What the fudge do i charge? A simple tool…
Putting the who, what, where and when associated with different pricing brackets and the theory behind them to one side, we need to earn a living from this! Whether you’re a photographer just starting out and need help plucking that all important pricing figure, or a well seasoned tog who is refining their pricing to maximise product and service delivery, Clare’s pricing tool is not only a fantastic starting point, you can pretty much work your whole pricing structure around it.
(COL + TAX + CRB) / TNOW + CPW = X ….Simples! Maybe not without a little more explanation…
click play on the video below or read on for a summary…
COL – Cost of Living
At team PB we refer to this as your F*** You Fund (apologies) – it’s the amount of money you need every month to say “F*** You” to your previous employer, it’s not the amount of money you need to thrive, it’s the amount of money you need to survive. Think fixed monthly outgoings and variable necessities. In other circles this is called your ‘burn’ or ‘burn rate’. i.e) how much money you effectively burn through each and every month.
Mortgage/Rent + Bills + Food + Insurances + Loan Repayments (Not disposable income expenditures like holidays and eating out)
TAX – Tax
Clare doesn’t touch on tax in the sample video here, but let’s work it into the equation. A very handy figures to know is the average percentage of deductibles for every £1 you pay yourself. To work this out, take a look at last years accounts. Let’s say you paid yourself £37,000 and your total tax liabilities were £10,000. Divide your tax liabilities, £10,000 by your income, £37,000 and you get 0.27, or 27%. Now you know that for every £1 your earn, you pay roughly 27p in tax.
To calculate your (COL + TAX) you have to divide your cost of living (annualised) by the percentage of income you get to KEEP, then multiple by 100. Soooo, if you’re taxed at 27% you get to keep 73%. Let’s say your COL is £24,000, 24000 / 73 x 100 = £32,876 – That’s your PRE tax Cost of Living.
CRB – Cost of Running the Business
Think Equipment (annualised, so true cost divided by presumed years of service to you), Accountancy, Insurance, Education, Web Fees and more. These are your static costs that do not change no matter how many weddings/shoots you undertake.
Side Note: If you buy a 3k body every 3 years, you use it for 90 weddings (30 a year), that body costs you £33 a wedding. Take lenses, flashguns, memory cards and computers into the mix too and it may be over £100 a wedding!
CPW – Cost Per Wedding
Think about; Travel/Accommodation + USB/Packaging/Postage + Hard Drives . e.c.t
TNOW – Number of Weddings (but also applicable to commercial shoot days) you want to shoot to cover life essentials, a’la the F*** You Fund.
Now let’s visit the equation and chuck some numbers in there….
(COL + TAX + CRB) / TNOW + CPW = X
(COL + TAX from above: 32,876 + CRB: 6,000) / TNOW: 30 + CPW: 200 = 1,495.86
So you’ve got to achieve 30 weddings at £1,495 to cover the basics, but what if you actually want to live a little?! Holidays? Clothes? Eating out? Luxuries!! Let’s say you want £600 for luxuries and/or investments/savings each month; first work out your (LUX + TAX) so, £7200 / 73 x 100 = £9,863. Now you can either divide that by the number of jobs you want to shoot and add it to each fee bringing the fee per job up to £1,823, or, you can keep your fee the same and shoot an extra 7 jobs, bringing your TNOW up to 37.
This is pricing 101 backed up with some sound maths and considerations; a great starting or refining point to make sure your pricing is on track – Give it a go!
If you need a handy calculator, this free online tool works a treat.
To learn more about Claire and to watch Claire’s webinar payback in full, please click here.