeling.
Now, as a self-employed photographer, what salary do you want to pay yourself?
Write that figure down in whatever currency you use.
Now add how much you need each year to pay for your
-
>studio rental
>business & equipment insurance
>advertising & marketing
>rentals
>transport costs (be that car or van or both)
>employees
>investment in new equipment
>other regular expenditure associated with your business
Got that? Good. Write that figure down.
Lets call it: Annual Expenditure
OK, now for the basis of this I’m going to use an example figure. Yours may be way in excess of this or way below it. Different photographers will have different expenses in running their business. I recognise that. But whatever your figure is – the principle remains the same:
You must know what you need to earn just to break even before you can understand how to make a profit
Take your Annual Expenditure figure and divide it by 104.
Why 104?
104 is the average amount of billable days that a commercial photographer can charge for in a given year (of 365 days obviously!).
Lets call the resulting figure our “need to make per day rate” or NTMPD rate
Update: 5th Feb 2008: Many thanks to Bruce Elliott for pointing out a web resource that will do this calculation for you!
Click the link below and fill the table in then input 104 shooting days. This will ensure you don’t miss any expenditure that you pay but forgot about!
https://www.nppa.org/professional_development/business_practices/cdb/cdbcalc.cfm
Example:
My Annual Expenditure rate is £50k GBP ($100k USD)
Divide by 104
My NTMPD rate is £480 GBP ($960 USD)
Still with me?! I hope so. I’ve just shown you how to:
Calculate a figure that will allow you to break even based on a shooting year of 104 days.
But what if you don’t shoot 104 days a year? Then simply replace my 104 with however many days you shoot and bill for. The 104 is the average and in our calculation its also the constant.
But we don’t want to break even do we? We want to make a profit? That’s what companies do right? That’s what part three is going to address.
How to take your NTMPD rate and use it in calculations and negotiations with clients to not only let you break even but make a healthy profit; while (of course) retaining control of your copyright and rights as a creative.
One final thing…..
Your NTMPD rate is not a “day rate”. It is simply a way of arriving at a figure we must be aware of (your client needs know nothing about what you need to make – its nothing to do with them).
We don’t charge day rates. Day rates and charging on time loses you money.
Why?
Bone up on this post until Part Three to see why:
Don’t base your photography rates on time
PP
Tags: Assignment Photography, Getting paid, Photography Business, pricing photography
https://www.nppa.org/professional_development/business_practices/cdb/cdbcalc.cfm
Cost of doing business calculator. You plug in the figures it does the maths.
Bruce,
That’s great – thanks. I’ll update the post to reflect that calculator. I’d never seen that before but it does exactly what is needed.
Many thanks
PP
[...] Part One of the tutorial I showed you why making it up as you go along is not a good idea and in Part Two we discussed how you need to know your costs of business to be able to break even before you price [...]
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