Are you considering becoming a professional photographer? One of the first questions you should be asking yourself is: how much money does my photography business need to generate in order for me to have the standard of living I want?
I put together a spreadsheet that hopefully will help you estimate just that and you can download it for free at the link below.
I strongly encourage you to do this exercise because knowing your numbers is the first step to profitability. It’s very unfortunate that so many photographers (and artists in general, actually) fail to see themselves as business persons and treat their profession as if the only thing that counted were the beauty of their work. If that’s you, please rethink.
Step 1 - Select the personal expenses worksheet and estimate the amount of money (net income after tax) you need every month in order to meet your desired standard of living (first worksheet). I created the most common categories in order to give you a template, please tailor the template to fit your own scenario by adding any other item relevant to you. You need to roughly figure out your total tax rate and insert that into the worksheet. I used 35% as an example.
The outcome of this estimation is the gross salary your company needs to pay you. It doesn’t really matter if you have incorporated your business or you are running it as a sole proprietor. You can still use this tool to get a ball park figure. See also my other blog post about personal spending.
Step 2 - Select the business expenses worksheet and you’ll see that the amount calculated in Step 1 is automatically fed into your business worksheet as a cost for your business. I created the most common business categories that will help you create your own spreadsheet based on your forecast. Once you’re done filling in all the blanks, you’re going to see the overall total cost for your business on a yearly basis. That number is minimum amount of income your business (not you as a person) needs to generate in order to breakeven and guarantee you the desired standard of living.
You can either fill in the yearly figures and disregard the monthly ones or fill them in month by month or just put a figure for the month of January and that will be automatically copied to each and every month.
Download the ‘Cost Of Doing Business’ tool for free
This exercise will give you a better idea of how many assignments you need per year and what to charge for those. If, for examples, your business breaks even at $100k, the following scenarios are examples of how you would be able to meet that goal:
10 assignments paying $10k each
50 assignments paying $2k each
100 assignments paying $1k each
200 assignments paying $500 each
Moreover, you can use these scenarios to get a feel for how many days per year you’re going to need to work.
Lastly, this model deals with the estimation of your fixed costs (they exist no matter if you have work or not). There’s going to be assignment related costs, such as rentals, supplies, props, etc that you are going to need to charge your client for on top of your creative fee.
Disclaimer: this is a simplified informational model whose only purpose is to encourage you to start looking at these numbers and figure out what is required to be profitable. This model should not be used for income tax or accounting purposes.
Thoughts?
Please share your experience with the community by commenting down below. If you enjoyed this information, please share it on your own channels.
Thank You and Happy Shooting!