Let’s Talk Pricing | Part 1

Let’s Talk Pricing | Part 1

There been a ton of discussion within various online forums that I’m in as well as at WPPI (wedding portraiture photographers international) convention this month about pricing services.

There’s been chatter from all different angles about how people who price low are under cutting the market and devaluing the industry (could be any industry). And those that are undercutting they’re competitors are in a race to the bottom.

Well, let’s talk about pricing.

pricing your creative service art

Knowing the Market Rate

You can research the market rate by talking to potential clients who are looking for the service you are offering. This is a delicate discussion but it can provide you with insights to the your rates based on what others are finding. This conversation may be best reserved for clients you have a longer standing relationship with.

Further, ask your industry colleagues what they charge. But be reciprocal when asked the question in return. You can step up and be the first to offer up what you’re charging and how you determined the pricing, which can spark a deeper conversation.

Last but no least, researching online can uncover rate sheets and ‘prices start at’ information.

Just starting out or don’t know where to look? Look up the industry groups. For photographers who want to shoot weddings, and portraits, starting your research with PPA and WPPI are good places to start. You can read articles, and find photographers in your area using the find photographer link. Click through to review the photographer’s work, and reach out to them if their work speaks to you. Let them know what about their work you admire and ask them for advice for a budding photographer.

For commercial photographers check out APA and ASMP, and drill down to the local chapters near you to find other photographers to connect with. Both sites have great information for different things to think about when it comes to pricing, bidding and licensing.

For makers check out the Academy of Handmade and Etsy regional groups to connect with other makers both in person and online. Also Etsy has a extremely active forum which is filled with great information. For pricing tips check out Megan Auman’s classes on CreativeLive.

As you begin to gather your research on what others in your field are charging, remember the information doesn’t not get at the heart of how those prices were calculated. You don’t know the persons life situation, other revenue sources and other expensives. So the information is merrily providing you with a scope and breath as to what is out there.

By no means, do your prices need to be aligned with or even within the same ballpark of your competitors, as your set of life and business circumstances are yours alone.

Time plays a part in profitability

Your profitability margin can change greatly based on your time. Time is a essential element in any creative business. How much time a task take you or your intern, from culling images from a wedding to creating a design mood board, needs to be tracked. Guessing how many hours something takes, is not the same as knowing. Create a daily habit of tacking your time will allow you to: 1) keep records from past jobs that can then be used to determine pricing for future projects of similar value, scope, and complexity; 2) identify profitable as well as unprofitable relationships and projects;  3) see where you can improve your systems and eliminate gaps or steps in your processes.¹

As creatives we trend to everything to make our offering/product/service perfect. But the reality is, being perfect, when most of our clients can’t distinguished between good and great, cuts into your profit. If you want to go the extra mile every time, make sure you’ve baked your cost into your price, or you’ll be cutting into your profit margin every single time.

There more to pricing. Here’s what is coming up in Part 2 –  looking at reasons to raise your rates and to lower them, as well as how to determine what is the right price tag for your business offerings. Stay tuned.

 

¹ from The Creative Professional’s Guide to Money How to think about it. How to talk about it. how to manage it. by Ilise Benum

 

 

Thoughtful Spending During the Season of Deals

girl hand with phone and laptop

You made it through Black Friday and Small Business Saturday and now it’s time for Cyber Monday. As a small business owner and a photographer, I am inundated with a flood of emails for all kinds of steals this week from software to gear and to digital products that solve your dire pain points. I know some of you are jumping for joy and scouring the inter-webs for the best deals.

But before we get to spending our hard earned cash on the greatest new gadget or a must have social media how-to ebook, pause first to assess your business needs. Is this an item I’ve been looking to implement into my business and planned on purchasing it this year? Do I have the funds to purchase it without having to carry debt or cause other items / client orders to be affected? Will I have time to implement the new product into my workflow or will it be lost in my download folder or collect dust on my shelf?

Look over your cash flow and assess how much spending, if any, is a wise business investment at this point in time.  Notice I used the word investment and not purchase. Whether you purchase a new computer, or a new set fonts, there needs to be a correlation between the purchase and how you generate revenue. If the new item will save you time, that means you’ll have more time to do other things (that’s a win). Or if you purchase a item that is a subscription you have budgeted anyway, and now it’s cheaper, that a win too. If you purchase hardware (i.e. equipment), what will it allow you to do? Do you have plan for selling off your old equipment and props? This can help offset the cost of your upgrades.

Have a plan when shopping. I know I get caught up in the buzz and the excitement, but having a plan (aka shopping list) of what you’re actually in the market for will help keep you from going astray and over spending. Oh and check in on your tax deduction strategy… can your purchases be written off this year?

To help you with your financial strategy download the free PDF budget worksheet (or upgrade to the excel version to plug in your budget numbers).

A list of deals from vendors I love and use:

Fundy – huge sale off the suite and the modules
Totally Rad  –  save 35% off all their products (I love RadLab, Replichrome and ProRetouch).
SmugMug – save 40% through 11/30 (after 11/30 save 20%)
Creative Live – 25% off 1000+ classes
Squarespace – 20% off your site on #GivingTuesday 12/1

Want more deals?

Check out these two huge lists collected nicely together for you from Photographer Black Friday Sales and Behind the Shutter

What deal is the right investment for you?

 

Budgeting: How to Get Started

It’s your dose of business logic and advice. My background is in business economics and I have been in the financial world for over 7 years. I’m not a banker, though. My position resides in the world of community relations. Within this position I’ve been responsible for a number of things over the years; reading over 800 grants a year, analyzing financial data, reviewing budgets, tracking trends, writing technical manuals, researching organizations and so much more.

As I balance my life between the artistic and the financial worlds, I find that many of my creative friends struggle when looking at their numbers. They have a hard time budgeting, tracking their data and understanding how to price for profit.

You may be thinking, “Yes that’s me! I can’t do this number thing.” If you can do simple addition and subtraction, you can budget. Let say you started your business in Sept 2011. You now have six months worth of data to help you plan for the remainder of year. The question is really: where is this data?

If you are a paper person (I won’t ask why) you most likely have a pile of receipts stashed in a box under your desk. Pull out the receipts organize them into categories (utilities, marketing, office supplies, products, travel, gift given, postage/shipping, etc.), put each categories into its own envelope and then tally the total for each category on the outside of the envelope. These numbers become your base expenses when planning the remainder of this years budget. Since you have six months worth of data, you can double the totals and guessimate what your costs will be for the rest of the year. Goal for 2012: find a program to help you track your expenses. If you like envelopes take the concept digital, check out Mvelopes.

If you manually enter your information into a spreadsheet program, then you may already know that you can find your statements for your checking and credit cards online. Most banks have online banking options that allow you to download your statements. Use this information to help you calculate your expenses. Programs such as QuickBooks, Wave Accounting and a bunch of other programs can help you budget, run income statements, show cash flow and balance sheets. As you become more aware of your numbers you can better execute your business. Check out this article on other money management programs and my previous post on free resources.

More financial goals for 2012:
– open a separate business account. Don’t mix personal with business
– don’t use cash (physical bills). Use your debit card. This method you can track and clearly see where the money is going.
– for every business purchase think to yourself- is it a need or a want?