November 9th, 2010
I’ve had several discussions this week and last that suggest that some people in real estate photography need some help analyzing their costs of being in business. I think there are many beginning real estate photographers that don’t know what the lower limit is for what they can work for. $99/shoot may make sense in rural Iowa but it may not make sense for New York or Southern California.
I raise this subject because I’ve become aware of specific situations where photographers are doing shoots for $30, $50 and $99. The cases where the photographers were taking away $30 and $50 were for large companies. So they don’t have marketing expenses or post-processing expenses but still, everyone should do the arithmetic or they could find themselves in a hole down the road and not know why.
I believe that and essential part of being in business (for yourself or as a contract photographer for a company) is understanding what it’s costing you to show up for a shoot. If you don’t know what it’s costing you to show up you don’t know the lower limit of what you must take home from every shoot to stay in business. That is, you’ve got a bunch of fixed costs that are the same no matter how many shoots you do. Costs like:
- Car payments, maintenance and insurance costs for the vehicle you use to go to shoots.
- Business insurance that covers your equipment and liability insurance that covers you if you inadvertently break some homeowners priceless art work.
- Health Insurance – yea, this is a cost of showing up, in the old days employers used to pay for this but most don’t any more. It’s up to you now days.
- Computer hardware costs– you are going to have to replace it every two or three years.
- Computer software costs – you are going to upgrade Lightroom and Photoshop every couple of years.
- Personal development costs – this is training costs for publications and workshops that keep you current and help you improve your craft.
I don’t claim that these six items is an exhaustive list, you may have more or less. These are just typical fixed costs that are applicable for most real estate photographers.
The reality is I can’t sit here and tell you what your cost of showing up is because health care, auto costs and business insurance are different in different states and different for different people. So my example above in the spreadsheet is intended to show you an approach not the specific numbers. In a previous post I’ve talked about ways to verify that your shoot price is in the ball park by checking what other companies in your area charge to show up.
In my example above, if it’s costing you $215 per week in fixed costs and you are doing 7 shoots per week, it’s costing you about $31 to show up for each shoot. This cost of showing up along with your shoot price and the average number of hours you spend on a shoot will allow you to compute how much per hour you are grossing.
Something to beware of when you are doing this spreadsheet is when you are computing how many weeks to divide your yearly fixed cost by, don’t use 52 weeks a year. You’ll probably have a couple of weeks for vacation, a week or so for sick days and a week for holidays that you don’t work. So you’ll be dividing by 48 or 46 to account for the time you don’t work.