How do you factor in expenses and overheads in your pricing?

1 Know your expenses

Your expenses are the direct costs of running your business, such as equipment, software, travel, insurance, taxes, and fees. You need to track and categorize your expenses accurately, and update them regularly. You can use tools like spreadsheets, apps, or accounting software to help you with this task. To calculate your expenses per project, you can use a formula like this:

Expenses per project = Fixed expenses / Number of projects per year + Variable expenses

Fixed expenses are the ones that don't change much, such as rent, subscriptions, or depreciation. Variable expenses are the ones that depend on the project, such as materials, props, or assistants.

2 Know your overheads

Your overheads are the indirect costs of running your business, such as marketing, education, administration, and personal expenses. These are the costs that are not directly related to your projects, but are essential for your growth and sustainability. You need to estimate and allocate your overheads realistically, and review them periodically. To calculate your overheads per project, you can use a formula like this:

Overheads per project = Total overheads / Number of projects per year

Total overheads are the sum of all your indirect costs for a year.

3 Know your time

Your time is your most valuable asset, and you need to account for it in your pricing. You need to estimate how much time you spend on each project, from pre-production to post-production, and include any communication, research, or revisions. You also need to consider how much time you spend on non-project-related tasks, such as marketing, networking, or learning. To calculate your time per project, you can use a formula like this:

Time per project = Project hours + Non-project hours / Number of projects per year

Project hours are the hours you spend on the project itself. Non-project hours are the hours you spend on other aspects of your business.

4 Know your rate

Your rate is the amount of money you charge for your time and expertise. You need to set your rate based on your expenses, overheads, time, and market value. You also need to adjust your rate according to the scope, complexity, and demand of each project. To calculate your rate per project, you can use a formula like this:

Rate per project = (Expenses per project + Overheads per project + Time per project x Hourly rate) x Markup

Hourly rate is the amount of money you want to earn per hour. Markup is the percentage you add to your cost to account for your profit and value.

5 Know your value

Your value is the intangible factor that sets you apart from your competitors. It's the quality of your work, your style, your reputation, your experience, and your relationships. You need to communicate your value to your clients, and justify your pricing with confidence and professionalism. You also need to review your value regularly, and update your portfolio, testimonials, and credentials.

6 Know your market

Your market is the environment in which you operate, and the clients you serve. You need to research your market, and understand the supply and demand of commercial photography in your niche, location, and industry. You also need to analyze your competitors, and see how they price their services, and what they offer. You need to position yourself in your market, and target the clients who appreciate your value and can afford your rate.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?