I was talking to a photographer friend of mine last night she's always asking me for pricing advice. I usually tell her to charge her daily Cost of Doing Business (CODB)
and then mark it up from there based on the scale of usage. She told me she's never calculated her CODB
and I scolded her big time. I told her they next time we meet, we are sitting down and doing this together. As I refresher, I thought I would write this blog post and hopefully you find it helpful.
Being in business as a photographer, you have to know your CODB, because that's how you set your Baseline Creative Fee (BCF). If you take jobs that are below your CODB, you are operating at a loss. You should also do your CODB every year to make sure you're staying on track and to set sales goals.
In a very simple formula, this is how you calculate your CODB:
(YOUR SALARY + YOUR EXPENSES) ÷ SHOOT DAYS PER YEAR = DAILY CODB
Fortunately, there's an easy way to calculate your CODB and it takes less than 30 minutes to do. You will need two things: Your Profit & Loss Statement from last year and NPPA's Online CODB Calculator. If you use accounting software like Quickbooks (PC / Mac) or AccountEdge (Mac), it's really easy to generate you P&L report. Make one and print it off. Then click over to NPPA's Online CODB Calculator.
For this exercise, I'm using some numbers that I would consider to be average for an emerging photographer in a medium market (i.e. not NYC or LA) and is making a living solely from their photography. This photographer wants to make $50,000 a year, has a small office, no employees, no family to support, and someone who shoots a mix of editorial, commercial and stock. Let's assume they will shoot 50 billable days in a year (that's around 4 shoots a month). Here's how there CODB breaks out. Note: CODB should be calculated on business expenses, not shoot expenses. So leave out any reimbursed expenses like assistants, travel, food, etc.