It’s so hard to decide how to price your services right out of the gate.
But, I’m a firm believer in taking the time to set your business up right instead of throwing numbers up in the air and hoping you pick the right one.
When I decided to open my studio back in 2010, I did a ton of research. I looked at different pricing options, how to structure my business and position it for profits, whether I needed a license or a permit, a bookkeeper or CPA, and so on.
I wanted to do this business thing right, and not have it fail. I was so stressed about starting this big, new endeavor and falling flat on my face.
I worried about the potential embarrassment I’d feel if that happened, which is why I worked my tail off to start out right.
Having said that, I’ll tell you that I never given away my time and services for free or offered super low prices.
In doing my groundwork first, I was able to price myself where I needed to be in order to make a profit. I did several things up front:
- I looked at what I was being charged for the products I sold by my labs
- I added in the total material cost associated with each product (the product, the packaging, all the way down to the tissue and ribbon)
- I looked at the time it took me to create my products (retouching, packaging, etc)
- I then added everything up and decided on a markup factor
PPA recommends home studios use a markup factor of 3, and retail studios use a markup factor of 4.
Because I was just starting out, I started low at 2.5. At the time I didn’t feel comfortable charging any more than that.
Although I was able to cover myself, I quickly realized that in order to pay my overhead and myself, I needed to cover myself more. I bumped my markup to 3.
There isn’t some magic number to charge when you’re starting out. You have to sit down and do the math to see what you need to be charging to make a profit.
It doesn’t matter what the photographer down the street charges, it matters what costs are associated with your business and your products. You have no idea what kind of costs the other photographer has, so you can’t follow their lead because it might not work in your own business.
Take the time to set up your prices the right way, from the start.
I look at my prices every year to see what products are selling the best. If my lab ups their pricing I might need to adjust mine. I always make sure I am able to pay myself and put money back into my business.
Pricing really doesn’t have to be the incredibly difficult and painful side of business that people make it out to be. It’s actually quite simple, you just have to do the math.
To knowing your numbers,