Depreciation of Equipment - the Aspiring Pros need to know

[ronniegogs]

Dumb hobbyist buys equipment to satisfy his hobby needs. Take pictures and enjoy. Business arguments are totally irrelevant as he does not use the equipment to run a successful business. Photography is a hobby so why would it matter to him if the value depreciates.

In terms of losing money I lose much more value with my other hobby. Being a computer geek... I spent 6k on a computer system with 3 screens and water cooling last year... In 1 year it would be worth 2-3k so a loss of 3k ;p ... But do I care... no way its was so much fun building the system I would do it again in a few years

 

[Jackkkk]

Every job or business involves a depreciating investment to begin with. Buying paint as an artist you don't expect to make money till your painting is complete; designers incur losses on their electronics and computers and such, valuations of electronics and basically everything depreciates in value unless your sole job is to stock gold, property or bonds, almost every job requires an incurring lost to begin with.

I urge you to think of it this way; buy only gear you need and keep it minimal, you don't need the entire armory of Nikon/Canon lenses at your disposal to be a good photographer. Buy the gear you need, not the ones you want and you should be fine.

 

[Berkins]

Dumb hobbyist buys equipment to satisfy his hobby needs. Take pictures and enjoy. Business arguments are totally irrelevant as he does not use the equipment to run a successful business. Photography is a hobby so why would it matter to him if the value depreciates.

In terms of losing money I lose much more value with my other hobby. Being a computer geek... I spent 6k on a computer system with 3 screens and water cooling last year... In 1 year it would be worth 2-3k so a loss of 3k ;p ... But do I care... no way its was so much fun building the system I would do it again in a few years

i agree with u on this... as long as hobbyists don't resort to robbing banks to finance their hobbies, there's nothing wrong with buying equipment with features that exceed the usual hobbyists' requirements.

don't think it's fair to label hobbyists as "dumb" for that matter. there are other similarly more expensive hobbies like motor-sports, watch collection, etc - as long as the hobbyist feels the $ is well-spent, who are we to judge them as dumb?

 

[Cowseye]

Thank you JasonB. Now I can finally fill in the last figure on my balance sheet.

 

[ricohflex]

TS has deliberately used the wrong title to his thread. His entire message was about curtailing expenditure of an aspiring pro.
It had nothing to do with hobbyists. TS has purposely used the phrase "dumb hobbyist" in a mis-guided effort to arouse readers' interest. Sort of a verbal hook.

My assessment of what TS did, is that: it is a pitiful reflection of his lack of confidence in the message that he wants to say.

Even if you address the actual content of his message, it is a sad one. If one is so afraid of investing in good photographic equipment, then do not be in the professional photography business. Factoring in depreciation of equipment is a given in any trade. No need to mention.

It is not the price that you quote after you have factored in depreciation.
It is whether you are considered good enough by prospective client to command a particular price.
If one is considered to be a very lousy "pro" then whether you factor in depreciation or not is not the point - you can't get the project.


Leave it to more highly skilled photographers who are confident of excelling in this business and who can make lots of money from it.

 

[TWmilkteaTW]

IMO what TS post is relevant and it is right. If you are putting food onto the table with your picture. Every cent can count. So is depreciation cost of equipment. no doubt about it.

I guess many are unhappy or rather dont agree because they are not shooting to live. And they probably didn't realize this thread is posted in the "photo biz" forum. Which means this thread is more so directed to the people whom are working in this industry especially the new ones or anyone who is sitting on the fence thinking to take the jump or not.

Apparently seems like this thread, the "unpleasant" title have attracted more hobbyist than the "biz pple" therefore the rage. Well. Does not matter who you are. Indeed the depreciation of equipment should be considered..(like it or not unless you are really rich ) But whether to what extend. That is another story..

 

[Slackeye]

I consider myself a dumb hobbyist I guess as photography is not my "tan chiak". I've spent thousands on gear mostly lenses , buying and selling. But honestly, i've had no regrets. Photography is a visceral experience for me even if I take pictures for my own pleasure. Its more of a heart thing. But if its your bread and butter,well I guess its only prudent to watch the dollars and cents. I started with film, recently re-started with DSLR but I'm gonna go back to the organic experience of the old Leica. Just enjoy what you do I always say.

