I believe HOW TO CHARGE seems to be one of the most asked questions.
Just feeling bored so spend sometime to write this and feel free to add to it.
Here are a few things that you need to consider when doing your costing.
This is often miss by many when doing their costing, or somehow mis-calculation which cause to "eat in" to your profit margin, and as a result, you have nothing left even if you have lots of jobs.
Here is a some list of things that you need to consider:
a. Cost of Time
- Preparation time - Equipment preparations (charging, checking and arranging).
- Service Time - Time required to serve a client from the first email to the product delivery (this timing can be quite major, so make sure you consider this)
- Session Working Time - This is time require from preparation to actual session to post-processing to ordering to delivery
b. Cost of Equipment
- Equipment cost range from the camera system to computer system to supporting equipment (battery, cards, etc)
- Servicing cost
- Depreciation value of the equipment
c. Cost of Marketing & Advertising
- This is one of the major cost when start up and when established, you will need to set aside 15-20% for Marketing every year
d. Cost of space
- This apply to the space that you rent for your business.
e. Cost of Products
- This is the cost of printing, album, etc.
Profit is the margin you add in on top of your cost and should include at least 10% "human error" margin.
Competition do dictate how much you can charge in your market.
If you are a follower: You can charge lesser than the leader
If you are the leader: You can charge any amount that you see fit as long as you understand your value vs price equation.
4. BRAND PRESTIGE
Depending on your total "Brand Image", your price should reflect your "Prestige".
Once you have calculated your real "cost", you will need to know how many shoots you do a month, with that, you know "cost per job".
Here is an example:
You own 2 semipro DSLR with 2 f2.8 zoom, a couple of flashes plus bunch of card and batteries
Lets say you buy second hand it cost $8000 (need replacement in 2 years) - $ 333/month
Your Computer, HDD, etc - $2000 (need replacement in 2 years )- $83/ month
Your phone bill - $30/month
Your "meal & transport" cost - $300 per month
Lets just say, you don't charge for your time, you stay at home with your parents and eat at home and don't pay them for any electricity and dues to them, you have a cost of $750 a month. (But please don't do that to your folks).
Also, there is no money going to advertising and marketing, so how you are getting jobs and we are cutting a lot of things out to make this example simple.
So, you just need to work out, how much more do you want to "make" after knowing the "cost" by work out number of shoots a month.
This is how simple it is for price equation.
I hope this helps for those who is doing their math in working out their costing.
So for those who is seriously want to charge people for doing photography, you will need to make sure you consider your real "COST".