Patina Photo: New Zealand Wedding Photographer of the Year
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Pricing Workbook Guide

Introduction

Thank you for purchasing the pricing workbook. This is the help guide to help you get the most out of this powerful tool.

The goal of this workbook is to help you figure out the costs of running your photography business, and how to price your products and services to make the salary and profit you want to make.

There are 3 sheets included in this workbook.

  1. Overview

  2. Cost of Sale

  3. Overheads

Sheet 2 & 3 are optional – although if you do use them, they will help give you more accurate figures that you can use in the ‘Overview’ sheet.

Use the tabs at the bottom of the app to change between sheets

Use the tabs at the bottom of the app to change between sheets

What is the difference between a 'cost of sale' and an overhead?

In a very simple business. the way to figure out your profit, looks something like this:

business-profit-calculation.png

Simple right? Well things get slightly more complex when you realise not all costs are the same.

Some costs increase as you sell more of a service/product. E.g. if you give a free print with every wedding booking; then the more bookings you have, the more your printing costs will increase. We call these “Cost of Sale” – they are a cost of doing that sale. Possible examples of a cost of sale include: travel costs, printing costs, subcontractors, etc.

Some costs stay the same whether you sell 1 of a product or service, or whether you sell 10. E.g. you need the same amount of camera gear to shoot 1 wedding as you need to shoot 10 weddings. We call these “Overheads” – it’s a cost that is hanging over your head whether you use it or not. Possible examples of an overhead include: motor vehicle, equipment, software subscriptions etc.

This workbook was setup to help you figure out these costs quickly and accurately to better help the running of your business.

 

1. Overview Sheet

This sheet lets you experiment quickly with pricing of services/products, and how many you expect to book/sell, so that you can get see how if affects your salary and profit.

1.Overview-annotated.png
  1. Set your GST/VAT rate and if choose if you are registered or not. This will affect the entire workbook and can be changed at any time.

  2. Add a service/product.

    a) Set how much you wish to charge.

    b) Estimate the cost of sale for this service/product (or work it out more accurately use the Cost of Sale sheet – refer to the ‘Cost of Sale’ section for help).

    c) Estimate how many you expect to book/sell for this service/product.

    You can also see the GST/VAT owed (if you are registered), the gross profit (this is the money you make for each service/product), and the subtotal for the whole line.

  3. Estimate your business overheads (or work it out more accurately use the Overheads sheet – refer to the ‘Overheads’ section for help).

  4. Set how much you wish and how often you want to pay yourself (e.g. $1,000 weekly, $52,000 yearly etc.).

    You can now see your Annual Salary. Remember this is your pre- income tax amount, check your Government website to calculate your net salary.

  5. Check your total profit. If this number is positive/green, congratulations you will make a profit with the numbers you’ve entered! If this number is negative/red, you are making a loss.

    Typically the things you can do to affect this number, in order from most impact to least impact, are:

    • Reduce how much you wish to pay yourself.

    • Increase how many you book/sell for your service/product.

    • Increase your prices for each service/product (use gross profit number as your guide here).

    • Reduce overheads (if possible).

    • Reduce your costs of sale for each service/product (use gross profit number as your guide here).

 

2. Cost of Sale Sheet

This sheet lets you more accurately work out your cost of sale and ideal pricing for each product. A cost of sale is a cost that increases as you sell more of a service/product. E.g. if you give a free print with every wedding booking; then the more bookings you have, the more your printing costs will increase. Some other possible examples of a cost of sale include: travel costs, printing costs, subcontractors, etc.

2.CostofSale-annotated.PNG
  1. Add the services/products you sell (or copy them from the ‘Overview’ sheet).

  2. Set how much you wish to charge (e.g. this is the price you would put on your public pricelist, and it should include GST/VAT if applicable).

  3. Add your costs of sale for this product.

    a) Add or edit the cost of sale categories. These categories can be whatever you want them to be.

    b) Set how much you spend on each category for this service/product. e.g. if you spend on average $50 petrol, driving to/from photo shoots, you would put $50 under a travel category. NB: I always use the GST/VAT inclusive price - that way I am overestimating my costs - that way I will generally have more profit than I expected, not less

  4. This is your total costs of sale for each service/product. ✔Add this value to the corresponding ‘Cost of Sale’ box in the ‘Overview’ sheet.

    You can also see the GST/VAT owed (if you are registered), and the gross profit (the money you make) for each service/product.

  5. Keep going for all the products and services you sell.

 

3. Overheads Sheet

This sheet lets you more accurately work out your overheads for your entire business. An overhead is a cost that stays the same whether you sell 1 of a product or service, or whether you sell 10. E.g. you need the same amount of camera gear to shoot 1 wedding as you need to shoot 10 weddings. Some other possible examples of an overhead include: motor vehicle, equipment, software subscriptions etc. Typically photography business have quite high overheads because of the big investment in equipment that needs to be keep reasonably up to date. The categories

3.Overheads-annotated.PNG
  1. Add the various overhead expenses for running your business.

    a) You can either be specific or general about the items you wish to include in this column. I like to be quite specific and list each cost our business has. e.g. we have Adobe CC, Dropbox, G Suite all listed separately, even though they are all ‘computer expenses’.

    b) If you have got specific in the first column, then this column allows you to also group them together by category. It’s optional, however if you do use it, you can then use sorting options or pivot tables, to quickly and easily see different areas of your business where spending is high. You can also add, remove or edit the drop category options on the ‘Data Val’ sheet.

  2. Enter how much you spend on each overhead item. For general things, such as meeting and entertainment costs, your accounting software and/or bank statements can give you a much more accurate idea of what you actually spend.

  3. Choose how frequently you spend the amount in (2) on each overhead item.

    a) This is the period frequency.

    b) This is the period.

    For example, if you spend $200 every 6 months on a blog ad, (2) would be ‘$200’, (3a) would be ‘6’, (3b) would be ‘months’.

  4. This is how much you spend on each overhead item each year. NB: For some overheads, such as camera gear, you might spend a lot one year, then almost nothing the next few years - this annual figure is the average of all those years evened out.

  5. (Scroll down) At the bottom is your total annual overheads. ✔Add this value to the corresponding ‘Overheads’ box in the ‘Overview’ sheet.

    NB: Photographers generally have quite high overheads - ours have always hovered between NZD $30,000-$50,000. If your total annual figure is looking a little low, it is worth going through your bank statements for the last couple of years to be sure you have picked up all those little purchases - they can add up!!