 

[ed9119]

From Business Perspective:

Here is my calculations when buying a piece of equipment for work.
Average life span = 3 years

In my case, I know my average shoot per month is 30 (average) and if I spend $20,000 on equipment, I should charge $56 more per shoot and I will break even in 12 months, so I just tweak my rates according to general ordering pattern. Another 2 years, it will double its price as income as it has been reduced in the first 12 months.

From business stand point, it make no sense to buy a piece of equipment and it become bleed you more money. If it is, get rid of it.

Film VS Digital... been there done that... It is a personal choice. No more and no less. If you can sell well using film because it offer the "look" that people want, why not? Many choose Digital for the convenience and control. Film still alive, but lab that can do the processing and printing is getting lesser. If you want to do film, just market it as premium service because really, the turn over rate will be slower then digital. With Digital, though gear is more expensive, it is compensated with higher speed of turn over. I learn that $3 x 7 = $21 but $7 x 3 is not always $21 in business world, but if you can ensure $7 x 3 is always $21, then by all means, this is how you charge. Just put as many Zero behind it as you see fit. It is always a choice to be a premium business or to be a business who is dealing with volume. Each has its own advantages and disadvantages.

Sorry to say, but when I buy gear for business, I will spend the least to make the most.

From Hobbyist Perspective:
To be honest, from hobbyist, stand point, it really doesn't matter how much they spend on gear... it is in the name of "shiok". They have the money and they want the equipment, then they buy... no other justification needed. It is great to be hobbyist who makes money elsewhere and not depend on the photography for living. I don't really see the point of calling names as hobbyist at the end of the day is hobbyist.

But when I am in Hobbyist mode, where I just want something, I just buy it, money is not the issue, as long as it is "Shiok". So I understand how it is like between Business VS Hobbyist as far as money spend on the gear. Hobbyist buying gear with their heart, and business buy gear with their head. It really doesn't make one smarter or dumb.

If you are someone who is seriously looking to become a pro one day, the money out and money in is very important equation and you always want to have the least possible out and highest possible in. You decide which side of the fence you want to be.

See it is not fun to be in business as you need to watch the dirty word "budgeting"

Regards,

Hart

Amen to THAT brother , couldnt have said it better myself

I just keep it simple. With my equipment depreciated over 4 years, my fixed overhead on depreciation is about $260 a month as a hobbyist .... down to $140-160 a month after selling it off for cash 4 years later .... even lower if I take in a couple of freelance jobs once in a while .....

Except for Barefoot Walking/Jogging or Reading (library books) all other hobbyists in whatever hobby are 'dumb' ha ha ha!!

And that includes ME..... dumb x1000 with so many hobbys

 

[Shizuma]

i have a very simple solution to the headache plaguing pros who are undercut by hobbyists. or hobbyists giving away good quality work. or bad quality work. or whatever .

i am sure i will get flamed for this

it's a free market. get better or lose out. people charge less, how are you going to bring value more to customer?

hobbyists turned pro if no positive cash flow, close down, too bad?

anyway, for buying capital equipment like camera i always like to model it as fixed cost plus running costs. whereas fixed cost should ideally have been paid in cash or equity and running costs of business such as renting office, expenses, wages and salary, etc be minimally covered by revenue to keep the business running.

businesses do not close down due to fixed asset depreciation . they close down due to running costs exceeding revenue .

while yes it is possible to lose money over depreciation of capital goods, this is not the main cause of business closing unless the capital equipment was by leveraged funding or credit. always use cash to buy please

 

[sjackal]

This thread is like a cleaver cutting apart two twin brothers, one motivated by survival, the other motivated by pleasure, and both caring little or none at all for each other's interest, and the conflict of interest suddenly becomes apparent by the edge of that cleaver.

