Iris Richardson Photography - Breaking down the Costs for your Business
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It is not unreasonable for a commercial photography business to have an overhead of $30,000 per year plus health and disability. In addition, basic equipment costs can be as little as $15000 if you buy used, but likely much more. Digital systems cost at least $30,000 and need to be replaced every 1-2 years (Yes, one or two years)!
For simplicity lets say you purchased your equipment for $20,000 and are paying a monthly loan of $400.
Your monthly fixed costs for renting an inexpensive commercial studio are as follows:
Startup Loan$400.00
Car Payment$300.00
Studio Rent$800.00 (this is not NYC by the way)
Business Insurance$100.00
Health Insurance$250.00
Disability Insurance$???.??
Car Insurance$120.00
Phone$50.00
Cell Phone$50.00
email$20.00 (Commercial DSL is $160.00 and up).
Web site$30.00
Electricity$100.00 (Photography lights use a lot).
Gas$100.00
Water$30.00
Total$2380.00
After spending $2380.00 per month, you haven't even clicked a shutter yet.
You will need to earn more to allow your business to maintain itself and still more to make a salary and retirement savings. This adds up to $28,560 per year just to cover your fixed costs. You will need to earn close to $40,000 for the business to grow. Let's say you can live on $25,000 per year yourself and your total earning requirements come to about $65,000. Keep in mind, you are running a bare bones studio here.
Lets assume you can line up two paying jobs per week. This would mean about 100 jobs per year. Many seasoned photographers work this many days per year. Newcomers will work less. At 100 jobs per year, that means you need to earn (net, not gross) at least $650 on each shooting day to cover your ability to run your business and earn a living. The other three days a week will be for sending out estimates, sending out finished jobs and promoting, everything that you must do that does not earn you money. In addition to the $650, you will still need to pay for film, models, props, assistants, stylists, and rent equipment you might not yet own. When you hear someone pricing out a job at $1200.00 plus expenses, that is what they mean. They earn $1200.00 and all the extras will cost the client additionally. Depending upon the region in which you live, the prices will vary greatly.
To put the industry in perspective, freelance newspaper photographers working for the Associated Press earn somewhere in the neighborhood of $175-$200 per day. Time Magazine, as of August 2000, has a standard assignment rate of $400. Compare these numbers to the $650 above and you will start to understand why photography is a difficult business. Go to editorialphoto.com to learn more.
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