Monday, December 22, 2008

"I Forgot" Is Not Acceptable

At the core of the housing crisis right now is one simple fact - people were buying houses they could not afford. Now, you can lay the blame on the banks who told people what they could afford, or the elected officials who bent the bank executives over and got them to loosen credit requirements, or you can lay the blame on the people themselves.

Consumerist (Former Treasury Secretary Says He "Forgot" That People Had To "Afford Their House", 12/22/06) cites the New York Times article:

“The Bush administration took a lot of pride that homeownership had reached historic highs,” Mr. Snow said in an interview. “But what we forgot in the process was that it has to be done in the context of people being able to afford their house. We now realize there was a high cost.”
How does this apply to photography?
(Continued after the Jump)


Before you can know what to charge, you must know what it costs to be in business. If you are charging $X and you don't factor in costs like depreciation, or the fact that you will be paying between 40 and 50% of your profits to the government, the sentence "I forgot to include the cost of my cameras in my cost of doing business", or "I spent all the money that came in. I forgot that I had to pay half that to the government."

Forgetting these things is unacceptable. Here's a re-wording of the quote above:

“John Doe Photography took a lot of pride in his photography and how so many people were hiring him for assignments,” Mr. Doe said while in line for his welfare check. “But what I forgot in the process was that the business of being a full-time photographer has to be done in the context of charging more than it costs to be in business. I now realize there was a high cost that wasn't reflected in what I charged my clients.”

Do not be like a starry-eyed Doe in the headlights. Determine what it truly costs for you to be in business, and take that into consideration when setting your rates. Check out the NPPA Cost of Doing Business (CDB) Calculator to get a start.

Please post your comments by clicking the link below. If you've got questions, please pose them in our Photo Business Forum Flickr Group Discussion Threads.

8 comments:

Anonymous said...

Great Post John:

This is a solid reminder to everyone. In my market, I compete with a lot of Journalists working for the many local papers, small weekly's and specialty papers.

Most of those photographers are working with equipment furnished by their organizations. Many also are already on assignment at the event and happily spread their images around to anyone with 50 bucks.

The organizations are equally happy to give images for the privilege of being there. Wash my hand if you will.

Add to that, the many offering to shoot for free and you'll see why success shooting sports alone is a poor business model.

Sorry to make this sound so simple when it is really sad.

Anonymous said...

Wow; you mean photojournalists are killing parts of this business?

What else is new?

Many of those folks are total snobs; they get equipment, benefits (even though the newspapers are cutting back; they still get something), and yet they still find the time to undercut most people in my market.

I'd like to raise a glass and toast every photojournalist for making this year tougher than the last on all of us. I truly want to thank you for doing what you do to help crush the business.

Anonymous said...

I really like the NPPA CDBC. I used it to calculate my fees.
It's always a god idea to check it once a year.
I will post something about it for Italian photographers on my blog.
Thanks

Anonymous said...

In the CDBC, is the default '$40,000' desired salary before or after Federal & State income taxes?

John Harrington said...

Good question - it's as if that's your salary as an employee of your company. Thus, it's the before-taxes amount, as if you were looking at a job listing for a staff job.

- John

Anonymous said...

Anonymous 1:40 am,

If you want the salary number to be an after-taxes amount, just get a good idea of how much taxes you will actually pay and add that into the taxes entry slot (which is designed for property, self-employment and business taxes but could easily include other taxes)

Anonymous said...

^^ nice blog!! ^@^

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Anonymous said...

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