But such is actually the natural phenomenon of society and the world. Hard times to be a pro, good times to be an amateur, and probably best times to be a client.

 

[trd2970]

I guess this may be what it all sums up as is, a full time photog is just like any other businessman. A full time photog is after all running a biz, so bad financial mgt e.g. not knowing your business running costs, will eventually lead to biz losses.

 

[Shizuma]

I guess this may be what it all sums up as is, a full time photog is just like any other businessman. A full time photog is after all running a biz, so bad financial mgt e.g. not knowing your business running costs, will eventually lead to biz losses.

The interesting thing about photographic industry is that due to the lower psychological levels of entry anyone can say they are photographer. and that part timers, hobbyists and amateurs, regardless of skill level can shoot for money too.

thankfully i am not a photographer shooting for money or shooting on assignment from others. so let me enjoy the creative process whew.

 

[oracle0711]

Every piece of assets depreciate. For those who are accquainted with accountancy or book-keeping, they will understand how to treat all this capital on their balance sheet. At the end, if you are using the cameras, lenses and other accessories (regardless of what they are) to run a business, i say to you, treat them the way an accountant or book-keepeer will treat them. The numbers need to be associated with all the rest of the items in the books and balance up eventurally to determine if you are making a profit or not. If it is a loss, you need to figure a way to work the numbers around - turning them from red to black eh?

 

[catchlights]

thank to Jason for sharing the business aspect of photography on camera gear acquisition.

camera gears are tools of trade for the professionals, we don't have much emotional attachment to it, we buy/trade it in new/old, or rent it when we need, dispose it when no longer in use, write it off when when their lifespan is up.
we don't hug hug sayang sayang or fondling them, don't boast how many or how expensive our gears are, or flashing them around.
We own and use them is just to help us to put food on our table for our family.


tho the thread title is a little provoking, but I guess those who read this section here are mature enough and serious about doing business with photography, so I just keep it as it is, and please keep the discussion relevant.

 

[JasonB]

tho the thread title is a little provoking, but I guess those who read this section here are mature enough and serious about doing business with photography, so I just keep it as it is, and please keep the discussion relevant.

Thanx Catchlights. Yes I sometimes ruffles lotsa feathers and indeed those who find the info useful will take the knowledge and use it. Those who find the post offensive will likewise use it to increase their heartbeat, pen an interesting reply and gave the thread 15 minutes of their life. Those who are neutral are firm and steadfast like a mountain, no amount of my provocative words can tempt their calm minds.

Peace be upon all.

I am open to questions - topic related ones.

 

[raptor84]

Or if you only get your shoots ad-hoc (aka day job + shoot on weekends) you can consider renting the big bodies and lenses as your job required and factor it into your quotations to clients accordingly. It is sort of like paying the depreciation costs per job rather than holding on to a slowly depreciating asset that is not brining you much income.

*Disclaimer* I do have affiliations with a rental house so take this as you will

 

[JasonB]

Or if you only get your shoots ad-hoc (aka day job + shoot on weekends) you can consider renting the big bodies and lenses as your job required and factor it into your quotations to clients accordingly. It is sort of like paying the depreciation costs per job rather than holding on to a slowly depreciating asset that is not brining you much income.

*Disclaimer* I do have affiliations with a rental house so take this as you will

Yes, viable and what many pros do. Some equipment no reason to hold and it's on a per job basis.

Like I have no use for anything above 300mm till the job that requires it comes in.

But some gear you can't do without so just bite it and factor in your numbers.

 

[raptor84]

Yeap I have 3 lenses and abody that I invested in because they are the workhorse things I need for almost any shoot. Additional equipment is rented as backup or when I want to experiment or like you said, when the job calls for it.

 

[reviveramesh]

many interesting points to think about and thanks for sharing - and as readers we all should be kind, generous and encouraging - it is very easy to be critical - but it takes courage to accept some things and be gracious about it....

 

[third3rdwheel]

With all due respect, I do not really understand what is the point of doing all those depreciation calculations. Buy what you can afford and enjoy your photography...