I’ll never forget within the first week of quitting my newspaper job (in February 2006) I was at the gym and someone asked me what I do for a living.
“I’m a wedding & portrait photographer” happily rolled off my tongue.
They perked right up and said “oh that’s a GREAT job! I bet you make a lot of money, since most weddings are like TWO-grand! And you have the weekdays off!”
Even at that point, I knew I wouldn’t be technically be pocketing that much per wedding and I knew I would be editing and marketing Monday-Friday.
But I had NO idea how the actual breakdown of a professional photographer’s fees would be.
I get a lot of inquiries asking about business tips or photography tips. I even have a workshop that allows these eager minds to pick my brain for a day.
But I wanted to set the record straight right here on my personal blog about being an artist: it isn’t glamorous (unless you become very, VERY famous).
I stick to my career because it is my passion and I can’t NOT do it. It’s how I think and everything around me inspires me to continue doing it.
With that being said, here’s a breakdown you may have never thought about.
Taxes - Remember when you were a teenager and you got your first paycheck? I do. I was getting paid around $5.10/hour and after doing the math was expecting a paycheck for a certain amount. As I opened it, I thought “what…on…earth?!” It seemed short. Very short. Looking at the bottom of the stub, it showed the breakdown of why my check was about 30 percent shorter than I anticipated. Good ol’ Uncle Sam.
When a bride & groom cut a check for their photographer, about 30 percent of that check AUTOMATICALLY isn’t the photographer’s for the keeping. It’s Uncle Sam’s.
My husband (the numbers guy) is diligent about transferring over this set percentage to a “tax savings” account. So at year-end, I have that tax money ready to hand over.
*added note: I realize that this seems like a high percentage. My husband & I agreed on his amount as a goal (not obtained 100% of the time) because we would rather have too much left over than not enough. If there is money left over, it goes into owner’s draw or towards a nice luxury overhead item at year-end.
Overhead – Being a professional photographer is DARN expensive. Beyond the normal phone, fax, computer, office supplies, website, etc. overhead, there’s membership fees, license fees, marketing, cost of prints & albums*, massive backup drives, insurance, seminars to stay on top of the latest trends, Adobe Lightroom & Photoshop software (and yearly upgrades) – I could go ON & on about this category. It’s kind of the invisible category that people tend to overlook but it allocates a whopping 30 percent of every dollar that comes my way.
*a note on COGS*: I realize that cost-of-goods-sold is another category all together, but to me it is a percentage related to money that comes in & it is money that I “spend” to do business… that’s why I have it roughly plopped it this category.
Even with a home-office & studio, my overhead is upwards of several hundred dollars a month. And this doesn’t include attending any awesome workshops or upgrading my computer. These are what I consider “luxury overhead” items and I only get to do them if I I have covered the essentials, have given myself a cushion for the next month, and make over a certain amount each month.
Equipment Savings – This is another overhead, but it’s so critical, it has it’s own category. It takes a LONG time to save for a new camera body when you stash 10 percent at a time away. Let’s put it this way: a Canon 5D Mark II (with insurance & a warranty) is approximately $3,000. That is 10 percent of $30,000. If each wedding is $2,000, that’s 15 weddings. Or, if each portrait client spends $300, that’s 100 portrait sessions.
I realize equipment is a tool, but I also don’t advocate credit card debt (even though society does)…
I personally cannot actually handle that kind of volume (alone) without outsourcing or sacrificing quality of product. (So, obviously, I need to make up for that in sales… that’s another blog post all together).
So when you hear a photographer getting a couple new big-ticket-items: camera body and nice L lens, you know they have either
a) saved for a year to do so
b) invested much more than 10 percent (borrowed funds from another “category”).
I guess there is another option there:
c) they have a sugar momma or fund their business with personal funds. (And last I checked, I think they call that a “hobby”…)
Retirement - Ya, I want to retire someday and I thank my lucky-stars that my husband is so patient with me finally realizing I need to always, always put 10 percent of each check that comes in the door into the 401K. Seriously, I can’t be hauling around 20+ pounds of gear in my senior-citizen days.
Taking retirement, college/vacation savings & the owner’s draw: money in your pocket category, that totals 30 percent. I think you’d be hard-pressed to find a corporate employee putting 1/3 of their “take home pay” into their 401k. So it does feel like a lot to save, because it is (proportionally speaking).
Savings College Fund (-or- Vacation Fund) – Maybe you don’t have a kid [yet], so you can call this your vacation fund. Either way, you will want to have a little nest-egg and 10 percent* is a nice round number to work with.
*a note on this: if you don’t have kids & don’t go on vacations, yes: this amount goes into your pocket… it is owner’s draw, but most people would love a getaway to recharge their batteries. Consider this percentage an investment in your mental health.
Owner’s Draw – Owner’s Draw means money in your pocket. It’s like you are taking cash out of the business cash drawer. This is the category people often assume is the big one. Nope. Maybe it is for your business model, but it isn’t for mine. Of course if I have a really good month, I’ll do the Happy Dance and want to spend a little extra on something my husband and I have been saving for, but in general, 10 percent is what I actually get to “pocket.”
Owner’s Draw isn’t always for fun things, however: this is also to pay our personal bills (*sigh* adult responsibilities).
So in case you haven’t been adding all this up in your head, here is the breakdown:
- Taxes 30%
- Overhead 30%
- Equipment Savings 10%
- Retirement 10%
- College Fund 10%
- Owner’s Draw 10%
Equals 100 %
$2,000 for a wedding:
- Taxes 30% $ 600.00
- Overhead 30% $ 600.00
- Equipment Savings 10% $ 200.00
- Retirement 10% $ 200.00
- College Fund (or Vacation Fund) 10% $ 200.00
- Owner’s Draw 10% $ 200.00
Even when you lump Retirement, College Fund (or Vacation Fund) and Owner’s Draw into ONE category, that is $600 for a $2,000 wedding.
If you are doing the math and thinking, Heather: stop complaining! $600 / 8 hours of shooting = $75 per hour…. erase that concept from your mind!
There’s countless behind-the-scene hours that go into a wedding. I don’t just say that to make it sound like “so much work” goes into what I do, so I can charge more. It’s completely and totally legit. I tend to invest 60 hours of time in one wedding (start to finish: i.e. consultation, engagement portraits, travel, preparation, wedding, editing, album design, etc.). Most of that time is editing each image, but that’s my style and business model.
So, if you confirm that math $600 / 60 hours = $10 per hour.
And for every $30 dollars of that, I’m not even touching $20 (into 401K and college fund it goes…)
One more example. It’s pretty common for NEW photographers to charge for a session and images on CD. Let’s be generous and say they are charging $200:
- Taxes 30% $ 60.00
- Overhead 30% $ 60.00
- Equipment Savings 10% $ 20.00
- Retirement 10% $ 20.00
- College Fund 10% $ 20.00
- Owner’s Draw 10% $ 20.00
Hmmm, “pocketing” $20 for one session is kind of depressing. They probably spend 6-8 hours (maybe longer) on shooting and editing this session. For example-sake: if they spent 6 hours on it, they are making $3.33 / hour. YIKES!
If you made it this far, you are either really excited about numbers, you are curious why photographers are “so expensive” or you are struggling with finding a balance with your photography business cashflow.
My answer? It’s not easy but I hope this breakdown helped put some perspective on what you need to do.
PS- Feel free to share this blog post & give credit to me by linking back to this post.
PPS- I realize everyones business model will vary, but many pro photogs will agree (once they crunch their own numbers), this is pretty accurate for the industry.
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